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 with a country-by-country activity profile.
Libya
Wintershall has been actively involved in crude oil exploration and production in Libya for almost 60 years, with the company having spent more than $2 billion in the country where it has drilled over 150 wells.
Production activities were locked down in February, 2011 during the Arab Spring, but the company resumed output in October of the same year. As the first foreign oil company to return to Libya after the revolution, Wintershall has done well to consolidate its activities in the country.
“We believed that as an oil company, one of the best ways we could help the reconstruction of the country was to help it produce and sell to the international market, as much oil and gas as possible,” says Martin Bachman, head of exploration and production at Wintershall.
Both onshore and offshore exploration production activities could recover and infrastructure is being restored. The company now has more employees working for Wintershall Libya, than it did before the war. 480 of the 500 staff are Libyan citizens who work with colleagues from Germany, the Netherlands, Canada and the UK.
The Company produces oil from eight onshore fields in Libya. The As Sarah oil field near the Jakhira oasis is the largest deposit. Here the company operates a facility which conditions the associated gas produced from oil production operations and supplies gas and condensate for sale on the coast. Wintershall also has another exploration area in the South East of Libya.
Russia’s Gazprom joined the projects with a 49% share in 2007. Aside from onshore production, Wintershall has a 6.75% stake in the Block C 137 of the offshore platform Al Jurf in the Mediterranean. The block is operated by the national oil company, Mabruk Oil, which holds a 73% stake, and also involves Total, which owns a 20.25% stake.
Crude oil production in Libya increased to around 85,000 bpd in the last quarter of 2012. This is close to the 100,000 bpd lifted before the civil uprisings. The average production during 2012 reached 83,000 barrels per day.
“Wintershall intends to return to pre-war levels as soon as possible with a planned, per-day production between 85,000 to 90,000 barrels in 2013,” says Stefan Leunig, spokesperson for Wintershall.
“But it remains unclear as to when the maximum daily production capacity will be reached,” he adds. Production increase can be explained by the new 52-km-long pipeline built in co-operation with the Libyan National Oil Corporation and its subsidiary Arabian Gulf Oil Company, which connects the Wintershall concession and the oil field Nafoora with Harouge’s Amal field, from there the crude oil will be transported to the export town of Ras Lanuf.
“What we wanted to do was make a pragmatic, un-bureaucratic contribution to the reconstruction of the country,” says Bachman.
“We saw that there was a bottle neck in the explort stream because of an old and corroding pipeline, we said look, let’s do a quick, pragmatic solution when nobody was in the country yet. Of all the operators and contractors, we said that we can do the whole project for you, we actually managed the whole project and mobilized the contractors.” The pipeline was completed at the beginning of 2013.
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Qatar
“Today, the Middle East region is gaining an increasingly important role in Wintershall’s diversification portfolio,” says Leunig. “So does Qatar as the country with the world’s third-largest gas reserves.”
Qatar has been an important and reliable partner for Wintershall with an excellent working relationship with the Ministry of Energy and Industry of Qatar, and Qatar Petroleum regarding future development of natural gas resources.
Wintershall currently operates two blocks in Qatar. In 2008, Wintershall and Qatar Petroleum signed an Exploration and Production Sharing Agerement (EPSA) for the Block 4 North in the Khuff formation which made Wintershall the operator of the block.
In 2010, Japanese Mitsui Gas Development joined the project as partner. The Khuff formation is directly adjacent to the North Field, the world’s largest natural gas field. It covers 544 square kilometres and has water depths of around 70 meters.
After four years of intensive research including 2D/3D seismic surveys and exploration drillings, 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 which could be developed from the field.
“It is the first discovery in Qatar since the discovery of the North field at the beginning of the 1970s,” says Leunig. Further development of the field is planned. “We have 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,” says Martin Bachman, head of exploration and production at Wintershall.
“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,” he adds. In addition to Block 4 North, Wintershall is also involved the significantly larger Block 3 which covers an area of 1,666 square kilometres.
With a 40 percent share, Wintershall is the operating company for the exploration activities together with the Japanese company Cosomo Oil (35%) and Indonesia’s Pertamina (25). Since 2007 Wintershall has carried out a depth measurement survey in the shallow section of the block as well as seismic surveys.
“Wintershall has been a respected and reliable business partner in Qatar, working with Qatar Petroleum for a long time,” says Leunig. “Wintershall intense to become even more actively involved in long-term upstream projects in the Gulf Region.”
The recently announced plans for the Block 4 North production underline the importance of Qatar for Wintershall’s Middle East strategy. “Wintershall is a reliable and technically competent operator and partner in Qatar. The company is committed to the highest HSE standards, contributing regularly to the Sustainable Development Industry (SDI) Report issue by the Qatari Ministry of Energy & Industry,” says Leunig.
“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.
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United Arab Emirates
Wintershall has been present in the UAE for decades, with exploration and production activities already having been conducted in Dubai, Ras Al Khima and Sharjah.
The company is currently aiming to increase active involvement in long-term upstream projects in the Gulf region. The company recently opened its own branch office in Abu Dhabi in 2010, the first representative office belonging to a German E&P company in the Emirates.
From there, the company is specifically developing its exploration- and production-based activities in the Middle East region.
Part of this strategy is the combination of modern exploration techniques and innovative production methods for enhanced oil recovery from complex reservoirs and to provide local partners with the best of modern German engineering.
In 2010, a memorandum was signed with the Abu Dhabi National Oil Company which allows Wintershall to confuct long-term exploration and development of a deposit in the Western region of the Emirate.
In 2012; Wintershall, ADNOC and OMV agreed upon a technical evaluation agreement for appraising the sulphur rich sour gas and condensate field at Shuwaihat. The field is situated approximately 25km west of Ruwait in the western part of Abu Dhabi.
“Wintershall wil conduct a comprehensive assessment of the deposits as the operator of the upstream joint-venture,” says Leunig. “In doing so, the joint-venture will apply advanced technologies of the highest standards which includes drilling up to three appraisal wells and acquiring 3D seismic over the field.”
A successful appraisal campaign will result in Shuwaihat being an important development of a gas and condensate field in the Western region for Abu Dhabi, contributing to cover the increasing hydrocarbon demand of the UAE and the country’s long-term export capability, according to Leunig.
“I think the interesting part was that we convinced them we can do it, because we have more than 40 years of sour gas production experience, which is the challenge, sour gas needs to be handled with care, because you don’t want any leaks, Wintershall was chosen for its technical capability, we had ADNOC come and see our field operations, and our technical capabilities,” says Bachmann. “ADNOC was impressed with our technical work so they invited us to tender for the Shuwaihat field.”
