Energy Life ME Issue 02

S P O R T • D E S T I N A T I O N S • M O T O R I N G • S A I L I N G • T E C H N O L O G Y

Would you like a refill?The Neutral Group’s Karl Feilder explains how McDonald’s UAE is turning fat into fuel

August / September 2011

IRANPOLITICS, POWER &

POLICYOPTIMISE

PRODUCTIONAspen Tech shows how

TWICE THE BOAT

Wider’s yacht makes waves

EMIRATES PALACEA Right Royal Retreat

REGISTERED AT DUBAI MEDIA CITY

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OPINION | ISSUE 02 | 2011

04 ENERGY LIFE AUGUST/SEPTEMBER 2011

Issue 02 August/September 2011

Editorial Will Rankin [email protected] Tel: +971 4 390 3940 Contributors Phil Moore Mike SimpsonDesign Cherie QuinAdvertising Tel: +971 4 390 3940 [email protected] & Distribution [email protected] Publisher Michael Dawes Tel: +971 56 644 0469 [email protected] By Auto Trader Publishing FZ-LLC PO Box 94866, Office 209, Building 5, Dubai Media City, Tel: +971 4 390 3940 Fax: +971 4 390 8286 Registered at Dubai Media CityManaging Director Matthew German Registered at Dubai Media CityPrinted at Masar Printing and Publishing

Welcome to the latest edition of Energy Life Middle East magazine, the newest oil and gas publication in the region. I’d like to wish everyone Eid Mubarak on behalf of

Energy Life Middle East. As we move towards the busy part of the year,

we’re excited by the prospects of Q4 - packed as it is with events, conferences, outdoor sports occasions and a lot of industry-related golf events.

I’m delighted to see the range of features in this issue. We’ve got big-names who are keen to be seen in Energy Life Middle East, such as the Neutral Group, Masdar, Aspen Tech, and DHL, while our features cover some of the hot topics of today, such as fracking, the creation of South Sudan, Shell’s oil leak in the North Sea and even an opinion piece from a Florida-based peak oil theorist, who says we should all be taking to our bikes. With the weather cooling off, and fuel prices still rising, maybe that’s not such a bad idea…..

We are proud to be the Official Media Supporter for the 2011 Regional SPE (Society of Petroleum Engineer’s) Honours and Awards Ceremony and Dinner in October. We’re equally excited to be the official publication for the 2011 and 2012 IADC (International Association of Drilling Contractors) and EIC (Energy Industry Council) Golf tournaments.

Our readership is around 5,000 people. That is, every month, we post out 5,000 copies of Energy Life Magazine (ELME) across the region and the globe, and according to our research, in many cases it’s read by many more people than just the recipient. I know for a fact that

one copy gets sent around an entire company for their feedback, as they are avid supporters and contributors to ELME. We know who our readers are, and we plan to launch an electronic newsletter before the end of the year, to ensure we maximise our audience and give the right information to precisely the right people.

In recognition of the lifestyle interests of the region’s professionals, the magazine contains essential reading for the thrill-seekers in the energy sector. Golf, cars, boats, bikes, gadgets, luxury brands, destination reports - and much more.

Subscribe FREE on www.energylifeme.com, for a chance to WIN two tickets to the 2011 Abu Dhabi GP, Brunch at Nineteen (the award-winning restaurant at the Montgomerie Golf Club, Dubai) and much more….

Let us know what you’d like to read about, who you’d like to see interviewed and the style of industry profile that helps you best maintain competitive advantage. Enjoy this issue! Regards

Michael Dawes [email protected]

A NOTE FROM THE PUBLISHER

WELCOME

The publisher regrets that it cannot accept liability for any error or omissions printed, however caused. The opinions and views contained in this publication are not necessarily those of the publisher. Readers are advised to seek specialist advice before acting on information published here, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing.

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CONTENTS | ISSUE 02 | 2011

AUGUST/SEPTEMBER 2011 ENERGY LIFE 05

09OpinionAnalysts predict an economic slowdown in the Middle East

11IntelligenceOur pick of the most important news from the region and the globe

18 Iran: Two steps forwards, two steps backThe country has sanctions, a growing population, a burgeoning nuclear industry and some of the world’s largest energy resources. Interesting times.

24 Cover story: Being neutral with passionInterview with Karl Feilder of The Neutral Group, who talks about sustainability, turning fat into fuel and his hopes for the region’s energy industry.

30 Feature: FrackingThe good, the bad and the hopes and dreams of hydraulic fracturing. Tom Arnshott gives us the lowdown.

36Feature: Meet MasdarExplaining the UAE’s carbon-neutral cityscape.

40 Innovate Refinery OptimisationAspen Tech reveals how to maximise plant performance.

45 Feature: The right stuffDHL’s VP of Global Energy Development, Jonathan Shortis, takes ELME through the machinations of MRO.

48 Geopolitics: South SudanWelcome to the world’s newest nation. Beset with energy-related issues from the day it was created.

50 Comment: Is Ghawar still dying?Controversial author and peak oil theorist, Chip Haynes, writes exclusively for ELME about Saudi’s oil fields and the need for transparency.

53 Lifestyle: Your indispensable guide to discerning living.

56

DESTINATIONS: ELME visits Abu Dhabi’s stunning Emirates Palace Hotel, the jewel in Kempinski’s crown.

CONTENTS

ENERGY LIFE: • VOLUME 01 • ISSUE 02

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OPINION

Growth forecasts across the Middle East have been cut by analysts reacting to Standard & Poor’s down-grading of the US.

However, as the slower growth prediction comes late in the year, its impact

should be minimal in 2011, according to Ann Wyman of Japanese investment bank, Nomura.

Wyman, speaking to the FT newspaper, said Nomura anticipates a slowdown in Saudi’s economic growth from 4.5 per cent to 4 in 2012. As Saudi is the largest economy in the Arab world, it is the region’s barometer.

The Kingdom has previously said it will hike spending by hundreds of billions of dollars to create jobs and build infrastructure after the regional protests –which the Kingdom itself avoided. Plans announced include spending more than US$100 billion on power plants and electricity distribution networks by 2020, as domestic demand soars - by about 8 per cent a year for the foreseeable future.

Deutsche Bank recently suggested that every percentage point of lower global GDP growth is worth about one percentage point less oil demand.

But other analysts believe that even if demand falls substantially, prices could still be supported.

Oswald Clint, an analyst at Sanford C. Bernstein thinks Saudi Arabia may reduce its oil output sooner than it did after the financial crisis in 2008. He argues that the Saudi authorities need oil prices above $85 a barrel to meet their spending obligations – and this at a time when Saudi Arabia is pumping more oil than it has done in 30 years. Saudi Arabia has expanded oil production since the

spring by more than 1 million barrels a day, partly to cover the deficit caused by the halt in Libya’s oil production.

Meanwhile Commerzbank says the oil price recovery appears to be over already.

“Given the gloomier economic outlook in major consuming countries, there is no reason to be overly optimistic,” the German bank said in a recent report. “The latest figures suggest that economic growth in the US has already slowed down considerably.

“France has…reported an unexpected stagnation of GDP in the second quarter. Lending in China was more restricted than expected in July, which should mean lower oil demand there, as lower oil imports have already shown recently,” it said.

It seems market watchers – and market makers - are split on the future direction of prices. OPEC does not appear to be on the verge of calling an emergency meeting to tighten quotas ahead of its scheduled next meeting in December – and it is not expected to, unless Brent heads towards $90 a barrel.

Nomura’s Wyman also told the FT that she cut her 2012 Qatar forecast to 13.5 per cent from 14 per cent and reduced the United Arab Emirates’ forecast to 3.8 per cent from 4 per cent.

A lack of certainty over future oil prices is perceived as a brake to Gulf spending and growth. One analyst suggested that domestic spending can shield economic growth; but that domestic spending is surely reliant on healthy oil prices?

Some say Saudi will protect its economic growth by drawing down its foreign assets to finance the spending, as it did in 2009.

Wyman’s current forecasts for the UAE are in line with the International Monetary

ECONOMIC CO-DEPENDENCY WOES

Fund, though her forecasts for Saudi and Qatari growth next year are actually more optimistic than thoser proposed by the IMF.

Interestingly, while the US looks for ways to reduce reliance on Gulf energy supplies, it seems the economies of the GCC are just as reliant on the US: “The region‘s oil-dependent economies, dollar-pegged exchanges rates and sovereign wealth portfolios heavily invested in US treasuries are all affected by shifting perceptions of prospects for US and global growth as well as US creditworthiness,” Wyman wrote in her report.

For more on Wyman’s report, read: http://blogs.ft.com/beyond-brics/For more market analysis, read: www.telegraph.co.uk/finance/commodities

Will RankinEditor, Energy Life

Do you have an opinion you’d like to share with Energy Life Middle East? Get in touch at [email protected]

“A LACK OF CERTAINTY OVER FUTURE OIL PRICES IS PERCEIVED AS A BRAKE TO GULF SPENDING AND GROWTH.”

OPINION | ISSUE 02 | 2011


SYRIA Syria has found a promising gas field in the central governorate of Homs.

“The first wells were drilled at Qara in Homs governorate and the flow rate is 400,000 cubic meters per day,” Oil Minister Sufian Allawi was quoted as saying by state news agency SANA.

“This discovery opens new perspectives in the region of Qalamun and the Syrian company will continue its drilling,” said Allawi, adding that the field was located in the Basin of Dau. He said Syria’s natural gas production has reached 30.29 million cubic meters per day, up by 3 million cubic meters since last year. Oil production in Syria is about 380,000 barrels per day, Allawi added.

Syria has partially replaced oil with gas as fuel in its power stations – after falling crude production. The nation’s gas reserves, estimated at 284 billion cubic meters, may increase after new discoveries in many parts of the country, Allawi added.

Meanwhile lobby group Human Rights Watch said the European Union should freeze the assets of the Syrian National Oil Company, Syrian National Gas Company and the Central Bank of Syria until Damascus ‘ends gross human rights abuses against its citizens.’ The rights advocacy group said the state-run oil and gas companies have a 50 per cent share in every oil and gas project in Syria.

US Secretary of State Hillary Clinton has urged countries to stop buying Syrian oil and gas in a bid to pressure President Bashar Assad to end a brutal crackdown on protesters. “We urge those countries still buying Syrian oil and gas, those countries still sending Assad weapons, those countries whose political and economic support give him comfort in his brutality, to get on the right side of history,” Clinton said.

In a March 2010 report, the IMF estimated that Syria’s government earns around US$3 billion from oil and gas revenues every year. Most of Syria’s oil is used domestically, but it exports approximately 150,000 barrels per day. Around 95 percent of that goes to Europe, primarily to Italy, the Netherlands, France, and Germany.

New gas field fuels Syria’s domestic supply A rewarding night

INTELLIGENCE Shell’s gas plans for Iraq 13Pirates foiled by diplomacy 14Second quarter profits 15Statoil discovery 16Fluor gets $100m contract 17

SPE AWARDS

ABU DHABI Ali Al Jarwan, CEO, ADMA-OPCO and Ganesh Thakur, Vice President, Chevron, will be guests of honour at the Regional SPE Honours and Awards ceremony and dinner in Abu Dhabi this October.

The SPE Honours and Awards Programme recognises significant technical and profes-sional contributions to the worldwide oil and gas industry, the petroleum engineering profession, and exceptional service to the society and to the greater community.

Award categories include Regional Service Award, Regional Outstanding Young Member Award, Regional Distinguished Achievement Award for Petroleum Engineering Faculty, Technical Awards, and Distinguished Corpo-rate Support Awards.

The 2011 ceremony will recognise individ-uals whose leadership and passion have had an enduring impact on the industry. Awardees are nominated by peers and colleagues, and selected by the Regional Awards Committee against a set of multiple criteria.

Some 400 guests are expected, including key E&P professionals from ADCO, BHP Petroleum, Lufkin Industries, ONGC, Saudi Aramco, Schlumberger, Shell, The Petroleum Institute, and ZADCO.

Tickets to the event are available through the SPE website. Sponsorship opportunities are also available for this prestigious event. For more information, or to purchase tickets to the awards event, visit the Regional SPE Honours and Awards Ceremony’s website.

Schlumberger is an Associate Sponsor for this event. Energy Life Middle East is Offi-cial Media Supporter. The Regional SPE Honours and Awards Ceremony on Sunday, October 9, 2011, 7pm, Beach Rotana Hotel, Abu Dhabi www.spe.org/middleeast/awards

SYRIAN ENERGY CONTROVERSY


GLOBAL | INTELLIGENCEREGIONAL/GLOBAL | INTELLIGENCE

“WE URGE THOSE COUNTRIES STILL BUYING SYRIAN OIL AND GAS, THOSE COUNTRIES STILL SENDING ASSAD WEAPONS, THOSE COUNTRIES WHOSE POLITICAL AND ECONOMIC SUPPORT GIVE HIM COMFORT IN HIS BRUTALITY, TO GET ON THE RIGHT SIDE OF HISTORYHILLARY CLINTON, US SECRETARY OF STATE

1

Sunday, 9 October 2011Beach Rotana Hotel, Abu Dhabi, UAE

Join us to celebrate with your industry peers and clients and to reward outstanding achievements at the region’s finest oil and gas gathering and networking event.

The 2011 Regional SPE Honours and Awards Ceremony and Dinner will bring top industry figures together for an unforgettable evening where guests enjoy a lavish dinner, dazzling live entertainment and unique networking opportunities.

Date: Sunday, 9 October 2011

Venue: Beach Rotana Hotel, Abu Dhabi, UAE

Time: Welcome Reception: 1900–1930 hours

Awards Ceremony: 1930 hours onwards

Dress Code: Business/Smart

Sponsorship opportunities are available for this prestigious dinner. To Sponsor or to book your place, please email Samantha Armstrong at

[email protected] or call +971.4.457.5800 for more information.

Table of 10: USD 2,000

Individual ticket: USD 1

www.spe.org/middleeast/awards

50

Society of Petroleum Engineers

Official Media Supporter:

The 2011 Regional SPE Honours and Awards Ceremony and Dinner

BASRA GAS COMPANYQATAR BRAIN DRAIN?


QATAR The completion of megaprojects like Shell’s Pearl Gas-To-Liquids plant has resulted in the demobilisation of tens of thousands of workers in Qatar recently. Most of those who have left the country are construction personnel, though some remain on-hand for maintenance related work.

According to the latest report from energy industry recruitment portal, oilcareers.com, senior LNG experts without contracts are being snapped up by Rasgas and Qatargas in support of future LNG expansion projects, and any remaining candidates are now finding immediate employment in Asia Pacific or Australia.

“A massive petrochemical refinery project announced by Shell is expected to revitalise employment statistics in Qatar, though for the moment much of the design work is being handled elsewhere, and major staff increases are not expected until eight to twelve months from now,” said Oil Career’s MD, Mark Guest.

The demobilisation of significant numbers of expats in LNG and construction is welcome news for expertise hungry areas like Australia and Asia Pacific, the report suggests.

Of the demographic outbound from Qatar, many are native Australians returning home, where similar major project work has opened up during their time away. In spite of a universal Qatarisation programme from the government, offered by major employers in Qatar, the quotas are impossible to fill, so almost all the work is still being done by expats.

Global Oil and Gas Workforce Survey H2 2011, available at www.oilcareers.com

IRAQ Iraq’s gas deal with Shell to capture and exploit associated gas from its giant southern oil fields is expected to produce two billion cubic feet a day, according to an official agreement summary obtained by Dow Jones Newswires.

Iraq’s oil ministry signed a final draft deal with Shell and Japan’s Mitsubishi to develop gas production in southern Iraq in July. But to become valid the deal still

needs approval from Baghdad. The investment required for the 25-year

venture - in which Baghdad has 51 per cent, Shell 44 per cent and Mitsubishi 5 per cent - is US$17.2 billion, instead of the previously announced $12 billion, the document said.

Some US$12.8 billion will be spent on rehabilitation of existing infrastructure and new builds. An additional US$4.4 billion is required for an LNG facility, to be built by Shell and Mitsubishi.

The joint venture, Basra Gas Company (BGC), will deliver gas to Iraq’s domestic market to fuel-starved Iraqi power plants. Surplus gas will be exported. The planned LNG terminal would handle the export of 600mcf a day.

The JV will sell gas to Iraq’s state South Gas Company at international standard pricing. The crude and gas-linked pricing formula in the agreement summar y implies that, at Brent price of US$75 a barrel, the BGC would get US$3.22 per million British thermal units of dry gas sold to SGC. But the SGC would have to sell the gas it buys back from the joint venture at just $1.04/mmbtu to Iraqi power plants and industry, meaning the SGC would pay huge subsidies, which would further increase if global gas prices rise.

Iraq confidently estimates profits of around US$31.1 billion over the 25 years of the project from taxes, fees and raw gas sales to the J V , the document said.

Iraq is losing 1 billion cubic feet per day of gas through f laring, mostly from the south. The venture will help the country capture more than 700 million cubic feet per day of gas being burned off at three southern oilfields - Rumaila, Zubair and West Qurna Phase One.

Iraq, which has natural gas reserves totaling 112.6 trillion cubic feet, the tenth largest in the world, produces only around 1.5 billion cubic feet a day, with half of that amount f lared daily, because of lack of infrastructure to produce and market the gas.

Shell’s gas plans for IraqQatar’s employment shift

“IRAQ IS LOSING 1 BILLION CUBIC FEET PER DAY OF GAS THROUGH FLARING, MOSTLY FROM THE SOUTH. THE VENTURE WILL HELP THE COUNTRY CAPTURE MORE THAN 700 MILLION CUBIC FEET PER DAY OF GAS BEING BURNED OFF AT THREE SOUTHERN OILFIELDS - RUMAILA, ZUBAIR AND WEST QURNA PHASE ONE.”

REGIONAL/GLOBAL | INTELLIGENCE

“A MASSIVE PETROCHEMICAL REFINERY PROJECT ANNOUNCED BY SHELL IS EXPECTED TO REVITALISE EMPLOYMENT STATISTICS IN QATAR THOUGH FOR THE MOMENT MUCH OF THE DESIGN WORK IS BEING HANDLED ELSEWHERE”MARK GUEST, OIL CAREER’S MD

1

Sunday, 9 October 2011Beach Rotana Hotel, Abu Dhabi, UAE

Join us to celebrate with your industry peers and clients and to reward outstanding achievements at the region’s finest oil and gas gathering and networking event.

The 2011 Regional SPE Honours and Awards Ceremony and Dinner will bring top industry figures together for an unforgettable evening where guests enjoy a lavish dinner, dazzling live entertainment and unique networking opportunities.

Date: Sunday, 9 October 2011

Venue: Beach Rotana Hotel, Abu Dhabi, UAE

Time: Welcome Reception: 1900–1930 hours

Awards Ceremony: 1930 hours onwards

Dress Code: Business/Smart

Sponsorship opportunities are available for this prestigious dinner. To Sponsor or to book your place, please email Samantha Armstrong at

[email protected] or call +971.4.457.5800 for more information.

Table of 10: USD 2,000

Individual ticket: USD 1

www.spe.org/middleeast/awards

50

Society of Petroleum Engineers

Official Media Supporter:

The 2011 Regional SPE Honours and Awards Ceremony and Dinner

HIJACKS ON THE HIGH SEAS

UAE Flying UAE colours, oil tanker MV Jubaa XX was hijacked in mid-July by Somali pirates in the northern Indian Ocean, the European Union Naval Force Somalia (EUNAVFOR) confirmed.

It was later reported by the owners that the MV JUBBA XX was released on July 27 off the coast of Somalia following intervention by Puntland officials and tribal elders and all the 16-strong crew was safe.

Nine pirates descended on the tanker midway between Somalia’s northeast-ernmost tip, better known as the Horn of Africa, and the coast of Yemen.

The attack was the latest in a long string of acts of piracy on commercial shipping lanes in the region in recent years that have targeted particularly valuable oil tankers with cargoes worth millions of dollars.

The 4,831-tonne vessel is much smaller than the giant tankers that haul millions of barrels of crude oil around the world, but was still fully laden when hijacked.

According to a statement issued by Commander Harrie Harrison, Royal Navy spokesperson for EUNAVFOR, nine pirates somehow managed to overpower the tanker’s crew.

“Late on the morning of July 16, it was reported by the owners that the MV Jubaa XX, a laden tanker, had been pirated in the northern Indian Ocean, on her regular route from the UAE to the port of Berbera, Somalia,” said the naval force statement.

“On the morning of July 17, the vessel was located by a Maritime Patrol aircraft 100 nautical miles north-west of Socotra Island, heading to the northern Somali coast. Little information is available at present but it is reported that nine suspected Somali pirates are on board.”

European Union Naval Force Somalia — Operation Atalanta is a military operation tasked to keep blue water areas around Somalia and the east coast of Africa free from pirate attacks and conducts opera-tions under the authority of United Nations Security Council resolutions.

The naval force mission “has been extended until December 2012,” officials said.

The spiralling incidence of piracy on Somalia’s coast is being fuelled by drought, poverty and the lack of a recognised government in the destitute African nation.

The European Union Naval Force Somalia, meanwhile, said it is working to protect ships carrying goods for the World Food Programme, humanitarian aid and African Union Mission in Somalia (AMISOM).

“Contributions from third countries such as Norway are participating as well. Also, a number of Cypriot, Irish, Maltese and Finnish military personnel supplement the team at the Northwood Operation headquarters,” the naval force said on its website.

LOSSESOF$16BAYEARPiracy remains a significant issue (with estimated worldwide losses of $13-$16 billion per year), particularly in the waters between the Red Sea and Indian Ocean, off

Pirates foiled by diplomacy

the Somali coast, and also in the Strait of Malacca and Singapore, which are used by over 50,000 commercial ships annually.

A recent surge in piracy off the Somali coast spurred a multi-national effort led by the United States to patrol the waters near the Horn of Africa.

Modern pirates favour small boats and take advantage of the small number of crew on modern cargo vessels. They also use large vessels to supply the smaller attack/boarding vessels.

Major shipping routes take cargo ships through narrow bodies of water (such as the Gulf of Aden and the Strait of Malacca) making them vulnerable to be overtaken and boarded by small motorboats.

Other active areas include the South China Sea and the Niger Delta. As usage increases, many of these ships have to lower cruising speeds to allow for navigation and traffic control, making them prime targets for piracy.


REGIONAL/GLOBAL | INTELLIGENCE

increase in net profit - compared to US$4.39 billion a year earlier. The figure was helped by a $1.44 billion gain booked on a mix of tax credits, trading activities, and asset sales.

BPMeanwhile European rival BP said its profits for the second quarter of the year were also up, but only by 13 per cent year-on-year, to US$5.6 billion.

Higher oil and gas prices and stronger refining margins supported the higher earnings despite sharply lower production due to asset sales and higher costs.

The announcement failed to inspire investors, after its adjusted earnings missed market expectations - and the company faces pressure to undergo a structural shake-up in the wake of the Gulf of Mexico oil spill last year.

Adding in the spill-related charges, BP’s replacement cost profit for the quarter was $5.31 billion, compared to a record $16.97 billion loss in the same period of 2010 when BP took a $32 billion charge for the Gulf spill.

BP said it believes it is making “rapid progress” against its priorities amid a “year of consolidation as we reset the focus of the company.”

ROSNEFTMeanwhile, Russia’s energy giant Rosneft’s revenues grew by more than 1.5 times year-on-year to US$23.274 billion in 2Q 2011. The increase was primarily attributable to higher crude oil prices, and growth of production and refinery throughput. In 1H 2011, revenues reached US$ 43.397 billion, an impressive 44 per cent higher compared to the first half of 2010.

SECOND QUARTER PROFITS

Energy companies globally reported high profits for the second quarter and first half of the year, bucking the recessionary trend and benefitting from the increased energy prices.

Chevron, the second-largest US oil company, reported a 43 per cent jump in quarterly profit, beating Wall Street forecasts as high oil prices and fat refinery margins offset a drop in its oil output. Its Q2 profits rose to US$7.7 billion, from $5.4 billion a year earlier. Revenue rose 30 per cent to US$69 billion.

Chevron’s surging earnings were the latest in a string of huge profit announce-ments from the industry – clearly reaping the benefits of oil prices standing at their highest since 2008.

Chevron’s better-than-expected profit was largely due to a strong performance by its global refinery operations. But oil and gas production yielded nearly 90 per cent of the company’s profits.

Chevron reported 2.69 million bpd of oil-equivalent production, compared with 2.75 million a year ago.

European benchmark Brent oil prices averaged US$117 per barrel in the second quarter, up from $79 in the same quarter in 2010 and US$11 higher than the first quarter. Chevron switched to Brent in April from the US benchmark when calculating production-sharing changes.

EXXONExxon Mobil reported a 41 per cent increase in quarterly profit, driven by higher crude oil prices and increased refining margins. However, earnings per share missed analysts’ expectations, while revenues beat their estimates.

The company’s net income for the second quarter was US$10.68 billion, up from $7.56 billion in Q2 last year.

Total revenues and other income for the quarter grew 36 percent to US$125.49 billion from $92.49 billion in Q2 last year.

SHELLRoyal Dutch Shell, Europe’s largest oil company, posted Q2 profit of US$8.66

billion. “Without the distractions which have plagued arch rival BP, Shell has been able to capitalise on higher energy prices and the bottom line performance is stark confirmation of the gap between the two,” said Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers, in a note on the earnings. “Shell is also looking further ahead, with a major investment program over the next three years already underway in countries such as Canada and Qatar.”

Shell’s profits were boosted by higher oil prices and new production from Canadian oil sands and natural gas in Qatar.

Shell plans to begin drilling next year in Alaska, and to regain lost production in the Gulf of Mexico, as global production fell 2 per cent to 3.05 million barrels per day. Output in the gulf, which is still recovering from a moratorium after last year’s deep water blowout, is around 200,000 barrels per day - 50,000 below normal.

Second quarter results showed a 97 percent

Big players put in energetic performances

Profits at a glance

Chevron US$ 7.7 billionExxon US$10.68 billionShell US$8.6 billionBP US$5.6 billionRosneft US$23.274 billion

CONSTRUCTION AT THE SHELL GTL PEARL PROJECT, QATAR 2009


GLOBAL | INTELLIGENCE

FUTURE ENERGY FOR NORWAY BRENT FIELD RESTARTS

UK Communication between the Aldous and Avaldsnes oil discoveries on the Utsira High in the North Sea has now confirmed that combined, these discoveries may represent an oil structure of between 500 million and 1.2 billion barrels of recoverable oil equivalent.

If the upper part of the interval strikes pay dirt, the discovery will be one of the ten largest oil finds ever on the Norwegian continental shelf (NCS). Norway’s Statoil has a 40 per cent stake both in licence PL 265, where Aldous was discovered, and in PL 501, where the Avaldsnes discovery was made.

“Aldous/Avaldsnes is a giant oil discovery, and according to our estimates the combined discovery may make the top ten list of NCS oil discoveries. Norway has not seen a similar oil discovery since the mid-eighties” says Tim Dodson, Statoil’s executive VP for Exploration.

This is the third “high-impact discovery”* for Statoil in 2011. In April, the 250 million barrel Skrugard oil discovery was made in the Barents Sea, and the 150-300 million barrel Peregrino South oil f ield was discovered offshore Brazil.

“The discoveries are a result of Statoil’s exploration strategy of prioritising high-impact opportunities, while focusing on our established core areas,” says Dodson.

The company announced in early August that a minimum 65-metre oil column has been confirmed in Aldous Major South well 16/2-8 in the North Sea. The discovery was made in Jurassic sandstone in a very good quality reservoir consisting of coarse-grained, unconsolidated sand.

The well has also established common oil/water contact between the Aldous and Avaldsnes structures. According to prelim-inary estimates the combined discovery in the two licences totals between 500 million and 1.2 billion barrels of recov-erable oil equivalent. Between 200 and 400 million barrels of these resources have been discovered in well 16/2-8, with strong indi-cations from well data of another 200 to 400 million barrels of recoverable oil equivalent in the same structure, whereas a resource

base of 100 to 400 barrels previously has been estimated in the Avaldsnes structure.

The well was drilled by the Transocean Leader drilling rig, which soon will spud Aldous Major North well 16/2-9 to clarify the further potential and any communi-cation with Aldous/Avaldsnes. In addition the partners plan further appraisal drilling in licence PL 265 next year to clarify the full volume potential for a future

UK Shell has announced production has restarted in its Brent field after a seven month shutdown for safety reasons. Brent Bravo, which lies 150 miles north east of Shetland, and Brent Alpha are again working. It is expected Brent Delta will resume in the near future and Brent Charlie will restart early next year.

The platforms were closed in January as a precaution after one of the fenders protecting the platform from service vessels fell into the sea. All non-essential staff were evacuated and nobody was harmed. Production was halted at platforms A, B, C and D.

The Brent Alpha, Bravo, Charlie and Delta platforms, located in UKCS Block 210/29, produce around 4.5 million cubic metres of gas per day, 2 per cent of British gas require-ments, and 20,000 barrels of oil per day, equivalent to 1 per cent of UK oil demand, Shell said at the time of the shutdown.

Massive North Sea discovery Shell’s Brent field resumes production

development solution.“The NCS is a world-class petroleum

province. The Aldous/Avaldsnes discoveries are evidence that the NCS is still attractive. Making a discovery of this size in a mature area shows that exploration is all about perseverance, creativity and obtaining new knowledge,” says Dodson.

Aldous Major South is located in licence 265. Statoil is the operator and has a 40 per cent interest. The other partners are Petoro (30 per cent), Det norske oljeselskap (20 per cent) and Lundin (10 per cent).

Avaldsnes is located in licence 501. Lundin is the operator and has a 40 per cent interest, whereas partners Statoil and Mærsk have 40 per cent and 20 per cent interests, respectively.

*”High-impact discovery” = a total of more than 250 million barrels of oil equiv-alent, or 100 million net barrels of oil equivalent to Statoil.P

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]


INTELLIGENCE | GLOBAL

“THE NCS IS A WORLD-CLASS PETROLEUM PROVINCE. THE ALDOUS/AVALDSNES DISCOVERIES ARE EVIDENCE THAT THE NCS IS STILL ATTRACTIVE. MAKING A DISCOVERY OF THIS SIZE IN A MATURE AREA SHOWS THAT EXPLORATION IS ALL ABOUT PERSEVERANCE, CREATIVITY AND OBTAINING NEW KNOWLEDGE.”TIM DODSON, STATOIL EXECUTIVE VP FOR EXPLORATION

CASPIAN PIPELINE EXPANSION PROJECT FINANCE

Fluor has been awarded a contract by Chevron Neftegaz - one of three project managers engaged by the Caspian Pipeline Consortium - for its recently announced expansion project. Fluor will provide project services for the marine terminal and supervisory control and data system (SCADA) portions of the Caspian Pipeline Expansion project.

The pipeline begins in western Kazakhstan and runs 1,510 kilometers west to the terminal in Novorossiysk, Russia, on the Black Sea. Fluor booked US$100 million into backlog in the second quarter.

“This pipeline expansion is a vital first step to pave the way for numerous additional crude oil production expansion projects in the region,” said Peter Oosterveer, president of Fluor’s Energy & Chemicals Group. “As the original programme management contractor for the first phase of the Caspian Pipeline project - which involved refurbishing more than 700 kilometers of pipeline and building an additional 740 kilometers - we’re pleased in the confidence the client consortium has again placed in us. This expansion of the Caspian pipeline and terminal to increase oil transportation capacity is crucial to Russia, Kazakhstan and European economic stability and to meet energy demand.”

As the project services contractor, Fluor is providing oversight assistance for the deepwater marine terminal expansion in Novorossiysk as well as the SCADA system for the entire pipeline. The project is scheduled to be completed at the end of 2014.

Fluor completed the first phase of this pipeline project with the first crude oil loaded onto a tanker at the marine terminal in October 2001.

VIETNAM: PetroVietnam Gas Corp is in talks to raise up to US$700 million in foreign loans for a US$1 billion liquefied natural gas terminal in what would be the fifth overseas borrowing by a Vietnamese company since the near- collapse of the country’s largest shipbuilder in December, according to Bloomberg.

Ho Chi Minh City-based PetroVietnam Gas, also known as PV Gas, plans to start construction of the LNG terminal by 2012, general director Do Khang Ninh said. The company is in discussions with more than ten suppliers, including Qatar Liquefied Gas Co, as it seeks to boost imports of the fuel and meet Vietnam’s rapidly rising demand for energy, he said.

Fluor gets US$100m Caspian pipeline contract

PetroVietnam Gas to borrow $700m for LNG

“THE COMPANY IS IN DISCUSSIONS WITH MORE THAN TEN SUPPLIERS, INCLUDING QATAR LIQUEFIED GAS CO, AS IT SEEKS TO BOOST IMPORTS OF THE FUEL AND MEET VIETNAM’S RAPIDLY RISING DEMAND FOR ENERGY”

THIS PIPELINE EXPANSION IS A VITAL FIRST STEP TO PAVE THE WAY FOR NUMEROUS ADDITIONAL CRUDE OIL PRODUCTION EXPANSION PROJECTS IN THE REGION”PETER OOSTERVEER, FLUOR ENERGY & CHEMICALS GROUP PRESIDENT


GLOBAL | INTELLIGENCE

COUNTRY FOCUS | IRAN


IRAN | COUNTRY FOCUS


A senior Iranian oil official recently announced the Republic has achieved 98.8 per cent of its crude oil production plans in the first 100 days of the current Iranian year (which started on March 21).

NIOC Director for Oil and Gas Production Supervision Massoud Jabbari said in the production sector, 99.1 per cent of plans for onshore and mainland fields and 97.1 percent of plans for offshore fields, have been achieved by NIOC.

Iran is widely considered to hold the world’s second largest reserves of both oil and gas, and gets the majority of its revenue from exporting crude oil.

The International Monetary Fund recently suggested Iran would experience a 25 per cent growth in its oil revenues this year and the country’s oil income would amount to $97 billion in 2011.

In the latest edition of the World Economic Outlook report produced by the IMF, forecasts declare that Iran’s oil income will rise by some US$25 billion in 2011, compared to 2010, to reach US$97 billion.

Iran - two steps forwards, two

steps back

A growing population, sanctions, a burgeoning nuclear power industry and half the world

desperate for its vast energy supplies - Iran is never out of the news. Will Rankin takes a look.

commercial activity in Iran.The GAO says it identified 16 foreign

companies with commercial activity in Iran’s oil, gas and petrochemicals sectors between January 2010 and May 2011.

“Twenty of the 41 firms listed in our 2010 report declared in their public reporting or in letters to GAO, which were also confirmed by [the] State [Department], that they have with-drawn or are withdrawing from commercial activity in Iran’s energy sector,” the report adds.

Companies cited US sanctions, and those of other international organisations, as just one of the reasons for halting activity in Iran. Many also listed the difficulty associated with doing business with Iran as another reason for halting business, as well as the simple fact of contracts coming to an end.

Companies listed as being active in Iran’s oil, gas and petrochemicals sectors during the 2010-2011 period are: Belneftekhim/Belarusneft; China’s CNOOC, CNPC and Sinopec; South Korea’s Daelim and Hyundai Heavy Industries; Italy’s Edison; Croatia’s INA; India’s IOC, ONGC, Oil India Ltd, ONGC Videsh; Austria’s OMV; Petroleos de Vene-

zuela; South Africa’s Sasol; and Angola’s Sonangol.

Among the 20 companies listed as having withdrawn from Iran are: Italy’s Eni and Snamprogetti; Japan’s Inpex and JGC Corpo-ration; Russia’s Lukoil; Brazil’s Petrobras; Thailand’s PTT Exploration and Production; Spain’s Repsol; the Netherlands’ Royal Dutch Shell; Norway’s StatoilHydro; France’s Total; and Turkish Petroleum.

PRODUCTION UPHead of the Iranian Union of Exporters of Oil, Gas and Petrochemical Products Hamid Hosseini says the country has boosted exports of its oil, gas and petrochemical products by 30 per cent year-on-year in the first three months of the current Iranian year ( which started on March 21).

Exports of oil, gas and petrochemical products amounted to US$3.81 billion during this period, Hosseini said.

Iran exported around 14 million tonnes of petrochemical products worth more than US$12 billion in 2010.

The country inaugurated a number of petro-chemical projects in Khuzestan province,

IOCS – THERE OR NOT?The republic faces US sanctions over its civilian nuclear programme. But Iranian officials, who are pushing ahead with ambi-tious energy industry expansion plans, have dismissed US sanctions as inefficient, suggesting they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing oil and gas deals.

Following US pressures on companies to stop business with Tehran – mostly via the US Comprehensive Iran Sanctions, Accountability and Divestment (CISADA) Act - many western companies have tried to do a balancing act; maintaining a presence in Iran, but not getting into deals so large that their US interests would become endangered. US sanctions legislation punishes foreign companies investing more than US$20 million in Iran’s energy sector.

But according to a recent report from the US Congress’s Government Accountability Office (GAO), foreign oil company activity in Iran has plunged in the past year. The report says half of the 41 companies identified in a previous report in early 2010 had withdrawn or were in the process of withdrawing from



southwestern Iran in February in the presence of President Mahmoud Ahmadinejad.

One of the projects, the Amir Kabir polyeth-ylene plant, valued at US$310 million, has a production capacity of 300,000 tonnes a year.

In May, First Vice-President Mohammad Reza Rahimi told delegates at the ninth International Petrochemical Forum that Iran plans to double the volume of petrochemical products by building dozens of production units across the country.

DISCOVERYIn late June, the National Iranian Oil Co announced the discovery of a ‘huge’ crude oil and gas reserve in the region of Assaluyeh in the southern part of the Islamic republic, Mehr news reported. The company said the studies show the region holds around 260 billion cubic meters of natural gas. Iran’s oil and liquid gas reserves are estimated at 700 billion barrels.

RELIABLE PAYMENTSDespite Iran’s confidence that it can supply crude and gas to countries unaffected or unwilling to respond to the US sanctions, an on-going battle over non-payment for crude by India has only recently been resolved.

Iran hopes oil deliveries to India will return to a normal level now the long-running payment problem has been resolved, the head of international affairs at the National Iranian Oil Co. said in an interview with semi-official Fars news agency.

Mohsen Ghamsari confirmed that its Indian customers had started to pay debts that had built up over the year, and said any perceived slowdown in supply in August due to the dispute was now over.

He said he hoped to get back to the supply arrnagmeent, which saw an average daily export of some 400,000 barrels per day from Iran to India.

Iran denied it halted shipments to India, but refiners there said they did not get supply notices for the month. Ghamsari said: “Oil exports to India have not been halted. Of course it is possible that these exports have been reduced because we needed to organise our financial situation.”

Indian Finance Minister Pranab Mukherjee also told media that India and Iran had resolved their problem over payments, which started at the end of last year when, under US

pressure, the Reserve Bank of India scrapped a long-standing regional clearing house mech-anism, via a German bank.

Ghamsari confirmed that Iran had received at least 1 billion euros of the US$5 billion debt. Iranian media quoted an Iranian central bank official as saying 40 percent of the debt had been paid.

The new payment mechanism uses Turkey’s state-owned Halkbank to route payments to Iran - described as a potentially vulnerable point if the US applies pressure on Turkey to close the conduit.

FRIENDS ELSEWHEREWhile Iranian officials work to chase India’s debt, they are also hard at work making friends in other places. Iranian and Nigerian officials held a recent meeting in Abuja, where, having stressed both countries’ abundant potential and rich resources, announced plans to “exchange experiences” in industrial, devel-opmental, technological and energy sectors.

Iran’s Minister of Foreign Affairs Ali-Akbar Salehi was in Nigeria to participate in a conference of the D-8 Foreign Ministers, and held a meeting with his newly-appointed Nigerian counterpart Ulubnega Ashiru.

The ministers spoke about “further acti-vation” of commercial and private sector firms and activities of the two countries’ merchants through expert delegations to each other’s countries.

“COMPANIES CITED US SANCTIONS, AND THOSE OF OTHER INTERNATIONAL ORGANISATIONS, AS JUST ONE OF THE REASONS FOR HALTING ACTIVITY IN IRAN.”

IRAN | COUNTRY FOCUS


The Iranian and Nigerian foreign ministers also talked on other miscellaneous issues, such as regional and international develop-ments, including the United Nations, OPEC, the OIC and the D-8, which comprises eight Islamic developing countries.

NUCLEAR PROLIFERATIONExperts from Iran and the International Atomic Energy Agency (IAEA) are due to hold talks in a bid to explore ways of increasing cooperation between Tehran and the UN nuclear watchdog, according to Foreign Minister Ali Akbar Salehi.

Speaking to reporters after meeting IAEA Chief Yukiya Amano in Vienna, Salehi described his talks with Amano as positive, and said, “It was decided that the two sides’ experts hold meetings and find a mechanism for further co-operation on Iran’s nuclear issue

so that the existing misunderstandings will be removed properly.”

Stressing that Iran’s nuclear case should have been closed long time ago, he said the main points of difference between Iran and the IAEA have been resolved.

Iran has rejected frequent allegations made against it regarding military use of the nuclear technology.

Tehran has repeatedly said that it considers its nuclear case closed, answering the IAEA’s questions.

Iran says its nuclear program is a peaceful drive to produce electricity so that the world’s fourth-largest crude exporter can sell more of its oil and gas abroad, and provide power to the growing population.

Meanwhile, Iran’s Atomic Energy Organ-isation Director Fereydoun Abbasi-Davani has announced the Bushehr nuclear power plant will be connected to the national grid by the end of the holy month of Ramadan (August 31), after Energy Life Middle East

goes to press. Once connected, the plant will generate 40

per cent of its total power capability, Abbasi-Davani told media.

The power plant first was launched in August 2010, as engineers loaded 163 fuel rods into the reactor under the supervision of the International Atomic Energy Agency.

Abbasi said Iranian officials have empha-sised that the plant will have the highest level of safety, particularly after the incident at Japan’s Fukoshima power plant.

The plant, located near the port city of Bushehr on the coast of the Persian Gulf, will produce 1000 megawatts of electricity once fully operational.

With such large reserves, a global market with enough countries willing to trade with Iran, and a growing population, Iran’s future looks bright – sanctions or not.

“IT WAS DECIDED THAT THE TWO SIDES’ EXPERTS HOLD MEETINGS AND FIND A MECHANISM FOR FURTHER CO-OPERATION ON IRAN’S NUCLEAR ISSUE SO THAT THE EXISTING MISUNDERSTANDINGS WILL BE REMOVED PROPERLY.”

Come and join us in this cosy little bar for an evening of social networking, complimented with a fine selection of expertly selected cheese and wine from around the world. Present on the evening will be a sommelier from the MMI wine team for exclusive wine tasting sponsored by MMI.

energizing your business

The EIC is proud to be organising and managing the UK National Pavilion at the 20th World Petroleum Congress (WPC).

Following the success of the 2011 EIC Middle East Golf Championship, the Par 72 Baker-Finch designed Arabian Ranches Golf Club will once again play host to the EIC Middle East Golf Championship.

EIC 2012 GOLF

CHAMPIONSHIP

1st March 2012

Arabian Ranches Golf

Course, Dubai.

>>>>>>>>>>>>>>>>

MIDDLE EAST NETWORKING & SOCIAL NIGHT23rd August 2011 Vintage Wine Bar, Wafi City, Dubai>>>>>>>>>>>>>>

FOR MORE DETAILS PLEASE VISIT WWW.THE-EIC.COM

The benefits of exhibiting through the UK Group are: Prime location for the UK Group at the show Innovative UK branded stand design to draw visitors to the Group Your own specially designed and furnished stand within the UK Group The use of a private Group lounge Promotion of the Group through various publications/press releases Entry for each exhibitor in the Guide to UK Group Brochure Dedicated project manager to assist prior to and onsite at the show Dedicated travel and freight packages Experienced organisation

20TH WORLD

PETROLEUM

CONGRESS (WPC)

4-8 December 2011

Doha, Qatar

>>>>>>>>>>>>>>>>



Come and join us in this cosy little bar for an evening of social networking, complimented with a fine selection of expertly selected cheese and wine from around the world. Present on the evening will be a sommelier from the MMI wine team for exclusive wine tasting sponsored by MMI.

energizing your business

The EIC is proud to be organising and managing the UK National Pavilion at the 20th World Petroleum Congress (WPC).

Following the success of the 2011 EIC Middle East Golf Championship, the Par 72 Baker-Finch designed Arabian Ranches Golf Club will once again play host to the EIC Middle East Golf Championship.

EIC 2012 GOLF

CHAMPIONSHIP

1st March 2012

Arabian Ranches Golf

Course, Dubai.

>>>>>>>>>>>>>>>>

MIDDLE EAST NETWORKING & SOCIAL NIGHT23rd August 2011 Vintage Wine Bar, Wafi City, Dubai>>>>>>>>>>>>>>

FOR MORE DETAILS PLEASE VISIT WWW.THE-EIC.COM

The benefits of exhibiting through the UK Group are: Prime location for the UK Group at the show Innovative UK branded stand design to draw visitors to the Group Your own specially designed and furnished stand within the UK Group The use of a private Group lounge Promotion of the Group through various publications/press releases Entry for each exhibitor in the Guide to UK Group Brochure Dedicated project manager to assist prior to and onsite at the show Dedicated travel and freight packages Experienced organisation

20TH WORLD

PETROLEUM

CONGRESS (WPC)

4-8 December 2011

Doha, Qatar

>>>>>>>>>>>>>>>>

COVER STORY | KARL FEILDER


KARL FEILDER | COVER STORYKARL FEILDER | COVER STORY


BEING NEUTRAL

WITH PASSION

When Energy Life Middle East first heard fast food chain McDonalds was powering its trucks with used cooking oil, we thought we’d misheard. Not only is that true, but we tracked down the man behind the group that turns fat into fuel – and is advising some of the region’s leading companies on how to become carbon neutral. Will Rankin chatted with Neutral Group’s Karl Feilder.

Give us a brief overview of Neutral Fuels...Neutral Fuels LLC, a joint venture between The Neutral Group and

Abdulla Al Jallaf, (a young Emirati entre-preneur) who is a member of the Mohammed Bin Rashid Establishment for SME Devel-opment, has obtained unique permission from the Dubai Ruler’s Court to be the first producer of biodiesel in the Middle East, using Used Cooking Oil (vegetable oil) as the raw material.

Neutral Fuels is part of The Neutral Group, an international clean tech organisation founded in 2006 by a team of experienced international business people, which has assessed many vehicle fleets and more than 2800 industrial buildings, offices, and hotels. The Neutral Group specialises in the optimi-

PH

OTO

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something “truly significant” as I had previ-ously been very successful in the IT industry, but felt that the global challenges of peak oil, energy price increases, and climate change presented a “perfect storm” of challenges to large organisations. We founded The Neutral Group to assist large organisation with these three issues, coming at the problem from a somewhat unique “business oriented” approach – saving carbon saves costs.

Is the Middle East behind in terms of awareness of carbon offsetting/carbon neutrality?For many years, energy and fuel prices in the Middle East have been some of the lowest in the world, which has created a care-free attitude to usage. Now that the prices have risen to almost equal to any other economy

sation of energy and sustainability param-eters for the global supply chain industry.

In the last four years, The Neutral Group has worked with some of the world’s best known brands to improve their operational efficiency and sustainability footprint. The Neutral Group’s international customers include DHL, British American Tobacco, Lockheed Martin, McDonald’s, IKEA, Kraft, and Marks & Spencer .

The Neutral Group has been operating in the UAE since 2008, working closely with the Dubai Government (since 2009) and becoming the first licensed sustainability consultancy to be based at the prestigious carbon zero Masdar City in Abu Dhabi.

How did you get into the business?In 2006 my wife suggested that I should do

“FOR MANY YEARS, ENERGY AND FUEL PRICES IN THE MIDDLE EAST HAVE BEEN SOME OF THE LOWEST IN THE WORLD, WHICH HAS CREATED A CARE-FREE ATTITUDE TO USAGE.”

WALKING THE TALK – FEILDER’S VEHICLE, AN UNMODIFIED LAND ROVER TD5, IS THE ONLY 100% BIODIESEL -POWERED CAR IN THE UAE.

KARL FEILDER | COVER STORY


in the developed world, the focus on elec-tricity, water, and fuel spending has risen towards the top of most corporate agendas.

The Middle East has been slow to see this change coming, with many not wanting to believe that the era of cheap fuel and elec-tricity is over, but now that it has become clear that this is indeed the case, The Middle East has embraced energy and fuel efficiency as business critical.

The UAE is a signatory to the Kyoto treaty, is developing the world’s only carbon-neutral city (Masdar) and the vast solar power plant at Madinat Zayed is underway, yet there seems to be a perception that it’s behind in terms of environmental awareness. What’s your take on this? What do we need to do?The first step in any energy efficiency project is to appoint the most senior person possible to lead and sponsor the programme. In many cases, we have worked with CEO, COO, CFO or other board level members who appreciate that this is not a trivial task. In most cases these projects require a complete rethink of the way the business operates.

Having appointed a programme sponsor, the initial requirement is to measure the baseline. In the early days, many thought that an annual baseline would be sufficient, but now realise that monthly and even weekly baseline updates are required to measure and manage change. This may sound over the top, but we have found that those organisations that have the most frequent data collection, tend to also produce the best cost savings.

Is a lot of your consulting work here educa-tional? Do you work more with multina-tionals or local/regional companies, or both?During the initial stages of our work within any large organisation we quickly identify the key stakeholders, and rapidly bring them up to speed. In fact there is not much general education required – senior managers quickly realise that energy and fuel saving is a fast, relatively simple way of improving bottom line profits by double digit percentages. The minute detail of how to do this takes a lot longer to understand, but thankfully we have some great case studies which show where and how we have done it before.

“THE FIRST STEP IN ANY ENERGY EFFICIENCY PROJECT IS TO APPOINT THE MOST SENIOR PERSON POSSIBLE TO LEAD AND SPONSOR THE PROGRAMME.”

Do companies save money through becoming carbon neutral? Carbon neutrality is rarely the goal – espe-cially in The Middle East. In fact most companies quickly grasp that with a reliable baseline, they can implement measurable monthly cost savings, and then they see the multi-year opportunities. In most cases, busi-nesses express their goals as x% reduction in actual carbon or energy usage by 2020, or y% reduction in carbon per revenue unit by 2020.

Are biofuels the way forward? The McDonalds deal was a ground breaking one here, but how far are we behind the rest of the world? Should individuals here be looking at using biofuels, and how hard is it to create biofuels at home? Do you need a licence? Much modification to a vehicle?Biodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl (methyl, propyl or ethyl) esters. Biodiesel is typically made by chemically reacting lipids (such as vegetable oil oranimal fat) with an alcohol such as methanol.

Trans-esterification of a vegetable oil was conducted as early as 1853 by scientists E. Duffy and J. Patrick, many years before the first diesel engine became functional. Rudolf Diesel’s prime model, a single 10ft (3m) iron cylinder with a flywheel at its base, ran on its own power for the first time in Augsburg, Germany, on August 10, 1893 running on nothing but peanut oil. In remembrance of this event, August 10 has been declared “Interna-tional Biodiesel Day”.

Chemically, trans-esterified biodiesel comprises a mix of mono-alkyl esters of long chain fatty acids. The most common form uses methanol (converted to sodium meth-oxide) to produce methyl esters (commonly referred to as Fatty Acid Methyl Ester - FAME) as it is the cheapest alcohol available, though ethanol can be used to produce an ethyl ester (commonly referred to as Fatty Acid Ethyl Ester - FAEE) biodiesel and higher alcohols such as isopropanol and butanol have also been used. Using alcohols of higher molecular weights improves the cold flow properties of the resulting ester, at the cost of a less effi-cient trans-esterification reaction. A lipid trans-esterification production process is used to convert the base oil to the desired esters. Any free fatty acids (FFAs) in the base oil

iadc.indd 1 8/18/11 11:38 AM



are either converted to soap and removed from the process, or they are esterified (yielding more biodiesel) using an acidic catalyst. After this processing, unlike straight vegetable oil, biodiesel has combustion prop-erties very similar to those of petroleum diesel, and can replace it in most current uses.

Biodiesel is meant to be used in standard diesel engines and is distinct from the vege-table and waste oils used to fuel converted diesel engines. Biodiesel can be used alone, or blended with petrodiesel.

Biodiesel has better lubricating properties and a higher cetane ratings than today’s lower sulphur diesel fuels. Biodiesel addition reduces fuel system wear, and in some high pressure systems increases the life of the fuel injection equipment that relies on the fuel for its lubrication.

Making biodiesel at home is probably too much effort, and the chemicals are quite dangerous. To make or sell biodiesel in the UAE requires a special licence from the government.

If I buy into biofuels, aren’t local fuel supply companies going to make it hard for me? Will we see biofuel filling stations in the UAE?It is very unlikely that biofuels will take over from traditional mineral diesel in this region. The main reason is the scarcity of good quality feedstock (raw ingredients). The only low carbon supply of suitable feedstock is Used Cooking Oil or waste animal fats, and there is simply not enough [of either] in the UAE to open biodiesel filling stations.

If we used virgin oils, it would be both

ecologically undesirable, and more expensive than fossil fuels. The early stage projects with other sources of oils – usually plants and algae, are showing some promise, but we are still quite a few years from being able to “grow” biofuels on non-arable land in a cost efficient way.

There has been a lot of reporting about how carbon offsetting by planting trees is inef-fective. (The ‘Coldplay’ forest springs to mind) Do you agree, and can you explain this?I am not the right person to opine on carbon offsetting – our business is about assisting organisations to make financially viable positive changes which also benefit the envi-ronment – many of the carbon offset projects don’t fit into that remit.

Dubai Global Energy Forum stated that the emirate needs to reduce reliance on tradi-tional fuels, and hopes to see some 30 per cent of its energy needs provided by coal, nuclear energy and renewable sources by 2030. Do you think this is feasible? It is certainly possible – my personal favourite has always been wind power. There has been a successful large wind turbine operating on Sir Bani Yas island for a few years, and yet people still tell me (incorrectly) that there is insufficient wind in the UAE for wind power.

We agree that carbon neutrality works, but isn’t a better model to set out to minimise carbon production in the first place? And isn’t carbon offsetting merely a conscience-salving exercise for those looking to improve their public profile in terms of CSR?As I have previously said, we specialise in saving money and saving carbon footprint. Projects which are aimed at pure marketing image usually fail, and usually damage the brand in the medium term.

Who’s doing it well? Who’s got it right?It’s hard to say that anyone has got it all right, but clearly the organisations we are working with are a long way ahead of many others.

Can energy companies really become carbon neutral?Yes, but it may take longer than a decade and require substantial changes in the organisation.

“IT’S HARD TO SAY THAT ANYONE HAS GOT IT ALL RIGHT, BUT CLEARLY THE ORGANISATIONS WE ARE WORKING WITH ARE A LONG WAY AHEAD OF MANY OTHERS.”

iadc.indd 1 8/18/11 11:38 AM

On average, 99.5%of fracturing �uids are

comprised of freshwater and compounds are injected into

deep shale gas formations and are typically con�ned by many

thousands of feet or rock layers.

Compound* Purpose Common application

Acids Helps dissolve minerals and initiate �ssure in rock (pre-fracture) Swimming pool cleaner

Glutaraldehyde Eliminates bacteria in the water Disinfectant; Sterilizer for medical and dental equipment

Sodium Chloride Allows a delayed break down of the gel polymer chains Table Salt

N, n-Dimethyl formamide Prevents the corrosion of the pipe Used in pharmaceuticals, acrylic �bers and plastics

Borate salts Maintains �uid viscosity as temperature increases

Used in laundry detergents, hand soaps and cosmetics

Polyacrylamide Minimizes friction between �uid and pipe Water treatment, soil conditioner

Petroleum distillates “Slicks” the water to minimize friction Make-up remover, laxatives, and candy

Guar gum Thickens the water to suspend the sandThickener used in cosmetics, baked goods, ice cream, tooth-paste, sauces, and salad dressing

Citric Acid Prevents precipitation of metal oxides Food additive; food and beverages; lemon juice

Potassium chloride Creates a brine carrier �uid Low sodium table salt substitute

Ammonium bisul�te Removes oxygen from the water to protect the pipe from corrosion

Cosmetics, food and beverage processing, water treatment

Sodium or potassium carbonate Maintains the e�ectiveness of other components, such as crosslinkers

Washing soda, detergents, soap, water softener, glass and ceramics

Proppant Allows the �ssures to remain open so the gas can escape

Drinking water �ltration, play sand

Ethylene glycol Prevents scale deposits in the pipe Automotive antifreeze, household cleansers, deicing, and caulk

Isopropanol Used to increase the viscosity of the fracture �uid

Glass cleaner, antiperspirant, and hair color

A FLUID SITUATION: TYPICAL SOLUTION USED IN HYDRAULIC FRACTURING

Source: DOE, GWPC: Modern Gas Shale Development In the United States:

A Primer (2009)

Potassium chloride

0.06%Guar gum/Hydroxyethyl cellulose0.056%

Ethylene glycol0.043%

Sodium/Potassium carbonate0.011%Sodium chloride0.01%Borate salts0.007%Citric acid0.004%N,n-dimethyl formamide0.002%Glutaraldehyde0.001%

Isopropanol0.085%

Petroleum distillate0.088%

0.49%ADDITIVES*

* The speci�c compounds used in a given fracturing operation will vary depending on source water quality and site, and speci�c characteristics of the target formation. The compounds listed above are representative of the major material components used in the hydraulic fracturing of natural gas shales. Compositions are approximate.

Acid 0.123%

*

!!!"#$#%&'($)#*+,"-%&

FEATURE | FRACKING


Hydraulic fracturing is the stuff of nightmares for environmentalists.

But it is still regarded as key to solving America’s energy woes. Tom Arnshott in

New York gives an enlightening update on the global shale scene.

Tracking fracking

W hile the US is keen to underline that it has enough shale gas and oil to end its reliance on Middle East energy,

there is a huge hurdle – public opinion. From the UK to New Zealand, people are viewing hydraulic fracturing (or ‘fracking’ – the process of fracturing rock and forcing the energy out of the shallow rock) with great suspicion.

The problem lies with the small amount of chemicals used in the fracking fluid – made up of water, sand, and chemicals which are injected to encourage fracturing, and proppant, the fluid then pumped into the fracture to keep it open.

CHEMICAL BOTHERSFracturing fluids comprise about 90 per cent water, around 9 per cent propping agents (such as silica sand), and typically less than 0.5 per cent chemical additives. In the US, Congress exempted fracturing fluid from regulations of the Safe Drinking Water Act in 2005.

A number of chemicals, specifically biocides and certain petroleum products, present in fracturing fluid are hazardous chemicals that may cause health risks, but those in favour of fracking suggest they appear in such tiny

On average, 99.5%of fracturing �uids are

comprised of freshwater and compounds are injected into

deep shale gas formations and are typically con�ned by many

thousands of feet or rock layers.

Compound* Purpose Common application

Acids Helps dissolve minerals and initiate �ssure in rock (pre-fracture) Swimming pool cleaner

Glutaraldehyde Eliminates bacteria in the water Disinfectant; Sterilizer for medical and dental equipment

Sodium Chloride Allows a delayed break down of the gel polymer chains Table Salt

N, n-Dimethyl formamide Prevents the corrosion of the pipe Used in pharmaceuticals, acrylic �bers and plastics

Borate salts Maintains �uid viscosity as temperature increases

Used in laundry detergents, hand soaps and cosmetics

Polyacrylamide Minimizes friction between �uid and pipe Water treatment, soil conditioner

Petroleum distillates “Slicks” the water to minimize friction Make-up remover, laxatives, and candy

Guar gum Thickens the water to suspend the sandThickener used in cosmetics, baked goods, ice cream, tooth-paste, sauces, and salad dressing

Citric Acid Prevents precipitation of metal oxides Food additive; food and beverages; lemon juice

Potassium chloride Creates a brine carrier �uid Low sodium table salt substitute

Ammonium bisul�te Removes oxygen from the water to protect the pipe from corrosion

Cosmetics, food and beverage processing, water treatment

Sodium or potassium carbonate Maintains the e�ectiveness of other components, such as crosslinkers

Washing soda, detergents, soap, water softener, glass and ceramics

Proppant Allows the �ssures to remain open so the gas can escape

Drinking water �ltration, play sand

Ethylene glycol Prevents scale deposits in the pipe Automotive antifreeze, household cleansers, deicing, and caulk

Isopropanol Used to increase the viscosity of the fracture �uid

Glass cleaner, antiperspirant, and hair color

A FLUID SITUATION: TYPICAL SOLUTION USED IN HYDRAULIC FRACTURING

Source: DOE, GWPC: Modern Gas Shale Development In the United States:

A Primer (2009)

Potassium chloride

0.06%Guar gum/Hydroxyethyl cellulose0.056%

Ethylene glycol0.043%

Sodium/Potassium carbonate0.011%Sodium chloride0.01%Borate salts0.007%Citric acid0.004%N,n-dimethyl formamide0.002%Glutaraldehyde0.001%

Isopropanol0.085%

Petroleum distillate0.088%

0.49%ADDITIVES*

* The speci�c compounds used in a given fracturing operation will vary depending on source water quality and site, and speci�c characteristics of the target formation. The compounds listed above are representative of the major material components used in the hydraulic fracturing of natural gas shales. Compositions are approximate.

Acid 0.123%

*

!!!"#$#%&'($)#*+,"-%&

FRACKING | FEATURE


amounts the public should not be concerned. Writing in the New Zealand Herald, Bernie

Napp, senior policy analyst at Straterra, a resource sector lobbying firm, gave a pro-fracking argument: “In New Zealand, in the concentrations used, fracking fluid is non-toxic to humans, just as swimming pools contain toxic chemicals yet people safely swim in them.

“In the same vein, sleeping pills can defi-nitely kill a human being but are fine if used safely.”

“IN THE SAME VEIN, SLEEPING PILLS CAN DEFINITELY KILL A HUMAN BEING BUT ARE FINE IF USED SAFELY.”

AFFORDABLE ENERGY – AT WHAT COST?And while people call for details of exactly what chemicals are used, oil and gas industry organisation Energy in Depth, published a list of chemicals in a “typical solution used in hydraulic fracturing.”

Part of the problem is that many of the players interested in shale don’t want to reveal the exact mix they are using, for fear of losing competitive advantage – or perhaps because of fear of public backlash.

On top of the chemical issue, people have expressed concern about earthquakes appar-ently caused by fracking, about contami-nation of the water table and other issues – including examples of people setting water from their taps alight.

However, they remain reliant on tradi-tional fuels.

As American Petroleum Institute Penn-sylvania (API-PA) Executive Director Rolf Hanson said recently: “Evidence continues to mount that the US has an abundant and reliable domestic supply of clean-burning domestic natural gas that can lead to more affordable energy and stimulate the economy.”

And yet 2011 has seen France ban fracking, enormous environmental pressure on fracking in New Zealand; and after Australia’s ABC TV channel aired a show revealing contamination from fracking, increased concern has led to a moratorium in New South Wales.

Canadians voiced greater concern about fracking recently, when British Columbia’s government gave Talisman Energy a 20-year water licence to draw water from the BC Hydro-owned Williston Lake reservoir. The practice has been temporarily suspended in Quebec, pending an environmental review.

At the time of writing, anti-fracking protestors were demonstrating in Cape Town.

In the six months up to March 2011, Arkansas – which sits atop one of America’s greatest shale reserves - Fayetteville - was hit by 1,000 earthquakes, including a dozen over 3.0 magnitude, and one of 4.7 – the highest in the state for 35 years.

IMPROVING ENERGY SECURITYGeologist Steve Horton, an earthquake

FEATURE | FRACKING


specialist at the University of Memphis Center for Earthquake Research and Information, iden-tified a correlation between the Arkansas earthquakes and the disposal of waste water in injection wells. “Ninety per cent of these earthquakes that have happened since 2009 have been within six kilometres of these salt water disposal wells,” Horton said. “The timing is too coinci-dental to ignore.”

The latest report on future energy risk from the US Chamber of Commerce says the “potential of shale gas to improve the security of natural gas supplies and lower energy costs and expenditures is beginning to emerge.

“Recent estimates double the volume of recoverable shale gas resources assumed in past estimates, leading to greater domestic and global supplies and lower gas imports. Increasing shale gas supplies and further improvements in natural gas extraction technologies will further delink the prices of crude oil and natural gas,” the report states.

The Chamber report, which measures risk in four areas—geopolitical, economic, reli-ability and environmental - suggests the US faces heightened threats to its energy security.

For 2010, the energy security risk index score was 98.0—the fourth highest since 1970 and a 6.5 point increase from the 2009 score of 91.5.

“These are the worst risks we’ve seen in recent history,” said Karen Harbert, pres-ident of the Chamber’s Institute for 21st Century Energy. “They approach what we saw following the Iranian hostage crisis. . . . Unless we take dramatic action to change the trajectory, America is headed toward an unprecedented level of sustained risk.”

The index, updated annually, tracks changes in energy security risk beginning in 1970 and projects future risk through 2035. The 2011 edition of the index incorporates the most current energy data from the U.S. Energy Information Administration (EIA) and other federal agencies.

“NINETY PER CENT OF THESE EARTHQUAKES THAT HAVE HAPPENED SINCE 2009 HAVE BEEN WITHIN SIX KILOMETRES OF THESE SALT WATER DISPOSAL WELLS. THE TIMING IS TOO COINCIDENTAL TO IGNORE.”

Of the 37 metrics weighed, 20 showed increased risk in 2010, 11 showed improvement, and six were unchanged. Eight of the top ten metrics with the largest score changes related to energy prices, price vola-tility and expenditures, the Chamber said, adding that the index projects a sustained period of high risk all the way through 2035. “These risks would be even higher if not for improvements made in energy efficiency, and the potential for shale gas to improve the security of natural gas supplies and lower energy costs,” the Chamber added.

“We must maximise all of our domestic energy resources, make clean energy technologies more affordable, and eliminate regulatory barriers that are stalling urgently needed energy projects,” Harbert said. “Only by taking these actions will we reduce our energy risks and make the nation and economy more secure.”

GASSHALES

OPINIONSHALE OIL – THE US ANSWER TO RELIANCE ON THE MIDDLE EAST?

FRACKING | FEATURE


A series of articles by Reuters columnists and Chesapeake Energy’s August 2011 Investor Presentation (once the “Ra-Ra” is filtered out) serve to underline

the rapid and largely unseen revolution that is going on in the domestic US oil and gas industry. And I don’t mean in shale gas — well, close — this is shale oil. From almost nothing just two years ago, production is ramping up faster than just about every projection expected. Chesapeake alone is expecting some 41 percent of its production to come from oil by 2012, up from just 12 percent in 2009, as this graph shows:

Stuart Burns, co-founder of Metal Miner, discusses America’s ‘unseen revolution.’

Where Chesapeake lead others follow, or more accurately, race them neck and neck. Drilling for liquids has taken off with a shift towards shale oil rather than pure shale gas plays. Rig demand is outstripping supply as explorers look to capitalize on high oil prices in preference to subdued natural gas prices.

But between June and July, the US Energy Information Adminis-tration boosted its own forecast for 2012 liquids production by a startling 170,000 barrels per day. Further revisions will no doubt follow. The consultancy Bentek said last week that output at Eagle Ford Shale in Texas had more than doubled in the last two months to 160,000 barrels per day and was on track to grow fivefold by 2015. Likewise, Chesapeake’s Utica Shale — stretching over large areas of Ohio, into Pennsylvania and north into Canada — has been valued by the firm at $20 billion. To put that

in perspective, the FT advises that is roughly equivalent to Chesapeake’s current market capitalization.

Not everyone is convinced however, although the often-close occurrence of shale gas and shale oil is proving a boon

2008 2009 2010 2011 2012

87%

13% 10%

30%

50%

75%

90%

70%

50%

25%

100%

80%

60%

40%

20%

0%

Total Natural Gas Capex

% o

f CH

K O

pera

ted

Dril

ling

and

Com

plet

ion

Cap

ex Total Liquids Capex

Source: Chesapeake Energy

for explorers as they seek to share cost savings across both resources. Many say shale oil resources suffer from the same challenge as shale gas. That is, initial well fracturing releases significant volumes, but well productivity drops off quickly, requiring operators to keep up the pace of drilling.

To counter this firms are invest ing signif icant ly in new technology and drilling processes. US firms’ leadership in this area is underlined by the

massive inflows of foreign investment in the sector as oil and commodity firms around the world look to both secure a chunk of what they see as a valuable asset and also the tech-nology. Unlike natural gas, for which the US is still largely a closed market with very limited LNG export capability, oil from shale is priced at world oil prices, not domestic US gas prices, which are below world markets. LNG prices abroad are twice the level they are at home, driving a coal-to-gas switch for electricity generation; levels doubled this summer from last.

A sharp correction in oil prices may slow drill rates, but even pessimistic predictions of a fall to US$80/barrel should not signifi-cantly dent the rate of reserve increases seen so far. If shale oil proves as bountiful as shale gas, it may not be long before the US import bill for Middle Eastern crude begins to fall as a result of greater domestic production.©Stuart Burns, Metal Miner, reprinted with permission from http://agmetalminer.com/

Source: Chesapeake Energy

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INSIGHT | NORTH SEA OIL SPILL


At the time of going to press, Shell UK confirmed an oil leak in a flow line to its Gannet Alpha platform is under control. The Gannet field is

in the Central North Sea around 112 miles (180km) east of Aberdeen. It is operated by Shell UK on behalf of itself and Esso Explo-ration and Production UK Limited.

Personnel on the platform are safe, and the platform continues to operate.

The subsea well was shut in for four days in mid-August and the flowline on the seabed is now isolated and depressurized. Leakage of oil has been considerably reduced.

A spokesman said “Shell takes all spills seriously, regardless of size, and we have responded promptly to this incident.”

SECRECYDespite these comments that the leak is now under control, Shell faces accusations of being secretive over the spill.

The company was criticised for lack of transparency by both environmental body WWF Scotland and wildlife conservation group RSPB Scotland over Gannet Alpha.

Between 12 and 120 barrels of oil are understood to have leaked into the North Sea, 112 miles east of Aberdeen, from the pipeline spill spotted on August 10. It wasn’t until two days later that the media was informed.

A Shell spokesman said a thin slick of oil was now covering an area of about 19 miles by 2.7 miles, and moving west. The energy giant said its experts anticipated that the oil was expected to disperse through wave action, and not reach the shoreline.

Richard Dixon, director of WWF Scotland, told media: “The leak has now been going on for a number of days, but Shell has only put out a statement once it has it all under control. Shell is keeping things very close to its chest. It has a clear picture of what is going on from the remotely-operated vehicle (ROV) it has sent down there, but the fact it has not released these pictures from the ROV, or given more detail is not good for transparency.

“After the Gulf of Mexico disaster, BP came under a lot of pressure because of its lack of transparency – and greater transparency is what Shell should be focusing on here.”

Shell faces Scottish wrathRSPB Scotland director Stuart Housden

agreed, and expressed concern over wildlife. He said: “We need to know the type of oil, how much has been released, the local weather conditions and the readiness to deal with any problems – these data are vital for proper contingency planning. This area of the North Sea is full of young seabirds dispersing from breeding colonies from Shetland to the Aber-deenshire coast.”

The size of the sea surface affected is esti-mated to be some 31 kilometres by 4.3 kilo-metres at its widest point, and the slick was seen moving westwards from the field.

“Our current expectation is it will be natu-rally dispersed through wave action, and will not reach shore. The weather currently is southerly winds of 25 to 30 knots and the sea state is some two meter waves,” the Shell spokesman said.

Shell deployed a Remote-Operated Vehicle (ROV) to do inspection checks and monitor the subsea leak, on a flow line on the sea bed.

The relevant authorities (MCA, DECC, HSE) are being kept informed.

A stand-by vessel remains on station with oil spill response equipment and dispersant if required, according to Shell.

Shell faces criticism from a number of sources over its ageing North Sea fleet. Apparently the platform had ten leak incidents in 2009 and 2010, according to an HSE

document showing voluntarily declared spills, although only one was described as ‘significant’.

The incident is the second to affect Ekofisk in as many weeks. Last month, a fire broke out on BP PLC’s Valhall platform in the Norwegian North Sea, with production unlikely to resume before the end of August.

Ekofisk is one of four crude grades feeding into the Brent benchmark, for more than half the world’s crude. There are already delays on Forties cargoes, the main component. Any more issues on Ekofisk could further tighten the North Sea’s physical market, and feed

through into Brent futures prices. Ben Amunwa, of UK-based social and

ecological lobby group Platform, said: “Shell has been rated as one of the worst company’s for safety in the North Sea. This latest oil spill, days after the UN issued a damning report on Shell’s sub-standard practices in Nigeria, is further evidence of serious flaws in its safety culture.

“Gannet Alpha, at over 18 years old, is now notoriously leaky, much like…half of the oil platforms in the UK North Sea that are now beyond their ‘design-life’.

“Regulators should be highly concerned about the inherent risks of offshore oil activ-ities, ageing infrastructure and expanding operations in the UK Continental Shelf. These trends increase the risks of daily oil spills to unacceptable levels.”

Plastering the leaks?

“SHELL TAKES ALL SPILLS SERIOUSLY, REGARDLESS OF SIZE, AND WE HAVE RESPONDED PROMPTLY TO THIS INCIDENT.”

CUTTER PLATFORM, NORTH SEA, UK, 2007

Welcome to one of Dubai’s most celebrated golf havens. Our magnificent boutique hotel and golf course offers an idyllic setting for the perfect getaway retreat. Whether you are playing on our championship golf course, staying in one of our elegant guest rooms, dining at the award-winning restaurant, Nineteen, or relaxing in our Angsana spa - you will want for nothing from the moment you arrive at The

Address Montgomerie Dubai.

T +971 4 390 5600 F +971 4 438 7888E [email protected]

WWW.THEADDRESS.COM

AN UNMATCHED HAVEN AN IDYLLIC ESCAPE

The Address MONTGOMERIE DUBAI

REPORTAGE | SUSTAINABILITY


Established in 2006, Masdar is a commer-cially-driven enterprise aiming to push the boundaries of the renewable energy and sustainable technologies industries.

Masdar City aims to be in tune with its surroundings. It is described as a model for sustainable urban development, while also seeking to be a commer-cially viable development, delivering a high quality living and working environment - with the lowest possible ecological footprint.

It is a community where cutting-edge cleantech research and development, pilot projects, technology testing, and construction on some of the world’s most sustainable buildings are ongoing.

As an industry cluster, the city creates a dynamic, vibrant, international and entrepreneurial community that offers numerous benefits, including potential access to capital, a critical mass of sector knowledge, a large pool of high-quality talent, and a launching point into local, regional and international markets.

Significantly, Masdar City serves as an open technology platform that gives partner companies an unmatched opportunity to develop, test and validate their technol-ogies in a large scale, real-world environment – and in particular, with consideration to the region’s climate conditions and consumption patterns.

Masdar operates through five integrated units, including an independent, research-driven graduate university, and seeks to become a leader in making renewable energy a real, viable business, and Abu Dhabi a global centre of excellence in renewable energy and clean tech.

The result is “an organisation greater than the sum of its parts” - where shared knowledge and technological advancement provide competitive advantage - including the ability to move “with agility and intelligence within an industry that is evolving at great speed”, according to a spokesman.

This approach keeps Masdar at the forefront of the industry, while ensuring it remains grounded in the pursuit of pioneering technologies and systems that are also feasible. As a result, it delivers innovation to the market while deriving profits for its shareholders.

Masdar is a wholly owned subsidiary of the Abu Dhabi Government-owned Mubadala Development Company,

Meet MASDAR – a vision of the future?

SUSTAINABILITY | REPORTAGE


a catalyst for the economic diversification of the Emirate.

WHY FUTURE ENERGY?Abu Dhabi is home to eight per cent of proven global crude oil reserves, while Abu Dhabi National Oil Company (ADNOC) is one of the ten largest oil companies in the world.

The Emirate has enough hydrocarbon reserves at current production levels to last 100 years.

So why has the leadership of this Emirate committed billions of dollars to developing Masdar and establishing Abu Dhabi as a global centre of excellence in renewable energy and clean technologies?

With a heritage tied to life in the harsh and unforgiving desert, Abu Dhabi’s lead-ership understands the lessons of traditional desert living, where sustainable practices and resource conservation are not just slogans, but are essential to survival. That’s why the emir-ate’s leadership understands the tremendous challenges posed by climate change, envi-ronmental degradation and the need to find sustainable energy sources.

FOR ABU DHABI’S FUTUREAbu Dhabi has traditionally played a leading role in global energy markets as a significant hydrocarbon producer. Through Masdar, it seeks to leverage its substantial resources and experience in this sector to maintain its leadership position in an evolving world energy market that is increasingly looking to renewable energy. Through Masdar, Abu Dhabi aspires to be an international hub for renewable energy, new energy and sustainable technologies; balancing its already strong hydrocarbon position.

While Abu Dhabi has long been known as a global energy player, through Masdar, it is demonstrating what a responsible oil producer can do to help create a balance between hydrocarbons and renewable energy, in addressing both climate change and energy security.

FOR ABU DHABI’S PEOPLEAbu Dhabi has embarked on a two-decade programme to transform its economy from one based on natural resources to one

LEFT: ARTIST IMPRESSION - STREET VIEW OF MASDAR CITY

STREET SCAPES AT THE MASDAR INSTITUTE CAMPUS - MASDAR CITY

“THE MOST ACTIVE DEEPWATER PETROLEUM FIELDS IN THE WORLD RIGHT NOW ARE OFF AFRICA’S WEST COAST”

REPORTAGE | SUSTAINABILITY


based on knowledge, innovation and the export of cutting-edge technologies. Guiding this transformation is a document called the Abu Dhabi Economic Vision 2030, which provides a comprehensive plan, including the steps to be taken to transform the emir-ate’s economy over the next two decades.

Key goals include increasing the non-oil share of the economy from approximately 40 per cent to more than 60 per cent and signif-icantly diversifying the scope of economic activity to include priority sectors such as education, banking and finance, tourism, pharmaceuticals, media, aviation and aero-space, transportation and logistics, and manufacturing in areas such as aluminium and petrochemicals. It also puts a strong emphasis on value-added knowledge-based industries, such as renewable energy and sustainable technologies.

Masdar will contribute significantly to this diversification in a number of ways. Across its five integrated units, the company will help:•Expand the export base•Encourage private sector entrepreneurship•Invest in education and research that stim-

ulates innovation•Train, attract and retain skilled workers in

knowledge-based sectors•Encourage investment in areas that

generate intellectual property gains•Grow the non-oil sector’s share of the emir-

ate’s economy and decouple economic growth from fluctuating oil prices

MEANINGFUL SUSTAINABILITYSuccessfully incorporating sustainable urban planning and development into how cities and towns around the world operate is a crucial part of the global response to climate change and to improving energy security.

This is because more than half the world’s population now lives in cities, a percentage that is expected to rise to 70 per cent by 2030, and because cities today are responsible for over 70 per cent of global CO2 emissions.

But, only if sustainability is economically feasible will enough communities be able to implement the technologies and systems, and do so on a big enough scale to achieve mean-ingful progress in this realm.

Masdar City is committed to building one of the most sustainable cities in the world, (and one that is an attractive place to live, hope-fully) and to achieving this in a commercially

SUSTAINABILITY | REPORTAGE


TOP RIGHT: EXTERIOR VIEW OF MASDAR INSTITUTE CAMPUS, MASDAR CITY

ABOVE: ARTIST IMPRESSION - MASDAR CITY EDGE SHOWING 10MV SOLAR FARM IN BACKGROUND

LEFT: PRT STATION AT THE MASDAR INSTITUTE CAMPUS

viable manner. The crux of the site is this – to deliver sustainability in a way that makes sense financially.

ENERGY MANAGEMENTMasdar City minimises energy consumption by deploying energy-efficient techniques and setting stringent building efficiency guide-lines in areas such as insulation, low-energy lighting specifications, the percentage of glazing (windows), optimising natural light, and installing smart appliances, smart meters, smart building management systems, an inte-grated distribution management system, and a citywide energy management system that

interacts to manage the electrical load on the grid – all along the system, from the utility to the consumer.

Currently, the city is fully powered by onsite renewable energy. As the city grows, however, this will change, with a medium-term target of at least 20 per cent of energy supply coming from onsite renewable sources. The remaining power will be sourced from offsite renewable sources. There are several renewable energy projects under construction or in earlier stages of development in the UAE that will provide potential clean-energy sources for the city.

In addition to photovoltaic electricity gener-ation, the sun’s energy is being tapped via evacuated tube solar collectors to provide domestic hot water. Furthermore, concen-trated solar and geothermal heat to run single- and double-effect absorption chillers are currently being tested as possible air-condi-tioning solutions for the city.

A 10MW solar photovoltaic plant is already operational within Masdar City, the largest such solar plant in the Middle East. It powers the first Masdar Institute buildings, the temporary Masdar administration buildings and many ongoing construction activities on site.

Built across 22 hectares by Abu Dhabi-based Enviromena, the plant was connected to the Abu Dhabi power grid in April 2009 and consists of 50 per cent thin film photo-voltaic modules and 50 per cent polycrys-talline photovoltaic modules.

Onsite solar power also is provided by a 1MW solar photovoltaic plant located on the roofs of the first Masdar Institute buildings, which provides 30 per cent of the buildings’ overall energy requirements.

“MASDAR CITY IS COMMITTED TO BUILDING ONE OF THE MOST SUSTAINABLE CITIES IN THE WORLD...”

ARTIST IMPRESSION- AERIAL VIEW OF PROPOSED MASTER PLAN OF MASDAR CITY (EASTERN ORIENTATION)

INNOVATE | PRODUCT OPTIMISATION


In any refinery, there will inevitably be a gap between planned and actual performance. Even a relatively small gap (5 per cent for example) can have a huge

impact on the profitability of the plant. As a result, refiners should review their plans to ensure plant performance meet expectations.

Refinery Optimisation – closing the gap between

planned and actual performance

BY JOHN HAGUE, SENIOR VICE PRESIDENT AND MANAGING DIRECTOR FOR THE MIDDLE EAST & NORTH AFRICA, ASPENTECH

R efinery optimisation is a complex business. Plant managers across the globe face constant pressure to achieve commercial targets. Fundamentally, a key part of the operational planning process

relies on setting accurate goals, whereby planning and scheduling, process modelling and day to day plant opera-tions are important tools to help set the target and achieve them. Often management encounters more questions than answers. Why do the Linear Programming (LP) models not reflect reality? How do we cope with continuously changing targets? Why are we not performing to expecta-tions? The optimal plan will typically be a ‘stretch’ target. It may not factor certain constraints like tankage, but it will account for plant availability whilst not assuming any product quality give-away.

The world of refineries is not a linear process. In reality, there are always a broad range of variables and fluctua-tions to manage. As a result, there will almost certainly be a ‘gap’ between planned and actual performance. A small percentage variation in the production process or delays in scheduling can be costly and equate to plant inefficiency. For executive decision-makers, this could have a significant impact on planning and forecasting for their whole operation. On the positive side, this could mean actual selling price is higher than expected

or opportunistic purchases. Conversely, the effect might be negative, causing less throughput, lower yields and product quality giveaways.

Primarily, there are two types of ‘gaps’: The unantici-pated event that has a big impact with a large gap across a short timeframe; the on-going margin leak during normal operation with small gaps over a longer period of time.

Overall, the gaps are likely to have a negative impact on refinery profitability levels. The recent experience of leading process industry software company, AspenTech, has found that the typical gap between planned and actual financial performance is about 5%, but that it is not uncommon to see a gap of 10% of gross margin. For a midsize refinery, at today’s margins, that represents a potential financial loss of up to $20 million per year. It is hardly surprising that for most refiners, closing this gap is one of the largest (non-capital) improvement oppor-tunities today.

So, from the perspective of the planners, it is important to ensure that plans are as accurate as possible from the outset of the process. In order to best achieve this, they need to be consistently questioning their model. They need to ask a few key questions. Is the plan the optimum and should we stretch it? Is it fit for purpose? Does the plan provide a true representation of the capabilities of the refinery and how resilient is it? These kinds of considerations also need to take into account not just the current status that the plant is operating under, but also the likely changes over time. Planning models when first developed usually reflect reality based upon the criteria known at the point of design. However, changes to the refinery mean the model will require modifications over time or inevitably inaccuracies will occur.

Therefore, updating the planning model becomes necessary, so planners need to decide how often to make necessary alterations. The best practice will be to use engineering simulation models (process and rigorous reactor models) to update the planning model. Engi-neering models may require tuning to current opera-tions, but there is a growing awareness that their usage is becoming critical to delivering optimum planning models.

A blend of planning and engineering tools from a process optimisation provider like AspenTech is likely to provide a powerful solution in this context. In this scenario, for example, a combination of Aspen HYSYS Petroleum Refining, a core element of aspenONE Engi-neering for Refining, Marketing and planning tool, and Aspen PIMS Advanced Optimization (PIMS-AO) will provide the level of accuracy required.

DEALING WITH RISKAny refinery plan must be able to effectively manage risk. This is always a difficult challenge. Key input vari-ables in planning can have a large degree of uncertainty

PRODUCT OPTIMISATION | INNOVATE


associated with them - feedstock and product prices being a couple of examples.

In the course of the planning process, refin-eries will typically need to make assumptions and even informed guesses about the values of these variables in the future. Inaccuracies in these guesses will result in significant gaps between planned and actual profitability.

The traditional approach to deal with this is to perform scenario analysis. Typically, this requires the time consuming definition of a large number of cases. Incorporating risk analysis can help in developing more resilient plans that are more likely to be achievable.

KEY ROLE OF SCHEDULINGScheduling is closely linked to planning, but is typically more about feasibility and less about economic optimisation. Planning

output is typically delivered to the refinery and the refinery scheduler teams. The sched-ulers then take the plans and convert them into hour-by-hour actions. A sensible approach to scheduling, however, should not only look at the various options for achieving the plan, but also provide the ability to react quickly to deviations from that plan.

Just as with the planning process, refinery management should be continuously ‘ques-tioning’ the scheduling approach. Key ques-tions typically asked include, ‘Are the plans and schedules aligned?’ ‘What is the feedback to the planning process?’ ‘How quickly can the schedulers cope with unplanned events and can they evaluate opportunistic sales/purchases in the needed timeframe?’

Here, solutions like AspenTech’s Aspen Petroleum Scheduler that comes with a PSMA (Planning & Scheduling Model Accuracy) tool that facilitates and automates the process of model accuracy tracking, can play a key role.

MANAGING ENERGYAnother key area that refinery management needs to focus on in meeting plan is energy management. Refineries are extremely high consumers of energy. After all, approximately 40% of a refinery’s outgoing costs are energy related. The cost of energy is the highest refining cost after crude oil purchase. The energy cost for an average 100,000 barrels per day (bpd) refinery can hit $100 million per year.

The rising cost of energy and stricter envi-ronmental emissions mean there is a need for better planning and management. In the future, there will be an increasing focus within refineries on energy optimisation rather than just hydrocarbons optimisation. Today, the previous focus on energy reporting is being superseded by a new focus on energy management, which requires management of both the demand and the supply side.

Refiners need to question energy costs. In particular, they should ask themselves, ‘Can energy costs be reliably forecasted?’ ‘Does energy usage and energy costs meet plan and can energy/emissions cause a constraint to the plan?’

INNOVATE | PRODUCT OPTIMISATION


OPERATIONAL FOCUSSome refineries today have successfully implemented and are continuing to inte-grate planning, scheduling and energy management systems as part of an overall risk management strategy, effectively taking a more integrated approach to the whole of their operational strategy.

They can look to achieve improve-ments in unit and refinery-wide perfor-mance by concentrating on two areas in particular: closed loop control and open loop management.

In terms of closed loop control, Advanced Process Control (APC) techniques typically come into play. Recent advances in APC have reduced the cost of implementation and made controller maintenance much easier. As a result, APC can now be justified on most units. Composite APC applications can be used to synchronise and optimise the oper-ation of multiple units. New work is aimed at feeding targets from scheduling directly to the APC applications, which can understand current operating constraints and feed back to the scheduling system (and from there back to planning).

Open loop performance management is also vital to adding value in the refinery. Most performance management systems used today are actually performance reporting systems. For performance management to be valuable it needs to move beyond simple reporting by delivering information in as near ‘real-time’ as possible; and also providing what is known as ‘look ahead’. This enables refiners to answer the question, ‘How will this impact my monthly plan, defining the magnitude of the issue and facilitating rapid solution investigation?’

Performance reporting is capable of pinpointing where a refinery is making errors and, therefore, help to eliminate them re-occurring in the future. The point in question is not to make the same mistake twice, it is a matter of performance management and not making the same mistake once!

Ultimately performance management is extremely powerful because it draws on

“REFINERIES ARE EXTREMELY HIGH CONSUMERS OF ENERGY. AFTER ALL, APPROXIMATELY 40% OF A REFINERY’S OUTGOING COSTS ARE ENERGY RELATED.”

data from many of the other tools previ-ously outlined from planning and sched-uling through to APC. Refineries need to carry out a systematic analysis of current performance to quickly identify gaps and actions. To be effective, this requires multi-disciplinary input.

WHY CLOSING THE GAP IS KEY TO SUCCESSRefinery margins continue to be squeezed in today’s highly competitive marketplace. The difference between planned financial perfor-mance and actual financial performance may be up to 10% of the refinery gross margin. Closing this gap is one of the highest return opportunities for refinery managers today.

Refineries need to regularly define current gaps in financial performance (typically on a monthly basis). To do so effectively, however,

requires a systematic analysis of why actual performance falls below target. They then need to analyse each step of the process from planning, to scheduling, through oper-ations and identify why there is a gap and what the financial value would be in closing it. Once the reasons for the gaps are known, appropriate actions can be taken. In some instances, these may be one-off actions (e.g. replacing unreliable equipment or “process systems” that require long-term operation change).

Refinery management must at all times bear in mind the fact that small incremental changes can make huge differences to the competitiveness of a refinery. Software tech-nology solutions provide a realistic method of closing the gap between planned and actual performance and will be critical to helping achieve long-term commercial success.

PRODUCT OPTIMISATION | INNOVATE


A GRAND DAY OUT

Abu Dhabi’s Grand Prix is undoubtedly one of the season’s highlights, and Energy Life ME, in conjunction with ZK Sports International, is delighted to offer readers an exclusive, discounted hospitality package.

The third race to be held in Abu Dhabi promises to be as exciting as ever, with drivers hoping to beat Vettel’s lap record – he covered the 5.554 kilometre track in just 1:40.279 back in 2009.

With guaranteed good weather, modern grandstands and first class hospitality, what better way to spend a day than entertaining clients at the iconic Yas Island race track?

We have organised a package to ensure you and your clients, prospects – or just you, your family and friends - have a top time.

THE HOTEL

ZK Sports has designed a sophisticated F1 programme and the exclusive hire of the entire ballroom and terrace at the Yas Island Rotana Hotel. This deluxe hotel is located just minutes away from the Formula 1 circuit, The Links Golf Course, Yas Southern Marina and Ferrari World Abu Dhabi.

PACKAGE FEATURES

• Welcome and registration with hostesses • Private table at the hospitality venue • Access to Yas Marina concerts all three

nights • VIP access to Ferrari World (optional) • Champagne and canapes reception • Four course lunch and post race five-

star buffet • Formula 1 prize draws • Celebrity guest speaker • Corporate signage on your private table • Premium open bar

RACE DAY ITINERARY

• 13:30: Registration at the hotel • 13:45: Champagne and canapé

reception • 14:15: Four-course gourmet lunch• 16:00: Short transfer to Yas Marina

Circuit• 17:00: Etihad fly past, warm up lap

and beginning of Grand Prix • 19:00: Short transfer back to the hotel

for post-race entertainment• 22:30: Hospitality concludes

FOR YOUR

READER’S DISCOUNT

& MORE DETAILS

PLEASE CONTACT

ENERGY LIFE

MIDDLE EAST ON:

Phone: +971 56 644 0469

Email: [email protected]

www.energylifeme.com

Abu Dhabi F1 Fact box

Date: 14 November, 2011 Laps: 55 Length: 5.554 km Race distance: 305.355km Lap Record: 1:40.279 S. Vettel (2009)

Achieving “right tools, right materials, right place and right time” saves companies 20 per cent of overall costs, according to DHL’s Jonathan Shortis, Vice President,

Global Energy Development for DHL Supply Chain

The right stuff

In today’s economic climate an increasing number of energy busi-nesses are looking at increasing efficiency and reducing cost. Many consider Maintenance, Repair

and Operations (MRO) to be a low-cost area with little opportunity for potential savings. However, independent research by the Aberdeen Group has shown that MRO is a substantial expense and accounts for up to 16 per cent of the cost of goods sold and 62 per cent of total requisitions and that the top performers in MRO spend management programmes are achieving close to 20 per cent cost reductions. Consequently, there seems

to be a driving force for change - and a real opportunity for substantial value creation.

MRO | INNOVATE


A GRAND DAY OUT

Abu Dhabi’s Grand Prix is undoubtedly one of the season’s highlights, and Energy Life ME, in conjunction with ZK Sports International, is delighted to offer readers an exclusive, discounted hospitality package.

The third race to be held in Abu Dhabi promises to be as exciting as ever, with drivers hoping to beat Vettel’s lap record – he covered the 5.554 kilometre track in just 1:40.279 back in 2009.

With guaranteed good weather, modern grandstands and first class hospitality, what better way to spend a day than entertaining clients at the iconic Yas Island race track?

We have organised a package to ensure you and your clients, prospects – or just you, your family and friends - have a top time.

THE HOTEL

ZK Sports has designed a sophisticated F1 programme and the exclusive hire of the entire ballroom and terrace at the Yas Island Rotana Hotel. This deluxe hotel is located just minutes away from the Formula 1 circuit, The Links Golf Course, Yas Southern Marina and Ferrari World Abu Dhabi.

PACKAGE FEATURES

• Welcome and registration with hostesses • Private table at the hospitality venue • Access to Yas Marina concerts all three

nights • VIP access to Ferrari World (optional) • Champagne and canapes reception • Four course lunch and post race five-

star buffet • Formula 1 prize draws • Celebrity guest speaker • Corporate signage on your private table • Premium open bar

RACE DAY ITINERARY

• 13:30: Registration at the hotel • 13:45: Champagne and canapé

reception • 14:15: Four-course gourmet lunch• 16:00: Short transfer to Yas Marina

Circuit• 17:00: Etihad fly past, warm up lap

and beginning of Grand Prix • 19:00: Short transfer back to the hotel

for post-race entertainment• 22:30: Hospitality concludes

FOR YOUR

READER’S DISCOUNT

& MORE DETAILS

PLEASE CONTACT

ENERGY LIFE

MIDDLE EAST ON:

Phone: +971 56 644 0469

Email: [email protected]

www.energylifeme.com

Abu Dhabi F1 Fact box

Date: 14 November, 2011 Laps: 55 Length: 5.554 km Race distance: 305.355km Lap Record: 1:40.279 S. Vettel (2009)

Efficient utilisation of labour, infrastructure and equipment is critical to the maintenance and operation of existing facilities across the energy industry. Whether operating an oil refinery or petrochemicals plant, managing a drilling operation on-shore or off-shore, mining, generating or distributing power, businesses cannot make the most of internal resources unless they can efficiently and consistently supply them with the right mate-rials at the right time.

Global integrated energy logistics firm, DHL, has identified key steps that can be taken by companies to re-design their MRO supply chain, in order to achieve 20 per cent cost savings and ultimately create compet-itive advantage. By using the “right tool, right material, right time, right place” prin-ciple, companies can maximise their plant output, their maintenance productivity and their cost savings whilst improving plant and

team safety and security. In a recent webcast on logistics operations

within the energy sector, my colleague Mark Johnson, Head of Global Energy Sector, and I, examined the traditional supply chain model and explained that the supply chain is inef-ficient, reactive in nature and that material visibility and traceability is poor. As more material is fed into the system, increasing the level of complexity and the inventory levels, companies suffer from reduced managea-bility, poor supply performance and, of course, increased costs.

To tackle the problem and reshape MRO

“A MORE STREAMLINED APPROACH TO MANAGING INDIRECT MATERIALS COULD SAVE MILLIONS IN UNNECESSARY SUPPLY PURCHASES, IMPROVE SITE SAFETY BY ELIMINATING VENDOR TRAFFIC AND ALLOW MANAGEMENT TEAMS TO FOCUS ATTENTION AND SKILLED RESOURCES ON MAINTENANCE, REPAIR AND OPERATING PRIORITIES.”

INNOVATE | MRO


processes, DHL advises companies to analyse their existing processes and re-design the supply chain to improve material delivery from supplier to point of use. This can involve the creation of a consolidation facility to bring together all of the inbound deliveries, some of which can be made through vendor collections and to generate kits of parts for planned engineering jobs on the site. In this way there can be an immediate increase in the visibility and traceability of supply and a reduction in the number of parallel supply lines running through the sites gates and to different parts of the plant.

Implementing this new methodology, DHL experts forecast significant reduc-tions in inventory, as “squirrel stores” are reduced, eliminating over-ordering and reducing stock outs. Once visibility and faith in the network increases, companies can substantially reduce the overall stock holding on site whilst increasing stock avail-ability – working with the plant maintenance management teams to agree stock profiles and inventory levels through a risk-benefits

analysis approach.CASE STUDYDHL Supply Chain was selected by a leading Middle Eastern energy company, to help it keep up with growing demands and maintain control over increasingly complex and geographically dispersed operations. The remote locations of oil field resources in the region mean that drilling and production operations have to be operating consistently and simultaneously across dozens of distant

sites, often only accessible via harsh terrain. Therefore, the efficient and timely delivery of maintenance and repair parts, as well as operating supplies, is critical for success.

Previously serviced by multiple logistics providers, the company’s expansive supply chain was not able to offer the predictability, visibility and responsiveness the company needed to maximise upstream and down-stream up-time and productivity. A more streamlined approach to managing indirect materials could save millions in unnecessary supply purchases, improve site safety by elim-inating vendor traffic and allow management teams to focus attention and skilled resources on maintenance, repair and operating prior-ities.

DHL Supply Chain’s solution encompassed a re-designed distribution network, approx-imately 550 employees and more integrated systems – all supported by a central control tower to monitor the new streamlined supply chain.

The solution included the establishment of a materials transportation and delivery

network to increase efficiency and predicta-bility, an integrated Material Tracking System (MTS) linked to the customer’s ordering and replenishment system and strategi-cally located distribution points to ensure service reliability. Moreover, with thousands of vendors, site congestion and the risks inherent in this industry, HSSE compliance was a must for every aspect of the supply chain. Consistent procedures focused both on people and processes - with better aligned

health, safety, security and environmental standards across the supply chain.

By partnering with DHL to bring new processes, technology support and effi-ciencies to its supply chain, the customer has been able to achieve its goals of keeping its skilled resources focused on the core business activities, thereby reducing costs. Engineers and maintenance personnel receive the right equipment and parts at the right time and place, reducing site congestion and improving productivity and hence production.

IMMEDIATE BENEFITSAs detailed in the case study above, when companies implement a change in their supply chain strategy, they see immediate benefits in cost reduction and improved service quality. However, more importantly, the change, which takes the maintenance supply chain forward from the reactive to the proactive, drives major benefits in terms of maintenance team productivity, plant avail-ability and hence production rate. These benefits are orders of magnitude higher in value than those seen through supply chain cost reduction.

By improving engineering effectiveness and increasing plant productivity, companies will ultimately derive the long term benefits of right tool, right material, right place, right time, developing a much more stable model of productivity, whilst increasing plant avail-ability and consequently production levels.

For more information on DHL’s energy sector work, visit: www.dhlsupplychainexperts.com

MRO | INNOVATE


GEOPOLITICS | SUDAN


The great divide that splits Sudan in two – separating the lush green south from the deserts of the north – has now become a political reality.

Early July saw the creation of a new state, South Sudan – after five decades of conflict with the north, and six years of negotia-tions following the 2005 peace deal – and

a referendum in January this year which revealed some 98.83 per cent of the population wanted independence. Africa’s largest country is now split in two.

The new country has already been officially recognised by the international community, with the UAE’s Ministry of Foreign Affairs releasing a statement saying it hoped the declaration of South Sudan’s independence would “open a new page in achieving security and stability to serve the interests of the region’s people”.

South Sudan: New nation beset with problems

Will Rankin examines the challenges facing the world’s newest nation – with oil at the crux of the issues.

“The UAE is keen to bolster co-operation and to build close relations with South Sudan politically, economi-cally and socially,” the statement read.

One of the new nation’s first embassies is set to open in Abu Dhabi, along with a trade bureau, an investment conference in the UAE and scheduled flights between the two countries.

NEGOTIATINGSouth Sudan produces about three quarters of Sudan’s approximate half a million barrels of oil output - and depends on oil for 98 percent of its revenue. While 75 per cent of Sudan’s oil wells lie in the south, all the pipe-lines run north, where the refineries are located, along with Sudan’s only commercial port, Port Sudan on the Red Sea coast – now in a separate state.

South Sudan is negotiating over oil rights with its old

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SUDAN | GEOPOLITICS


civil war foe to the north, which has received half of the revenues from southern oil for six years - and which wants pipeline fees after secession. Negotiations are ongoing, with the north keen to continue the 50-50 revenue spilt.

Perhaps understandably, the newly-formed South Sudanese government is holding out for more favourable terms.

New president Salva Kiir Mayardit faces an uphill struggle to bring economic success to the nascent nation.

While oil has kept the Sudanese economy afloat for the last few decades, until a mutually agreeable profit sharing deal is brokered with the north, oil revenue will be stymied.

BLACKLISTEDOn top of this, the US has blacklisted Sudan as a state sponsor of terrorism, so American companies cannot legally purchase oil from South Sudan under any deal in which the Sudanese government receives a share of the revenue from a South Sudanese oil sale.

As a result of the ban, and the perceived unlikelihood of South Sudan exporting its oil via Kenya, US energy companies have little presence in South Sudanese oilfields. Most oilfields in South Sudan are owned by companies affiliated with China, Malaysia’s Petronas and the Indian Oil and Natural Gas Corporation.

China has bene working closely with Sudan

since the 2005 peace deal, but its diplomats have already made it unequivocally clear that they will not get involved in any negotia-tions over delivering the crude to the refineries in the north.

Li Zhiguo, charge d’affaires at the Chinese Embassy in South Sudan, said arguments between South Sudan and Sudan on oil revenues were an internal affair to be decided by “the two brothers of Sudan”.

“Any intervention in this key sector from the outside would only complicate the situation and would not help resolve the issue,” Li said.

“We will respect the decision by the two sides and adjust our plans of cooperation accordingly,” he added, without elaborating.

China’s Xinhua news agency said China could leverage its experience in working in the oil industry in Sudan to help the new nation: “Compared with other countries, China’s advantage in energy co-operation is its investment based on equality and mutual benefit,” Li was quoted as saying. “We’d like to carry forward (that) advantage in future co-operation with South Sudan.”

Another issue is that with foreign companies involvement in the development of Sudan’s oil sector, few South Sudanese have acquired expert energy industry knowledge.

SOUTHERN SUDANESE LINE UP TO VOTE IN JUBA ON JANUARY 9, 2011, THE FIRST OF SEVEN DAYS OF REFERENDUM POLLING. TRAINING

Sudan was China’s sixth largest source of oil imports in 2010, and the PRC is alreadyoffering citizens of the new state free training in energy sector skills, such as welding.

Undersecretary at South Sudan’s Ministry of Mining and Energy, David Loro Gubek, said the lack of skills is a serious development bottleneck South Sudan must overcome. He encouraged those who did not get the chance of the free training (with 800 people applying for 30 places on the training course) now not to give up because there will be more oppor-tunities in the near future.

Li Zhiguo added that China is ready to co-operate with South Sudan in various fields including energy, infrastructure and agriculture.

Since China and Sudan began cooper-ation in the energy sector in 1995, Beijing

has helped Khartoum build a complete oil industry and trained tens of thousands of Suda nese oi l workers as well as senior professional managers, bringing an economic boom to the African country.

On top of political a n d d i p l o m a t i c issues, at the time of writing South Sudan is still waging war

with at least seven armed groups - with tens of thousands displaced. And while the new country is rich in oil, it remains one of the least developed countries in the world, where one in seven children dies before the age of five.

While the UN has re-branded its Sudan-based peace keeping force, and border issues are settling down, South Sudan has a long way to go before it gains the economic pros-perity its people deserve.

As Rosie Sharpe of campaign group Global Witness said: “The most important thing about southern secession is what will happen to the oil revenues. Without a new, equitable oil deal between north and south, it is difficult to see how southern separation could pass off peacefully.”You can read the Global Witness report, “The Continued Lack of Transparency over Oil in Sudan” at www.globalwitness.org

“WHILE OIL HAS KEPT THE SUDANESE ECONOMY AFLOAT FOR THE LAST FEW DECADES, UNTIL A MUTUALLY AGREEABLE PROFIT SHARING DEAL IS BROKERED WITH THE NORTH, OIL REVENUE WILL BE STYMIED.”

ANALYSIS | COMMENT

COMMENTWhat? Ten years? It’s been ten years since I wrote “Ghawar is Dying”? Really? Well, I guess it has. Way back in the summer

of 2001, I submitted that short article on the future of Saudi oil production to The New Colonist web site at www.newcolonist.com. Eric Miller and Richard Risemberg were kind enough to post what I had written, and the fun and games began almost immediately. Seems it’s still a hot topic.

That original article was written as a piece of futuristic fiction, a look at “what if someday this happens”, but it was too often seen as historic fact in print. And maybe now it is. Right away, I was accused of having somehow snuck into the very restricted oil-producing Empty Quarter of the Kingdom of Saudi Arabia, and who let me in? Someone wanted names. The truth: I’d never been there. I still haven’t. Honest.

I received email from an oil production analyst in France who admitted they hadn’t seen what they considered accurate oil production figures from the Saudis about the Ghawar since around 1997. (Remember, this was in 2001.) Other analysts were not even that optimistic about what they were being told about the world’s largest oil field, and that was ten years ago. So: What about

now? If the Ghawar was dying ten years ago, then it must surely be dead by now, right? Oh, I sure hope not. For everyone’s sake.

That the Saudis are not telling the entire truth about their oil production is a universal constant right up there with death and taxes. You can count on it. And the thing is, we are counting on it. The last thing we want is the truth about the Ghawar. That would change everything, and we are all, globally, all quite snug and happy living in our “there’s-plenty-of-oil” fantasy. Thankfully, the Saudis know better than to spoil the illusion with harsh reality. We owe them big time for that.

(Thanks, guys! You rock!)There was a period a few years ago when

it was fashionable to pick a specific date for the peak of global oil production. Dr. Kenneth Deffeyes at Princeton chose Thanksgiving Day (the fourth Thursday in November) in 2005 as the day oil peaked. I think he did so just to give people a date to print. I chose Friday, August 26th, 2005, as it was the last full day of off-shore oil production in the northern Gulf of Mexico before Hurricane Katrina made such a mess of things up there. So who was right? Probably neither of us, but there’s a good chance we were both close. That we don’t know for sure is a tribute to the Saudi’s long-standing desire to keep the world from totally imploding, and to keep the world running with business as usual for as long as possible. Longer, if possible. And all

they have to do is lie. What could be easier?That we are not seeing true production

figures is a given. That the water cut is worse than we are being told is quite probably another. That these lies are all that stand between us and the physical and economic chaos of a post-peak world oil crash are why the Saudis are more than willing to play this game for as long as they can, long after any reasonable person would simply give up, tell the truth, and walk off the stage shaking their head.

We have certainly seen spikes in the price of oil, most notably in 2008. Everyone earlier this year thought we’d see those 2008 price records broken, but that hasn’t happened… yet. Still, there’s no doubt that oil prices are up, and it’s very easy to get fixated on the price of oil. Don’t. It’s not about the price of oil. It never was.

The Saudis can’t hide the price of oil. It’s a global trading thing. But they (along with others) can muddy the waters when it comes to overall global oil production figures. You can find the price of oil on today’s world market in a matter of seconds. Good luck telling me how much oil was pumped out of the ground last month. You can only tell me what you were told. It might not be the truth.

I suspect, after all of these years, that Ghawar may die and we might never know. And maybe I’m ok with that. We’ve been running on illusion for so long, the truth hardly matters. That the Saudis are willing to stand there and smile and calm our fears is maybe all we need to keep on keepin’ on. We plug away at our lives and we go through the motions. I top off the gas tank in my pickup truck every Saturday morning after breakfast. Sometimes the price is up and sometimes it’s down, but the gas is always there, and that’s all that really counts. The Saturday morning I roll up to bagged gas pumps is the day it all changes.

And when that happens? I’ll drive the truck back home, park it in the garage, and tell my wife, the lovely JoAnn, that we will be riding

American energy author and peak oil theorist Chip Haynes discusses whether the world’s largest oil field has dried up – again.

Is Ghawar still dying?


COMMENT | ANALYSIS

COMMENT

our bicycles today. Our first stop: The grocery store. And yes, I’ll be hooking up the cargo trailer to my bike for that one.

We have certainly seen the price of oil rise in the last ten years, but what can we say about production? The fact that the production of oil isn’t as transparent as the price is a good indication that the Ghawar, along with every other oil field on earth, can not possibly be as healthy today as they were ten years ago. And now, ten years on, we see the fact that we don’t know for sure as the only good news we’re likely to get. Man, that just can’t be good. Now let’s see what the next ten years brings.

Keep your bike tyres pumped.

Chip Haynes book - “Peak of the Devil” (Satya House Publications, 2010), is available in book stores now, and at www.peakofthedevil.com.

“THE SAUDIS CAN’T HIDE THE PRICE OF OIL. IT’S A GLOBAL TRADING THING. BUT THEY (ALONG WITH OTHERS) CAN MUDDY THE WATERS WHEN IT COMES TO OVERALL GLOBAL OIL PRODUCTION FIGURES.”


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INSIDE | LIFESTYLE


LIFESTYLE

66

GOLF The Tech Access International Pairs UAE - an amateur golf event - takes to the greens

DESTINATION Take the time to visit the iconic Emirates Palace – the perfect place for commerce and leisure...

DRIVE It’s raining Ferraris as new hot hatch comes down from the clouds

SAILING This exciting craft from new player Wider looks set to make waves

54 56 60 64

LIFESTYLE | DESTINATION

Tech Access International Pairs UAE, presented by Cadillac, is an amateur golf event played in more than 30 countries across six continents. The first tournament was held in 2004 and since then has developed into a world-renowned competition, now the largest event of its kind in the world.

Players compete in a club qualifier, with the winning pair qualifying for a National Final, the champions of which, win an all-expenses paid luxury trip to compete in the World Final.

In 2010-11, the UAE joined the International Pairs community.

Chris Turlik, who has worked in Dubai for the last 14 years, was awarded the licence for the region and now organises and promotes International Pairs UAE through the clubs of the UAE to all members of the

A PAIR TO BE RECKONED WITH

Emirates Golf Federation.16 clubs across Abu Dhabi, Al Ain, Dubai, Sharjah and

Ras Al Khamiah participated in the inaugural Interna-tional Pairs UAE series, which ran from October 2010 until the National Final at the end of May 2011.

National Finalists of the inaugural International Pairs UAE series were treated to an all-inclusive luxury weekend at the Park Hyatt Dubai that included an overnight stay at the resort, lunch, breakfast, the final itself at Dubai Creek Golf & Yacht Club and an exclu-sive invitation to the International Pairs UAE Awards Dinner, held at the Park Hyatt. UAE’s representatives at the World Final will be Ian Kelly and Denver Farrell of Arabian Ranches Golf Club in Dubai.

Here, Energy Life Middle East talks exclusively to Ian Kelly, the Chairman of Cansco Well Control Middle East, who is one of the two-man team who’ll be jetting off to Scotland in October to represent the UAE in the finals.


TECH ACCESS INTERNATIONAL PAIRS UAE | LIFESTYLE

Tell us how it felt to win the UAE final – how many games did you play to get through to the final, over what time, and did you see your game improving?It was a huge delight and surprise to win the national finals. We had previously won through to the final via our regional qual-ifier at Dubai’s Arabian Ranches golf club held in November 2010. Both our games had improved since the qualifiers represented by out handicap reductions. However we were handicapped during the final due to an injury I was suffering from with a torn rotator cuff in my left shoulder. So in light of being both the lowest handicapped team and playing injured, winning the final was a great delight. What’s your handicap? How often do you normally play? Do you do any business on the course, or is normally purely pleasure? Which club do you play at?My handicap is now 7 and my golfing partner, Denver’s is now 5. I play about twice a week and it’s usually purely pleasure. I am a member at both Emirates Golf Club and at Arabian Ranches – although the competitions tend to be better and more frequent at Arabian Ranches so I tend to play there more often. What do you find most challenging about golf?Trying to maintain consistency and staying relaxed when playing - all of us have the habit of trying to hit it too hard and end up hitting it worse than if using a smooth swing. It is also very challenging playing in the UAE during the heat of the summer months.Who did you face the most competition from – and were there any hairy moments?In this type of competition you don’t really know how anyone else is playing other than the people you are actually paired with so you really don’t know how you have done until it’s all over. The hairiest moment in the finals was the 17th hole (our penultimate hole) as my shoulder had finally had enough for the day and I hooked a ball into the water so my partner had it all on his shoulders. He did not play the hole very well and we were in serious danger of carding a zero for the hole but he made a miraculous chip from off the green and then a very slick putt for par.

How does it feel to be representing the UAE in Scotland, at the finals? And what’s at stake – beyond pride, I mean! What’s the prize?It feels great to be going there representing the UAE versus all the teams representing all the other countries. I have no idea what the prizes are other than a trophy I would imagine. As it is an amateur competition the prizes have to be limited, as if they are too much then your amateur status is at risk. What plans do you have to train for the final? Will you be playing in the UAE heat over summer?I will be brushing up on skills with coach Malcolm Young at Arabian Ranches and will be practicing at least once per week as well as playing. We will continue to play over the summer – it means a very early start usually

to avoid the worst of the heat.Have you played in Scotland before? Any issue you foresee – like the weather?I am originally from Scotland so yes I have played there many times. The weather in October at Loch Lomond will probably be the biggest challenge for all the teams in the finals. It will be very unusual if it is not windy and raining at that time of year.If you weren’t an oilman, would you be a golfer?

I think everyone who plays golf would love to have been good enough to have played profes-sionally, but when you play alongside or go to watch the top players, it soon becomes apparent that the gap between even very good amateurs and the top professional is so huge it’s unreal-istic to imagine you could have ever done that.Have you always played – or did you take it up here? How long have you been here in the UAE?Being Scottish I naturally played when I was young but really didn’t play much at all other than the odd social game a couple of times a year between the ages of 17 and the last 7 years (as our kids have now grown up and left and I have the time to play again). We first moved to the UAE in 1999.Will you be taking a team of Cansco supporters with you?I doubt if there will be any Cansco people there - as I’m expecting they will be too busy at work (other than my wife who we will kit out in Cansco gear so she looks the part).

“TRYING TO MAINTAIN CONSISTENCY AND STAYING RELAXED WHEN PLAYING - ALL OF US HAVE THE HABIT OF TRYING TO HIT IT TOO HARD...”

TOP: IAN KELLY DRIVING ON THE 1ST HOLEABOVE: DENVER FARRELL (L) AND IAN KELLY (R) WITH THEIR WINNERS TROPHIES PRESENTED AT THE DINNER.


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LIFESTYLE | DESTINATIONLIFESTYLE | DESTINATION


Whether you live there, or are in the UAE capital on business, take the time to visit the iconic Emirates Palace – the perfect place for commerce and leisure...

ABU DHABI’S PALATIAL GETAWAY

DESTINATION | LIFESTYLE


Built to showcase Arabian culture and hospitality to the world, Abu Dhabi’s Emirates Palace hotel, managed by Kempinski, has created a niche in luxury hospitality, welcoming world leaders, celebrities, global business travellers and leisure guests with a unique expe-rience, luxurious contemporary facil-

ities and amenities.Situated beside an impressive 1.3 kilometre stretch of

private, white pristine beach, and on 100 hectares of mani-cured lawns and lush landscaped gardens, Emirates Palace comprises 394 luxury rooms and suites and a variety of award-winning dining options. The resort’s leisure facil-ities include two intricately landscaped swimming pools one to refresh and relax and one perfectly designed for adventure and family fun, an Anantara spa, tennis courts, and a state of the art fitness centre.

Emirates Palace houses advanced meeting facilities, including an auditorium with up to 1,100 seats, a

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“WITH A FIFA STANDARD FOOTBALL PITCH AND HOME TO MANCHESTER CITY’S WINTER TRAINING GROUND, EMIRATES PALACE OFFERS THE BEST IN SPORTS ACTION, INCLUDING THE ANNUAL LASHINGS CRICKET FESTIVAL.”


ballroom for up to 2400 guests, more than 40 meeting rooms, a Media Centre and a Business Centre - and outdoor venue capacity for up to 20,000 guests.

The SPE International Board of Directors met here in February. The board meets three times a year in a different location worldwide to gain input and insights from the diverse regions SPE serves. Abu Dhabi – and Emirates Palace - was selected as the venue for the 2011 kickoff meeting to signify its importance to SPE and its members.

It’s no surprise that Emirates Palace plays host to a spec-tacular cultural calendar including hosting the Middle East International Film Festival. It features the largest hotel art gallery with regular exhibitions, and has an annual popular and classical music concert programme.

With a FIFA standard football pitch and home to Manchester City’s winter training ground, Emirates Palace offers the best in sports action, including the annual Lashings Cricket Festival.

On top of these incredible facilities, the site recently opened a luxurious, updated marina, managed by local company, ART Marine.

HE Sultan Al Hameeri, managing director of Emirates Palace, opened the yacht marina, alongside Constan-tinos Constantinou, President and CEO of ART Marine.

The new marina accommodates 167 yachts, with green surroundings. The marina is capable of mooring yachts with lengths ranging from 12 to 60 meters. Yacht owners taking advantage of mooring can enjoy the Emirates Palace’s gym, spa and swimming pool.

The yacht marina offers an unparalleled level of luxury for the sailing fraternity in the city, and as a custom desti-nation for luxurious yachts inside and outside the United Arab Emirates.

Constantinos said:“Emirates Palace Marina is the most prestigious Marina we operate in the GCC, and we are proud and excited to be part of this prestigious project.”

DESTINATION | LIFESTYLE


Capital dim sum at Hakkasan

Modern, award-winning Chinese restaurant Hakkasan forms one of the key elements of Emirates Palace.

Hans Olbertz, Emirates Palace general manager, said: ‘’As a brand of contem-

porary Chinese cuisine, the restaurant offers a wide choice of high quality delicious dishes served in a friendly, serene ambience.”

The 165-cover restaurant has its own private entrance with valet parking, and features four private dining rooms, that seat from 6 to 12 guests, and a 15 metre-long bar offering a wide selection of signature cocktails.

Anchoring the kitchen is Lee Kok Hua, from Hakkasan London, who has worked underneath head chef Tong Chee Hwee for five years. He brings his own flair to the menu with new dishes that have been specifically designed for the Emirates market, sitting alongside Hakkasan classics such as the Peking duck with royal beluga caviar; steamed dim sum platters; and grilled Wagyu beef with King soya sauce.

An extensive drinks list includes a wide array of teas from the best producers in Taiwan. Dragon Well green tea and High Mountain Oolong will be available to enjoy alongside the finest 50-year-old teas. All are brewed and served to precise instructions, with detailed etiquette to deliver the best flavour.

An exciting range of freshly-prepared non-alcoholic and alcoholic cocktails are also on offer.

Head chef Tong Chee Hwee has been showered with accolades since he arrived from the Ritz Carlton hotel in Singapore to open Hakkasan, including the Carlton London Restaurant Award for Best London Chef 2005.

Brainchild of Hong Kong-born restaurateur Alan Yau - who was also the driving force behind the Wagamama chain of restaurants - Hakkasan was awarded a Michelin star in 2004, and for four years following, the only Chinese restaurant to hold the rating.

Hakkasan has been a fixture on the annual World’s 50 Best Restaurants list, voted for by an international panel of the world’s leading chefs, restaurateurs and critics, since 2004.

LIFESTYLE | DRIVE

WHAT THE FF?RUSSELL BRAY drives the Ferrari FF, the new 651 hp, four-wheel drive

2+2. The car was flown in by chopper to an Italian mountain resort.

You may have seen those surprising pictures of a mega-buck Ferrari FF coming out of a helicopter on the top of an Italian mountain and being driven around a track bulldozed in the snow.

Quite reasonably you may then have thought; one, they have gone completely mad, or two, assuming you have enough wedge to buy one, what good is that to me?

After all, acting the rally driver and sliding a car about on snow is great fun, but the chances of snow in the GCC countries are about as likely as your pad on the Palm doubling in value in the next six months and I don’t think the owners of Ski Dubai are about to let you play cars in it.

But stay with me. The FF is the first Ferrari with four-wheel drive, and the system isn’t just great on snow, it also helps big time if any wheel hits dust, gravel or sand which reduce the grip on the road.

It’s raining Ferraris as new hot hatch comes down from the clouds


DRIVE | LIFESTYLE

And sand the Gulf can manage easily.Whacking 651bhp through the rear tyres is hard

enough on a perfect surface – and that means some-thing like Ferrari’s Fiorano test track on a hot, dry day – but if grip suddenly drops mid-bend you need the reac-tions and instincts of Ferrari racer Ferdinand Alonso to stay on the Tarmac.

So, to increase the everyday usability of this grand tourer par excellence, along with four full-size seats and decent luggage space, Ferrari has fitted the FF, the replacement for the 612 Scaglietti, with all-wheel drive.

Of course, it’s not any ordinary four-wheel drive system. Adding all-wheel drive corrupts steering ‘feel’ and turns

a car into a front heavy ‘barge’ that ploughs straight on at corners.

While normal 4WD uses a single gearbox and transmits power using a central prop-shaft, the FF has a seven-speed gearbox on the rear axle, and another, two speeds only, gearbox at the front. To help weight distribution, the front gearbox is only half the weight of conventional ones and takes its drive directly off that monster V12 engine.

There’s no mechanical connection between the front and rear axles, though there’s a lot of electronic chatter between all the stability and traction systems including the E-diff and the F1-Trac.

Power to each front wheel is via a wet clutch, so the system is more responsive and more controllable than traditional 4WD set-ups.

Four-wheel drive cars lose the accelerator adjustability in corners that skilled drivers love with a well-balanced rear-wheel drive car. Ferrari though has given the FF a 53 per cent rear weight bias and power only starts to go through the front wheels when the driver is demanding more power than the back wheels can cope with.

Using technology now banned in Formula 1, sensors monitor the grip every split-second, and if they detect slip, can transfer power across the rear axle or activate power to each front wheel independently.

The beauty of the technology is that the driver doesn’t have to press any buttons.

“The systems are monitoring the slip of the tyres all the time,” says engineer Andrea Constantini. The system’s software analyses grip levels according to the Manettino switch on the steering wheel which lets the driver adjust the car’s handling.

In addition to sport, comfort and stability off settings, on the FF there are also ice and wet settings. With ESC off, it’s down to your own talent to stay on the road if you are pushing at the edge of the car’s performance envelope.

“With this system we don’t have to cut power to the rear wheels when they start to slip so the driver feels more and is in more control,” says Constantini. Err, right.

Sport is meant for high grip surfaces. It’s a really tail-happy car on snow. Great fun I thought.

“APPARENTLY THE FF HAS AN EXCELLENT SOUND SYSTEM, BUT I NEVER FOUND IT BEING CONTENT TO LISTEN TO THE GLORIOUS NOTES OF THAT NEW 6.2 LITRE ENGINE BEING PIPED INTO THE CABIN.”


www.autotraderuae.com


LIFESTYLE | DRIVE

But the FF is a big, wide car and not for those who without instinctive spatial sense for where the car is.

Even on the road, with enough room and confidence, you can get the rear wheels sliding sideways even when the dashboard display shows the front wheels are fully powered.

Stay within the computer’s parameters, steer correctly and use the right amount of throttle for the grip, and Big Brother will let you drift the car without intervening. Four-wheel drive was never so much fun.

On the road the FF isn’t just faster than the 612 Scaglietti, scorching to 124mph from rest in 11 seconds, it handles like a much smaller car and feels like a 599GTB.

Even maximum speed starts using the launch control electronics doesn’t see the front system being used if the road is grippy enough.

If you enter a corner too fast, there’s a moment’s understeer and then, providing you stay on the power, you sense the front wheels pulling round. The sensation blends out as cornering forces reduce.

The front gearing is slightly higher than the rear gearbox’s, so to equalise the speed

between front and rear axles, the clutches slip continually.That sounds bad news but the front clutches run in oil

with carbon discs and Ferrari reckons they would last more than 10,000 kilometres in ‘normal’ use, meaning at least ten years.

I never saw the system showing 100 per cent traction. Ferrari said that was because you needed exactly the right tyre pressures and temperatures, and the right type of asphalt, to name a few conditions.

Yet 99.9 per cent of the time the FF felt rear-wheel drive with lovely, precise steering.

Ferrari says the front wheels can even turn quicker than

Specs

Engine 6262cc, 12 cylinders Power 651bhp @ 8000rpm Torque 504 lb-ft @ 6000rpm Gearbox Seven-speed paddle change semi-automatic Fuel consumption 18.3mpg (combined) Acceleration 0-60mph 3.7 sec Top speed 208mph Kerb weight 1880k CO2 360g/km Price £227,026 (UK) Gulf TBA

the rear wheels to improve grip and act rather like traction control but without cutting engine power output.

Despite your suspicions, some Ferrari owners aren’t poseurs and don’t buy cars to put on display in their living rooms.

Some are expert drivers, and would know if the company fouled up. That’s why Ferrari won’t have any truck with ‘active’ steering which puts on different amounts of lock at different speeds and feels invasive to a good driver.

For the same reason there’s hydraulic pump power steering because it delivers better feel than electrically assisted steering.

Tugging on the steering wheel paddles - which are bigger and closer than before - you can change each of the seven gears faster than you can blink.

Constantini says the gear change could be faster, but the very slight pause feels more involving and helps drivers keep track of what gear they are in.

Seventh is a long-legged overdrive for reduced fuel consumption when motorway cruising.

It takes a while in the FF before you notice it has a speed-ometer because your attention has been taken up looking where you are going, and glancing at the huge rev counter.

Ferrari has kindly provided a passenger-frightening data display above the glovebox that shows speed, engine revs, individual wheel traction and how many police cars are chasing you. I may have made up the last bit.

Apparently the FF has an excellent sound system, but I never found it being content to listen to the glorious notes of that new 6.2 litre engine being piped into the cabin.

Somehow, that the FF is easy to drive doesn’t spoil the fun. You just choose how hard you want to push and how much adrenalin you need.

It is uncannily stable at high speed thanks partly to aero-dynamics honed in the same wind tunnel Ferrari develops its Grand Prix cars.

The use of a proper key to activate the ignition has been a tradition since 1957, even though you now use a button on the steering wheel to fire up the engine.

But for us eternal schoolboys it’s sad that the modern electronic handbrake prohibits handbrake turns. It’s more difficult to create a four-seater with charisma and glamour than a sexy mid-engined two-seater, but this time Ferrari has managed it.

The shooting brake styled FF is so capable in all condi-tions it really is a Ferrari for everyday use.

It suits whether you want to high speed cruise, take three friends to the theatre (the Senna movie anyone?), or even drive to a ski resort.


LIFESTYLE | SAILING


A WIDER WATER PLAYGROUND

Most of the time we go through life content in the knowledge that things are just about as good as they are going to get, and then along comes an invention,

a thing or an idea that turns everything you know on its head.

The new Wider yacht is one such thing – a craft that is sure to make waves.

Created by Till Antonelli, formerly of Pershing, this 42 foot day boat looks sleek and stylish enough; it wouldn’t look out of place in any one of the GCC’s marinas. Yet it hides a secret – hull extensions.

With some cunning engineering that wouldn’t look out of place on a space station, this Italian newcomer expands its cockpit to an impressive 18m² – the equivalent size to those only normally seen on a mega-yacht. The extensions also make for 6.6 metre flotation width – previously unthinkable on

a craft of this size.The extensions are stabilised by flotation

devices. And all of this happens automat-ically, at the press of a switch, in just 12 seconds. Wow.

It’s no surprise, then – at least to the yachting fraternity – that this millimetre accurate design comes from Mark Wilson, racing yacht designer extraordinaire.

With double the usable surface, you can weigh the anchors and relax in the clam waters of the gulf, with more room to entertain than ever before, without the financial headache of a mega-yacht.

On top of this game-changing deck, the Wider employs the latest energy saving tech-niques, in the engines, in its aerodynamic shapes, and by employing materials used in the aerospace industry like the “pre-preg” carbon mentioned above, which guarantees huge savings in fuel consumption and a lower

This exciting craft from new player Wider looks set to make waves

SAILING | LIFESTYLE


environmental impact. The two engines are not installed in a classically symmetrical way, but offset in a racing style; giving a consequent increase in stability and ease of inspection.

This is a high-performance, lightweight model built to the very latest vacuum-infusion moulding (Scrimp System) techniques with 70 per cent hybrid carbon textile. Other parts, such as the T-top and the seats are carbon, made using the autoclave technique by companies who also supply Formula 1 teams and the aerospace industry.

Because it’s lightweight, the craft gives a new way to experience the sea, thanks to the shape of the double stepped hull. Creating an air cushion between the surface of the sea and the hull, the yacht planes quickly to maintain a highly dynamic sailing trim.

The Wider 42’ reaches an impressive top speed of 53 knots and a cruise speed of 40 knots with just 100 l/h consumption for the two 480 mhp Cummins engines. This results in a range of almost 400 miles at 40 knots, unthinkable for a yacht of this kind until now!

Cutting edge technology also extends to the equipment on-board – you can personalise the electronic, audio and navigation systems.

The multi-functional steering wheel with in-built multi-view display, similar to those used in Formula 1, and featuring all the infor-mation needed for sailing, is a first.

Helm station equipment includes a GPSMap 7012 Garmin chart plotter, with a 12.1 inch touchscreen display, and a Garmin VHF 300i digital radio.

Cockpit furnishings are different to any other boat,too. The windscreen protecting the seats, for example, can be raised and concealed in a special retainer inside the T-top.

The pilot and co-pilot seats can be folded up to become a back support for standing while driving. They can be easily removed, as if they were car head-rests, and placed in a dedicated storage locker astern. This simple movement completely opens up the galley furniture fitted with a sink, a large central worktop, a teppanyaki griddle and a 51 litre removable ice-box. Apparently, a 50 litre fridge and a single ceramic glass hob are also available on request.

Wider’s engineering boffins also managed

“THE FINAL FUNKY POINT THAT IMPRESSED US IS THE INFLATABLE SEATS – REPLACING HEAVY, CUMBERSOME FIXED FIBREGLASS ONES YOU SEE ON MOST BOATS. THEY CAN BE USED IN THE WATER, TOO!”

to totally open up the engine room hatch with a simple, but functional movement: the galley furniture is simply shifted forward in order to completely free the flooring, giving access to the engine room.

The space to the fore of the pilot house is fitted with a carbon bench, which can be split in two to create a dining area - with an electric table lifting from the floor.

Even the decking is sustainable. Esthec provided the teak-like material, which is not only indestructible, stain resistant, fireproof, non-slip, does not splinter, and requires no maintenance, but is recyclable. We wonder why they don’t make kid’s bedroom floors with it.

The final funky point that impressed us is the inflatable seats – replacing heavy, cumbersome fixed fibreglass ones you see on most boats. They can be used in the water, too!

The stern can house a jet ski, rubber dinghy, or even a diving centre, in an uncovered garage. The housing for the jet ski (or rubber dinghy) lowers towards the water, forming a slide for launch and recover operations. And then that space can be converted into an addi-tional sundeck.


www.boat traderuae.com

REVIEWEDIT’S A HARD LIFE

Tech expert Steve Walloon puts the new breed of tough external hard drives through their paces.

Whether you’re an engineer in the field or a plant boss overloaded with production figures to plough through over the weekend, the need for external hard drives is clear – and they’re here to stay.

While a little USB memory stick or drive might do the job taking data between offices, for the sort of environments we’re talking about in the oil and gas industry, you need something a bit more rugged, and a bit more special.

And that’s where ioSafe’s external drives come in. Does this sound like an advert? It’s not meant to, it’s just that sometimes a product comes along that is genuinely good, and that might just get you out of trouble.

When catastrophe strikes, you want to ensure your information is protected.

California-based ioSafe makes a line of nearly indestructible drives that they say can survive flame, chemicals, shocks and drops.

So, like the overgrown child I am, I took a flame to the “Solo Pro”. This hulk of a drive is built to withstand intense heat up to 1,550 degrees for a half hour. Much of the one terabyte drive’s heft comes from the fireproof shielding inside. I burnt my finger. The drive didn’t look any different.

Despite my pathetic attempts to destroy the drive, official tests have shown that it can indeed survive those sort of temperatures – and while the USB connectors and the power ports were frazzled, post-fire, the actual hard drive inside the casing was fine, despite the stench of scorched electronics.

The specs for ioSafe’s “Rugged Portable” external driver suggest say this (water) baby can last for up to three days in ten feet of water,

without the data being compromised.

Tested by dunking it in water for a couple of days, and still dripping wet,

the drive was plugged into a computer. Again, it loaded up without a problem – playing the video file we transferred over before the test.

For added fun, I tossed the drive, still connected to the computer, back into the water. It still worked.

Wisely, for idiots like me, ioSafe also offers a data recovery service with the drives, so that you don’t need to crack it open after a disaster.

The Rugged Portable external drive starts at $149 for a 250 GB model, and the Solo

Pro at $249.While ever y situation’s

different and everything has limits, if you’re looking for a little extra protection for your data in the desert, in extreme heat or underwater, these drives live up to the claims.

“THE SPECS FOR IOSAFE’S “RUGGED PORTABLE” EXTERNAL DRIVER SUGGEST SAY THIS (WATER) BABY CAN LAST FOR UP TO THREE DAYS IN TEN FEET OF WATER, WITHOUT THE DATA BEING COMPROMISED.”


TECHNOLOGY REVIEW | ioSAFE EXTERNAL DRIVE

Energy Life ME Issue 02

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Transcript of Energy Life ME Issue 02