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Interview

with Lewis Affleck, Managing Director, MAERSK OIL Qatar

09.10.2012 / Energyboardroom

What where the main milestones and achievements since Maersk Oil settled in Qatar?

It is a good time for you to visit as we are getting very close to Maersk 20th anniversary of being in Qatar, on the 22 June 2012. How it started is quite simple: we took a field in 1992 that others thought was uneconomic, and that was not particularly productive. Today, after 20 years we have produced around 1.2 billion barrels of oil from that field, whereas others thought it was not economically viable. We have come to produce 300,000 barrels of oil per day so it is quite a massive achievement for us, as it is the largest oil-producing field offshore Qatar.

Maersk Oil took over the operations of the Al-Shaheen field in 1992 when very few companies believed in its economical viability. Maersk has been visionary and has succeeded in operating this huge project, which now accounts for around one third of Qatar’s oil production. What were the main challenges that you had to overcome and what were your key factors of success?

It is a carbonate reservoir and its particularity is that the reservoir is very thin but extends over a large area. Many companies thought it was not producible. What Maersk did is that we brought technology that we used in the North Sea where we drill extensive horizontal wells, to have a much larger exposure to the reservoir. We brought in that technology and it has been very successful. In addition to that we are running a recovery technique called waterflooding; we are injecting water into the reservoir to help flush the oil out and enhance the recovery. We have one of the largest offshore waterfloods operations in the world. In total we have drilled 300 wells, including 169 wells in our last development program, which we just completed.

Maersk Oil holds more than 35 oilfield technology patents, and is establishing the Maersk Oil Research and Technology Centre (MO-RTC) at Qatar Science & Technology Park (QSTP).How significant is R&D for Maersk and how does it account in your unique technological lead?

We believe we are a technical-led company. If you look at the overall vision we have, “navigating complexity, unlocking potential”: we actually unlock it through technological solutions in complex reservoirs. We have done it in Denmark and we have done it here in Qatar, as well as in other countries, making us experts on this niche. We are only upstream, unlike other companies. We partner with the NOC’s like QP here to unlock the potential of these fields.About R&D, Maersk Oil Research and Technology Center is our only Research Center in the world, so it is THE Research Center, is it not something we are just doing because Qatar would like us to do it. It is something very important to us. We have committed to spend 100 million dollars over a 10-year period and we inaugurated it last year. We have got some very good projects going on, which have been very well received. When you go into such a field, the first stage is primary production, where you drill the wells, you get the oil recovery that natural energy will produce, you then go into second recovery which is waterflood by swiping more oil to the wells and you finally go to enhanced recovery which makes the oil in place more mobile. We are currently running a pilot which will be starting next month on the enhanced oil recovery, it is called a WAG: water-alternating-gas injection. We believe that there is tremendous potential.

Maersk Oil is a company that sets Safety as one of the most important value: we know that everyday Maersk Oil Qatar is performing quite challenging tasks where safety is key. The CEO Jakob Thomasen visited Qatar in February to see how « incident-free » is being implemented in Qatar and he set safety as the main priority for 2012. What measures are you implementing on that regard and what challenges and successes are you facing in this particular context?

The Incident-Free philosophy is something that Jakob Thomasen has launched worldwide, to drive and improve the safety culture.Here in Qatar we have had an enormous focus on safety ever since we started here. We are trying to make safety a performance driver and we see HSE as critical to our business. Because if we manage HSE well, it will result in good performances. There is not any company in the world that ranks best in safety, but not in performance, it goes together. Of course we are doing it because it is the right thing to do, to send people home safely. It is going down very successfully in Qatar and it is very well received.

There has been a recent green trend emerging in Qatar recently, with the recent creation of the Ministry of Environment or the hosting of the UN Conference on Climate Change at the end of the year. In the meantime Maersk is involved in a project on gas recovery with QP that was approved by the United Nations in 2007 as a Clean Development Mechanism (CDM) under the Kyoto Protocol, which will aim at reducing CO2 emissions in Qatar by 17.5 million tones over 7 years. As a company deeply involved in environmental concerns, what strategic role is Maersk willing to play in the green growth trend that is currently taking place in Qatar?

The project you mentioned is a fantastic project. In many of the areas of the Middle East, flaring is done extensively to create production, and what we can see now in Al-Shaheen is that we have reduced production flaring to an absolute minimum. It is an amazing achievement when you consider that we produce 300,000 barrels of oil a day.

Together, Qatar Petroleum (QP) and Maersk Oil have successfully reduced gas flaring from the Al-Shaheen field to an absolute minimum – a rare accomplishment in the industry. A 90% reduction (2007 – 2011) in greenhouse gas emissions has been achieved by capturing previously flared gas and turning it into clean electricity, thereby increasing the national electricity supply, providing employment and transferring technical knowledge to local industry. As a result of its approach to environmental management, the project’s gas gathering system was recognised as the world’s largest Clean Development Mechanism (CDM) project by the UNFCC, as part of the Kyoto Protocol.

Will you participate in COP 18, the UN conference on climate change that will be hosted in Doha?

We are actively discussing with QP and the Minister, to see what role they want us to play, and we will happily assist them in the conference. Certainly this CDM project will be showcased. Environmental performances is also one of the themes that the Maersk Oil Research and Technology Center is looking at.Every summer the Al Shaheen Oil field hosts one of the world largest aggregations of whale sharks – the worlds largest fish. Maersk Oil is operating the Al Shaheen oil field on behalf of Qatar Petroleum and the offshore staff have been instrumental in reporting observations of whale sharks to both local and international scientist. These observations have sparked a strong interest in studying these magnificent animals and Maersk Oil Research and Technology Centre in Doha has become a partner in the Qatar Whale Shark Research Project established by the Ministry of Environment. It is the objective to establish a long term monitoring program that can provide ground breaking information about the population and ecology of whale sharks in the Arabian Gulf. A two week long survey was conducted in May-June this year (2012) with participation of researchers from The Ministry of Environment, Maersk Oil and international whale shark scientists. More than 100 sharks were identified during the survey and several of the sharks were fitted with transmitters in order to follow their movements in the Arabian Gulf and beyond.It is a great project, which has attracted a lot of attention.

The new centre at QSTP will offer training for employees and local universities, to help building cooperation with students by providing support and shared expertise. How would you define Maersk Oil Qatar’s commitment in helping the local community?

One of the themes we have in mind is developing the locals. We are very proud of the fact that we have 25% of our staff that are Qataris, and 50% of that 25% are in the technical areas. We are defining ourselves as the employer of choice for the Qatari population, especially those who work on the technical side. We are also supporting programs in Texas A&M and we are participating in the career fairs. Maersk Oil is committed to fulfilling its social and environmental responsibilities in a manner that will bring long-term benefits for the citizens of Qatar and supports the Qatar National Vision. It is challenging to find what we could bring from the West to one of the richest nation of the world, Qatar. In that regard we believe that we can do a lot on the medical aspect, especially on diabetes, which is an issue here. For example, we’re working in partnership with the Supreme Council of Health, the Hamad Medical Corporation, the Qatar Diabetes Association (QDA), and world leader in diabetes care Novo Nordisk to support the Qatari authorities to raise awareness of diabetes, advising on how to prevent it, and supporting people already living with diabetes manage their health better. (www.action-on-diabetes.qa/)

Where do you see Maersk Oil in the next 2 to 3 years?

The great thing about this field, although we have already produced around 1.2 billion barrels and drilled 300 wells, spent over 8 billion dollars developing it; is that today there is still enormous potential. Within the next month we expect to get the next stage of development approved, which will be another 50 well development. We believe that this is a field that will still be producing in 70 to 80 years time. We are looking forward to making further technical achievements and improving recovery. The focus at this moment is maintaining the plateau, 300,000 barrels a day for a long period of time. The work that we have done has identified a number of projects which would allow us to do this for many years ahead. We truly think there is enormous future yet to be unlocked with this reservoir alone.

I have worked in many areas of the world, and I can say that Qatar is an excellent place to do business. The Qataris have an encouraging environment, and this is why we are committed to the long time.

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