Year of entry in the Omani oil and gas market1980
Halliburton’s global revenue for 2014$32.9 billion
Improving efficiency in OmanSeptember 2, 2015
Zeinoun Klink, Eastern Gulf managing director for Halliburton, talks to TOGY about the importance of optimising operations through practices such as using integrated services and enhanced oil recovery methods. US multinational Halliburton is one of the world’s largest oilfield services companies.
Why are bundling services and integrated project management rare in Oman and what benefits are lost due to this?
In Oman, the prevailing practice is to tender distinct services individually. While this may achieve the lowest price per service, the efficiency and productivity factor of one service company doing multiple services on the same well is lost.
As the oil and gas industry evolves due to rising exploration and development costs, the need for improved efficiency and service optimisation has become a full requirement.
However, the working practice of operators has to change. Instead of trying to break down services into many small contracts in which many services companies compete, the operator needs to explore the value of integrated services for increasing efficiency and optimisation to reduce the overall cost per barrel of oil equivalent.
Integration and optimisation will not stifle competition and drive out small services companies. On the contrary, it has an opposite effect.
In Iraq, for example, Halliburton works with local subcontractors and assists them in meeting international standards. The transfer of knowledge from the international oilfield services provider to local subcontractors is extremely beneficial.
Has there been a slowdown in project activity in the Middle Eastern region?
In this region, oil and gas developments are not strongly affected by one or two years of low oil prices. These projects are long-term investments that will benefit not only a country’s economy but its energy security as well.
There has not been a noticeable slowdown in activity in the Middle East. This is mainly because the region remains heavily dependent on revenue generated from the sale of hydrocarbons. Oil and gas production by Petroleum Development Oman, for instance, represents a large share of the country’s GDP.
Countries in the region cannot afford to put major oil and gas projects on hold for very long. Any slowdown will cost the region more in the future. Instead, this is the best time for operators to engage in new contracts with services companies. They should take advantage of the price crisis to become lean and efficient so that when prices rebound, they can reap huge dividends.
How can oilfield services companies in Oman enhance production in a cost-efficient way?
Between the years 2000 and 2007, declining Omani oil production rates pushed operators to embark on complex enhanced oil recovery projects to reverse these trends. Complex reservoir drilling to maximise contacts also became critical to improving production rates.
Today, there are three areas of enhancing production that are not adequately exploited in Oman that will increase value with minimal expenditure. These are using non-damaging reservoir fluids, advanced completion technology and water conformance solutions.
A lot of money is spent on well placement and field development, but operators are often faced with either near wellbore reservoir damage, early water production or the inability to maximise oil production from horizontal wells.
Oilfield services companies such as Halliburton design approaches to these issues. For example, custom reservoir fluid solutions to help prepare, repair, clean out and complete the wellbore to minimise damage to the producing zone. Advanced completion technology can smooth production throughout the horizontal interval and delay water and gas breakthrough.
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