DHAHRAN, August 04, 2010 –  Saudi Aramco on July 28 signed several contracts with local and international contractors for the detailed engineering, procurement and construction (EPC) of the Yanbu‘ Export Refinery Project at Yanbu‘ Industrial City.

The newly incorporated Red Sea Refining Co. will be responsible for the execution and operation of the project.

EPC contracts for the major process units were awarded to:

•  Tecnicas Reunidas (Spain) — coker package.
•  Saudi Services (Saudi Arabia) — high voltage electrical package.
•  SK Engineering and Construction Co. (South Korea) — crude package.
•  Dayim Punj Lloyd (Saudi Arabia) — offsite pipelines package.
•  Daelim (South Korea) — gasoline and hydrocracker packages.
•  Rajeh H. Al-Marri (Saudi Arabia) — onsite pipeline relocation package.
•  ENPPI (Egypt) — tank farm package.

The Project Management Team said several remaining packages will be awarded over the next few months.

Early this year, the Project Management Team awarded the site preparation contract to Abdulrahman Al-Shalawi Establishment to ensure that the site would be ready for EPC contractors.

“Signing these contracts represents a critical milestone for the Yanbu‘ Export Refinery Project and will pave the way for many other major activities in the Yanbu‘ area,” said Motassim Al-Ma’ashouq, executive director of New Business Development, who attended the signing ceremony together with representatives of the winning contractors.

The project is one of a number of downstream projects that Saudi Aramco is pursuing, and demonstrates the company’s commitment to meeting future worldwide fuel demands. As part of its long-term strategy, Saudi Aramco is now making downstream investments following a massive upstream program that increased the company’s crude oil capacity to 12 million barrels per day.

The project will build a new “grassroots” refinery on a site of about 5.2 million square meters. The new refinery will process 400,000 bpd of Arabian Heavy crude and produce 90,000 bpd of gasoline, 263,000 bpd of ultra-low-sulfur diesel, 6,300 metric tons per day (mtd) of coke and 1,200 mtd of sulfur.

The new refinery will use existing Saudi Aramco facilities to receive crude oil and export the refined products.

It will include refinery process units, utilities and interconnecting piping, associated feedstock and refined product storage, as well as offsite facilities necessary to support the safe and efficient operation of the refinery.
The signing of the EPC contracts is the culmination of a process that started in January 2006, when a team began the base configuration and preliminary engineering, and initiated the selection process for the contractor and process technology licensors.

“We have taken many steps along the way to ensure the Yanbu‘ Project will pioneer many firsts for the Kingdom in the areas of detailed engineering, human resources development, and support of local equipment and material manufacturers,” said Fahad Al-Helal, the designated president and CEO of the Red Sea Refining Co. “Approximately 70 percent of the total project value will be spent within the Kingdom.

“We have mandated that more than one million man-hours in detailed engineering must be executed in the Kingdom,” he said. “That includes the full execution of the detailed engineering of the refinery’s Sulfur Recovery Unit in the Kingdom, which is the first time a major process unit of this size will be fully executed in-Kingdom.

In addition, several in-Kingdom lump-sum turnkey packages will be executed covering cross-country pipelines, communication and electrical work. We will also make maximum use of the Saudi work force during the detailed engineering and construction phases.”

He said the international EPC contractors will hire and train many Saudi engineers in process and mechanical engineering during the detailed engineering phase. “Among our main objectives are the development of young Saudi professionals, helping technology transfer to the Kingdom and maximizing local content in all goods and services used by the project.”
The Yanbu‘ project is expected to create business opportunities for local enterprises and new job opportunities, each of which typically creates five to six indirect job opportunities.

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Waleed Al-Obaid operates freeze drying equipment on nano-clay samples as part of work being done by the Advanced Materials Group at R&DC.

DHAHRAN, August 11, 2010 –  The Research and Development Center (R&DC) is working on a new generation of materials that can address Saudi Aramco’s production and operational challenges.

“We are pioneering research on advanced and nano-structured materials for specific oil and gas applications,” said R&DC Upstream Program director Abdullah M. Al-Houtan. “We want to develop materials that will enhance reliability and improve efficiency safely and cost-effectively.”

Al-Houtan said materials science has been an ongoing human endeavor for thousands of years. “It has a long history under the name metallurgy, which is essentially material science for metals,” he said. “Most recently, material science has focused on nano-materials and nano-technology and how it can be used in new ways.”

Al-Houtan said R&DC’s newly formed Advanced Materials Group is working on a variety of projects.

“We are looking at nano-structured nickel coatings combined with carbon nano-tubes to be used for erosion and corrosion protection,” he said. “This project will be developed in collaboration among R&DC, Dammam College for Girls, and King Fahd University of Petroleum and Minerals.

“We’re also developing ionic liquids for separation applications in areas such as desulfurization, salt removal and nano-particle conductivity.”

Other projects include looking for membrane materials for gas separation, which is being pursued for the Natural Gas and Sulfur Utilization Project under the Downstream and Strategic R&D Program; and creating monitoring sensors to assess pipeline integrity, which is being led by one of the group’s experts in fiber-optic sensor technology for the Northern Area Pipelines Department.

“Putting together a strong team that can handle advanced materials for Saudi Aramco is a key to success,” said Al-Houtan. “In fact, we have an excellent mix of both highly experienced and new Saudi post-graduate scientists.”

They include Turki A. Khaldi who earned a Ph.D. from Manchester University in the U.K.; Abdullah A. Shahrani, who also earned a Ph.D. from Manchester University; and Bandar A. Fadhel, who graduated from Monash University, Australia. “Several others will join the group bringing additional experience,” Al-Houtan said.

As important as the intellectual capital are the laboratory assets to use it.

“We have state-of-the-art equipment that supports our research,” Al-Houtan said. “The equipment includes a plasma spray and solution-spray system, freeze drying for nano-powder production, scanning electron workstations, pulsed electroplating, jet and slurry erosion equipment, and a high-temperature system that can reach up to 1,600 degrees Celsius.”

Now that it’s up and running, Al-Houtan sees big things ahead for the group.

“Successful as we have been in our first year,” he said, “we will continue to expand and position ourselves as a nationally and internationally recognized research group dedicated to becoming the most effective advanced materials group in the oil and gas industry for both upstream and downstream arenas.”

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ASC engineering specialist Joseph Thorp was recently honored at an International Organization for Standardization (ISO) Technical Committee meeting in Rome for his leadership in developing American Petroleum Institute (API) standards within ISO. In particular, he co-developed API/ISO machinery standards for the oil, gas and petrochemical industries that have become the most referenced around the globe.

	Joseph Thorp

ISO is the world’s largest developer and publisher of international standards, with a network of more than 160 member countries. Industry groups, such as API, cooperate with ISO to develop and draft standards related to their areas of interest.

Thorp is chair of API’s Subcommittee on Mechanical Equipment, which includes more than 100 members representing such oil majors as Chevron, ExxonMobil, Shell and Total. He is credited with outlining a strategic map in 1996 as a member of API’s International Standards Coordinating Committee that paved the way for his subcommittee’s work to be adopted in more than 35 countries, including China, Russia and Brazil. According to API, the widespread adoption of these standards is having a positive effect on environmental and commercial interests. Benchmark studies have shown that API-compliant equipment has the highest safety and reliability outcomes, and lowest emissions in the world.

“This worldwide acceptance places Saudi Aramco at the forefront in helping to create globally recognized standards that allow projects to operate more efficiently everywhere,” said Majid Al-Ghaslan, manager of ASC Technical Services.

Ali Abuali, ASC president and CEO, added, “Standards development participation is a strategic investment in human assets. This effort allows us to make key contacts with industry leaders, better understand the market in which we operate, obtain competitive intelligence on emerging technologies and benchmark our own work processes.”

ASC Engineering provides a broad range of engineering and project services to Saudi Aramco. They include supporting the company’s project teams based in North America; identifying and developing technical products and services that might enhance the company’s operations; participating in joint industry programs to review emerging technologies; and involvement in national and international standards development committees such as API, ISO, NACE International, and the Institute of Electrical and Electronics Engineers.

(Article by Judi Ottmann)

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Executives from Japan, France, the United States and Saudi Aramco discussed a new technology that uses heavy oil in petrochemical processes.

Representatives came from Japan’s Nippon Oil Corp. (NOC), France’s Axens, U.S.-based Shaw Group, and Saudi Arabia’s King Fahd University of Petroleum and Minerals (KFUPM). With Saudi Aramco, these entities form a consortium working on the technology.

HS-FCC is a breakthrough in the refining and petrochemicals industry thanks to a unique downflow FCC. The advanced technology allows refineries to produce petrochemicals from heavy oils by converting refinery gas-oils into products suitable for integrated petrochemical processes.

The configuration produces more gasoline fuel at the same light olefin yields than a traditional reactor design. Propylene yields of four times greater than conventional FCC operations were achieved in pilot-plant studies. HS-FCC units can produce 20 percent propylene from heavy feedstocks while minimizing fuel gas. Therefore, the high-yield design makes the new process a potentially valuable and competitive platform on which to develop integrated refinery and petrochemical complexes.

The first day of the forum provided a broad view of the current status of the project, which included an update by NOC regarding the 3,000-barrel-per-day precommercial plant in Mizushima, Japan, and a discussion on potential HS-FCC opportunities in-Kingdom initiated by the Facilities Planning Department. The second day enabled all participants to get a more detailed understanding of the technical aspects of the HS-FCC process and next steps.

The goal of many refiners is to increase production of high value products. This breakthrough was the hope of the research consortium, which not only saw the potential of maximizing the original FCC process but also the additional economic value it would produce. As Saudi Aramco executive director of New Business Development Motassim Maashouq noted, “Refiners are urgently seeking to improve profit margins, and this new technology provides a key solution to achieve this important objective.”

Leading the effort for more than 15 years, NOC has provided significant investments, including technical research, demonstration facilities and, most recently, the construction of the precommercial facility in Mizushima. “Our goal is to leverage the cooperative relationships that we have in this multinational group and to encourage this new refining technology,” said Hiroji Adachi, NOC’s executive officer and general manager.

In the second phase, NOC worked closely with Saudi Aramco and KFUPM to design and build a 30 bpd demonstration unit at the Ras Tanura Refinery. This year, NOC embarked on the third phase with the assembly of the 3,000 bpd precommercialization plant. Completion and production are expected in 2012.

Saudi Aramco has been active throughout the development process, especially during the second phase, by ensuring a natural scale-up progression from the laboratory at KFUPM to a commercial unit at a refinery complex.

HS-FCC is a more selective process than conventional FCCs and can use a wide range of feedstocks to maximize production of propylene and other higher value refinery products such as ethylene and butylene. “The industry is looking for much higher value-added processes than are available from conventional FCCs used by the refining industry,” said Dr. Halim Hamid, assistant to the vice rector for Technology Development and Industrial Relations at KFUPM. With that in mind, the forum continued discussions on next steps with the hope of sustaining the current momentum.

According to Axens and Shaw, the consortium’s technology licensors, the parties will soon begin discussions regarding how to implement this process in worldwide applications. “We are excited about promoting our new technology to refiners seeking the most innovative process known for higher propylene production,” said Axens’ Jean-Paul Gouzard, executive vice president of the Process Licensing Business Unit.

With the continued collaboration of the global alliance, the HS-FCC process will be fully proven after start-up of the precommercial unit in spring 2011.

Axens and Shaw will participate in the final development and deployment of the HS-FCC technology with NOC, Saudi Aramco and KFUPM. While there will be more challenges ahead and a great deal of work to be done, the consortium looks to the future and the opportunities the new technology could provide. “We are confident that this next-generation technology will greatly increase the profitability of refineries,” said Roger Aiello, senior vice president of Sales, Strategic Planning and Proposals at Shaw.

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	The actual-size image of this  Atomic Force Microscopy photograph of the Resbots™ used in the field trial is 1/50th the size of the period at the end of this sentence.
	Mazen Kanj gets ready to add the nanoagent solution to the injection water at a test well.

Three years ago, EXPEC ARC technologists originated the concept of sending nano-sized detectors through the reservoir to gather in-situ data for enhanced reservoir mapping and characterization. That vision earned Saudi Aramco a 2008 World Oil Award. Saudi Aramco has been leading the industry ever since, developing the agents and demonstrating that they can be injected and removed from reservoir carbonate rock.

“Today, with the notable success of the first field trial, our vision is closer to becoming reality,” said Amin H. Nasser, senior vice president of Exploration and Producing. “Resbots will be able to measure, report and interact with the reservoir environment to monitor and even change properties.”

“Our recent field test is an essential step to fully develop Resbots capable of accurately characterizing the reservoir to further optimize our reservoir management strategies and increase recovery,” said Mohammed Y. Al-Qahtani, executive director of Petroleum Engineering and Development.

In the single well test, 250 barrels of the diluted nanoagent solution were displaced into the Arab-D formation with the injection water. The Resbots used in this test averaged 10 nanometers in size (approximately 1/10,000 the width of a single human hair).

The well was shut-in and then put into production for analysis. Samples of the produced water were analyzed to estimate the recovery of nanoagents using fluorescence spectroscopy.
The fluid temperature, wellhead pressure and flow rate were also continuously monitored and recorded during the production phase to help with the analysis.

Stability of nanoparticles in high temperature and high salinity conditions is the fundamental challenge for this milestone of the Resbots initiative. “The technical challenge, at first, seemed enormous,” said Samer S. AlAshgar, EXPEC ARC manager. “However, the team simplified the problem and came up with innovative solutions.”

The analysis of the sampled fluids from the well confirmed a very high recovery of the Resbots material and, accordingly, a desired stability and hydraulic mobility of the nanoagents. As a precursor to the field trial, the team introduced a new type of nanoagent material with the ability to survive the hot, hypersaline Arab-D environment and successfully tested it through a series of coreflood experiments under field conditions.

“With major milestones and challenges conclusively behind us, EXPEC ARC has succeeded in clearing the way for several unique types of Resbots,” said Abdulaziz O. Al-Kaabi, Reservoir Engineering Technology Team chief technologist.

“We envision three basic types of nanoagents,” said Mazen Kanj, lead scientist of the Resbots program. “The simplest is the passive type, which works at cross-correlating injectors to producers in the field. A more sophisticated version is the active type, which can sense the environment (pressure, pH, salinity, saturation, etc.) in the underground. The most advanced type is the reactive one, which can intervene to rectify unfavorable conditions as nanoagents travel in the underground, for example, target deliver chemicals where they are most needed in the reservoir.”

Why nano-sized agents? Reservoir rock is composed of tiny compacted grains with nanoscale spaces between the grains. Reservoir agents must be able to pass easily through some (but not necessarily all) of the pores in their quest to explore the reservoir.

The milestone test was made possible with support from Saudi Aramco’s Southern Area Reservoir Management, Southern Area Production Engineering and Southern Area Production Services Departments.

(Article by Heather Bence)

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LONDON, July 21, 2010 –  A virtual world created to position Saudi Aramco as a top lifestyle choice as well as a great place to work was nominated July 7 for the prestigious CIPD (Chartered Institute of Personnel Development) Recruitment Marketing Awards.
Held at the Grand Connaught Rooms, London, the black-tie event sought to honor the best and brightest talent in recruitment marketing for 2010.

March 2010: Chevron is the only large international energy company with a continuous upstream presence in the Kingdom of Saudi Arabia, spanning more than seven decades. We are engaged in a wide range of petroleum-related interests in the kingdom, and we work closely with Saudi Aramco, the state-owned national oil company, as well as with private firms.

We put special emphasis on projects that provide high level employment opportunities, professional training and exposure to new technology.

The company conducts exploration and production activities in the onshore Partitioned Zone (PZ) on behalf of Saudi Arabia. The PZ is located between Saudi Arabia and the State of Kuwait. Petroleum and mineral resources in the PZ are jointly shared by the governments of Saudi Arabia and Kuwait.

Chevron Phillips Chemical Company LLC (CPChem) has interests in Saudi Chevron Phillips Co., a $650 million petrochemical plant at Al Jubail. A second company, Jubail Chevron Phillips, is operating a $1.3 billion petrochemical facility adjacent to and integrated with Saudi Chevron Phillips. Chevron also has interests in a third company, Saudi Polymers Company, which is building a $5.2 billion plant at Al Jubail to produce basic chemicals.

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n the front row, Majid Al-Sani, third from left; Mohammad Al-Zahrani, fifth from left; W.K. Ki, sixth; Saud Bukhari, seventh; and Khalid Alhammad, ninth, are joined by other Daewoo and Vela staff for the naming of the “Virgo Star.”

OKPO, Republic of Korea, July 07, 2010 –  Vela International Marine Ltd.’s Virgo Star, the second vessel of four very large crude carriers ordered from Daewoo Shipbuilding and Marine Engineering, entered service June 23 after a naming ceremony at the South Korean shipyard.

Mohammad G. Al-Zahrani, Saudi Aramco’s executive director of Safety and Industrial Security, presided over the ceremony.

Among the more than 55 guests were Daewoo Shipbuilding senior executive vice president W.K. Ki; Saud Bukhari, Vela’s Technical and Support Department manager; Majid Al-Sani, Vela’s Tanker Construction manager; and Khalid Alhammad, project site manager.

The Virgo Star is built to the latest shipbuilding rules and regulations and to Vela’s standards of safety, reliability and the environment to ensure the reliable transportation of Saudi Aramco’s crude oil to customers.

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LONDON, July 07, 2010 –  “One of the major challenges our industry is facing is the shortage in skilled professionals,” said Huda Ghoson, general manager of Training and Development, in her opening remarks at the World National Oil Congress held June 23 in London.

In her speech titled “Workforce Development: An Enduring Legacy,” Ghoson called upon organizations to redouble their efforts to make the oil and gas industry attractive to young people.

She went on to address four challenges. “The world is more sensitive than ever before … to the impact the oil industry can have on our fragile natural environment,” said Ghoson of pressing environmental issues. She said Saudi Aramco has long been a leader in environmental stewardship.

The second challenge relates to oil resources and the fact that oil demand is expected to increase over the next two decades. “This means that the oil industry will be expected to develop additional production capacity,” she said.

The third challenge focuses on integrating technology into business practices. “A significant portion of production will be coming from relatively small and mature fields that are also likely to have complex geology and production mechanisms” said Ghoson. She believes that “progress would be best made by sharing ideas and experiences, and making greater efforts in collaborative technology development.” Through this, collaboration will help address the fourth significant challenge which is the shortage of a skilled and technologically agile work force.

“It is obvious that the business is best served by employees who possess the passion for continuous personal growth and development and lifelong learning, whatever their careers and professional interests may be,” said Ghoson.

She concluded by saying, “With proper investments in technologies, partnerships and people, these challenges can be surmounted, as we have always done in the past.”

Ghoson went on to share Saudi Aramco’s integrated employment value proposition strategy, which enables Saudi Aramco to attract, develop and retain top talent. “The strategy combines three factors in a balanced approach starting from hire to retire,” she said.

These three factors involve building on the solid reputation of the company; investment in training, development and management of people; and the total pay package designed to satisfy every stage of an employee’s personal and professional growth.

Ghoson highlighted Saudi Aramco’s talent management and development strategy, which is designed to provide a continuous flow of talent regardless of labor market conditions, skill shortages and swings in oil prices. The strategy uses blended learning to integrate various learning techniques and delivery methods such as technology simulations, knowledge sharing and online communities of practice in addition to standard instruction.

She mentioned that since Saudi Aramco draws 87 percent of its work force from Saudi Arabia, the company has a special relationship with students, educators and educational institutions throughout the Kingdom. To complement these relationships, Saudi Aramco also has partnerships with international universities, training companies, government agencies and private businesses around the globe.

“Together, they allow Saudi Aramco to share ideas, experiences and knowledge as well as ensure the skills of the next generation meet the business needs of today and tomorrow,” she said.

Ghoson concluded by stressing the importance of the industry in providing energy to the world, “while protecting the environment, advancing research, sharing best practices and teaming with the community, education sector and governments to improve the social and economic well-being of people everywhere.”

(Article by Laura Baker)

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PARIS, Schlumberger (NYSE:SLB) announced today the acquisition of Geoservices—a privately owned French oilfield services company specialized in mud logging, slickline and production surveillance operations. The total value of the transaction, including net debt, is $1,070 million.

Geoservices, founded in 1958, employs approximately 5000 people active in more than 50 countries worldwide. The company is the leading mud-logging company, and has invested heavily in the development of new technology for exploration and appraisal well activities, particularly in the emerging deepwater market.

“The addition of mud logging technology to the Schlumberger portfolio is an important step in the development of higher-performance drilling systems”, commented Andrew Gould, Chairman and CEO, Schlumberger Limited. “The combination of Schlumberger real-time downhole formation sampling measurements with Geoservices’ drilling mud analysis will help customers better identify and react to drilling hazards, while the combination of mud logging with Schlumberger formation evaluation measurements will bring more complete understanding of rock lithology and fluid content.”

Mud logging extracts information from the drilling mud and drilling process while drilling and provides data for both formation evaluation and drilling efficiency. In formation evaluation, mud logging complements wireline logging and logging-while-drilling measurements. In drilling efficiency, mud logging information provides insight into the dynamic state of the well and allows drilling mud weight properties to be optimized.

“I believe this to be a wonderful opportunity for Geoservices and for all of our employees”, commented Gaston Rebilly, founder of Geoservices. “Both our companies value people and technology as the means to bring greater value to our customers. The complementary nature of our services offers the opportunity to accelerate growth in both technology development and operational deployment.”

In addition to Geoservices’ mud-logging technology and expertise, Geoservices’ footprint, expertise and technologies in well intervention and field surveillance also complement existing Schlumberger activities.

“We are very pleased to be joining Schlumberger,” remarked Bruno Burban, Chairman of the Board of Geoservices, “In addition to our mud logging activities, Geoservices brings considerable expertise in slickline services and in production surveillance operations”. Philippe Salle, Geoservices CEO added, “The success of the strategic alliance we have enjoyed with Schlumberger has shown us the strength of the cultural fit between us that we believe will foster increasing innovation and create further opportunities.”

Joel Lacourte, Managing Partner of Astorg Partners, majority owner of Geoservices, concluded: “We have had a wonderful adventure with Geoservices management over the last five years. The company has gone through a dramatic transformation, considerably strengthening its strategic positioning and the depth of its management team. The sale of Geoservices to Schlumberger is for us an outstanding recognition of the value that has been created over these years.”

About Schlumberger
Schlumberger is the world’s leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide. Employing approximately 77,000 people representing over 140 nationalities and working in approximately 80 countries, Schlumberger provides the industry’s widest range of products and services from exploration through production.

Schlumberger Limited has principal offices in Paris, Houston and The Hague and reported revenues of $22.70 billion in 2009. For more information, visit www.slb.com.

About Geoservices
The Geoservices Group, with approximately 5,000 employees worldwide and US$ 491 million turnover in 2009, provides a range of oilfield services that help evaluate hydrocarbon reservoirs and optimize field exploration, development and production. Geoservices serves oil and gas companies worldwide through a network of bases in 52 countries, covering all the main areas where oil or gas is to be found. Its services include mud logging, well intervention and field surveillance. For more information visit www.geoservices.com