Saudi Aramco Review 2016

Scientists at Aramco’s Geosteer FID

Scientists at Aramco’s Geosteer FID

Technology the bedrock of Aramco’s achievements

Saudi Aramco’s unwavering dedication to pursue breakthrough technologies and generate innovative ideas is a cornerstone of its commitment to help build a secure energy future in the kingdom, and for people around the world


Sustained investment in technology — particularly in today’s challenging business climate — is a key enabler of Saudi Aramco’s long-term resilience and essential for the company to realise its strategic intent of becoming the world’s leading integrated energy and chemicals company.

To achieve this goal, Aramco fosters a culture of innovation and knowledge sharing. By investing in new technologies, Aramco seeks to improve operating efficiencies, decrease greenhouse gas emissions, and create greater economic opportunities for the people of the kingdom, the firm says in its Annual Review for 2015.

Aramco seeks to create sustainable competitive advantage through the introduction of a balanced portfolio of technically feasible and commercially viable technology options — all in support of its goal to realise the greatest value from the kingdom’s hydrocarbon resources. As part of its broader efforts to address climate change on a global scale, Aramco is pursuing technological solutions to cut greenhouse gas emissions while also growing sustainable supplies of energy.

The alignment Aramco has forged between its research and technology delivery organisations and its upstream and downstream businesses ensures a focus on the development of globally competitive technologies and the establishment of a technology portfolio that creates value across the business and supports the creation of a vibrant knowledge economy in the kingdom.

Collaborating with local and global centres of technical excellence complements and enhances its own in-house research capabilities. Within the kingdom, Aramco has joined efforts with research universities to advance its work on new technologies for upstream and downstream disciplines, and it nurtures alliances between academia and industry by engaging with leading energy service companies in research and innovation parks.

Internationally, Aramco has productive research and education associations with world-renowned technical universities. Aramco also invests globally in startup and high-growth companies developing technologies aligned with its vision. These relationships allow the company to enhance the intellectual rigor of its research by providing access to top qualified talent and creating opportunities for training and development.

Strategically located in technology hubs in key energy markets, its global research network attracts leading researchers interested in doing the best work of their careers. The network provides an environment for innovation to flourish and underscores its drive to achieve global leadership in energy-related technologies.

Aramco’s approach is steadily building results. For example, during 2015, Aramco was granted a record number of patents — 123 — by the US Patent and Trademark Office, marking significant progress toward its vision of becoming a pioneer in technology development. Investments in building its research capacity are designed to achieve a lasting competitive advantage and make the company more adaptable and resilient as a company.


TECHNOLOGY HIGHLIGHTS

Technology at work

Pursuing game-changing innovations generates potentially wider benefits, such as creating businesses to manufacture and service new technologies, inspiring a new generation of Saudi researchers and scientists, and enabling a globally competitive Saudi energy sector.

Upstream Aramco focuses on key domains within exploration, drilling, and production with the goal of increasing the kingdom’s hydrocarbon reserves and improving recovery rates of oil from major reservoirs at a lower cost and with greater reliability.

Some upstream technology developments from 2015 included:

• Its GigaPowers simulator successfully tested a 1.2 billion cell model, one of the largest real field simulation models in the industry. The model will help evaluate production strategies for Khuff reservoirs in the Ghawar field. Aramco also made significant progress in developing the next generation of GigaPowers with the deployment of the Makman-2 Reservoir Simulation Supercomputer, which ranked 28th on a global list of top supercomputers. With a computing capacity of 2.25 trillion operations per second, the Makman-2 supercomputer represents a 260 per cent growth in its total simulation computing capacity compared to 2014. Along with other supercomputers in its Expec Computer Centre, the Makman-2 will enable Aramco to create multi-billion cell simulation models, further improving its ability to manage reservoirs for the benefit of generations to come. Its investments in research are designed to achieve a competitive advantage;

• Heavy oil mobiliser technology could enhance the recovery of heavier grades of crude oil, leading to increases in reserves of recoverable oil. Aramco is also evaluating the potential for chemical and thermal enhanced oil recovery technologies as part of this effort;

• SmartWater Flooding holds the potential to improve its oil recovery rate by an additional 4 per cent to 8 per cent from carbonate reservoirs. Aramco conducted demonstration projects in North ‘Uthmaniyah and Khurais, drilled pilot wells, and deployed monitoring and surveillance equipment to acquire log data. Aramco also completed detailed design and engineering work for the main surface facilities;

• A pioneering seawater-based fracturing fluid, developed in-house, was successfully tested in an acid fracturing job in the field. This approach, which leverages its extensive seawater infrastructure used to support reservoir water flooding, could help preserve groundwater resources;

• Aramco’s first demonstration project for carbon dioxide

(CO2 ) sequestration and enhanced oil recovery, located in the North ‘Uthmaniyah area of the Ghawar field, started injecting CO2 in July 2015. The expected gain in oil recovery from the CO2 injection is projected to be between 7 per cent and 9 per cent. A state-of-the-art monitoring and surveillance plan to track the CO2 plume in the subsurface, monitor the performance of the CO2 injection process, and assess the effectiveness of the field pilot was designed and deployed;

• Aramco completed a field prototype of its new cable deployed electric submersible pump, which can be deployed and retrieved in one day — independently of a workover rig — significantly lowering costs for this process. Aramco also focused on developing a reliable high-speed electric submersible pump for slim hole completions, with the potential to further boost operating efficiencies;

• Date trees, the symbol of Saudi Arabia, may offer an ingenious, low-cost solution to a drilling challenge: Preventing the loss of expensive drilling mud. Aramco examined the waste components of date trees to determine whether this material can be effective in sealing rock formations while drilling oil and gas wells. Drilling fluid engineers engaged with organisations in Al Hasa, an oasis in the Eastern Province, and performance evaluation tests produced positive results. Final testing is scheduled for completion in early 2016. Aramco has filed three patent applications in the US for this environment-friendly solution that also may enable new business and job creation in local communities. Aramco is also evaluating the potential use of local sand as an alternative proppant in fracturing operations;

The use of 3-D images at one of Aramco’s facilities

• Aramco filed a patent application for its high-density cement technology, which provides better wellbore isolation in high-pressure gas wells. This technology reduces gas migration in deep gas wells and helps eliminate expensive remedial operations. Aramco conducted 10 field tests and plan to cement 25 wells in the Khursaniyah field with the new formulation;

• Aramco evaluated a new catalyst (CAN-15) developed at its Riyadh Refinery, which enhances performance in the processing of heavy, de-metalised oil (oil that has had heavy metals such as vanadium removed). The catalyst has boosted the production of distillates, and as a result is creating additional value. A commercial trial is scheduled for completion in early 2016;

• Aramco’s unconventional technology for oil upgrading with a supercritical water process seeks to increase the API gravity of oil, and thereby raise its value for commercial production. Its pilot plant validated the technology and work is under way to build a 10 bpd demonstration unit in collaboration with S-Oil of South Korea, with full operations planned for 2016;

• Aramco continued development of a technology for converting crude oil to chemicals, resulting in significant improvements in the yields of ethylene and propylene. Its project team collaborated with a technology company and a university in the US to design, build, and operate an integrated ethylene pilot plant to demonstrate the feasibility of the technology. The potential for this pioneering technology to add value to its crude oil resource base is significant;

• The one-step process offered by its proprietary SuperButol technology enhances the value of mixed butane streams and produces a clean burning fuel additive that boosts gasoline octane. During 2015, Aramco worked with a technology partner to develop a licensing and deployment system and also reached agreement with another technology partner to develop a feasibility study to incorporate this technology into its processes for developing feedstocks. Its SuperButol technology may play an important role in producing cleaner fuels and lowering emissions;

• Aramco leveraged its collaboration with the King Abdullah University of Science and Technology (Kaust) to examine the use of ceramic membranes for the pre-treatment of produced water before desalination, and to provide guidelines for selecting membranes. Laboratory tests proved the feasibility of using ceramic membranes to treat water produced from oil and gas fields. Ceramic membranes offer a reliable, cost-effective, and environmentally friendly method for treating produced water. Its R&D Centre also developed a preliminary design for using membrane distillation to desalinate produced water at its gas-oil separation plants. Research is ongoing to develop these techniques with the objective of treating produced water on-site at company production facilities, helping conserve the kingdom’s freshwater resources;

• Aramco pioneered an acoustic based dewatering system that permits the timely control of water discharge from the dewatering tank system. An initial pilot system was installed in a crude oil tank at the Riyadh Refinery in 2009 and the system was patented in 2015. The technology costs 70 per cent less than a conventional dewatering system. The first phase of the deployment covered 31 storage tanks and resulted in significant cost avoidance. Aramco plans to install this system in terminals, bulk plants, and refineries in the second phase of deployment. In addition, Aramco is evaluating the commercialisation of this technology. Strategic Greenhouse gas management, cleaner burning fuels, and more efficient engines were its key strategic research focuses during 2015. The goals remain to radically improve fuel efficiency, lower emissions, and provide more affordable energy — benefits with global impact. Aramco continued its investigation of solutions that reduce CO2 emissions from transportation through a cost-effective onboard vehicle CO2 capture system. Its carbon management technology includes an onboard system capable of capturing 25 per cent of the CO2 emitted through vehicular exhaust systems, with a goal to capture as much as 60 per cent;

• At a 15 megawatt thermal boiler facility in the US, Aramco successfully tested the oxy-combustion of heavy residue with pure oxygen and with enriched air. Test results indicated an increased combustibility of the fuel with 50 per cent lower nitrous oxide emissions, demonstrating the potential of using difficult to burn heavy residues for efficient and clean power generation with the potential for 90 per cent CO2 capture;

• Aramco continued its research efforts focusing on the technologies needed to develop advanced engine-fuel systems for gasoline and diesel engines. Its goal is to promote the development and adoption of efficient and cost-effective oil-based engine-fuel systems while addressing global CO2 and energy demand challenges. Aramco has demonstrated fuel efficiency benefits from low octane gasolines in heavy- and light-duty engines at its R&D Centre in Dhahran and at its global research centres in Paris and Detroit, and have shared its findings with the automotive industry. As a result, in 2016 Aramco envisions establishing its first-ever collaboration with one of Europe’s leading automakers; and

• Fuel detergents to increase fuel efficiency are one of the methods under investigation to help reduce domestic consumption of motor fuels. Results from fleet trials showed potential annual kingdom-wide fuel savings of more than 5.6 million barrels per year of diesel and more than 3 million barrels per year of gasoline. The detergents are being piloted at two company bulk plants. If the estimated financial savings obtained in the fleet tests can be confirmed in the bulk plant trials, Aramco plans to implement the programme at all of its bulk plants to help support the country’s drive to reduce fuel consumption.

A scientist at work in the field

In support of its strategy to maximise value creation, Aramco is expediting the migration of projects from research to development and deployment. This effort includes prototyping, licensing, and commercialisation.

In addition to developing new chemicals and tools, Aramco is aggressively evaluating local materials and chemicals to replace imported products to reduce costs and create opportunities for local businesses.

In 2015, two licensed technologies were signed with third parties during the year to commercialise its intellectual property. A licensing agreement was signed with a Norwegian technology company to commercialise its patented technology for monitoring packer integrity.

This technology determines the effectiveness of one or more seals that provide a watertight barrier to isolate hydrocarbon inflow control devices in open hole wells. The commercialisation and deployment of this technology will deliver significant cost avoidance savings through the early detection of water leakage in well completions, thereby decreasing the instances of well closures. Its inflatable contingency ease scraper technology, which helps prevent production loss in offshore facilities, will be commercialised through a licensing agreement signed with a new company created by IK International in Norway and its Saudi Aramco Energy Ventures (SAEV) corporate capital venture subsidiary. Investments in technology aid affordable, sustainable energy supplies.


GLOBAL RESEARCH NETWORK

Establishing and growing a global research and technology presence is an integral component of its drive to develop breakthrough solutions for the challenges faced by its industry. The network Aramco has established reflects its belief that investments in technology development are critical for maintaining an affordable, accessible, and sustainable energy supply to the world while also reducing greenhouse gas emissions.

Its research network includes its in-kingdom research centre at Kaust, five international research centres (Beijing, Boston, Detroit, Houston, and Paris), and three technology offices (Aberdeen, Daejeon, and Delft), all of which are aligned with its R&D Centre and Expec Advanced Research Centre (Expec Arc) in Dhahran.

Its global research network marked two significant milestones in 2015:

• Its Beijing Research Centre became operational and 42 employees were on staff by the end of the year. The centre conducts research on chemical enhanced oil recovery and advanced seismic imaging technologies, including automated fault detection and improvements in data quality through super resolution. The results of its research are already producing cost savings and improvements in exploration and reservoir management. The centre is also evaluating the expansion of research activities into the downstream sector in areas such as transportation efficiency, greenhouse gas management, advanced control and power systems, robotics, materials science, nanotechnology, and advanced computing; and

• In November, Aramco inaugurated its Detroit Research Centre. The 4,645 sq m centre is configured with fits fuel and engine dynamometer research labs and features a vehicle lab equipped with an environmental chamber. The centre can accommodate light-duty and heavyduty fuels research programmes and also offers full on-site integration and the demonstration of new vehicle technologies. Its Strategic Transportation Analysis Team, based in the Detroit Centre, provides dynamic industry analysis relevant to its fuels research and development activities.


ACADEMIA AND INDUSTRIAL COLLABORATION

Geologists mapping out potential sites

Collaboration with global universities and industry leaders, both domestically and internationally, provides opportunities for developing and acquiring new technologies, evolving new skills in its workforce, recruiting top talent, and helping to strengthen the research capacity of in-kingdom universities in areas aligned with its business objectives.

For example, in 2015 Aramco signed a Memorandum of Understanding with Dammam University to strengthen the university’s education, research, and economic development.

Elsewhere in the kingdom, its joint efforts with Kaust focused on advancing research in downstream domains such as fuel technology and cleaner burning engines, as well as other leading-edge developments in information technology, materials science, nanotechnology, robotics, and solar energy materials.

A new Saudi Aramco R&D Centre is under development on the Kaust campus. When fully operational, the 15,300 sq m centre will host 139 full-time researchers and support staff exploring carbon management, computational modeling, oil and gas network integration, and environmental protection.

In addition to its 23 full-time scientists and engineers currently conducting research at Kaust, Aramco also sponsor employees pursuing advanced degrees at Kaust and hire graduates, creating a conduit of talent to drive innovation in its company and in its industry.

Research performed as part of its multifaceted interactions with the King Fahd University of Petroleum and Minerals (KFUPM), located adjacent to its headquarters, spans upstream and downstream focus areas, including enhanced oil recovery, reservoir quality prediction, near surface seismology, drilling optimisation, subquality gas treatment, CO2 capture and utilisation, and the upgrading of heavier crude oils to lighter, more valuable grades.

In 2015, Aramco continued work with KFUPM to create a new College of Petroleum Engineering and Geosciences, a project that includes the construction of a new laboratory building and the establishment of a private subsidiary company under the Dhahran Techno Valley Company (DTVC) to support associated nonacademic activities. The new college will provide a collaborative and cross-disciplinary environment that will bring faculty, students, and industry together to address business and technical challenges of vital importance to the petroleum industry. Aramco also continued to support work by leading energy companies associated with DTVC, which manages a research and innovation park adjacent to and integrated with KFUPM.

In 2015, Aramco established a dedicated Technology Coordination Group, and met regularly with DTVC companies to facilitate new research and development. Researchers in DTVC have begun efforts to tackle challenges in geophysics and petroleum engineering, refining and petrochemical processes, water management, energy efficiency, renewable energy, and advanced computing. The work under way at DTVC supports the wider transition to a knowledge-based economy and breakthroughs in these research domains will have far-reaching benefits for the kingdom’s economy.

In 2015, Huawei joined the roster of international energy technology firms established at DTVC. A Joint Innovation Centre dedicated to pursue information and communication technologies for the oil and gas industry will focus on areas of interest such as unified communications, high-performance computing labs, mobility, and the digital oil field. Its research and education association with the Massachusetts Institute of Technology (MIT) in the US, fostered by its research centre in Boston, continued to advance upstream and downstream research efforts, with a focus on low carbon energy, modelling, visualisation, simulation, advanced materials, and power generation.


INVESTING IN ENERGY

Aramco’s commitment to invest in innovation reaches beyond its own global research network and collaboration with universities. Its SAEV corporate capital venture subsidiary invests in startup and highgrowth technology companies that offer the potential to maximise the value of its resource base, create new industries, and spur job creation.

In 2015, SAEV completed fits investments in companies specialising in drilling services, well technology, spectrometers, and construction technology. Its investment in Novomer, a US-based technology company that uses CO2 as feedstock to produce high-performance, cost-effective, and environment-friendly polymers and chemicals, is a landmark step in its journey to diversify further downstream.

Aramco supports collaboration through an expanding "open innovation network" that taps into cross-functional sources of scientific expertise and researchers around the world. The alliances Aramco has created for cooperative engagement will secure its commitment to the sustainability of its resources, promote growth in the domestic economy, and help drive job creation opportunities for Saudi businesses and citizens.




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