Abu Dhabi Company For Onshore Oil Operations.

ADCO is owned 60% by ADNOC and 40% by Abu Dhabi Petroleum Co. (ADPC) - formerly known as PD/TC. ADPC consists of BP, Shell and Total, each holding 9.5% of ADCO; ExxonMobil holds 9.5% and Partex has the remaining 2%. (PD/TC's original concession agreement was signed in January 1939. In 1962 the company became known as Abu Dhabi Petroleum Co. Ltd. - ADPC - and in 1979 it was renamed ADCO).

ADCO has about 30 fields, including three major producers. Its capacity has risen from 860,000 b/d in 1990/91 to more than 1.5m b/d. The ADCO fields are linked by more than 450 km of pipelines to storage and shipping facilities at the Jebel Dhanna oil terminal.

Bids for the project management consultancy (PMC) contract on the Sahil, Asab and Shah (SAS) programme, to increase Abu Dhabi's onshore crude oil production capacity to 1.8m b/d were re-submitted in October 2008. The winning bidder is to work along-side the Washington Group Int'l, the front-end engineering and design (FEED) contractor, on the whole programme. The work includes the drilling of production wells, construction of gas-oil separation plants (GOSPs) and inter-field pipeline networks in the five fields.

In September, ADCO split the SAS development into two EPC packages in an effort to make the project more manageable. Package A, the larger of the two, covers work on the Asab field, including replacement of the existing gas gathering, gas lift, and oil and gas treatment facilities. Package B covers installation of degassing stations at Sahil and Shah, plant and flow lines, and main oil-lines connecting Sahil to Asab, and Shah to Asab. ADCO is expected to approve the contracts for both packages before end-January, having secured lower prices from bidders. Sharjah-based Petrofac has won Package A. A JV of TR of Spain and Athens-based Consolidated Contractors Int'l Co. (CCC) won package B. MEED on Jan. 16 quoted a source close to the programme as saying "good discounts" had been obtained on the original bids for both packages.

MEED on Jan. 16 said the US/Canadian firm Veco had won the contract for the first part of the PMC. It quoted a source as saying the second part of the contract was to be retendered "in the near future".

ADCO has initiated new smart wells technology to optimise reservoir management. Its smart wells concept for EOR involves an interesting technology already proven. In north-east Bab, ADCO is using smart wells which help in optimising production and reservoir management. It is very cost-effective and does not entail much investment.

ADCO has grown considerably in the past 44 years to become the top oil-producing company in the UAE. From 60,000 b/d in the 1960s to 1.5m b/d now, it is growing rapidly as ADCO now can produce up to 1.8m b/d for a short period if necessary. But such surge production has proved to be a very costly exercise, judging by the experience in Iran.

ADCO is employing over 2,000 people, with nearly half of them being nationals. ADCO has achieved a 50% Emiratisation target by continuously developing staff development. ADCO is aiming to achieve a 75% Emiratisation of its workforce before end-2009.

ADCO is based in a 17-storey, V-shaped complex on the Abu Dhabi corniche completed in early 1998. It is one of five HQs for ADNOC and its affiliates. The others are for ADMA-OPCO, ADGAS, NDC and a joint HQ for ZADCO and GASCO.

ADCO has over 10 bn barrels of proven oil reserves spread over 10,000 sq km (almost the size of Lebanon). In late 1993, after Supreme Petroleum Council (SPC) approval, its board adopted a plan for its sustainable capacity to reach 1.5m b/d by end-1997. But actual capacity only increased to 1.19m b/d; the foreign partners did not spend as much as was needed because of OPEC quota limits. But work was resumed subsequently and the capacity has reached more than 1.5m b/d.

Murban-Bab was the first oilfield in Abu Dhabi found in 1954 by PD/TC. It went on stream in 1964, after delays. Bab is a giant rich in natural gas. Its oil production capacity was developed in the 1970s to more than 75,000 b/d. It was closed down in 1986 and re-opened in 1989. Its sustainable capacity rose from 60,000 b/d in 1989/90 to 100,000 b/d in early 1990. Because of the Gulf crisis, ADCO quickly raised its output to 150,000 b/d by early 1991. This was expanded to 250,000 b/d in 1993 and 300,000 b/d in June 1995. Now the field's design capacity is 420,000 b/d but its sustainable production potential is limited to 350,000 b/d.

On Oct. 7, 2008, six groups submitted technical bids to ADCO for the contract to install new gas compressors at Bab to boost the field's production system. Commercial bids for the project were made on Dec. 16. The firms are Petrofac, Snamprogetti, a JV of Technip and the local National Petroleum Construction Co. (NNPC, an affiliate of ADNOC), the Dubai-based Indian firm Dodsal, India's Larsen & Toubro, GS Engineering & Construction of South Korea.

The project covers the installation of three compression stations, each containing three booster compressors. The work is part of the second phase of Bab's expansion. The final award of the EPC contract was expected this month.

The original tender was cancelled after two bids submitted by a German team of ILF Consulting Engineers and Siemens, and NPCC with Technip and Germany's Man, came in up to three times the initial estimated budget of $600m. For the re-tender, ADCO split the procurement of the compressors from the EPC element to reduce costs and the overall development period. Technip is the FEED consultant.

At North-East Bab and Bu Hasa fields gas injection compressors and related long-lead items have been supplied by Dresser Engineering and Mitsubishi under a $50m contract.

Located about 85 km south-west of Abu Dhabi City, Bab occupies an area of around 1,200 sq km. It has more than 10 oil and gas bearing zones, mainly in Thamama formations (Fms), at depths of 88 to 12,000 feet. The oil is of the Murban group, as in the case of ADCO's Bu Hasa, Asab, Shah and Sahil. Bab has over 460 wells, including more than 130 oil producers in the upper oil zone, 20 gas producers in the upper gas zones and seven wells in the lower gas zones. The Murban blend from ADCO's fields is exported through Jebel Dhanna terminal which has been expanded. A 126.5-km crude oil pipeline built from Bab to an oil refinery on Umm al-Nar island was completed in 2003 which replaced old oil and water pipelines.

Shell, one of BP's equal partners in ADCO (see omt2AbuDfieldsJan12-09), has been in discussion since 2008 about providing its EOR technology to help raise productivity at ADCO's oilfields - particularly the ageing structures - thanks to its unique EOR experience in Oman. Shell is hoping to have a similar arrangement with ADMA-OPCO and other operators in Abu Dhabi, as well as elsewhere in the world. In a presentation to Abu Dhabi International Petroleum Exhibition and Conference (Adipec-2008) on Nov. 5, 2009, Val Brock, the EOR-related business development manager for Shell International E&P, said: "[Shell's] EOR technology can improve recovery rates" by 5-20% on average, "depending on the reservoir". He said the technology currently deployed by Shell in Oman on a commercial scale was producing the desired results, adding: "We are using the EOR technology at our own fields and now are offering it to our potential partners... The EOR technology helps stop the decline of a producing field. It helps in extracting the oil trapped in rock pores. The demand outlook for oil in the coming decades is very strong, so over the next decade we could see a number of onshore and offshore EOR projects, worldwide".

Brock said the EOR was first implemented in the 1930s and now the technology has become "very attractive because it's proven and cost effective". He noted that some 70% of current world oil production came from fields which were past their peak production. And, typically only 30-35% of their oil will actually be recovered. Developing and applying new technologies to produce more from such fields was essential for meeting the world's expanding energy needs. For example, he said, a global increase of 1% in the average recovery factor of mature fields would yield an additional 20-30 bn barrels, adding: "[The] North Sea is a classic example, where the deployment of EOR technology can improve recovery rates and arrest the decline in overall oil production".

Shell on Nov. 3, 2008, signed an MoU with ADNOC to look into ways of co-operating on deep gas exploration. Shell Executive Director for E&P and a Shell board member, Malcolm Brinded, said the MoU was "an opportunity to evaluate jointly with ADNOC the scope for co-operation on deep gas exploration". The MoU covers "deep horizons" offshore. Speaking at the Adipec 2008 conference, Brinded said he hoped a final agreement between Shell and ADNOC would be signed "relatively quickly".

ADNOC unit Esnaad on Nov. 7, 2008, said it had signed a collaboration agreement with Kuwait's Napesco Int'l Petroleum Co. under which Napesco will provide oil well stimulation and other services to ADCO. Esnaad General Manager Darwish al-Qubaisi said: "The alliance with Napesco is for two years and it can be extended by another year. Esnaad/Napesco expect to generate Dh20 million yearly income through services to ADCO". Esnaad's Well Services Department Manager Sa'id S. al-Khatib said Napesco was initially targeting 50 wells for stimulation in the first year of their alliance. Napesco's Assistant General Manager for Business Development Muhammad A. Meghani said their work in Abu Dhabi was to begin before February 2009 and equipment worth up to $8m will be deployed in the operations to be brought in from Kuwait. He said: "The oil well stimulation will enhance recovery and increase production of the wells by as much as 50%". He said ADCO had up to 3,000 wells in five major oilfields.

Esnaad was set up in 2002 through a merger of two ADNOC units - Abu Dhabi Drilling Chemicals and Products Ltd and National Marine Services Co. Esnaad provides full-fledged services and supplies to the petroleum in Abu Dhabi with emphasis on production and marketing of drilling chemicals, oil well services, handling materials, labour and equipment supply, marine services, storage facilities, lease of warehouses, offices, stores and special installations.

Bu Hasa, found in 1962, is ADCO's biggest oilfield. It has been expanded from 400,000 to 620,000 b/d, under a gas injection programme for both Bu Hasa and Sahil fields. But this capacity is not sustainable for a long time and the field produced at 100,000-200,000 b/d for years in view of OPEC quota limitations.

A project is expanding the field's long-term sustainable capacity to more than 730,000 b/d by 2012/13. A series of projects include supply and installation of a 730,000 b/d degassing plant; replacement of existing two-phase 50,000 b/d gas separators with four new three-phase ones each of 120,000 b/d capacity; and re-injection into the G, F and D Fms of 95 MCF/d of gas and about 120,000 b/d of water. One of the EPC contractors for this is Snamprogetti, with Parsons Int'l of the US providing PMC services. The new EOR system is necessary and challenging, as the water content at Bu Hasa in early 2003 was expected to rise above 30% within five years. The water cut has reduced reservoir pressure. In a related project, four units and Bu Hasa's instrumentation and control system have been upgraded.

For its part, the state-controlled Abu Dhabi Gas Industries Co. (Gasco) in 2003 contracted Larsen & Toubro of India to upgrade and modify the gas-gathering system and related facilities at Bu Hasa. This now handles up to 65 MCF/d of additional gas.

Huwaila, a small field just south of Bu Hasa, has been developed to a capacity of 10,000 b/d. VECO has done the FEED work and has the detailed engineering and procurement contract. Crude oil from the field is pumped to Bu Hasa by pipeline. It is to be expanded to 20,000 b/d.

Asab, found in 1965, is ADCO's second biggest field, but its production capacity is limited to 240,000 b/d. The field is capable of 400,000 b/d peak production. ADCO is raising its long-term capacity to 250,000 b/d. Asab is rich in sour gas. VECO in late 2004 won a $40m EPC contract for a Asab water injection system aimed at improving reservoir pressure at the field. VECO did the FEED work on the project.

Shah, found in 1966 but developed in 1990/91, has a capacity of 40,000 b/d. Sahil, found in 1967, has a capacity of 40,000 b/d. The crudes are processed at a central facility at Asab which has a spare capacity of 80,000 b/d. Both fields are being developed to reach a combined capacity of 180,000 b/d by 2018. Shah has a huge field of very sour gas being developed on a big scale by ConocoPhillips under a project worth about $10 bn (see below).

All these fields have gas-rich Arab and Thamama Fms, the basis of a major onshore gas development programme. They provide gas to local power plants and Gasco at Ruwais.

ADCO's North-East Abu Dhabi (NEAD) oilfields, Rumaitha (found in 1969), al-Dabb'iya (1970s), and their satellite Shanayel (1983), came on stream in 2000 at a total capacity of 10,000 b/d producing. They have been developed to a sustainable long-term capacity of 150,000 b/d and a plateau of 200,000 b/d - mostly from al-Dabb'iya. Most of their current 120,000 b/d output is being supplied to the Umm al-Nar oil refinery.