Improve Production and Cost Efficiency

Improve Production and Cost Efficiency

The first strategic panel discussion on the second day of the third Technical Upstream Convention saw four oil and gas experts discussing how to improve production and achieve cost efficiency.

The panel featured some of the most prominent figures in the oil and gas industry giving their views on the topic. Osama El Bakly, Chairman of the Egyptian Natural Gas Holding Company (EGAS), as well as representatives from three of the largest International Oil Companies (IOCs) operating in Egypt were in attendance to give their views. The representatives included Khaled Kacem, Vice President, Country Chairman and Managing Director at Shell Egypt; Sameh Sabry, Senior Vice President and Managing Director of Egypt at Wintershall Dea; and Jeroen Regtien, CEO of Scimitar.

Moderating the discussion was Iman Hill, Chief Operating Officer (COO) of Energean. Hill led the panel noting that brownfields represent around 65% of global production, adding that it is a global challenge to optimize brownfields. Hill highlighted the importance of  “chasing diminishing resources, and asset integrity investments to ensure that people and then environment are kept safe,” emphasizing the significance of “the smart deployment of technology and the ruthless procedure cost efficiencies in order to keep mature assets or brownfields as economic for as long as possible.”

Modernization, Brownfields Optimization

The panel kicked off mentioning the Ministry of Petroleum and Mineral Resources’ Modernization Project. “One of the Modernization Project pillars is working on upstream, which means boosting production of brownfields,” El Bakly noted, adding that brownfields have been a point of global interest and that Egypt managed to double production with a new asset.

“It is not very difficult to identify where you can optimize brownfields,” Sabry stated, adding that by examining the full value chain of brownfields, operators could identify the main issue needing the adjustment of the declining production.

“The beauty in Egypt’s oil industry is that it has a very widespread data, it has assets, and it has diversity of everything,” El Bakly stated, explaining that when operators need to optimize operations and costs as well as boost production to reach recovery, the necessary means are available.

Some technological applications need to be expanded in Egyptian brownfields, as the oil and gas sector “needs to adopt more of the technologies that are not fully implemented in Egypt like horizontal drilling and fracture stimulation,” Sabry explained, adding that “adjusting the production decline is one of the key challenges of course.” Sabry pointed out that enhancing brownfields performance is further affected by cost optimization policies as well as overburdening the brownfields.

Kacem agreed noting that “increasing production and reducing costs is indeed important for all the investing companies.” According to Kacem, Shell believes that developing and creating upstream projects are important to the development of the oil and gas market.

Meanwhile, Regtien compared mid-life brownfields with end-of-life brownfields, “In mid-life brownfields you still have the opportunity to invest significantly, really increase production and extend the field’s life.” Regtien explained that the technologies are available around and operators need to challenge everything from commercial practices and strategies without losing all the experience earned from past projects.

El Bakly disagreed stating that “there is nothing called ‘dry’ in our industry.” He emphasized that Egypt is “leaving every field with existing hydrocarbon, but it is looking for optimized technical solutions” to face this challenge. However, El Bakly explained that not every technology is applicable in the Egyptian oil and gas sector and operators need to choose the technology that best suits their needs.

Integration, HSE Significant for Optimizing Brownfields

During the panels, the four industry leaders spotted light on the importance of integration and HSE in boosting brownfields performance. “Egypt is very operational and that is one of the strengths of Egypt, but sometimes one needs to take a step back and look at it more realistically and make more of an integrated plan that really allows the country to optimize the value of overdevelopment,” Regtien stated.

Kacem mentioned operational excellence, shedding light on safety, adding that the operators “never jeopardized safety and asset integrity.”

Meanwhile, Sabry talked about failure of running assets, explaining that having operation failure is not the only threat for the oil and gas field, but from an HSE perspective, it is unacceptable. Sabry also added that it affects efficiency and production, noting that integration and HSE are other leverages used to optimize brownfields.

Sabry emphasized that “asset integrity is important and it is not only to avoid interrupting production, but also failing equipment can lead to serious HSE problems,” stressing that HSE is the ultimate priority for everyone in the oil and gas industry.

Success Stories

The distinguished panelists reviewed successful projects of brownfields optimization implemented in Egypt. Kacem shared with the audience an initiative launched by Shell in 2015. “This initiative is in fact the transformation program that is called Fit for the Future, which is aimed at operating assets more safely, lively and cost effectively.” The initiative has standardized working methods and recognize the available opportunities based on benchmarks and comparisons with competitors.

Badr El Din Petroleum Company (Bapetco) “managed to realize and sustain significant cost reduction improvement,” Kacem explained as an example of the initiative implementation in Egypt. Kacem also added that “in 2019, Bapetco suffered from zero days of nonproductive time, compared to almost 70 days in 2018.” Kacem further gave an example of Shell’s success in Egypt via the Phase 9B of the West Delta Deep Marine (WDDM), which produced natural gas five months ahead of schedule.

Regtien discussed the Issaran field in the Egyptian Eastern Desert, in which Scimitar used the campaign approach in the second phase, followed by drilling in the third phase.  Regtien mentioned attention given to details, systematic approach and dealing with progressive opportunities.

Requirements of Brownfields Optimization in the Future

Towards the end of the strategic panel, the four prominent figures expressed their views on what the future of brownfields need. Regtien noted the need to have campaigns, explaining that campaigns give operators “leverage in procurement, in contact, it gives them operational efficiencies.” Regtien also mentioned that his company was able to decrease cost by 40% after half a year of adopting it. Regtien further stated that the oil and gas operators need to challenge the status quo and to ask questions.

“In order to be able to [achieve sustainability], the oil and gas sector has to continue to reduce unit operated costs, increase availability, but enhance wells, reservoirs and facilities management,” Kacem noted, adding that it is important to spread the culture of discipline, action orientation, accountability, as well as competitiveness.

El Bakly declared that Egypt has a lot of oil and gas potential and what is needed is “the involvement of all individuals, all companies, and all sides because this is how it could [help] develop the good future of the industry” adding that it further needs “to work on the skills of the new generation,” he said, stressing on the importance of empowering young professionals. EGAS aims to double production through exploration and development to face the declining production while working on extensive developing plans, according to El Bakly.

“It is very important that the fiscal regime in Egypt would recognize the particularities of brownfields,” Sabry concluded. Studying suitable technologies and the involvement of all parties would help the North African country optimize its brownfields, reduce costs and comply with regulations to ensure the safety of people and assets.


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