twitter linkedinfacebookacp contact us

Read the Digital Magazine

Top Stories

Grid List

Onshore Middle East is the cheapest source of new production, with an average breakeven price of just US$27 per barrel. (Image source: Adobe Stock)

Exploration & Production

Onshore Middle East is the cheapest source of new oil production, as the cost of developing new upstream oil projects continues to rise, according to new research from Rystad Energy

According to Rystad Energy, the average breakeven cost of a non-OPEC oil project grew to US$47 per barrel of Brent crude, a 5% increase in the last year alone, thanks to inflationary pressure and supply chain issues. Offshore deepwater and tight oil projects remain the most economical new supply sources, with oil sands still the most expensive.

The report found that onshore Middle East is the cheapest source of new production, with an average breakeven price of just US$27 per barrel. This segment also boasts one of the most significant resource potentials. Offshore shelf is the next cheapest (US$37 per barrel), followed by offshore deepwater (US$43) and North American shale (US$45). Conversely, oil sands production breakevens average US$57 per barrel, but can go as high as around US$75.

Cost pressures

"Rising breakeven prices reflect the increasing cost pressures on the upstream industry. This challenges the economic feasibility of some new projects, but certain segments, including offshore and tight oil, continue to offer competitive costs, ensuring supply can still be brought online to meet future demand. Managing these cost increases will be critical to sustaining long-term production growth,” said Espen Erlingsen, head of Upstream Research at Rystad Energy.

As well as breakevens, average payback for new projects, internal rate of return (IRR) and carbon dioxide (CO2) intensity are vital metrics for evaluating new oil development economics. The tight oil sector’s payback time is just two years, assuming an average oil price of US$70 per barrel, illustrating how quickly operators are recovering their investments. Payback time is closer to 10 years or more for the other supply segments. Tight oil also leads the pack in terms of IRR, with an estimated IRR of around 35% in the same average oil price scenario. Conversely, oil sands, the most expensive supply source, has the lowest IRR of approximately 12%.

Over the last three years, the average CO2 intensity for tight oil has been 14 kilograms per barrel of oil equivalent (kg per boe), while deepwater has a slightly higher average CO2 intensity of 15 kg per boe. The oil sands sector again falls behind the other segments, with the highest future estimated emissions at around 70 kg per boe.

John Morgan and Marc Gerrard, RenQuip directors launching the company's groundbreaking flange spreading technology. (Image source: Renquip)

Industry

RenQuip, a manufacturer of hydraulic and mechanical equipment, is expanding globally, and is set to reinforce its position in the Middle East following a significant contract win

Founded in 2021, RenQuip outperformed its revenue projections by 20% in 2022, and tripled its revenue in 2023. As of 2024, the company has doubled its workforce to 14 dedicated team members and is on track to achieve a further 25% growth over the previous year.

A key driver of this success has been RenQuip’s robust expansion strategy, particularly its focus on the US market, where it has added 20 new distributors and resellers in 2024.

RenQuip’s strategic expansion into the Middle East has already resulted in a significant order secured from a major operator in Saudi Arabia. Looking ahead, the company is set to continue its growth trajectory in the Middle East while also expanding into new markets in Asia and Central Europe. To facilitate this continued expansion, RenQuip is launching a comprehensive new product catalogue, producing a series of application videos, and introducing an array of innovative new products designed to meet the evolving needs of its global customer base.

Marc Gerrard, managing director of RenQuip, said, “Our growth in 2024 is a testament to our strategic vision, commitment to quality, and the strength of our team. As we continue to expand globally, our focus remains on exceeding our clients’ expectations through continuous innovation and dedication to excellence in all aspects of our business.”

RenQuip plans to further strengthen its global presence and solidify its position as a leader in the hydraulic and mechanical equipment industry.

The new process will improve efficiency and reduce carbon footprint. (Image source: Honeywell)

Petrochemicals

Honeywell has launched a new process to improve the efficiency and sustainability of light olefin production

The naphtha to ethane and propane (NEP) technology generates a tunable amount of ethane and propane from naphtha and/or LPG feedstocks, generating more high-value ethylene and propylene with reduced production of lower-value by-products compared to a traditional mixed-feed steam cracking unit and resulting in net cash margin increases. An NEP-based olefins complex also reduces CO2 intensity per metric ton of light olefins produced by 5 to 50% versus a traditional mixed-feed steam cracker.

More efficient production

“The petrochemical industry faces strong competition and challenges in obtaining raw materials globally,” said Matt Spalding, vice president and general manager of Honeywell Energy and Sustainability Solutions in MENA. “Our technology helps to enable more efficient production of ethylene and propylene, two chemicals which are in high demand, while also helping our customers lower their carbon emissions.”

The new solution is a part of Honeywell’s Integrated Olefin Suite technology portfolio to enhance the production of light olefins.

The wireless steam trap monitoring device. (Image source: Yokogawa)

Technology

Yokogawa Electric Corporation has launched a new ATEX-compliant wireless steam trap monitoring device for steam trap status monitoring in steam piping equipment

Developed with thermal utility engineering firm Armstrong International, the new product is part of Yokogawa's Sushi Sensor range in the OpreX Asset Management and Integrity family.

Steam traps are installed on steam distribution pipes, heat exchangers, humidifiers, sterilisers, tracers, and other equipment to remove condensate and ensure efficient heat transfer. Losses from failures in steam traps can reach tens of thousands to millions of US dollars annually. Currently, in most instances, workers are responsible for inspecting and monitoring steam traps wherever they have been installed. While the installation of an automatic monitoring system is an effective way to reduce this inspection workload, the cost of installing such systems has been cost prohibitive. In addition, there is the need to monitor not only the status of steam traps, but also a wide range of related equipment.

By facilitating the timely detection of failures in steam traps, the new product can significantly reduce energy loss. When used in combination with the other wireless pressure sensors, wireless temperature sensors, and wireless vibration sensors in the Sushi Sensor lineup, this device enables the monitoring of a wide range of equipment. Features include:

1. Automatic detection of steam trap status

This device utilises a high-quality temperature sensor and an acoustic sensor to detect the status of steam traps. It can be used in environments with a maximum steam temperature of 440°C.

2. Lower wireless network construction costs

The use of long-range wireless LoRaWAN communication gives this device the ability to communicate at distances of up to around 1km, enabling the monitoring of equipment over a wide area. These monitoring devices can thus be easily installed wherever steam traps are located, and can be connected to a single gateway, thereby holding down network construction costs.

3. Better consistency in inspection quality and less time spent on on-site inspections

The use of Yokogawa’s on-premise GA10 data logging software or other similar cloud-based software will enable the centralised monitoring of steam traps and other equipment wherever they are installed around a plant. Not only will this make for greater consistency in inspection quality, it will mean that on-site inspections do not need to be carried out as frequently.

Hiroshi Tanoguchi, a Yokogawa Electric vice president and executive officer, and head of the Yokogawa Products Headquarters, said, “With this release, we have enriched the Sushi Sensor family of solutions and made it possible to construct networks efficiently and at a lower cost. In the future, we intend to provide this as an energy monitoring solution. Based on steam trap status, this will enable the calculation of projected energy losses in monetary terms and facilitate the creation of maintenance plans, with the priority on high-risk equipment. Through the provision of such highly convenient solutions, Yokogawa is helping its customers reduce their emissions of greenhouse gases and hit their ESG management targets.”

This new product is available in Malaysia, Singapore, Thailand, and Saudi Arabia. It will be later released in the USA, Europe, and India in compliance with IECEx, FM, and other explosion-protected standards.

The webinar will discuss how AI surveillance applications can enhance operational efficiency and improve standards in onshore and offshore operations. (Image source: Adobe Stock)

Webinar

How can AI surveillance applications enhance operational efficiency and improve standards in onshore and offshore operations?

This will be the focus of an exclusive live webinar hosted by Oil Review Middle East, in association with industry leaders Convergint and Axis Communications on ‘Enhancing oil and gas operations with advanced video analytics’, taking place on Wednesday 9 October at 11am (KSA time).

At this webinar, Saif Al-Shahrani, KSA country director, Convergint, and Andrea Monteleone, segment development manager, Critical Infrastructure – EMEA at Axis Communications will explore the transformative impacting of adopting cutting-edge AI-driven video analytics and surveillance technologies on onshore and offshore operations.

Challenges and solutions

Our experts will provide valuable insights into the current landscape of the oil and gas sector, discussing the unique challenges faced by both system integrators and manufacturers. They will unveil the latest cutting-edge surveillance solutions for mitigating these challenges, and delve into how AI surveillance applications are enhancing operational efficiency, improving safety standards, and providing real-time insights crucial for decision-making in this high-stakes industry.

Additionally, the webinar will cover the importance of choosing the right types of cameras and aligning them with video analytics to meet specific operational objectives. It will also explore how to integrate these technologies into a centralised, multi-layered system that maximises the benefits of video analytics, all while ensuring seamless integration and optimal performance. The second in a webinar series addressing AI video analytics transformative applications for oil and gas operations, this webinar follows a highly successful and engaging earlier event on advanced surveillance for oil and gas remote facilities, attended by more than 175 people, including senior representatives of the region's leading oil and gas companies.

Whether you are involved in operations, safety or security, don’t miss this opportunity to access expert insights to help you enhance safety and improve your operations with the latest advances in surveillance technology.

You can register for this free of charge webinar at https://alaincharlestraining.com/webinar2/convergint-webinar

Further support is needed to get low-carbon hydrogen projects off the ground. (Image source: Adobe Stock)

Energy Transition

A new report from the IEA finds that investment and projects in low-emissions hydrogen are growing, but it still accounts for less than 1% of total hydrogen production.

The IEA’s annual Global Hydrogen Review 2024 finds that the momentum for low-emissions hydrogen is growing, as illustrated by a wave of new projects, despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers. The number of projects that have reached final investment decision has doubled in the past 12 months, which would increase today’s global production of low-emissions hydrogen fivefold by 2030. The total electrolyser capacity that has reached final investment decision now stands at 20 gigawatts (GW) globally. Global electrolyser manufacturing capacity doubled in 2023, with China accounting for 60% of this.

If all announced projects are realised worldwide, total production could reach almost 50 million tonnes a year by the end of this decade. However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and 2030.

Lack of clarity on government support, along with uncertainly around demand and regulatory frameworks means that installed capacity for electrolysers and low-emissions hydrogen volumes remain low, with most potential production still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.

“The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals,” said IEA executive director Fatih Birol. “But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”

The report highlights a gap between government goals for production and demand, as well as technology and production cost pressures, with progress in electrolysers in particular stalling due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, as well as optimising deployment processes and moving to mass manufacturing to achieve economies of scale.

Unabated fossil fuels continue to dominate

Despite the growth in momentum, the report points out that low-emissions hydrogen accounted for less than 1% of total hydrogen production in 2023. Producing renewable hydrogen today is generally one-and-a-half to six times more costly than unabated fossil-based production, the IEA notes. It forecasts that hydrogen production is likely to continue to be largely dependent on unabated fossil fuels this year, with unabated natural gas accounting for around two-thirds of total production. The Middle East is a key player, producing 20% of all hydrogen from unabated natural gas.

China leads in terms of production, accounting for almost 30% of the global total, followed by the USA and Middle East with 14% each, and India with 9%. Total hydrogen production reached 97Mt in 2023, and could approach 100Mt by the end of 2024.

Industrial hubs – where low-emissions hydrogen could replace the existing large demand for hydrogen that is currently met by production from unabated fossil fuels – remain an important untapped opportunity by governments to stimulate demand, the IEA says.

The Middle East saw stronger growth in hydrogen demand than other regions (more than 6% growth year-on-year, due to an increase in demand in refining and methanol production). The region accounted for 14% of hydrogen use in 2023. The Middle East was the second largest consumer of hydrogen in industrial applications after China, with 4% growth, mainly driven by methanol production.

Latest news