Landmark oil project performs well

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Lewis Affleck, Managing Director of Maersk Oil Qatar

Maersk Oil and Qatar Petroleum, two highly distinguished oil and gas powerhouses, combine their expertise to industrialize a field others have deemed as an impossible commercial source. Inside Investor discusses with Lewis Affleck, Managing Director, Maersk Oil Qatar the challenges, this partnership, and the future of the company.

Q:  Maersk Oil’s biggest project in Qatar is the huge Al Shaheen offshore development. Could you give an update on this project, is it up and running? What is the current production output?

A:  In 1992, Maersk Oil took on the challenge of the Al Shaheen Field in Qatar. This was a field others had walked away from because of its complexity. It was deemed non-commercial, with very thin, low permeability carbonate reservoirs but, with our partner Qatar Petroleum (QP) we turned Al Shaheen into a commercial success. This year we are celebrating our 20th anniversary with QP and we have already produced more than one billion barrels of oil from the Al Shaheen field.

Q: What has been the experience with your investment partner Qatar Petroleum? Why did Qatar choose Maersk?

A: The Al Shaheen field is very complex and the reserves are very difficult to extract. Despite these challenges, in partnership with QP, and by applying innovative solutions, development strategies and technologies – many of which came from Maersk Oil’s experience of developing tight chalk reservoirs in the Danish North Sea – we’ve turned this challenging field into a commercial success.  Since 1994, Maersk Oil has set new world records for drilling the longest horizontal wells in the world. The last record, recognised by the Guinness Book of World Records, was set in 2008 with a 12.3 kilometer horizontal well. So first and foremost I believe that our value proposition to QP and the State of Qatar is around technology and experience. We also provide an attractive and rewarding work environment for our Qatari employees. We’ve implemented many initiatives to help our recruitment, retention, and employee development – but also to achieve our goal of providing our employees with a good work-life balance. We recently introduced a reduced work-hours policy to support female employees with special family circumstances or health conditions that prevent them from working full time. We also focus on being a socially responsible company. We’re working in partnership with the Supreme Council of Health, the Hamad Medical Corporation, the Qatar Diabetes Association (QDA), and world leader in diabetes care, Novo Nordisk, to support the Qatari authorities to raise awareness of diabetes, advising on how to prevent it, and supporting people already living with diabetes to manage their health better. Our focus is on high quality, value-adding, social initiatives – so I feel this is an area where we can bring value.

Q:  What is Maersk’s investment to develop the field?

A:  Our most recent field development plan was the $6 billion dollar development known as FDP2005.  It was one of the largest and most complex field developments of its kind anywhere in the world. It included 15 new platforms, 169 new wells, 230 kilometers of pipeline and two of the world’s biggest FSO’s to facilitate production from the field. We delivered the project on time and on budget.

Q:  What were the infrastructural and technical challenges you were facing to exploit the Al Shaheen field?

A: The technical challenges of unlocking the potential of the Al Shaheen field were significant. The Al Shaheen field development uses multiple injectors and producer wells that run in parallel to each other. The production wells are positioned between injector wells, which force water and oil through the tight carbonate rock and into the production well where it is recovered.  So far, we’ve drilled more than 300 wells. We’re already performing what’s considered to be the world’s largest water flood operation of a carbonate field and we’re engaged in many studies that look at the best ways for us to use improved and enhanced oil and gas recovery in the future.

Q:  What was the experience with Qatarisation and how many Qatari nationals are working for Maersk at present?

A: Around 25 per cent of our employees are Qatari and we work hard to attract, retain, and develop our local employees – of which around 50 per cent are in technical positions. As of 31 December 2011, Maersk Oil Qatar had 160 Qatari nationals, who are direct hires. We work very closely with local high schools and universities and sponsor students who are willing to study majors related to the core of Maersk Oil business – such as petroleum, chemical, mechanical engineering, and geology. In 2011, Maersk Oil Qatar successfully launched its Qatari Unique Development and Rotational Assignment (QUDRA). This is a graduate development programme for Qatari females within Maersk Oil Qatar. It is intended to produce qualified employees who will have covered the whole value chain of Maersk Oil Qatar during their rotations – thereby gaining a lot of knowledge, skills, and competencies that will allow them to maximise their contribution to the company. The first group started in December 2010 and is expected to finish its training rotation by May 2012. As part of Maersk Oil Qatar’s continuous focus on the development and growth of our national Qatari staff, a Personal Development Plans system, was introduced and implemented for all Qatari staff. These plans are individually tailored career maps to support an employee’s career development. Developing human capital is very important to Maersk Oil.

Q: There have been talks that Maersk is interested in joining Qatar Petroleum International’s overseas operations. Can you give details?

A: We’re actively pursuing opportunities to work with QP both inside, but also outside of Qatar. So our relationship is definitely deepening. I can’t go into any details as these are commercially sensitive.

Q: How would you assess the general investment environment for oil companies in Qatar?

A: Maersk Oil has a very good working relationship with the State of Qatar, and with QP. This is testament to the very high professional manner in which QP operates. It’s a good and supportive place to do business with a focus on long-term partnership and a stable investment climate. Of course, this is possible as a result of the visionary leadership of HH Sheikh Hamad Bin Khalifa Al Thani, Emir of Qatar, who has inspired the State of Qatar to become a forward thinking world leader in the energy industry.

Q:  Maersk was investing into its new Maersk Oil Research and Technology Centre at the Qatar Science and Technology Park. How is the center doing?

A: We inaugurated the Maersk Oil Research and Technology Centre at the Qatar Science & Technology Park in 2011. We anticipate that it will be a $100 million investment over ten years into cutting edge applied research and technology – much of which is specifically focused on activities that will help to further unlock the huge potential of the Al Shaheen field. The research center will focus primarily on conducting applied research and development, aimed at improved oil recovery (IOR) technologies from long horizontal wells, and enhanced oil recovery (EOR) for carbonate fields. We’re also conducting research that will help us to better understand – and therefore protect – the offshore environment here in Qatar. I think it’s important that we also look at some of the significant achievements we’ve already made that have improved our environmental performance. QP and Maersk Oil have successfully reduced gas flaring from the Al Shaheen field to an absolute minimum – a rare accomplishment in the industry. As a result of its approach to environmental management, the project’s gas gathering system was recognised as the world’s largest Clean Development Mechanism project by the UNFCC, as part of the Kyoto Protocol.

Q:  Oil production is one of the most environmentally risky industries in the world, as seen with the Deepwater Horizon disaster in 2010. What is Maersk’s strategy in being environmentally cautious, especially at a field with the complexity of Al Shaheen?

A: Maersk Oil is determined to develop a world-class project that is designed and operated to high safety and environmental standards. We have already safely drilled more than 300 wells in the Al Shaheen field. Our first priority is the safety of our people and the protection of the environment through the robust design and construction of our facilities. However, recognising the risks inherent in the development and production of oil and gas, Maersk Oil is prepared and capable of responding quickly and effectively to operational incidents. We retain dedicated Oil Spill Response equipment and trained personnel located on offshore facilities. Safety is a core value for Maersk Oil –comprehensive, effective safety and environmental management systems are vital to drilling operations. We remain committed to continually improving our strong safety record, as we work with QP to develop the Al Shaheen field.

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Reading Time: 5 minutes

Lewis Affleck, Managing Director of Maersk Oil Qatar

Maersk Oil and Qatar Petroleum, two highly distinguished oil and gas powerhouses, combine their expertise to industrialize a field others have deemed as an impossible commercial source. Inside Investor discusses with Lewis Affleck, Managing Director, Maersk Oil Qatar the challenges, this partnership, and the future of the company.

Reading Time: 5 minutes

Lewis Affleck, Managing Director of Maersk Oil Qatar

Maersk Oil and Qatar Petroleum, two highly distinguished oil and gas powerhouses, combine their expertise to industrialize a field others have deemed as an impossible commercial source. Inside Investor discusses with Lewis Affleck, Managing Director, Maersk Oil Qatar the challenges, this partnership, and the future of the company.

Q:  Maersk Oil’s biggest project in Qatar is the huge Al Shaheen offshore development. Could you give an update on this project, is it up and running? What is the current production output?

A:  In 1992, Maersk Oil took on the challenge of the Al Shaheen Field in Qatar. This was a field others had walked away from because of its complexity. It was deemed non-commercial, with very thin, low permeability carbonate reservoirs but, with our partner Qatar Petroleum (QP) we turned Al Shaheen into a commercial success. This year we are celebrating our 20th anniversary with QP and we have already produced more than one billion barrels of oil from the Al Shaheen field.

Q: What has been the experience with your investment partner Qatar Petroleum? Why did Qatar choose Maersk?

A: The Al Shaheen field is very complex and the reserves are very difficult to extract. Despite these challenges, in partnership with QP, and by applying innovative solutions, development strategies and technologies – many of which came from Maersk Oil’s experience of developing tight chalk reservoirs in the Danish North Sea – we’ve turned this challenging field into a commercial success.  Since 1994, Maersk Oil has set new world records for drilling the longest horizontal wells in the world. The last record, recognised by the Guinness Book of World Records, was set in 2008 with a 12.3 kilometer horizontal well. So first and foremost I believe that our value proposition to QP and the State of Qatar is around technology and experience. We also provide an attractive and rewarding work environment for our Qatari employees. We’ve implemented many initiatives to help our recruitment, retention, and employee development – but also to achieve our goal of providing our employees with a good work-life balance. We recently introduced a reduced work-hours policy to support female employees with special family circumstances or health conditions that prevent them from working full time. We also focus on being a socially responsible company. We’re working in partnership with the Supreme Council of Health, the Hamad Medical Corporation, the Qatar Diabetes Association (QDA), and world leader in diabetes care, Novo Nordisk, to support the Qatari authorities to raise awareness of diabetes, advising on how to prevent it, and supporting people already living with diabetes to manage their health better. Our focus is on high quality, value-adding, social initiatives – so I feel this is an area where we can bring value.

Q:  What is Maersk’s investment to develop the field?

A:  Our most recent field development plan was the $6 billion dollar development known as FDP2005.  It was one of the largest and most complex field developments of its kind anywhere in the world. It included 15 new platforms, 169 new wells, 230 kilometers of pipeline and two of the world’s biggest FSO’s to facilitate production from the field. We delivered the project on time and on budget.

Q:  What were the infrastructural and technical challenges you were facing to exploit the Al Shaheen field?

A: The technical challenges of unlocking the potential of the Al Shaheen field were significant. The Al Shaheen field development uses multiple injectors and producer wells that run in parallel to each other. The production wells are positioned between injector wells, which force water and oil through the tight carbonate rock and into the production well where it is recovered.  So far, we’ve drilled more than 300 wells. We’re already performing what’s considered to be the world’s largest water flood operation of a carbonate field and we’re engaged in many studies that look at the best ways for us to use improved and enhanced oil and gas recovery in the future.

Q:  What was the experience with Qatarisation and how many Qatari nationals are working for Maersk at present?

A: Around 25 per cent of our employees are Qatari and we work hard to attract, retain, and develop our local employees – of which around 50 per cent are in technical positions. As of 31 December 2011, Maersk Oil Qatar had 160 Qatari nationals, who are direct hires. We work very closely with local high schools and universities and sponsor students who are willing to study majors related to the core of Maersk Oil business – such as petroleum, chemical, mechanical engineering, and geology. In 2011, Maersk Oil Qatar successfully launched its Qatari Unique Development and Rotational Assignment (QUDRA). This is a graduate development programme for Qatari females within Maersk Oil Qatar. It is intended to produce qualified employees who will have covered the whole value chain of Maersk Oil Qatar during their rotations – thereby gaining a lot of knowledge, skills, and competencies that will allow them to maximise their contribution to the company. The first group started in December 2010 and is expected to finish its training rotation by May 2012. As part of Maersk Oil Qatar’s continuous focus on the development and growth of our national Qatari staff, a Personal Development Plans system, was introduced and implemented for all Qatari staff. These plans are individually tailored career maps to support an employee’s career development. Developing human capital is very important to Maersk Oil.

Q: There have been talks that Maersk is interested in joining Qatar Petroleum International’s overseas operations. Can you give details?

A: We’re actively pursuing opportunities to work with QP both inside, but also outside of Qatar. So our relationship is definitely deepening. I can’t go into any details as these are commercially sensitive.

Q: How would you assess the general investment environment for oil companies in Qatar?

A: Maersk Oil has a very good working relationship with the State of Qatar, and with QP. This is testament to the very high professional manner in which QP operates. It’s a good and supportive place to do business with a focus on long-term partnership and a stable investment climate. Of course, this is possible as a result of the visionary leadership of HH Sheikh Hamad Bin Khalifa Al Thani, Emir of Qatar, who has inspired the State of Qatar to become a forward thinking world leader in the energy industry.

Q:  Maersk was investing into its new Maersk Oil Research and Technology Centre at the Qatar Science and Technology Park. How is the center doing?

A: We inaugurated the Maersk Oil Research and Technology Centre at the Qatar Science & Technology Park in 2011. We anticipate that it will be a $100 million investment over ten years into cutting edge applied research and technology – much of which is specifically focused on activities that will help to further unlock the huge potential of the Al Shaheen field. The research center will focus primarily on conducting applied research and development, aimed at improved oil recovery (IOR) technologies from long horizontal wells, and enhanced oil recovery (EOR) for carbonate fields. We’re also conducting research that will help us to better understand – and therefore protect – the offshore environment here in Qatar. I think it’s important that we also look at some of the significant achievements we’ve already made that have improved our environmental performance. QP and Maersk Oil have successfully reduced gas flaring from the Al Shaheen field to an absolute minimum – a rare accomplishment in the industry. As a result of its approach to environmental management, the project’s gas gathering system was recognised as the world’s largest Clean Development Mechanism project by the UNFCC, as part of the Kyoto Protocol.

Q:  Oil production is one of the most environmentally risky industries in the world, as seen with the Deepwater Horizon disaster in 2010. What is Maersk’s strategy in being environmentally cautious, especially at a field with the complexity of Al Shaheen?

A: Maersk Oil is determined to develop a world-class project that is designed and operated to high safety and environmental standards. We have already safely drilled more than 300 wells in the Al Shaheen field. Our first priority is the safety of our people and the protection of the environment through the robust design and construction of our facilities. However, recognising the risks inherent in the development and production of oil and gas, Maersk Oil is prepared and capable of responding quickly and effectively to operational incidents. We retain dedicated Oil Spill Response equipment and trained personnel located on offshore facilities. Safety is a core value for Maersk Oil –comprehensive, effective safety and environmental management systems are vital to drilling operations. We remain committed to continually improving our strong safety record, as we work with QP to develop the Al Shaheen field.

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