In The Spotlight
![Aramco's gas expansion is one of the factors behind the increase in capital expenditure. (Image source: Aramco)](/images/2024/july/aramcogas.webp#joomlaImage://local-images/2024/july/aramcogas.webp?width=787&height=399)
Aramco's gas expansion is one of the factors behind the increase in capital expenditure. (Image source: Aramco)
Aramco reports strong performance and capex growth
Aramco has reported profits of US$29.2 bn in Q2 2024 and US$56.3bn for H1 2024, slightly down on the corresponding periods of 2023, and expects to issue total dividends of US$124.2bn this year, according to its latest results
Aramco’s capital expenditure in the second quarter rose nearly 14% year-on-year to US$12.1bn, with H2 capex standing at US$23bn compared with US$19.2bn in the first half of 2023. Upstream capex rose particularly strongly, (24% in H2 2024 compared with H2 2023), reflecting progress associated with crude oil increments to maintain maximum sustainable capacity (MSC) at 12 mn bpd, and continued development of multiple gas projects to support the strategic expansion of the gas business.
Aramco president & CEO Amin H. Nasser said, “We have delivered market-leading performance once again, with strong earnings and cash flows in the first half of the year. Leveraging these strong earnings, we continued to deliver a base dividend that is sustainable and progressive, and a performance-linked dividend that shares the upside with our shareholders.
“We have also continued to create and deliver both value and growth, as demonstrated by the positive investor response to the government’s secondary public offering of Aramco shares and our recent US$6bn bond issuance."
Operational performance
In terms of operational performance, Aramco highlights progress in key strategic areas, notably its strategic gas expansion, with the announcement of contract awards worth more than US$25bn as it targets sales gas production growth of more than 60% by 2030, compared to 2021 levels. They include contracts for the Jafurah unconventional development Phase Two, Master Gas System Phase 3 and Fadhili Gas Plant expansion.
Aramco reports that in the second quarter, it achieved total hydrocarbon production of 12.3mn boed, while exploration activities resulted in seven oil and gas discoveries in the Kingdom’s Eastern Province and Empty Quarter, consisting of two unconventional oilfields, one Arabian light oil reservoir, two natural gas fields, and two natural gas reservoirs. Procurement and construction activities are proceeding on the Marjan and Berri and Zuluf crude oil increments.
Other highlights include partnering with leading car manufacturers on lower-emission vehicle technologies; expanding its new energies portfolio, with the acquisition of a 50% interest in the Blue Hydrogen Industrial Gases Company (BHIG); growing its global retail network with the acquisition of a 40% equity stake in Gas & Oil Pakistan Ltd; and the agreement with Pasqal to deploy the first quantum computer in the Kingdom.
In a presentation on the results, Aramco noted that oil demand growth is expected to continue in 2024 and beyond, amidst a robust economic outlook, highlighting record global oil demand in H1 2024 and demand forecasts of between 104.6mn bpd and 106.2 mn bpd for the second half of the year.
![Both onshore and offshore operations, and oilfield services did well. (Image source: Adnoc Drilling) oil rigs](/images/2024/august/ADNOC_Drilling_Delivers_All-Time_Record_Second_Quarter_Results.webp#joomlaImage://local-images/2024/august/ADNOC_Drilling_Delivers_All-Time_Record_Second_Quarter_Results.webp?width=787&height=399)
Both onshore and offshore operations, and oilfield services did well. (Image source: Adnoc Drilling)
ADNOC Drilling sees steady revenue increase in 2024
Driven by operational expansion across all business segments, ADNOC Drilling’s second quarter and first half 2024 revenue increased to US$935mn, surpassing US$1.8bn, up year-on-year by 29% and 26% respectively
There was a steady revenue increase in both onshore and offshore operations, and in oilfield services as well.
“ADNOC Drilling has continued to deliver on its strategic initiatives and has successfully closed the first half of the year on a strong note, achieving multiple milestones.
“The Company’s performance for the period is a continued reflection of our unwavering commitment to operational excellence and efficiency in every aspect of our business. Our achievements for the period are a testament to the relentless dedication of our people, whose efforts are central to delivering outstanding service to our customers and maximising value for our shareholders,”said Abdulrahman Abdulla Al Seiari, CEO, ADNOC Drilling.
The strong top-line translated into record EBITDA both in the quarter and the first half. Second quarter EBITDA increased by 37% year-on-year and 8% sequentially to US$472mn, yielding a 50% EBITDA margin. Consistency in revenue growth and cost-cutting strategies led to US$909mn EBITDA in the first half of the year, up 34% year-on-year and with a margin increase to 50%.
Net profit for the quarter also grew, up 29% year-on-year and 7% sequentially to US$295mn, driven by the increase in EBITDA, while for the first half the figure stood at US$570mn, up 28% year-on-year.
At the end of the second quarter, the fleet consisted of 140 rigs (136 owned plus four lease-to-own land rigs), up from 137 at the end of the first quarter due to the addition of three land rigs.
Encouraged by the positive results, the Board of Directors has approved an interim dividend of US$394mn, +10% year-on-year under new enhanced and progressive dividend policy, equivalent to 9.0468 fils per share.
The interim dividend distribution is expected to be in the last week of August 2024, to all shareholders of record as of August 12, 2024.
Record submissions for ADIPEC 2024 Technical Conference
The ADIPEC 2024 Technical Conference has received a record 5,977 submissions, a 16% increase over last year
Major growth in submissions was seen in the AI and Digital Transformation and Energy Transition and Decarbonisation categories, and increased submissions were received from African and Arab states.
The ADIPEC Technical Conference is a key part of ADIPEC, the world’s largest energy event, which takes place on 4-7 November 2024 in Abu Dhabi. Organised by SPE, the Technical Conference this year will feature 159 sessions across 12 categories, for which energy experts and engineers from around the world submit their work to be considered for presentation.
Dr. Khaled Abdul Monem Al Kindi, senior vie president, Upper Zakum, ADNOC Offshore and ADIPEC 2024 Technical Conference Programme chair, said,“I am immensely proud to announce a historic milestone of 5,977 technical submissions received this year. This unprecedented volume of contributions underscores ADIPEC's vital role as a premier forum for innovative dialogue and exchange within the global energy sector. I extend my heartfelt thanks to all authors – the pioneering experts that continue to drive our industry forward, fostering the advancements and collaborative spirit necessary to meet the evolving demands of our world.”
Bringing together the changemakers
As a key part of ADIPEC’s portfolio of 10 conferences, the ADIPEC Technical Conference brings together the brightest minds and technical experts from across the energy value chain – the changemakers at the forefront of engineering, technology and industry innovation.
The Energy Transition and Decarbonisation and AI and Digital Transformation saw jumps in submissions of 38% and 32% respectively. These increases reveal the energy industry’s growing focus on emerging digital technologies and efforts to decarbonise in support of the energy transition, which are a major focus of ADIPEC this year, reflected across its dynamic conference and exhibition agenda.
A significant increase was also recorded in the number of submissions from Arab and African countries over last year, rising 50% and 28% respectively. Double-digit growth was also recorded in submissions from the Asia & Pacific Region, North America, and the Middle East. The ADIPEC Technical Conference also saw experts from 25% more companies submit their work for presentation.
Christopher Hudson, president of dmg events, the organiser of ADIPEC, said, "Decarbonisation presents many challenges and opportunities for all sectors. ADIPEC’s focus on platforming low-carbon energy innovations to power industry, empower lives, and accelerate global prosperity makes its Technical Conference a critical forum to advance a sustainable, secure and equitable energy future. This year’s record number of submissions, along with the substantial increases in geographical and category-specific contributions, highlights the alignment of our agenda with the industry's needs and the global commitment to be part of the solution."
Global subsea market set for strong growth
The subsea market is set to experience a significant inflow of capital from 2024-2027, with total spending set to exceed US$42bn at a CAGR of 10% over this period, according to Rystad Energy
The growth is driven by investment in deep and ultra-deep projects and includes players involved in production and processing systems such as subsea umbilical risers and flowlines (SURF), trees, wellheads, manifolds and other components.
Driven by rising operator expenditure on equipment and installation services, investment activity has been particularly robust in regions such as South America and Europe, where major projects are making significant progress and attracting new investment. Brazil, with its vast pre-salt reserves, is driving strong demand for subsea equipment and SURF, with anticipated expenditure set to surge 18% to US$6bn in 2024. Meanwhile, in Europe, Norway is experiencing a resurgence in activity, fuelled by favourable market conditions and technological advancements.
Deepwater developments are set to dominate the sector, accounting for 45% of the market from 2024 to 2028. Significant greenfield projects include Barracuda Revitalization in Brazil, Johan Castberg and Breidablikk in Norway and Golfinho in Mozambique. Key brownfield initiatives include Balder Future, Gullfaks South and Schiehallion in Norway and the UK.
Ultra-deepwater projects, driven by major floating production, storage and offloading (FPSO) initiatives in Brazil and Guyana, are projected to capture 35% of the market, led by South America.
In 2024, ExxonMobil's expanded operations, with a focus on Guyana, are expected to significantly boost subsea tree installations, while in the SURF sector, global installations are anticipated to reach 3,500 km in 2024., with Brazil expected to account for 22% of this total, followed by the USA and Angola.
Looking ahead, TechnipFMC, OneSubsea and Aker Solutions are expected to lead the way in the supply of subsea trees. In terms of operators, Petrobras remains a dominant operator, particularly in South America, where it has heavily invested in pre-salt developments. In Europe, Equinor and Aker BP have extensive subsea portfolios, with significant tieback projects on the Norwegian Continental Shelf, while in the USA, Shell and BP lead with substantial investments in deepwater and ultra-deepwater exploration and production. TotalEnergies holds a strong position in Africa, especially in Angola and Nigeria.
The subsea sector is also expanding beyond traditional oil and gas applications, Rystad notes. The push for carbon capture and storage (CCS) is creating new opportunities for suppliers and spurring research and development in this emerging market. Consequently, suppliers are leading the way in developing more efficient subsea production systems, which are set to see broader adoption.
“The subsea market has rebounded robustly from the impacts of Covid-19, which caused a significant 20% drop in expenditure in 2020. By 2021, the industry began to recover, with spending increasing by 5% to reach US$23bn. Looking ahead, we anticipate steady growth in the subsea sector, fuelled by advancements in deepwater exploration and carbon capture and storage (CCS). This recovery highlights the industry’s resilience and suggests a promising trajectory of consistent progress,” said Sanwari Mahajan, analyst, supply chain research, Rystad Energy.
![The new pump is designed to meet the demanding requirements of the oil and gas industry, among others. (Image source: Michael Smith Engineers) Picture of a pump](/images/2024/august/michael-smith-tpm-pumps.webp#joomlaImage://local-images/2024/august/michael-smith-tpm-pumps.webp?width=787&height=399)
The new pump is designed to meet the demanding requirements of the oil and gas industry, among others. (Image source: Michael Smith Engineers)
Michael Smith Engineers introduces new TPM peripheral pump
Michael Smith Engineers Ltd has launched the TPM magnetic coupled peripheral pump, engineered by Dickow Pumpen
The TPM peripheral pump, also known as a turbine pump, is designed to meet the demanding requirements of industries including oil & gas, chemical, petrochemical, aviation, and renewable energy. It operates in a similar way to centrifugal and side-channel pumps, offering the best of both worlds. With its low Net Positive Suction Head (NPSH) requirements, the TPM pump is ideally suited for applications with limited suction head.
The TPM range can deliver flow rates of up to 17 m³/hr and a maximum differential head of 400 metres. With a design pressure of 40 bar and maximum operating temperature of 300°C, the TPM range is built to ensure reliable performance even under the most challenging conditions.
One notable feature of the pump is its ability to handle liquids with entrained gas, enabling continuous operation even during gas release or temporary air ingress. Additionally, its hermetically sealed design makes it ideally suited to handling toxic, explosive, or environmentally hazardous fluids, ensuring safety and compliance with stringent environmental standards.
David Todd of Michael Smith Engineers said, "‘We are delighted to be able to offer our customers this new pump technology from Dickow Pump, whom we have been in partnership with for almost three decades. We are confident this will be as successful as the rest of the Dickow pump range."
Honeywell launches new olefin production process
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 collaboration will help organisations simplify management processes. (Image source: Adobe Stock) oil and gas digitalised](/images/2024/august/AdobeStock_573101262.webp#joomlaImage://local-images/2024/august/AdobeStock_573101262.webp?width=787&height=399)
The collaboration will help organisations simplify management processes. (Image source: Adobe Stock)
SLB, Palo Alto Networks announce cybersecurity partnership
SLB and global cybersecurity provider Palo Alto Networks has announced collaboration expansion to strengthen cybersecurity for the energy sector
The companies will combine SLB’s cloud and edge technologies and domain expertise in the energy industry with Palo Alto Networks’ cross-industry, platform-based cybersecurity solutions. This will not only help SLB remain on the forefront with its own security infrastructure, but also help drive future enhanced solutions to address evolving cyber threats as the industry’s adoption of digital solutions and artificial intelligence accelerates.
“The maturation of our industry’s digital transformation makes cybersecurity paramount to our operations, and the digital solutions we offer to our customers,” said Olivier Le Peuch, chief executive officer, SLB. “Through this collaboration, we will continue to enhance and strengthen our role as our customers’ digital partner of choice.”
As part of the collaboration, SLB will integrate Palo Alto Networks Precision AI-powered cybersecurity platforms, including Prisma SASE, Prisma Cloud and Cortex XSIAM in its technology stack. These platforms will enable SLB to achieve comprehensive security across its network, cloud and edge platforms, enabling thousands of domain and AI users on SLB’s Delfi digital platform to collaborate in a safe and secure environment. The two companies also will develop and implement solutions for edge products and services, which will be critical as more energy customers move toward automated and autonomous operations.
“Through platformisation, organisations can simplify their management processes, reduce their total cost of ownership (TCO), and enhance their security outcomes,” said Nikesh Arora, chairman and chief executive officer, Palo Alto Networks. “Palo Alto Networks commends SLB for their forward-looking approach in shaping the future of the energy industry through secure and innovative solutions. Their vision for modern IT transformation through platformisation, aligns with our own commitment to safeguarding critical infrastructure and driving technological advancement. Together, we can build a resilient and secure energy ecosystem that meets the challenges of tomorrow."
Record numbers attend Oil Review Middle East webinar on advanced surveillance for oil and gas remote facilities
Kent to create guidelines for decarbonisation economics
Kent is collaborating with the UK’s Energy Institute to create guidelines for decarbonisation economics in Greenhouse Gas (GHG) emission reduction projects in the upstream oil and gas industries
This report will provide clear, actionable guidance to help the sector achieve its environmental goals, demystifying the economics of decarbonisation, including the societal cost of carbon. While it will focus on the UK North Sea upstream sector, it will take a global view so that it can serve as a basis for future research across the world. It will involve the collaboration of Kent’s Environmental team, Asset Decarbonisation team, and Energy Environment Economic (E3) Modelling and Communications team.
Key objectives
The guidelines will address the following key objectives:
Demystifying Decarbonisation Economics: Provide clarity for energy professionals with limited exposure to project economics, such as environmental or sustainability managers.
Understanding Carbon Costs: Offer insights into how carbon costs are calculated and influenced by market forces, including societal costs.
Alternative Metrics: Recommend non-standard metrics beyond NPV to ensure that decarbonisation goals are met, delivered as a technical note to the industry.
Justification of Metrics: Articulate and justify the choice of both standard and non-standard metrics used in the guidance.
Upstream O&G Value Chain: Focus on the upstream sector of the O&G value chain affected by decarbonisation and assess the potential to broaden the scope to the full value chain.
"We have seen the challenges of presenting decarbonisation projects against standard project economics with the only justification being the reduced OPEX related to Emission Trading Scheme credits and potential increased revenue from an increase in sales gas quantities from reducing fuel and flare gas," said Graham Filsell, Kent’s Decarbonisation lead. "There is a strong case for the societal cost of carbon and potentially an individual asset marginal abatement cost to form part of the project economics for decarbonisation projects."
James Lawson, chair of USEG (Upstream Environmental Group) added, "Decarbonisation and GHG reduction projects are inherently holistic, involving a wide spectrum of energy professionals, many of whom have not previously engaged in economic assessments and project prioritisation. Furthermore, these projects compete for capital and resources with other industry sectors. Therefore, a clear, concise, and targeted document that all energy professionals can refer to will be invaluable for ensuring that capital and resources are allocated appropriately and in line with net zero commitments."