Klaus Langemann, vice president Middle East, Wintershall reveals the company’s Middle East strategy to Jyotsna Ravishankar
Oil&Gas Middle East checks out how Wintershall continues to secure its place in the Middle East’s upstream energy market. The Middle East’s massive reserves have turned the region into somewhat of a battleground for the oil and gas industry. International oil companies, super-majors, EPC contractors, suppliers and service companies are all constantly vying for space in the hydrocarbon rich region.
Thriving and surviving in such an environment is no easy task. Companies need to hold on to their competitive edge in order to stay ahead of everyone else. This month, we take a look at how Germany’s Wintershall is shaping its own future in the region through a brief chat with Klaus Langemann, vice president Middle East, Wintershall.
Despite the ADIPEC madness, Langemann found a quiet corner with walnut stuffed dates for us to chat about the future of the Schizophyllan technology that Wintershall is developing for enhanced oil recovery, as well as deliberate over the methods of strategic partnership that will help the company grow in the region.
The German says the company’s strategic partnerships are so successful because everyone contributes what they are best at, and thus complements the other partner.
“We know how to take partnerships to new levels. Our partnership with Gazprom is a living alliance with excellent prospects for the future. Together, we share technical know-how, financial risk, and business success,” he said.
So what has Wintershall done in Russia that they want to emulate in the rest of the world, we ask? The company cooperates with Gazprom along the value chain, from production through transport, to sales in joint ventures.
The annual production of the Joint Venture Achimgaz and the project Yuzhno Russkoye amounted to around 26 billion cubic meters of natural gas in 2010. The two deposits hold reserves of up to 800 billion cubic meters of gas.
As a comparison, this volume is enough to provide all German households with the energy for around 25 years. The supply agreements give Wintershall access to these sources until 2030 and beyond. The joint Nord Stream pipeline through the Baltic Sea takes the gas directly from Western Siberia to Germany.
It is sold in the European market by German-Russian gas trading companies amongst others. So, this is great business success for Gazprom and Wintershall and greater energy security for Europe, points out Langemann.
“The focus of our partnership has shifted over the course of time. We have strengthened the cooperation at the well head, and as part of that strategy, we intend to increase our oil and gas production in Russia”, says Langemann. “In this way, the partnership gains a further dimension for growth,” Langemann explains.
“So, we want to do business with Abu Dhabi, not just in the country but also on an international level,” he explains. Together with the Austrian Company, OMV, Wintershall is an operator on up to three appraisal wells and utilises 3D seismic imaging to evaluate Shuwaihat sour gas and condensate field.
The Shuweihat field is located some 25 km to the west of the Ruwais in the Western Region of Abu Dhabi. Wintershall has proven track record for sour gas field recovery in Germany for more than forty years. They have three years to decide if the field has sufficient hydrocarbon reserves.
“We are optimistic and the first gas could be produced by 2020,” he says.
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Sour Gas Experts
The German gas fields that were developed in the 1970s and 80s were sour gas fields containing hydrogen sulphide and carbon dioxide, so the company has gathered a lot of experience there.
The first sour gas fields in Germany were discovered in 1961 and 1964 and the company realised early the potential of sour gas close to attractive markets and developed the discoveries.
So far, the company has drilled more than 50 sour gas wells and the company’s cumulative sour gas production exceeds 20 BCM.
So also in Abu Dhabi, it is this expertise that the German company will look on capitalising and demonstrating to the region that is being a capable and responsible producer of gas from sour fields.
Gas in Qatar
Abu Dhabi is not the only country the company has set its sights on. It is the first company to have discovered gas in the last 42 years in Qatar. After four years of intensive research including 2D/3D seismic surveys and exploration drillings, Qatar Petroleum and Wintershall announced a new gas discovery in the offshore Block 4 North in March 2013.
The discovered deposit is located in a water depth of 70m and according to estimates, holds approximately 2.5 trillion cubic feet, or 70 billion cubic meters of natural gas in place.
“It is not a huge field but the first discovery in Qatar since the find of the North field at the beginning of the 1970s,” says Langemann. Currently studies on the optimal field development are being performed.
“We have drilled two exploration wells now, one on the western side of the structure, and one of the eastern side of the structure, which give us a good handle on some of the subsurface,” said Martin Bachmann, head of exploration and production at Wintershall in a previous interview.
“And we will now have to determine what development concept we are going to pursue, what products we’re aiming for, that’s all happening now,” Bachmann has said.
“Wintershall intends to become even more actively involved in long-term upstream projects in the Gulf Region,” says Langemann.
“Wintershall combines state-of-the-art technology and innovative production methods to improve the yield from increasingly complex deposits, this applies particularly to further developing the technically challenging deposits in the region,” he adds.
Middle East strategy
The company’s Middle East strategy according to the vice-president of the region is three-fold. The first one is ‘true partnership’: sharing knowledge and expertise in the joint ventures and enable to implement joint activities both in the host country and internationally to fully balance the interests of the partners. This, he says, is a challenging task but both parties will be richly rewarded.
The second part of the plan is to be cost efficient and also have very high HSE standards; the final strategy is to have specific technologies for the region like sour gas extraction or enhanced oil recovery.
“We have done a complete study of what the host country here really needs. We have lots of technologies, but ADNOC may not need them; we carefully match the technologies required with our capabilities,” he concludes.
