Describe Total’s major projects in the UAE and Abu Dhabi and their importance to the company.
Two things show the importance of the UAE and Abu Dhabi to Total. The first is our footprint: We are the largest international oil company (IOC) in Abu Dhabi involved across the whole energy value chain—from upstream through midstream to downstream.
In the upstream sector, we operate the Abu Al Bukhoosh (ABK) field, making us the only major IOC to operate in Abu Dhabi, and we are also a partner in the Abu Dhabi Company for Onshore Petroleum Operations (ADCO) and the Abu Dhabi Marine Operating Co.
In gas treatment, we are a partner in Abu Dhabi Gas Industries Co. (GASCO), while for liquefied natural gas (LNG) exportation, we are a partner in Abu Dhabi Gas Liquefaction Co. (ADGAS).
For gas importation, we are a partner in Dolphin Energy. In the downstream sector, we are involved in the Fertil fertilizer project with Abu Dhabi National Oil Co. (ADNOC). We are also partners with Masdar in the Shams 1 solar energy project, as well as in the Taweelah desalination project. We have a lubricant blending plant and a trading office in Dubai. This shows how important Abu Dhabi and the whole UAE is to Total.
The second important thing is the recently awarded ADCO concession, because what we have offered to ADCO for our 10% stake is a clear indication of our commitment to Abu Dhabi and its future.
What led the Abu Dhabi government to choose Total in the ADCO concession?
I believe our offer took account of all of Abu Dhabi’s technical and commercial requirements.
Abu Dhabi was clear when it made the call for tenders for the ADCO concession, including its expectations from potential bidders: what they want to do in their fields and what recovery rate they target.
We are fortunate to have been operating in Abu Dhabi since 1939, so we know these reservoirs pretty well. Also, in the last ADCO concession, which expired last year, we held a 9.5% stake, and did several research projects at our research center in Pau, France, focusing on the specific characteristics of the Abu Dhabi fields. As a consequence, our technical offer matched ADNOC’s technical expectations.
The second part was the commercial bid, which was a very important element as our bid had to assess the commercial value of a 40-year concession. The challenge was to take into account production that comes after 20 to 30 years. So we have had to calculate the full-life value of the concession by applying our own knowledge, based on the long-term nature of the contract together with our detailed understanding of the reservoirs and their likely evolution over the next 40 years. Added to that is the fact that we have a very wise and understanding partner in ADNOC and an extremely efficient operating company in ADCO. In addition, everyone recognizes the long-term stability of the UAE. All of these factors combined made our commercial valuation of the ADCO concession correct. I believe that those who place a lower value on it were just wrong.
We cannot give the cost per barrel as this is commercially confidential information, but there has been widespread speculation that we paid around USD 2 billion. If that figure is correct, it means we have paid USD 1 per barrel, as our chief executive officer, Patrick Pouyanné, said. And I do not know where else in the world you can get proven reserves at that cost.
How much oil is produced from the fields operated in the UAE?
The only field we actually operate is the Abu Al Bukhoosh field, which produces a relatively small volume of oil (around 9,000 BOPD), but a significant volume of gas for the local market (more than 500 MMscf/D).
However, our overall production from the Abu Dhabi fields in which we have an interest is much higher at just under 300,000 B/D. This represents around 12% of Total’s global production, which shows how important Abu Dhabi is to the company.
What is the operational status of the Abu Al Bukhoosh field?
ABK is an interesting offshore field for two reasons. Firstly, this field lies in the economic water border between the UAE and Iran. The Abu Dhabi side of the field produces oil and gas, while the Iranian side currently produces probably only oil. So the geographical location of the field is very important.
Secondly, though the field is relatively small compared with other fields in Abu Dhabi, it has the same geological layers as the rest of Abu Dhabi’s fields. Therefore, everything that is done at the ABK field can effectively be used as a pilot project for other major fields in Abu Dhabi, most notably, perhaps, in terms of EOR.
For example, if you look at the overall recovery rate at ABK today, it is more than 45%. In some reservoirs, it is 55%, and there is one reservoir where we have achieved close to 70% recovery. The technologies that we have used to achieve these recovery rates at ABK can also be applied at bigger fields in Abu Dhabi.
The journey of technology application in the ABK field dates back to the 1990s when we started tertiary gas injection, which was followed by the first EOR pilot project in 1992. Also, we have been injecting gas in the field for a long while.
At the same time, we were producing a large amount of water with the gas produced from the ABK field. We tried various artificial lift methods to deal with this issue. We also did some pilot projects for chemical EOR, which showed interesting results. We are now considering how best to exploit these techniques going forward.
On the small reservoirs of ABK, the financial benefits from deploying these methodologies are not clearly tangible. However, if the same methodologies are successfully applied on the big fields of Abu Dhabi, then there will be a huge impact on the overall recovery of Abu Dhabi’s hydrocarbon reserves. Which is why, as I say, ABK is a sort of a pilot field for all of the Abu Dhabi reservoirs.
Which technologies are you bringing to the UAE?
We are utilizing a range of different technologies in the field we operate—whether managing produced water or applying gas injection and chemical EOR techniques. We are also studying various EOR techniques.
What is your exploration and production strategy for the UAE?
The UAE is important for us, and our strategy is in line with the UAE’s government strategy. We want to be a partner of choice with local national oil companies, maximize recovery rates in the fields we are involved in either as operator or asset leader, and help the UAE achieve its future energy objectives.
As I mentioned earlier, we are already involved across the entire energy value chain, but with the government’s acceptance, we have ambitions to further expand our presence. We would be happy to get involved with other Abu Dhabi-owned energy companies such as IPIC [International Petroleum Investment Co.] and Mubadala in addition to ADNOC. That’s why we are in ongoing discussions about new investment opportunities that are useful for the UAE.
For example, the soaring gas consumption in the country requires a clear strategy to meet the challenge. With our various projects in Abu Dhabi through Total ABK, Dolphin Energy, GASCO, or ADGAS we are working hard to help face this challenge and have also set a forecast for a gas balance in the country that reflects future needs.
The second major part of our strategy is related to research, either with ADNOC, Masdar, or the Petroleum Institute University and Research Center in Abu Dhabi, as we aim to achieve ambitious recovery rates.
A third element of our strategy is the development of local capability and talents. We are the only IOC in Abu Dhabi that has created a dedicated training academy, the Total ABK Academy, aimed specifically at training people for careers as technicians and operatives in the oil and gas industry. We also plan to provide training at other levels, including professional engineers.
Which technologies are being deployed in Abu Dhabi and the ADCO concession?
As part of our commitment under the ADCO concession, we have to establish a technology hub. In this hub, all the expertise and know-how of Total will be made available to ADCO. This means that ADCO, which is an independent operating company, and all its employees will have access to Total’s expertise worldwide, giving them access to the same data and knowledge as any of its affiliated companies worldwide.
Given ADNOC’s 70% recovery rate target, it is not enough to have a development plan just for today. We need to come up with additional EOR development plans that cover the next 40 years or more, including gas injection, which has already been successfully applied in Total ABK, in addition to carbon dioxide and chemical injection.
All of these have to be deployed with a detailed understanding of the fields in question, because maximizing recovery rate requires a clear understanding of the reservoirs’ characteristics. Fortunately, I believe this to be one of Total’s strongest points, thanks to the unparalleled geosciences expertise and know-how we have.
Describe the collaboration of Total and Masdar on the digital rock physics (DRP) project, which aims to produce an archive of rock images in microscopic detail.
The DRP project is, if we can say, the EOR of the EOR, as it enhances EOR. That means it targets the oil that cannot be reached even after deploying normal EOR techniques. It shows that we are not only supporting the UAE in the short term but also in the long term. It will take some time before we see the real benefits from this project. Eventually, however, we hope it will enable us and the UAE to extract the last drop of oil from the ground.