July - September 2013

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2 July - September 2013 The Kuwaiti Digest is a quarterly magazine published by the Kuwait Oil Company (K.S.C.) since The Kuwaiti Digest invites newspaper, magazine and trade journal editors to reprint or otherwise make use of articles or illustrations appearing in this issue. Material should be credited and a copy mailed to the Kuwait Oil Company. Produced by Al-Nazaer Printing Press Publishing & Distributing Co. w.l.l. Tel: Fax: Editor-in-Chief Saad Rashed Al-Azmi Deputy Editor-in-Chief Abdul Khaleq Al-Ali Correspondence concerning The Kuwaiti Digest should be addressed to: Editor-in-Chief, Kuwait Oil Company (K.S.C.) Information Team P.O. Box 9758 Ahmadi 61008, Kuwait Telephone: Facsimile: or visit the KOC homepage at 12 Hosnia Hashim Discusses Plans for NK 2 July - September 2013

3 Contents 4 Kuwait Energy and Efficiency Letter from the Editor 2 Letter from the CEO 3 Kuwait Energy and Efficiency 4 Crisis & Risk Management Summit 9 Hosnia Hashim Discusses Plans for NK 12 King of Lesotho Visits KOC 16 Behavior Based Safety Program 18 Impact of Sand Drifting on WK s Main Roads 21 The Benefits of Six Sigma 24 Oil Recovery Options for Waste Water Treatment Facilities 26 Global Conference on Sustainability & Reporting 30 KOC Honors Retired DMDs 33 Saving Energy in the Oil & Gas Industry 34 Produced Water: What is the way forward? 38 An Overview of Lung Cancer King of Lesotho Visits KOC 33 KOC Honors Retired DMDs Hi-Tech 44 KOC Recognized as Top Blood Donor Billion Year Old Water 47 KOC Celebrates Earth Hour 48 July - September

4 Saad Rashed Al-Azmi Deputy CEO (Administration & Finance) As everyone throughout the country prepares for another Kuwaiti summer, we at KOC continue to work hard to ensure that all measures related to the successful attainment of the 2030 Strategy are in place. With a close eye on our future goals and targets, we are glad to see all Teams throughout the Company put in the extra effort to help transform KOC into a larger, safer and more efficient exploration and production company. While we take a step toward the future, it is with a heavy heart that I bid Sami Al-Rushaid, our former Chairman and Managing Director, farewell. Hosnia Hashim, DMD North Kuwait, and Mazen Al-Sardi, DMD Technical Services and Projects, will also be missed as they leave KOC to lend their expertise to other K-Companies. The decades that these individuals have dedicated to the Company will never be taken for granted or forgotten, for they have instilled a culture of hard work, perseverance and cooperation that will live on at KOC for many years to come. I would like to take this opportunity to welcome Hashim Hashim as the new CEO of KOC. Hashim has spent many years in service with KOC, and I trust that his expertise and experience will be of great value in the new role that he will be playing for the Company. His address to KOC employees can be found on the page that follows. Our Company has gone through a number of major changes in terms of various senior leadership positions; however, what has not changed is our collective effort to uphold our Company s position as one of the world s leading oil and gas production and exploration companies. KOC continues to make strides in terms of adopting new technologies and conducting new research that benefits the Company and its employees. From new, innovative plans to create better efficiency throughout the Company to high tech solutions for oil recovery, KOC s engineers, geologists and technical specialists continue to offer new and improved methods for the Company to conduct its business and operations. While our goals for the future include raising production to 4 million BOPD by 2020, KOC remains committed to steadfastly adhere to protecting the health and safety of both its employees and the population at large. In addition, the Company s commitment toward the environment and giving back to the community remains strong, and we look forward to making more positive contributions over the next quarter. 2 July - September 2013

5 Letter from the CEO Dear colleagues, Please allow me to extend a warm greeting to you all in my first speech after assuming my new duties as CEO of Kuwait Oil Company. I would like to affirm that KOC will continue to perform its duties in the most desired manner while conducting its role of contributing to our national economy. It will also continue to fulfill the aspirations of our beloved country toward further development, stability and prosperity. I would like to remind all employees that any achievement made by the Company is only a result of your efforts in the first place, for you are the driving force and the engine of the Company s march toward more achievements. The success of our Company is based on your selflessness and dedication, and for that I thank you. I assume this duty today to carry on the fruitful and dedicated journeys of my predecessors, all of whom exerted a great deal of effort and encountered many challenges in order to ensure that the Company maintained its track record and achievements. We are thankful for all of them and we do appreciate what they have done for the Company and their country. I would also like to single out the former Chairman and Managing Director Sami Al-Rushaid for appreciation, for he shouldered much responsibility over the years, and the Company benefited a great deal under his leadership. We have also learned a great deal from his longstanding experience in this vital domain, and I am fully confident that he will continue to offer his advice in the coming period. While I appreciate the confidence bestowed in me by the leadership of KOC, I would like to reaffirm that my success in this duty will be largely dependent on our collective cooperation and teamwork, as has been the case in the company since its founding and it will continue to be so in the days to come by the grace of Almighty Allah. In conclusion, I would like to assert that the doors of the Company management will remain open for all employees, and we will always be pleased to receive your contributions to ensure sustainable development of this pioneering Company, for you are the cornerstone of its development and success. Yours sincerely, Hashim Hashim CEO Kuwait Oil Company July - September

6 International Event Kuwait Energy and Efficiency 2013 Nizar Al-Adsani, CEO Kuwait Petroleum Corporation, delivers his keynote address. The first Kuwait Energy & Efficiency conference took place recently at the Hilton Kuwait Resort. The high profile gathering of senior government officials and key private sector stakeholders was organized in conjunction with the Ministry of Electricity and Water, Kuwait Petroleum Company, Kuwait National Petroleum Company, and the Environmental Public Authority with the aim of creating a platform for meaningful discussion to establish an effective regulatory framework and energy efficiency strategy for Kuwait. The Kuwait Energy & Efficiency conference is the only conference that seeks to address the need for sustainable energy solutions in Kuwait and was the first and only forum of its kind in Kuwait where policymakers came together with industry leaders to begin the process of mapping an energy efficiency plan for the country. During the conference, speakers from a variety of technical backgrounds discussed the following topics: Establishing a regulatory framework to drive energy efficiency in Kuwait Outlining Kuwait s current energy consumption patterns and forecasting future requirements An overview of sustainable energy solutions that have worked internationally and regionally and how these can be applied in Kuwait Improving energy efficiency in power production including enhanced oil recovery, carbon capture and storage and the Clean Fuels Project Introducing energy efficient design for a more sustainable environment The impact of new technologies such as smart fields and automation in improving energy efficiency Assessing alternative and clean energy solutions such as solar, wind and waste to energy and the status of these projects in Kuwait Demand management strategies and smart grid solutions Energy efficiency in transport 4 July - September 2013

7 Organized by MEED Events and supported by the Ministry of Electricity & Water and Kuwait National Petroleum Company, Kuwait Energy & Efficiency 2013 provided an excellent platform for the debate and discussion of a sustainable energy plan for Kuwait, including identifying concrete solutions that will help energy consumption in Kuwait. Nizar Al-Adsani, CEO of Kuwait Petroleum Corporation, delivered the opening address during the event and maintained that Kuwait s increasing energy consumption has been driven by a number of factors. Heavily subsidized electricity prices, an increase in local and expatriate population, a rise in economic activity largely generated around oil production and increased penetration of modern conveniences such as cars and electrical goods has created a rising demand for energy which outstrips the current capacity of oil rich countries, adding that, Outdated infrastructure and the absence of an incentive structure to moderate energy usage have contributed to a difficult situation for the Kuwaiti government in planning for a sustainable future. The KPC CEO touched on a number of issues that are set to affect energy consumption in Kuwait, which he said is poised to grow by over a third over the next two decades alone. A proper energy efficiency plan, he said, will be instrumental in helping Kuwait cope with future energy needs. Making our energy sources more sustainable and energy consumption more efficient, while also making our economy more resilient to energy price is one of our priorities, Al-Adsani said, adding that there now exists a growing realization that the country was in great need for a sustainability plan. The KPC CEO suggested that credence should be given to new forms of thinking which have not necessarily held much popularity in the past, such as alternative forms of waste management and the use of clean technology. While waste was viewed as disposable in the past, today it is increasingly recognized as a resource, Al-Adsani told the audience. This is reflected in the waste management shift away from disposable toward recycling and recovery. Depending on its management, waste can impact both human health and the environment through emissions and pollution of ground and surface water. But it can also represent loss of material, resources and other recyclable materials and has the potential as an energy source. During his presentation, the KPC CEO suggested that Kuwait s outdated infrastructure and the absence of an investment structure to moderate energy usage has contributed to a difficult situation for the Kuwaiti government in terms of planning for a sustainable future. He also went on to say that although the GCC countries are major players in the global oil market in terms of production and availability of spare capacity, and despite the fact that as whole, about 40% of global oil reserves are located in the region, it is still imperative for the GCC to continue investing in oil exploration technologies and develop new oil fields it order to secure sustainability for the future. Despite the Arabian Gulf region s massive oil reserves, gas production is struggling to keep abreast of demand, especially in regard to major industrial centers and for the purpose of power generation. Bahrain, Kuwait, Oman, KSA and the UAE are facing an increasing gas shortage in the region. Demand has so far outpaced the local production. As a result, some GCC countries find themselves in an almost contradictory position of having to import gas when they have exported gas for decades, the KPC CEO warned. Al-Adsani said that the oil and gas growth strategy in Kuwait is aimed at bridging the demand gap as well as making energy more accessible to consumers in emerging economies and the developing world. This strategy, he said, includes achieving 4 million barrels per day of crude production capacity by 2020 and maintaining it to 2030 in addition to maximizing exploration, development and production of non-associated gas in Kuwait. Expanding refining capacity locally and internationally, pursuing growth of the petrochemical industry in Kuwait and international global markets, as well as identifying and investing in oil refining opportunities outside of Kuwait through joint ventures which focus on high growth markets are also part of Kuwait s priorities. The country s demand for gas will increase as Kuwait s demands for electricity increase through population growth and as industry expands, Al-Adsani said. It is expected that by 2030, electricity demand will have more than doubled, equaling some 25 GW. The KPC CEO added that Kuwait uses associated gas, heavy oil, and crude for power generation, which he said will continue for some time in the future. Currently, the state of Kuwait consumes approximately 1 billion standard cubic feet of gas per day, with about 60% consumed by the refineries and petrochemical sector while 40% is dedicated to the power generation sector. The summer peak period in Kuwait July - September

8 always corresponds with an increase in electricity demand, due in large part to the air conditioning needs of the population. During this peak demand, it is not uncommon for Kuwait to experience shortages. Al-Adsani said that Kuwait plans to use more national power generation, local industries, and crude in order to free up additional crude oil for export. This will help Kuwait achieve its environmental and economic needs, he said, adding hat to mitigate a gas shortage, Kuwait has an energy strategy for facilities which includes plans to build permanent facilities to be able to import gas over the entire year. Over the long term, Al-Adsani said that GCC countries can address the supply and demand imbalance by raising local gas prices gradually, improving energy efficiency through new regulations and advanced building codes, district cooling, increased penetration of alternative power sources, and investing in alternative measures for enhanced oil recovery. Such an approach would require national oil companies, utilities, and regulators in the region to work together to develop a GCC-wide approach and even consider a regional gas grid. Timing, he said, is crucial, and the GCC needs to act now to take advantage of the unique opportunity in the global gas markets to make a planned decision to serve consumers, such as providing more liquid fuels for power plants to redirect gas for more enhanced oil development. Following KPC CEO Nizar Al-Adsani s speech, Dr. Meshan Al-Otaibi, Assistant Undersecretary of Planning and Training from the Ministry of Electricity and Water, addressed the audience. During his presentation, Al-Otaibi maintained that Kuwait needed a five-point action plan to address soaring domestic energy consumption. Part of Kuwait s future five-point action plan, Al-Otaibi said, would need to include the following: An energy efficiency and renewable energy regulatory body Co-generation and district cooling systems for the new cities Kuwait is planning An efficiency program covering the electricity generation, transmission and generation system An energy-saving code for new and old buildings and the adoption of solar power Radical changes in consumer behavior that would be brought about in part by pre-paid electricity meters and higher tariffs. Al-Otaibi went on to say that peak demand for electricity could rise to more than 30,000 MW by 2030 from about 12,000 MW at present if recent trends continue. He said that this could involve burning more than 700,000 b/d of liquid fuels in Kuwaiti power stations. That would be about 30% of total fuel production in The Assistant Undersecretary added that a comprehensive energy efficiency program could cut peak power demand in 2030 to 20,000 MW. He also said that Kuwait planned to import 500 MW of power from a neighboring country in In the short to medium term, Al-Otaibi said that there were a number of policies that Kuwait can implement which will aid in creating better energy efficiency. To begin with, a new and comprehensive building code for new buildings has the potential to save up to 20% in terms of energy needs. An alternative system like cogeneration and district cooling has the potential to save up to 35%. In the long term, Al-Otaibi shared his ministry s desire for a renewable energy target of 15% by Energy Efficiency and KOC Later in the conference, KOC DMD (NK) Hosnia Hashim took the stage to deliver her presentation to the audience. If we are to create a new future, and if we are looking for a transformation, she said, Then we need to face up to a huge change in culture to make this happen, the DMD said, upholding her belief that energy efficiency in Kuwait depends largely on a change in attitude among the population toward the usage of energy. It is not in our culture, for example, to switch off lights as we leave a room. We can bring gadgets to automate efficient usage but the change we create in our behavior is by far the most effective and sustainable. A small change in our attitudes and the importance placed on the little things around us can make a big difference, the DMD said. Hashim then discussed the energy conservation efforts that KOC has been involved with over the past five years. These efforts included a careful and thorough analysis of KOC operations which have resulted in a reduction of power demand of around 33 MW daily (21%) on average. Examples of changes implemented include only running the large export pumps from the tank farms to the export tankers at peak times and relying more on gravity to transport the crude. Moreover, the application of new technologies and using best practices in terms of maintenance have resulted in additional power savings within Ahmadi of 7.6 MW, which represents a 15% reduction in consumption. 6 July - September 2013

9 Dr. Meshan Al-Otaibi, Assistant Undersecretary of Planning & Training from the Ministary of Electricity & Water, addresses the audience. The DMD went on to say that new projects both pilot projects and full-scale, actual projects are being implemented to further reduce power demand and improve network performance. For example, during the summer power saving campaign, KOC prioritizes shutdowns for maintenance to GCs with high power demand. In addition, a public awareness campaign which sought to encourage employees to save power and water has been especially effective, especially considering the fact that commitment, coordination, and close monitoring on the KOC management s part has played a key part in the success of this campaign. In what has probably been KOC s greatest landmark achievement in regard to efficiency, Hashim maintained that The Company has made huge strides in driving down gas flaring in operations over the last six years from 17% to 1% of gas production. Although this phenomenal achievement was initially driven by environmental concerns, it soon became apparent that millions of KD in cost savings could be accessed. The reduction in flaring led to a gain of KD 780 million. In addition, Kuwait recently joined the Global Gas Flaring Reduction (GGFR) partnership and KOC was appointed as GGFR focal point for this partnership. Part of being energy efficient is to focus on gas rather than oil for our power generation fuel, said Hashim. Towards this objective, KOC is following a very aggressive exploration and development program to accelerate the extraction of gas and find replacement gas reserves to meet our 2030 Strategy. Today our associated and non-associated gas is not enough during the summer months to meet Kuwait s demand for energy. We have significant gas reserves. However, our non-associated gas resources are deep, hot, sour and challenging to develop. Even so we have placed priority on accelerating its development and have partnered with the right IOCs to import skills that will deliver our aggressive gas production strategy, the DMD said. The KOC DMD went on to say that the Company continues to use innovative solutions to maximize oil production and recovery. The introduction of a digital fields system has allowed optimum matching between well performance and reservoir behavior by removing the data lag from the field to engineers. Efficient use of wells means less wells to drill and maintain, the DMD said. In addition, better ways to maximize oil recovery exist in special extraction techniques like Enhanced Oil Recovery, which when perfected, can push oil out more efficiently and save more than 50% of the produced water that normally would consume significant power to dispose safely. There are many more opportunities to unlock such as creative use of heat pumps, recycling fresh water, and more. Recently we have begun our journey in renewables. In West Kuwait Asset, solar panels at manifolds have been installed. In Ahmadi, we have installed solar powered panels for street lights, the DMD said. And although she admits it s a small step, she maintained that a medium sized solar pilot project currently is in the construction phase to test photovoltaic cells and concentrated solar power. According to Hashim, one of the major obstacles in achieving sustainability of energy efficiency in Kuwait is power subsidies. The very high subsidies on electricity discourage both households and industries to use July - September

10 this valuable resource carefully. Just as there is no drive to save energy, similarly there is no incentive to shift to renewables, she said, adding that she recognized that removing subsidies overnight would cause an enormous disruption to the current way of life in Kuwait. However, in order to influence such behaviors, the DMD suggested it was possible to encourage and incentivize transition into renewables without creating more hardship to people and without causing additional cost to the country. She suggested that Kuwait put the choice of energy sourcing in the hands of the family, with subsidies transformed into cash for them to decide the cost effective use of that money. These subsidies could also go towards encouraging investment in renewables. In her concluding remarks to the audience, the DMD maintained that, We must change before we have to. Before it s forced upon us and before we lose our choices on options for the way forward. And we must do so collectively - not at the company or corporate level, but at the country level. Hosnia Hashim, Former DMD (NK) delivers her keynote address. A recap of the conference: Kuwait plans to generate 15% of its electricity from renewable resources by Experts believe that as much as 20% of Kuwait s oil production will be needed just for energy generation by 2017, which all speakers agreed was unsustainable. Peak demand for electricity could rise to more than 30,000 MW by 2030 from about 12,000 MW at present if recent trends continue. Kuwait consumes approximately 1 billion standard cubic feet of gas per day, with about 60% consumed by the refineries and petrochemical sector while 40% is dedicated to the power generation sector. Kuwait Energy & Efficiency 2013 featured a comprehensive agenda of presentations, panel discussions and workshops involving energy experts from around the region. The conference was made possible thanks to the involvement of the Ministry of Electricity and Water and KNPC, including supporting partners Tekneen District Cooling Company, GDF Suez and ABB and Focus Consultancy Services. 8 July - September 2013

11 International Event Crisis and Risk Management Summit The oil and gas industry goes to great lengths to implement measures so that it can avoid major asset failures and disasters. However, pipeline explosions or leaks, plant explosions, gas leaks, and other incidents are not unheard of and happen at oil and gas companies all around the world. These types of disasters have many implications for operating companies, including major financial obligations and the tarnishing of a company s reputation within the community that it operates in. In order to be prepared for these types of situations, emergency response and crisis management teams need to be in place, all employees need to be well-trained in proper protocol, and they should also be well-equipped with technologies that can prevent, detect and manage disasters. This will allow for a proper, efficient, and safe response to gas leaks, oil leaks, offshore leaks, as well as potential fires, explosions and offshore incidents with employees and equipment. Companies must have comprehensive crisis and risk management systems as well as an effective loss prevention strategy in place to ensure uninterrupted production with swift remediation and recovery. Ali Asad delivers his address. As part of its efforts to remain ahead of the curve in terms of safety and preparedness, KOC recently took part in the IQPC Crisis and Risk Management Summit, which was held at the Al Manshar Rotana Hotel in Kuwait. The event was held under the patronage of His Excellency Khaled Al-Mansouri, President of the International Council, International Association of Emergency Managers. Al- Mansouri delivered the inaugural speech and maintained that such conferences were extremely important because of the opportunities they presented for various individuals within the industry to present and share their expertise and experiences in the fields of emergency response, coordination, and loss prevention in the oil and gas field. He added that the conference aimed to cover a wide range of topics related to damage control, environment management, July - September

12 risk assessment and management, remediation and recovery post crisis, planning a comprehensive crisis management system and risk communication. Aiding in the chairing of the summit and delivering additional opening remarks was Peter Johnson, Incident Commander for the U.S. Department of Homeland Security and Federal Emergency Management Agency. Johnson has more than 30 years of experience in emergency response activities and has led some of the largest responses in the United States, including the World Trade Center rescue operations in 2001 and the Hurricane Katrina and Rita disasters. In addition, Johnson has been Incident Commander for numerous responses and teaches Incident Command System tactics to other companies and agencies. He also has worked as a lead in developing national response plans for the United States Government working for Department of Homeland Security/Federal Emergency Management Agency, where he was responsible for bringing over 70 federal agencies together to build unified response plans. KOC Shares Experiences During the summit, KOC played a large role in the sharing of information in regard to its emergency response procedures. Recently retired Ali Hussain Asad, KOC Emergency Response Coordinator and Head of the Emergency Response Coordination Unit, took the stage to discuss some of KOC s emergency response plans. Asad has had a long and extremely impactful career with KOC he has more than 35 years of experience in emergency response experience and is responsible for authoring KOC s corporate emergency response plan. He has been actively involved in many emergency operations, from managing 42 burning oil wells after the Gulf War and leading the team known as the Kuwait Wild Well Killers to establishing many firsts in Kuwait, which include establishing the emergency unit of KOC, establishing major crisis support centers, unifying emergency telephone numbers to three digits, and many more). Ali is a member of the International Association of Emergency Managers, National Fire Protection Association and is the only Arab member in the UK s Emergency Planning Society. KOC s Emergency Response Systems Ali Asad began his presentation with a brief description of KOC and its operations before discussing how the Company deals with various emergency situations. He maintained that KOC has enacted many safety measures throughout all areas of the Company and that drills and emergency preparedness are extremely important points of concern for KOC. While KOC has invested a significant amount of effort into ensuring that its current standards are adequate, Asad maintained that there is always room for improvement. For example, in response to future challenges that affect crisis management, the Head of the Emergency Response Coordination Unit maintained that responses involving multiple agencies were the biggest challenge that the Company faced. This, he said, was because communication tools and frequencies may differ from one agency to the next. In order to overcome this issue, Asad suggested that it is imperative to consider unifying standards across companies and agencies so that emergencies may be dealt with in an efficient and unified manner. Fire Incident Management System (FIMS) Without science and technology, you will not have an effective emergency management system, Asad said. Indeed, all of KOC s current emergency response systems rely in some way, shape, or form on modern technologies, and this is especially true of the KOC Fire Incident Management System (FIMS). The current system stands in stark contrast to the ways of the past at KOC, Asad said. He maintained that KOC has gone from storing emergency numbers on bits of paper to installing computer and emergency management systems that store important numbers and information while linking all directorates of the Company. The Fire Incident Management Sys- 10 July - September 2013

13 tem (FIMS) was the end result of a move away from paper. This move away from paper was done for a number of different reasons. First of all, the realization existed that technology could be used as an extremely important tool that could help save enormous amounts of time and effort, which in turn, we realized, would result in helping us in our ability to save lives at KOC in the event of emergency situations. In addition to the obvious advantage of saved time and efficiency, a move away from paper also had an environmentally friendly impact as less resources would be needed without the need for paper, Asad said, adding that today the FIMS system has evolved to not only include fire-related incidents, but issues of security and environmental incidents are also included within the FIMS system. While continuing to uphold the advantages of science and technology in the field of crisis management, Asad affirmed that technology will continue to play a very important role in terms of how KOC will respond to future emergency situations. For example, KOC s current emergency number system is based, with some modifications, on the US emergency number system 911. KOC s emergency number of 160 can be used by anyone within the Company to report a fire, security issue, or emergency situation which requires an ambulance. The FIMS system, meanwhile, makes use of an extensive array of technologies that combine information from multiple sources to create a clearer picture of the emergency situation as it unfolds. For example, it combines communication systems, positioning systems, and information systems which all play a part in determining how manpower is managed and coordinated during emergencies. moves from person to person, Asad said. However, with the IMU, information is stored and communicated from a central location and can be shared with any relevant departments within KOC or government authorities. In short, the IMU has the ability to serve as a direct link for information to all authorities who need it. One of the underlying system technologies that KOC makes extensive use of is something called a Geographic Information System, or GIS. GIS is a system designed to capture, store, manipulate, analyze, manage, and present all types of geographical data. In the simplest terms, GIS is the merging of cartography, statistical analysis, and computer science technology. In a general sense, the term describes an information system that integrates, stores, edits, analyzes, shares, and displays geographic information for informing decision making. GIS applications are tools that allow users to create interactive queries (usercreated searches), analyze spatial information, edit data in maps, and present the results of all these operations. The GIS system at KOC aids greatly to help formulate and execute emergency response plans. During his closing remarks, Ali Asad maintained that while having the knowledge, resources and preparedness to tackle emergency situations is necessary, it is just as important to uphold the concept of prevention, which he said is more important than any cure. In addition to prevention, in the event of actual emergencies, Asad reaffirmed his belief that over responding to any situation was good Incident Management Unit and GIS The most important aspect to consider during an emergency situation is information, and information during an emergency is something that should never be taken lightly, Asad said. In this regard, one of Asad s most important contributions to KOC was the role he played in designing and acquiring KOC s Incident Management Unit, or IMU. The IMU is a mobile fortress that contains all the facilities one would expect to see in a disaster control room. From equipment designed for satellite communications to mobile phones and other phones built in, the IMU was designed to communicate information during times when all other communication fails. As a disaster management center, the IMU is equipped with a wide range of equipment to help emergency responders tackle any situation by providing them with the information they need to accomplish their tasks. For example, the IMU is equipped with an extremely powerful camera that allows it to zoom in on an area up to 5 kilometers away. This is especially important for a company like KOC, where hazardous leaks may limit the ability of emergency responders to approach certain areas. Information breaks down and is altered when it practice because it limits the ability of an emergency situation to overwhelm first responders. It is better to be over prepared than to regret being under prepared, he said. Kuwait Oil Company, Kuwait National Petroleum Company, Kuwait Gulf Oil Company, Petroleum Industries Corporation, Wintershall, BP, PDO, ADMA-OPCO, Anadarko Petroleum, ME-ETS, Pan Gulf Industrial Systems, Woodside Energy and a number of other companies participated at the recent Crisis and Risk Management Summit. July - September

14 Overview Hosnia Hashim Discusses Plans for NK Former DMD North Kuwait Hosnia Hashim was recently interviewed by Arabian Oil and Gas in a front page cover story by Daniel Canty. The article s text follows: North Kuwait s $14 billion E&P development projects are well underway, as Hosnia Hashim, former Deputy Managing Director for Kuwait Oil Company s North Kuwait assets recently revealed. Hosnia Hashim has a packed schedule, overseeing a giant E&P capacity push as Deputy Managing Director for Kuwait Oil Company s North Kuwait operations, and as a passionate and engaged chairperson of the board for the Society of Petroleum Engineers for the Middle East and North Africa. Hashim outlined her excitement at the big capacity push and how she is motivated by the task at hand preparing a new generation to run the country, and the region s next generation of energy workers. 12 July - September 2013

15 North Kuwait is currently responsible for 24% of the production of Kuwait Oil Company. However, as Hashim reveals, the NK assets are undergoing a prodigious upgrade which will see production increase by more than 40%. This will be achieved by a series of activities that encompass a drilling campaign of horizontal wells for conventional resources, and vertical wells, which will tap into Kuwait s huge resources of heavy oil. For North Kuwait, we are now at a production level of 700 thousand barrels per day, and we are planning to reach 1 million by 2017, explains Hashim. This target is part of a medium term plan to deliver 1 million barrels of oil per day by 2017/18, and maintain plateau for a minimum of fifteen years. North Kuwait s long term plan is to supplement production offtake with contributions from heavy oil development, implementation of EOR and extensive water injection programs to maintain the reservoir pressure, she adds. These goals will be achieved through a multi-year aggressive infill drilling and well maintenance programs aimed at lifting current well capacity by 43%. A large scale expansion of surface facilities including three gathering centers and associated headers, transit lines and power projects are planned to be completed in time to permit the efficient handling and processing of produced fluids, including the associated water and gas. In addition to increased oil production, the capacity push will ramp up associated gas production. Today North Kuwait s gas production is around 450 Million standard cubic feet of gas per day, all of which is sent directly to a refinery where it is commercialized. To accommodate the extra gas production we are also currently building a new gas booster station to accommodate the associated gas production, all of which falls under a large upgrade of facilities we are currently executing in North Kuwait. Many of the Middle East s most prolific production zones have begun to enter a period of terminal decline, with sophisticated and expensive enhanced oil recovery pushing itself increasingly to the top of the agenda on many assets. Hashim says the impact of field decline is not yet an issue the NK assets are faced with, but an advanced and ambitious development plan is being carried out with future field health firmly in mind. We have not experienced decline yet, and are, in fact, still experiencing growth for North Kuwait asset production. We need to take into consideration that North Kuwait oil fields are just at their early stages of development, so our current activities are in fact aimed to expand and increment our production. As an example of this, Hashim cites the 2013/14 program, already well underway. We have an approved action plan to drill 66 horizontal wells for our medium and light oil fields, to maximize the value these kinds of wells bring to our asset. Besides this, for our Heavy Oil fields, we will drill an additional 160 wells. This level of drilling activity evidences the importance that North Kuwait has for KOC, as our incremental oil production is a key component of our corporate strategy to meet the production goals in the years to come. The activity for the development of Heavy Oil in North Kuwait is particularly intense. These resources are effectively being developed as greenfield sites. I would like to highlight we have already drilled 700 wells for heavy oil, and that the budget for the heavy oil development amounts to US $5.3 billion over a five year term. These are impressive numbers by all standards, adding that several secondary and tertiary methods are being deployed to prolong productive field life. July - September

16 In our asset we are in the process of implementing waterflood and other EOR techniques. The results so far are the product of the initial phases, but I am glad to share with you that we have achieved success in the piloting phase, so we are positively confident the water injection and EOR programs will provide the necessary support to sustain North Kuwait production growth, to match KOC s and KPC s strategic targets, she said. That $5 billion-plus figure, is, she stresses, purely to cover the facilities expansion, specifically related the installation for the largest waterflood program encompassed up to date by Kuwait Oil Company. This budget also extends to building the necessary facilities for the handling and production of the heavy oil crude that will be an important component of our volumetrics very soon, she adds. The full field investment plans are much larger, and in fact represent a record for the NK area. The investment amounts utilized and approved for this expansion in North Kuwait are the biggest ever approved in Kuwait Oil Compamy for field development purposes, and amount to nearly $14 billion, distributed across a 5-year period, revealed Hashim. In addition to the heavy oil project work, the infrastructure expansion plan encompasses three gas booster stations, water injection facilities, a new water treatment center, power generation, new wells equipped with ESPs, flow lines and manifolds, among others. This package of upgrades and works underway will deliver an unprecedented optimization and expansion of our facilities, said Hashim. 14 July - September 2013

17 Road Ahead With such a considerable flow of work going on today it is easy to dodge the difficult questions which will dominate the business in the years ahead. However, Hashim has always placed the long-term needs of the company front and center of her own priority list. The single largest challenge she is tackling, she says, relates to the next generation of Kuwaiti workers who must come through the ranks to manage KOC and its activities in the future. KOC has many challenges but also many strengths. I ll start with the strengths first, as those are related to our people. Our leaders and professionals from Kuwait are a committed force towards improvement, and I thrive in witnessing the improvements that their preparation and professionalisms bring to our national main industry, she says. As for the challenges, I consider the main one KOC is facing today is the accelerated intake and training of its workforce to be able to cope with the many and complex characteristics of the modern oil industry to produce oil fields with EOR, with water injection, with complex facilities in a constrained skilled workforce environment. She adds that it is her most cherished goal to ensure a new generation of Kuwaiti technicians and professionals will have the skills and knowledge needed to meet and match the technical and operational challenges of the industry. Of what motivates her throughout her career, and especially today, she is clear: I enjoy my work every day, and the most exciting element for me at work is my connection with the people. I thrive to liaise with my teams members, and in particular, am very fond of the new generations of Kuwaiti operators, the engineers, the geologists, technicians of every branch of knowledge. In North Kuwait, we are all immersed in a spirit of collaboration towards success, in these times of growth, facing many challenges, and this is the most exciting element of my work. I do thrive when we all work with a high spirit of teamwork, and when I am able to touch people s hearts, she said. July - September

18 Internal Event King of Lesotho Visits KOC The King of Lesotho and his entourage toured the Display Center. His Majesty the King Letsie III of the Kingdom of Lesotho recently visited Kuwait Oil Company, where he and his accompanying delegation were provided with a tour of the KOC Display Center. His Majesty the King and Her Majesty the Queen of Lesotho were received by Public Relations and Information Group Manager Abdulkhaliq Al-Ali, who briefed the visiting delegation on the various KPC subsidiaries and their responsibilities. The King was also provided with information regarding the history of KOC, oil and gas fields in Kuwait, as well as production, refining, storage and export of oil and gas. His Majesty King Letsie III, as well as the Queen, signed the guest book at the Display Center and expressed their pleasure with the visit. The delegation then visited Gathering Center 19, followed by a visit to the Ahmadi Guest House, where they were received by former KOC C&MD Sami Al-Rushaid, who presented a memorial gift to His Majesty King Letsie III. Lunch was then served in honor of the guest. Kuwait Support for Lesotho: Recently, His Majesty King Letsie III said Kuwait has made various strategic interventions through the Kuwait Fund for Arab Economic Development in Lesotho s efforts to develop its economy. The kings maintained that road building projects assisted by Kuwait have enabled easy access to inaccessible mountain areas, while infrastructural projects in water supply have made it possible for many Basotho to enjoy clean water supplies. In addition, the King said there were windows of opportunity that the two countries could exploit, especially in the areas of trade and investment. He added that it was his hope for the two countries to diversify their trade partners and investment portfolios to minimize the risks associated with globalization. Cordial relations between Lesotho and Kuwait have been running for over three decades. In 1978, the State of Kuwait extended economic assistance to Lesotho in the form of construction of Moshoeshoe International Airport. 16 July - September 2013

19 About Lesotho: Lesotho (formerly Basutoland) was constituted as a native state under British protection by a treaty signed with the native chief Moshoeshoe in It was annexed to Cape Colony in 1871, but in 1884 it was restored to direct control by the Crown. The colony of Basutoland became the independent nation of Lesotho on Oct. 4, 1966, with King Moshoeshoe II as sovereign. In the 1970 elections, Ntsu Mokhehle, head of the Basutoland Congress Party, claimed a victory, but Prime Minister Leabua Jonathan declared a state of emergency, suspended the constitution, and arrested Mokhehle. King Moshoeshoe II was briefly exiled. After the king refused to approve the replacement in February 1990 of individuals dismissed by Justin Metsino Lekhanya, the chairman of the military council, the latter stripped the king of his executive power. Then in early March, Lekhanya sent the king into exile. In November, the king was dethroned, and his son was sworn in as King Letsie III. Lekhanya was himself forced to resign in April 1991, and Col. Ramaema became the new chairman in May. In Jan. 1995, he abdicated in favor of his father, Moshoeshoe II. Letsie again became crown prince. In 1996, however, King Moshoeshoe died in an automobile accident, and Letsie again assumed the throne. July - September

20 Technical Report KOC Takes Part in Behavior Based Safety Programs Submitted by R. Dave DeJohn, BBS Project Manager BBS 18 July - September 2013

21 This is not a typical HSE implementation with procedures, audits, inspections, and SOC s. Those efforts are indeed important for a strong HSE system. However, research proves that most accidents have a contributing factor of risk taking behaviors that can get people hurt in the workplace, on the road, and even at home. Emad Sultan, Deputy CEO (NK) Operations Group, stated, The changing factor is the behavior it s not the material, it s not the equipment. It is about behaviors. Sultan went on to explain another benefit. The best thing about this program is the variety of aspects housekeeping, fall protection, line-of-fire and others all in a system. The aim is to improve all behavior, he said. Bader Mahmoud, TL Production Operations (NK), echoed a similar sentiment and said, The gain here is that we can ensure HSE through BBS so the contractor can go home safely to his family. When KOC workers coach the contractors to improve worker behavior, the Observer Effect causes the KOC workers to also become safer as their risk competency improves on a daily basis. Bader Mahmoud further clarified, This is not a one-time training for today. This should change our behavior to become a habit and this is what we all want to improve safety in all our facilities. Two directorates recently kicked off their Behavior-Based Safety (BBS) implementations in North and West Kuwait. Controllers, Operators, and Maintenance Engineers from Operations delivered presentations in an effort to prove their dedication to accident reduction in the Gathering Centers. They were able to demonstrate a new BBS approach where KOC employees manage their own facilities to increase safe behaviors of contractors. BBS was introduced to KOC as a system that identifies critical behaviors that can cause injury, develop videos with KOC employees that engage workers to understand those behaviors, observe actual contractor behaviors with feedback, and conduct problem solving facility task force team meetings as a means to provide continuous improvement to long term injury reduction. The BBS process is positive, pro-active, and engages all involved to collaborate to achieve the mutual goal of zero accidents. The strategy takes advantage of the authority and visibility of KOC Operators and Maintenance Engineers as they conduct typical walkthroughs of their facilities during each shift. Operators are the most experienced guys who can find incidents before they happen. This is the idea of BBS, said Falah Al-Azmi, TL Production Operations (WK). When these Operators and Engineers return to the Control Rooms with the BBS data they gathered, instead of just entering the information and sending to HSE, the Operations group at the facility brainstorms to both provide positive feedback and to try to resolve problems themselves. Emad Sultan also noted, They should also analyze both the good and bad to improve. Operations and Maintenance can work together at our own facilities. I m really glad to see our Operators doing that. According to TL Maintenance Hamed Al-Mutairi, BBS also builds teamwork, as he explained, In the spirit of one team between Operations and Maintenance, together we can enhance HSE awareness for everyone with BBS. The idea is not to use safety as only punishment when people commit unsafe actions. Rather, we want to instead understand why we use the KOC HSE Management System. Was it a lack of training? Inadequate supervision? Poor communication? What other factor could contribute to the behavior? In each situation, all groups Operations, HSE, and Contractors can come together to analyze this information to create the ideal scenario that everyone wants an injury free workplace. July - September

22 BBS videos were produced that demonstrate which Safe and Concern behaviors to identify. Each film features a KOC worker on camera as host that has generated excitement in each of the facilities. BBS Consultants visit facilities on a daily basis and offer the flexibility to train KOC workers individually, as a group, or in field classrooms to prevent interference with critical situations in the facilities. KOC workers discuss what they see on screen, then go outside to verify that they have indeed learned the behavior. We watch the movies for concern behaviors then we can watch the contractors and give them feedback to be safe, said Khalid Al Azmi Operator II from GC-23. The workers can then immediately apply this potentially lifesaving knowledge as described by Maintenance Engineer Mohammad Jassim from GC 24, We saw the film on Working Surfaces and saw the dangerous behavior of standing on pipes, so during a leak repair, we were able to stop the behavior and give the feedback. One of the primary goals of BBS is to engage the KOC workers to the point of ownership in the program so that it becomes an everyday part of the job. Another goal is to put HSE into the hearts and minds of all KOC workers, contractors, stakeholders, and all family members and residents in Kuwait. This requires a true commitment and motivation from everyone. Omar Sadeq, Manager Operations (WK) summarized his thoughts during the BBS Kickoff at GC 27 by saying, Our Operators doing these observations shows their commitment to the goal of Safety for Everybody. Current plans are to roll out this process throughout KOC. 20 July - September 2013

23 Internal Report Impact of Sand Drifting on WK s Main Roads & Control Measures Adopted Submitted by: Sami Al-Kandari, Senior Environment Engineer, HSE Team (WK) Kuwait, with its geographic location placed firmly in the desert, has a climate that is characterized by summers that are dry, long, and extremely hot. Its winters are short and warm with occasional rainfall. Dusty sand storms often occur during the summer months (April-November). Roads throughout KOC s operational areas are affected at various degrees by sand drifting phenomena. This is particularly true of the roads in West Kuwait (WK), which are severely impacted. Sand accumulates on roadways due to sandstorms during the summer season, and this poses great safety threats to drivers on these roads. Accumulated sand on roads can have the following impacts: Road markings can be hidden by the sand, which can mislead drivers and result in Motor Vehicle Accidents (MVAs). Reduce skid resistance of tires with the road surface which might also lead to MVAs. The problem is compounded at night with poor visibility, when such an obstacle is least expected. Vehicles being stuck in the sand; this may cause obstruction to other vehicles and in case of poor visibility may result in MVAs. Sand disperses when vehicles pass over it, and as a result the cloud of suspended dust reduces the visibility of other drivers. Reduce the integrity of facilities near the streets. July - September

24 Delay logistic and emergency response equipment to reach the required location. Adverse human health impacts are also associated with suspended dust, such as allergic reactions and asthma attacks, eye irritation and respiratory problems. KOC spends millions of Kuwaiti Dinars every year (in the form of sand control contracts) for the removal of accumulated sand on roads. A permanent solution to this problem has still not been found. To tackle this issue, the Environment Section of HSE (WK) Team has conducted a study on the sand drifting impact on WK s main roads. The main objectives of the subject study was to identify the impacted sections of WK s main roads due to drifting sand accumulation, evaluate possible reasons for it and propose suitable sustainable control measures to avoid sand accumulation on roads. The study also recommended Best Practicable Environmental Options (BPEO) to utilize the already accumulated sand on the road. Sand Drifting Survey Mechanism Implemented Survey s Major Findings 1. A number of impacted locations due to drifting sand accumulation on WK main roads have been identified and the major factors contributing for the impact have been recognized as follows: Presence of large area of open desert on the northern side of the roads. The roads being almost perpendicular to the prevailing north-western winds. Long, dry summer season which reduces cohesion of the desert surface soil. As a result, the sand particles tend to move easily with the wind. Wind blowing above the threshold speed that makes it capable of moving sand particles from surface soil. Presence of obstacles/barriers (concrete blocks, elevated ground, wild desert plants, curb stone, waste bins etc.) on the northern upwind side of the road will affect the performance of the road s aerodynamics which reduces the wind speed and makes it incapable of transporting sand particles further. Therefore, the sand particles start to accumulate after the barrier on the road. As part of the study, a field survey was conducted covering approximately 70 kilometers of West Kuwait s main roads from the GC-2 checkpoint towards Umm Gudair checkpoint and passing through WK fields crossing Minagish checkpoint until the Abduliyah Kabd intersection. The main objective of the survey was to visually identify the impacted sections of the road due to sand drifting and analyze the reasons for its impact. 2. Sand profile varies in length due to existence of different parameters (natural vegetation, natural and man-made barriers, facilities, oil lakes, gatch pits, etc.) on the upwind side. 3. Many activities for projects are in progress which add to the problem, in addition to the poor management of the excavated soil which causes sand looseness and transfer with the wind. 22 July - September 2013

25 Sand Drifting Control Measures Under the harsh environmental conditions of the desert in Kuwait generally and West Kuwait specifically, full control of the sand encroachment problem along roads is extremely difficult. However, minimizing the problem is possible by implementing the following control measures: The features acting as barriers on the windward side of the road such as concrete blocks, wild desert plants, curb stones etc., should be removed. The elevated ground levels, which act as barriers, to be leveled off by adopting an aerodynamic concept to promote smooth flow of sand particles with the wind. At some locations where the obstacle is due to the existence of the facilities such as a checkpoint, sign boards, speed cameras etc., and the relocation of the same to elsewhere is not feasible, in that case a comprehensive sand drifting protection system along the road using physical and biological barriers should be constructed. Modify the design of the road by replacing the guard rails with crash barriers which has high performance in aerodynamics to avoid reduction in wind speed and prevent accumulation of sand on the streets. Regular survey and maintenance of the existing bund walls to be conducted. The impacted road sections to be included in the regular maintenance schedule for sand control. Ensure all heavy equipment and contractor vehicles use paved roads instead of rig roads and unpaved roads. In regard to the collected accumulated sand, it is recommended to use it for the following purposes: Backfilling the nearest abandoned gatch pit as part of a gatch pit restoration program. Backfilling the trenches to cover the new underground pipelines and protect the external coating from deterioration. Construction of longitudinal strips of sand barriers on the upwind side of the road ( m height, 5-8 m long, 2-3 m width on average) by mulching the surface soil with ecofriendly material. July - September

26 Technical Report The Benefits of Six Sigma Submitted by Mubarak Al-Ahmad, Snr. Engr. Projects, Support Services Group (S&EK) Six Sigma is a method of continuous improvement that focuses on the elimination of defects by controlling the variability in a system or process. A process is a series of steps or activities that are employed to accomplish a certain task. The Six Sigma methodology consists of five phases that ensure the process improvement, which are referred to as the DMAIC process. DMAIC stands for Define, Measure, Analyze, Improve, and Control. These are the stages of the six sigma methodology, as detailed below: 1. Define the customer, their Critical-to-Quality issues, and the Core Business Process involved. 2. Measure the performance of the Core Business Process involved. 3. Analyze the data collected and process map to determine root causes of defects and opportunities for improvement. 4. Improve the target process by designing creative solutions to fix and prevent problems. 5. Control the improvements to keep the process on the new course. The aim of Six Sigma is quality improvement, whether it is applied to a single product line or to a complete business overhaul. Its purpose is to satisfy existing customers and/or acquire new ones. The Six Sigma methodology can be applied to any process that generates defects or that could benefit from improved quality management. 24 July - September 2013

27 Why is Six Sigma important? Six Sigma is valuable because it creates an environment for improving productivity and efficiency in a business environment of continuous improvement. It gives everyone an opportunity to make improvements to traditional processes. It creates a disciplined, knowledge-based approach designed to enhance customer satisfaction and build a customer culture that embraces innovative approaches to technology and business development. Overall, it is a highly structured strategy for acquiring, assessing and applying customer expectations with manageable solutions for the purposes of product, system or enterprise innovation and design. Definition of Six Sigma Six Sigma is a data-based methodology to improve performance by reducing variability. Six Sigma heavily depends on statistical analysis of data. It requires thorough understanding of product and process knowledge and is completely driven by customer expectations. More specifically, it is a methodology to achieve 3.4 defects per million opportunities. It can also be used to bring breakthrough improvements in the process. It focuses on the bottom-line and is a proven methodology for problem solving. Goals of Six Sigma To reduce variation To reduce defects/rework To improve yield/productivity To enhance customer satisfaction To improve the bottom line To improve the top line Shortening cycle time Benefits of Six Sigma Organizations that implement Six Sigma correctly achieve significant benefits that contribute to competitive advantage and to changing the culture in an organization from reactive problem solving to proactive problem prevention. Specifically, the proven benefits include: - For the organization Bottom line cost savings (5%-20% of turnover per annum) Improved quality of product or service as perceived by the customer (internal and external customers) Reduction in process cycle times Development of staff skills Common language throughout the organization World class standard - For the individual Improved knowledge and skills Ability to use a wide range of tools and techniques A status that is recognized world wide July - September

28 Technical Report Oil Recovery Options for Waste Water Treatment Facilities Submitted by: Hamad Al-Mebayedh, Engineer Environment, Health, Safety & Environment (Technical Services) Team The ultimate goal of this study is to develop an environmentally and economically sound technology to manage and recover oil from waste water treatment facilities by studying the behavior of oil in water, particularly at waste water facilities in Kuwait. The information available regarding this matter is diverse and widespread. Despite the necessity for such information, at this time there is no paper in the literature concerning the fate and behavior of oil in water in regard to Kuwait s environment. The actual frequency, magnitude, and consequences are unknown, which has proven to be a serious problem for environmental waste management in Kuwait s oil industry. This study attempts to correct that informational void by presenting waste management techniques, solutions, and the behavior of oil in water within waste water facilities areas in Kuwait. The methodology adopted was performed by carrying out a review of existing literature, contacting companies previously involved in recovering oil from water worldwide, and holding discussions with operators. This is then applied to ADIOS2, which is the Automated Data Inquiry for Oil Weathering Model which helps develop the ideal scenario. After completion of this study we extrapolated that most of the existing mechanical recovery equipment was designed to collect oil using its property to adhere to the surface material of the recovery unit. This equipment can efficiently collect oil with certain physicochemical properties at standard conditions and cannot be used with equal competence both in warm and cold waters and on variable oil types and properties. The recovery efficiency significantly changes with time due to the oil slick property changes and emulsion formation. Therefore, multiphase interactions between oil, water, and the material of the recovery unit need to be studied thoroughly due to their strong influence on the oil recovery process. In respect to the appropriate recovery strategies, failure to consider the properties of the oil, and the specific local environment conditions, can dramatically reduce the recovery effectiveness and ultimately the success of the most economical and environmental option. All factors must be carefully considered when developing an oil recovery plan. This study discusses the best oil recovery options for oil mixed in water, particularly in waste water facilities in Kuwait, and provides environmental and economic recovery and recycling solutions. Processes that Affect the Impact of Oil Releases Oil is a complicated mixture of many components, and when it mixes with water, the water surface will largely be effected, and this depends on the initial properties of the oil and composition as well as on specific local environmental conditions. Spreading, evaporation, dispersion, and emulsification can rapidly alter oil properties within several hours, leading to formation of water in oil emulsion. The same type of oil released under different environmental conditions disperses in dramatically different patterns due to the influence of air and sea temperature, wind speed, and weather. Oil dispersal and deterioration can have significant ramifications. Weathering Following an oil spill or any other event that releases crude oil or crude oil products into the marine environment, weathering processes begin immediately to transform the materials into substances with physical and chemical characteristics that differ from the original source material. Emulsification Emulsification is the process of formation of various states of water in oil, often called chocolate mousse or mousse among oil spill workers. 26 July - September 2013

29 Dissolution Dissolution is the chemical stabilization of oil components in water. Dissolution accounts for only a small portion of oil loss, but it is still considered an important behavior parameter because the soluble components of oil, particularly the smaller aromatic compounds, are more toxic to aquatic species than the aliphatic components. Modeling interest in dissolution is directed at predicting the concentrations of dissolved components in the water column. Most models in existence do not separate the dissolution component. The entrainment model is sometimes used but fails to distinguish between dispersion and dissolution. Oxidation Oxidation occurs when oil contacts the water and oxygen combines with the oil hydrocarbons to produce water-soluble compounds. This process affects oil slicks mostly around their edges. Thick slicks may only partially oxidize, forming tar balls. These dense, sticky black spheres may linger in the environment, washing up on shorelines long after a spill. Oil Weathering Model ADIOS2 Clearly, planners and responders need a tool to help estimate realistic release scenarios. In response to this need, a simple model has been developed to estimate the amount of product spilled and the leak rate based on easily obtainable information. The KOC lagoon model is included as a module within the oil-weathering model, ADIOS2, which is an oil spill response tool which assists oil spill responders and contingency planners in making decisions on potential response strategies. It inte grates a library of approximately one thousand oils with a short-term oil weathering and clean-up model to help in developing clean-up strategies based on estimates of the amount of time that spilled oil will remain in the marine environment. Waste Water Facility Scenario (KOC) It was noted that the oil/water separator was feeding wastewater and oil to a small lagoon nearby. This lagoon feeds a larger lagoon. Both lagoons contain crude oil; the initial smaller lagoon contains the highest concentration of crude oil. Figure 1 demonstrates our case. Evaporation Evaporation occurs when the lighter or more volatile substances within the oil mixture become vapors and leave the surface of the water. This process leaves behind the heavier components of the oil, which may undergo further weathering or may sink to the bottom of the ocean floor. Spills of lighter refined products, such as kerosene and gasoline, contain a high proportion of flammable components known as light ends. These may evaporate within a few hours, causing minimal harm to the aquatic environment. Heavier oils, vegetable oils, and animal fats leave a thicker, more viscous residue. These types of oils are less likely to evaporate. Environmental factors that affect the rate of evaporation are: Area of slick exposed, which changes rapidly Wind speed and water surface roughness Air temperature and solar radiation Formation of emulsions, which dramatically slows evaporation All these factors must be carefully considered when developing an oil spill response plan. July - September

30 Spill Scenario The following information pertains to the figures that were available from the tank farm waste water facility area in Kuwait, which we then fed into ADIOS2. After this information is fed into the system, the models will display the predicted property changes and estimated oil budget for a given time as a graph and table. All sizes and measurements are given as a guide as known data was taken off site during the visit. Input for the Lagoon Scenario: Oil Type Burgan, Oil & Gas Location = Divided Zone Synonyms = None listed Product Type = Crude API = 23.3 Pour Point =.20 deg C Flash Point = Unknown Viscosity = 28.1 cst at 50 deg C Adhesion = Unknown Aromatics = Unknown Wind and Wave Conditions Wind Speed = 20 mph from 0 degrees Water Properties Temperature = 35 deg C Salinity = 15 ppt Sediment Load = 5 g/m3 (Ocean) Current = 0 mph Release Information Continuous Release Time of Release = May 30, 1500 hours Amount Spilled = 567 bbl Duration of Release = 4 days The program will provides us with a best answer and also calculates possible ranges in the values of estimated spill properties. Spill Scenario Oil Budget Table Oil Name = BURGAN, OIL & GAS API = 23.3 Pour Point = -20 deg C Wind Speed = constant at 20 mph Wave Height = computed from winds Water temperature = 35 deg C Time of Initial Release = May 30, 1500 hours Total amount of Oil Released = 567 bbl Hours into Spill Relaeased BBL Evaporated percent Dispersed percent Remaining percent July - September 2013

31 Conclusions and recommendations 75 Oil Remaining (percent) We conclude that full understanding of the impact of petroleum loadings into the water requires an accurate assessment of the magnitude, spatial extent, and duration of exposure. Because of the incredible diversity of physical environments within the lagoons, each case has different assumptions and conclusions. For example, wind directional changes, variances in crude oil concentrations in the lagoon, oil layer thickness, evaporation, etc. all have to be taken into account when trying to establish a recovery rate. This explains why each lagoon has various recovery coordinations. It is not possible to derive simple generic relationships between petroleum mass loadings and ambient concentrations that can be applied universally. The fate (where it goes) and persistence (how long it remains in the system) of petroleum in water are controlled by processes that vary considerably in space and time. In a completion of this study we extrapolate that most of the existing mechanical recovery equipment was designed to collect oil using its property to adhere to the surface material of the recovery unit. This equipment can efficiently collect oil with certain physicochemical properties at standard conditions and cannot be used with equal competence both in warm and cold waters and on variable oil types and properties. The recovery efficiency significantly changes with time due to the oil slick property changes and emulsion formation. Therefore, multiphase interactions between oil, water, and material of recovery unit need to be studied thoroughly due to their strong influence on the oil recovery process This graph indicates the amount of oil remaining over the course of the spill scenario May May Jun Jun Jun 02 July 16, Jun 03 Oil Evaporated (percent) 0000 Jun 02 July 16, Jun Jun Jun 04 This graph shows the amount of oil lost due to evaporation; the solid line shows the best estimate. July - September

32 International Event The Global Conference on Sustainability and Reporting was held recently in Amsterdam. Organized by the Global Reporting Initiative (GRI), the event was attended by more than 1,600 individuals from 70 countries. Global Conference on Sustainability and Reporting Submitted by Abdulkhaleq Al-Ali Manager Public Relations & Information The objective of this year s conference was to examine issues related to sustainability, corporate social responsibility, and issues affecting the development of communities around the world. With the theme of Information Integration Innovation, the conference provided participants with new knowledge and insight about sustainability reporting, which can be built on and disseminated to enable a change for a sustainable future. Danish Minister of Trade and Investment, Pia Olsen Dyhr, Swedish Minister of Finance, Peter Norman, European Commissioner for Internal Markets and Services Michel Barnier, and GRI Chief Executive Officer Ernst Ligteringen addressed the audience during the conference to deliver their remarks about the state of social responsibility and sustainability on the global level. Other business and political leaders also delivered their remarks during the conference. During her speech, the Danish Minister of Trade and Investment emphasized the important role that research plays to investigate the underlying causes that prevent proper governance and documentation in the field of sustainability and social responsibility. She upheld the need to include companies and various institutions in the process of formulating operational strategies that help create a general culture of sustainable behavior. This, she said, is successful when employees take it upon themselves to display and implement strategies detailed in efforts that encourage sustainability and social responsibility. Attendants at the conference unanimously agreed on the need to consolidate the concepts of sustainability and social responsibility in the operations of major companies because of the global development challenges that the world currently faces. Low-income countries in particular face these same problems, but in a more serious way. Part of the solution, the GRI CEO suggested, was to do a better job of documenting and improving social responsibility and sustainability projects on behalf of major global companies. 30 July - September 2013

33 Commisioner Michel Barnier delivers his keynote speech To increase transparency and find solutions to sustainability challenges, it is important to stay informed of new trends and developments in the field. Companies and investors need better information to assess risk, measure performance, and identify market opportunities. Governments and consumers need better information to make policy and purchasing decisions. A sustainable global economy will be built on the disclosure of sustainability information, and this important topic was a key component of the first day of the conference, which set the agenda for the days to come. In a speech he delivered during the conference, Swedish Minister of Finance Peter Norman emphasized the need for governments and policy-makers to make practical decisions and impose the concept of corporate social responsibility and sustainability. He recalled a decision in Sweden where the government made it mandatory for state-run companies to implement corporate social responsibility measures, which he said would influence the private sector into following step. July - September

34 Social responsibility and sustainability in Kuwait s oil sector European Commissioner for Internal Markets and Services Michel Barnier maintained that efforts to rehabilitate the financial sector of Europe after the economic crisis have not been sufficient, and that large companies must consider the long-term policies that make the principles of corporate governance and sustainability more effective through transparency and ethical practices. He added that the European Commission recently adopted a new draft law to increase transparency in commercial and financial transactions that relate to environmental and social issues. Several specialized sessions were held on the sidelines of the conference to discuss the issue of sustainability and social responsibility. One of the sessions, which was devoted to the oil and gas industry, saw the participants agree on several points, which can be summarized as follows: The issues of social responsibility and sustainability discussed during the conference are relevant to Kuwait in general and to its oil industry in particular. Despite the fact that some K-Companies, KOC in particular, have been involved with CSR activities for many years, the method of documenting and reporting these activities have not been in accordance with some international standards, which have hindered some efforts to register the Company internationally for its CSR initiatives. However, with the support of senior management, KOC is currently in the process of introducing a culture of social responsibility and sustainability with the formation of a team that will pave the way for a new era of CSR activities. This new team will hold workshops and training courses to allow for better documentation and corporate governance, which are in line with international standards. It is hoped that these efforts will place KOC and other K-Companies under KPC in the international ranks of socially responsible companies. The Global Reporting Initiative (GRI) promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to a sustainable global economy. GRI s mission is to make sustainability reporting standard practice. To enable all companies and organizations to report their economic, environmental, social and governance performance, GRI produces free Sustainability Reporting Guidelines. GRI is an international not-forprofit organization, with a network-based structure. Its activity involves thousands of professionals and organizations from many sectors, constituencies and regions. The need to obtain the support of senior management in oil and gas companies to proceed with the adoption of sustainability policies and social responsibility. Develop and find new means of communication to convey messages of social responsibility. Creating a culture of sustainability and social responsibility in these companies. The challenges facing the implementation of policies and social responsibility sustainability, transparency, and data processing required for authentication. 32 July - September 2013

35 Internal Event KOC Honors Retired DMDs Former KOC C&MD Sami Al-Rushaid recently showed his appreciation for three of his former deputies who were honored for their commitment to the Company during their time of service. Al-Rushaid wished the DMDs, who recently retired, with the best of luck and success in their lives. The event took place last May during a ceremony held by KOC at the Missoni Hotel in the attendance of the Company s senior officials, where Al-Rushaid and the outgoing DMDs recalled some of the memories they have of the decades of time spent with the Company in cooperation and mutual solidarity in service to Kuwait and KOC. In his speech, Al-Rushaid recalled some of the memories he had of former DMD for Planning & Gas (currently CEO of EQUATE Petrochemicals Co.) Mohammad Hussain, former DMD for Exploration and Production Development Khaled Al-Sumaiti, and Former DMD for Administration and Finance Khaled Al-Khamees. Following the chairman s comments, the outgoing DMDs expressed their pride in belonging to KOC and the great satisfaction they had in regard to the expertise and achievements that they were able to accomplish during their long periods of service in the Company. They also wished KOC more success on the local, regional and international levels and urged colleagues to put in their time and effort for the benefit of the Company. On the conclusion of the ceremony, Hussain, Al-Sumaiti and Al-Khamees were presented with commemorative gifts consisting of albums of their respective work within the Company. They were also presented with the traditional blue work overalls signed by KOC s higher management and managers. In comments he made during the ceremony, PR&I Group Manager Abdul-Khaleq Al-Ali expressed his gratitude to the outgoing DMDs for the lessons they taught him during the years he spent working with them. During the event, a video was projected which highlighted some of the early work the outgoing DMDs had accomplished with KOC. At the conclusion of the event, a group photo was taken with the recently retired DMDs and their former colleagues. DMDs and senior officials honored the outgoing DMDs during the ceremony. July - September

36 Report Saving Energy in the Oil and Gas Industry Global demand for energy is growing, driven by rising population and economic growth. Over the past three decades, energy use has more than doubled. This increase, in turn, has enabled the world economy to expand, raising living standards and helping to meet the aspirations of millions of people around the world. It is impossible to operate a factory, run a shop, drive a car or deliver goods to consumers without using some form of energy. Saving energy through improved efficiency and conservation has a central role to play in reconciling the goals of economic development, energy security and environmental protection. A number of recent studies have shown that investment in more efficient energy technologies is often the most cost-effective way of curbing the growth in demand for fossil fuels and cutting emissions of greenhouse gases and air pollutants. Ways of Saving Energy Energy can be saved by using it more efficiently or by using less of it. Energy efficiency refers to the ratio between the input of energy - be it a primary source like hydrocarbon fuels or an energy carrier such as electricity or hydrogen - and the output of an energy service, such as light, heat or mobility. Improving energy efficiency, by reducing the quantity of energy consumed, can enhance energy security and mitigate the environmental harm caused by producing, transporting and consuming energy. It can also bring broader economic and social benefits, by lowering costs to businesses and households, increasing the competitiveness of the economy and creating jobs in supplying energyefficient technologies and practices. Energy efficiency can be enhanced through the application of new technology that yields a lower input/output ratio, using the same fuel or an alternative. For example, energy can be saved in power generation by replacing a conventional thermal station with a gas-fired combined-cycle gas-turbine station, which has much higher thermal efficiency. Improving energy efficiency is not the same as energy conservation which, strictly speaking, refers to consuming less of a given energy service, and therefore consuming less of the energy that would be needed to provide it. Examples include switching off the light when leaving a room or walking short distances instead of driving. Where an energy service is wasted or is of little value to the person or business benefiting from it, conservation can bring real economic and social benefits. But forgoing an energy service that is critical to economic activity or to living standards can hold back economic development and reduce social welfare. Outlook for global primary energy use and carbon dioxide emissions. 34 July - September 2013

37 Energy Use in the Oil and Gas Industry It is often overlooked that the oil and gas industry is, itself, a major consumer of energy. The industry is inherently very energy-intensive. Large amounts of energy are needed to extract resources from the ground and process, transform, transport and deliver those resources to final users, relative both to the economic value and to the volume of the oil and gas supplied. This does not mean that the oil and gas industry is inefficient compared with other industries, as efficiency can only be compared for processes involving the same inputs and outputs. In fact, oil and gas companies have been investing and will continue to invest heavily in improving the efficiency of their operations. Globally, the energy consumed by the oil and gas industry is estimated to amount to approximately 10 per cent of gross oil and gas production, or about 600 million tons of oil equivalent (Mtoe) a year. Around 90% of the primary energy used by this industry takes the form of oil and gas, as supplies are available on site and are typically the cheapest source of energy. Natural gas makes up about half of the total. Some of the oil and gas used directly by the industry is transformed into electricity and heat, especially in the case of refineries and other large facilities. In total, about 10 per cent of the electricity and heat consumed by the industry is supplied from the grid, though its relative importance varies considerably by type of activity and country. The oil and gas industry has a strong financial incentive to save energy, because of the large share of energy in the overall cost of operating its facilities. Efficient energy use reduces costs along the whole supply chain, improves supplier s competitiveness and makes energy more affordable to consumers. The industry is also committed to acting in a socially responsible manner, notably with respect to the environmental impact of energy use, and has a strategic interest in extending the life of its large but finite resources. That is why oil and gas companies have invested heavily over the years in more efficient technologies all along the supply chain and plan to invest more in the future. However, those investments are not always reflected fully in trends in the energy intensity of oil and gas supply, measured by the amount of energy needed to supply a given quantity of oil or gas to consumers. Outlook for global primary energy use and carbon dioxide emissions. July - September

38 How the Oil and Gas Industry is Saving Energy Energy management There is a strong consensus within the oil and gas industry on the importance of saving energy by improving the efficiency of its operations along the supply chain and eliminating unnecessary waste. Despite the large investments that have already been made, oil and gas companies continue to devote considerable resources in pursuit of further energy savings. Many companies have developed and implemented formal energy management systems, which seek to incorporate efficiency improvements and emissions reductions into the routine operations of every aspect of their businesses. Integration of operations often makes a big contribution to improving efficiency. For example, cogeneration of electricity and steam using natural gas is nearly twice as efficient as traditional methods of producing them separately. A growing share of power and heat needs at upstream production sites, refineries and petrochemical plants around the world is being met by cogeneration plants, yielding big improvements in energy efficiency. Oil and gas production The growing energy intensity of oil and gas production in many parts of the world - as well as rising energy prices - is giving new impetus to industry efforts to improve the efficiency of the different operations involved in the production process, combat waste and reduce emissions. Recent initiatives, as mentioned earlier, have largely focused on better integration of operations, including the increased use of cogeneration of power and steam. The introduction of more efficient pumps and compressors has also helped save energy. The most advanced high-efficiency motors that are increasingly being used in the upstream industry are about 85 per cent to 95% efficient, compared with 60% to 70% for many of the oldest motors still in use. In addition, energy use associated with oil and gas exploration has been reduced as a result of big improvements in drilling success rates, mainly due to advances in seismic surveying and analysis, and drilling techniques. One important way in which the oil and gas industry has been conserving energy is by reducing the flaring or venting of natural gas produced in association with crude oil. Flaring is sometimes carried out where barriers to the development of gas markets and gas infrastructure prevent the gas from being used. The industry is committed to eliminating unnecessary flaring by developing processing and distribution infrastructure in order to monetize the gas. The Global Gas Flaring Reduction partnership, which KOC is a part of, is a World Bank-led initiative that brings together representatives of governments of oil-producing countries and state-owned and major international oil companies and facilitates and supports national efforts to use currently flared gas by promoting effective regulatory frameworks and tackling the constraints on gas utilization, particularly in developing countries. Oil refining As large energy consumers, oil refiners have long recognized the importance of improving energy efficiency. The amount of secondary processing of crude oil and other feedstocks carried out by refineries as a proportion of throughput has increased sharply over recent decades, resulting from the need to handle heavier crude oils with higher sulphur content and to meet increasing demand for lighter and better quality products. Yet the amount of energy used per barrel of output has actually fallen, due to massive investments in more energy-efficient processes, the adoption of efficient practices and the reconfiguration of refining and associated operations such as petrochemicals and power production. Improved integration of operations, including increased reliance on cogeneration of heat and power and the installation of heat recovery systems on processing units, has contributed much of these gains. Refiners have become far more systematic in reviewing the efficiency of their processes, improving maintenance practices and running on-site assessments or audits of energy performance. The refining industry has developed tools to benchmark performance to provide a robust basis for taking decisions about energy use and efficiency. Transportation The energy requirements of long-distance oil and gas pipelines and local gas networks have been reduced significantly in recent years, mainly through the development of more efficient pumps and compressors, and high pressure (HP) gas transmission pipeline technology. High-efficiency turbines used to compress natural gas can now achieve thermal efficiency of up to 40%. Higher pressure permits a corresponding increase in throughput capacity for a given diameter. Energy consumption per cubic meter of gas transported is between 20% and 35% lower for a 15 to 30 billion cubic meter/ year line, because of the need for fewer stations, higher throughput levels and reduced friction losses. The fuel efficiency of oil tankers, which carry the bulk of crude oil and refined products traded internation- 36 July - September 2013

39 ally, has improved greatly over the years, with the replacement of steam boiler propulsion systems with more efficient and less polluting diesel engines. LNG carriers, which account for a growing share of trade in natural gas, are among the few large ships still using steam boilers, fuelled with gas that has to be boiled off during the voyage to maintain pressure and temperature inside the vessels to within operating limits. But a number of carriers now being built feature modified diesel engines, including dual-fuel systems that can burn both diesel oil and gas. The loss of oil, natural gas and refined products through leaks and spills in transportation and storage has been dramatically reduced through the introduction of a wide range of technologies, including improved valves, vapor-recovery units, double-hulled tankers, improved underground storage tanks at gasoline stations and improved corrosion prevention technologies. When spills do occur, a substantial portion is now recovered and reused. For example, well over half of the crude oil associated with pipeline spills is now recovered and reused. Future Challenges: The Way Forward The oil and gas industry is facing major challenges in meeting the world s rising hydrocarbon needs in an environmentally sound and socially acceptable way while curbing its own energy consumption. Many new sources of hydrocarbons, including oil sands, gas-to-liquids and biofuels, are inherently more energy-intensive. Tougher standards for refined products and the growing shift towards lighter products are pushing up the energy intensity of refining. The greater distances over which oil and gas must be transported will boost fuel needs, as would the introduction of carbon capture and storage. These challenges make it all the more important to unleash the potential that still exists for the industry to save energy through efficiency gains and conservation. Energy efficiency is often the cheapest, fastest and most environmentally friendly way of meeting the challenges of reducing industry s own energy needs. All stakeholders in the hydrocarbon sector - from producers to consumers - have a role to play, working together, to ensure energy is used efficiently and cleanly. The hydrocarbon industry is committed to stepping up efforts to seek out every opportunity for saving energy where it is economic to do so, and to helping policymakers formulate strategies and measures aimed at saving energy and reducing emissions. Policymakers, for their part, are responsible for establishing a stable and predictable policy framework that promotes planning and investment in more efficient energy options, and enhances market drivers to improve efficiency all along the supply chain. Oil and gas companies will continue to invest heavily in research and development of more efficient technologies; many companies are augmenting their efforts substantially. Government-funded research will remain vital, especially for promising technologies that are not yet ready to be commercialized. Yet public budgets for oil and gas research remain well below the levels reached after the oil shocks of the 1970s and have fallen in many cases over the past decade. There is a pressing need for the public and private sectors to work together to develop more efficient oil and gas technologies. The oil and gas industry is responsible for ensuring efficient energy use and conservation in its own activities. But it also has an interest - and, in some cases, a legal obligation - to promote energy-efficient use of its products too, particularly since the potential for saving energy there is considerably higher in absolute terms. For example, a 10% improvement in the efficiency of oil use in transport and other end uses would save the equivalent of one-half of all the energy used by the oil and gas industry worldwide. The oil and gas industry is already helping final consumers of its products to save energy and will continue to do so. Another way in which the industry is seeking to reduce energy needs is through improvements in the quality of its products, such as advanced road fuels that improve mileage. Several European countries have implemented or plan to introduce white certificate schemes, involving obligations or voluntary commitments on the part of producers, suppliers and distributors of oil, gas and electricity to undertake energy-efficiency measures that ensure that their final users save an amount of energy equal to a pre-defined percentage of their annual energy deliveries. White certificates are documents certifying that a certain reduction of energy consumption has been attained. Great Britain was the first EU country to introduce such a scheme, combining its obligations on suppliers to save energy with the possibility of trading those obligations and the certificates. Italy started a scheme in January 2005 and France a year later, while Denmark and The Netherlands are considering introducing them in the near future. July - September

40 Overview Produced Water: What is the way forward? Produced water is attracting the attention of an increasing number of water technology companies. With rising volumes and increased treatment needs, it looks like a good market. But can water companies find their way in? The oil industry is effectively a water industry which delivers oil as a byproduct. In the North American onshore oil industry, eight barrels of water are brought to the surface for every barrel of oil. This produced water is often highly saline and contaminated by hydrocarbons: it is a hazardous waste which requires treatment, disposal, and potentially recycling. Handling this produced water is an integral part of the oil and gas industry. It is also a big business worth an estimated $2.4 billion a year. Although overall oil production in the US has peaked, the produced water management market is expected to grow, because the water to oil ratio (WOR) is increasing. By 2025, as a result of ageing wells, the WOR is expected to reach an average of 12 for onshore crude oil resources. This will underpin the growth in the produced water management market. Typically, produced water is treated in three stages: The first stage separates the oil from the water using equipment such as API separators and hydrocyclones. The second stage involves induced gas flotation to bring smaller droplets of oil out of the water. The final stage is tertiary treatment, which may involve media filtration, biological treatment, and beyond that desalination. The real growth opportunity in the treatment sector is in tertiary treatment and desalination. This is expected to grow faster than the produced water management market as a whole, as a result of the increased reuse of produced water. There are four main sectors of the market where demand for advanced water treatment technologies is expected to grow most quickly. 38 July - September 2013

41 Growth sectors The first area in which we expect to see more reuse is in conventional oil fields where there are only limited opportunities for reinjection. At present, around 98% of onshore produced water is disposed of onsite, typically through reinjection into deep aquifers or back into the oil reservoir. However, in many parts of North America, for geological and regulatory reasons it is necessary to dispose of produced water off-site. In extreme cases, this can cost as much as $10 per barrel ($63/m3). Advances in desalination technologies have meant that the beneficial reuse of this wastewater, either on-site or off-site, is becoming an increasingly economic possibility. The second area of growth is related to the quality of water required for certain enhanced oil recovery techniques. Primary recovery typically recovers only 5-15% of the oil from a well. Secondary recovery, often involving pumping water down the well to maintain the pressure on the oil, may increase recovery to 30%. Enhanced oil recovery techniques can increase the proportion of the oil brought to the surface to 60%. Although a variety of fluids can be used in EOR, many require flood water of a precise salinity. For example, low-salinity water from which divalent ions have been removed, but monovalent ions remain in a certain concentration, can be used to peel off the oil from the clays which surround it, increasing recovery rates without the clay becoming mixed in with the oil. Creating these custom waters requires advanced water treatment technologies. The third driver is the expected dramatic expansion of the shale gas industry. In order to bring the gas to the surface, the rock which holds it must be fractured typically using around 13,000 m3 of water. This water is contaminated by chemicals and requires treatment before disposal. Environmental concerns related to frac water entering the water table look set to ensure that energy companies operating in the shale will need to invest in water treatment services. The fourth market which is driving increased expenditure on water treatment equipment is the growth of the oil sands industry in Canada. The process of extracting synthetic crude oil from oil sands is highly water-intensive. Even though Canada is one of the most water-rich countries on earth, the water availability in the Athabasca oil sands region is insufficient to meet demand unless a greater proportion of the wastewater is recovered and recycled. With oil prices in the region of $100 a barrel, production of synthetic crude is expected to continue to rise steeply. Market challenges The technologies which will do best in this new market are likely to be both membrane and thermal desalination technologies, filtration systems and biological treatment systems. This does not mean that seawater desalination technology companies will necessarily succeed in the market. There are a number of challenges, which include the following: A Different Orientation Seawater desalination may be very similar to produced water desalination in terms of the processes involved, but it is fundamentally different in outlook. In seawater desalination, the objective is to produce as much potable water as possible at the lowest cost. In produced water desalination, the objective is to reduce the waste stream by as much as possible at the lowest cost. This means that the desalination technologies which are likely to be most appropriate to the oil field are those with the highest recovery rates (i.e. HERO, OPUS, brine concentrators, and crystallisers). July - September

42 A Conservative Market Water technology companies are likely to find it difficult to establish themselves as credible suppliers in the oil and gas industry without oil field references. Oil and gas production is a harsh environment, and mistakes are costly. There is a general preference in the industry for tried and tested technologies rather than new technologies which might save money but lack a track record in the industry. The Route to Market There are two potential customers for water treatment equipment: the energy companies themselves, and the oil field service companies who act on their behalf. Establishing an initial reference is difficult without the support of either. In many cases, in order to get started it might be necessary to form a joint venture or alliance with an oil field service company, which might undermine the potential profitability of a project for the water technology company. This is perhaps why the three main water technology companies which have entered the market (Veolia, GE Water and Siemens) have done so through acquisition rather than organic growth. Market Concentration One company Cameron has more than a 50% market share of the primary and secondary produced water treatment market. Veolia and Siemens are the next biggest, with around 8% market share each. This might imply that this is a market for big companies. In fact, because the nature of the challenge varies so much according to geography, geology, local regulation and the type of resource, there are a large number of small specialist suppliers often working in a single region, with a single technology. Opportunities Besides the potential for market growth, there are also a number of specific niche opportunities with strong prospects in the produced water sector. Outsourcing Outsourcing is a long-established practice in the oil field, but to date, specialist water treatment outsourcing remains a relatively underdeveloped market. This may change as the need for on-site reuse using relatively complex technologies evolves, and energy companies and oil field service companies look to outsource the operational and regulatory risks associated with treating produced water to a higher level. Outsourced water treatment specialists might be able to make good profits by applying cuttingedge technologies that energy companies and oil field service companies have little experience of. Water services for shale gas are particularly suitable for outsourcing because the treatment need is temporary, and a service provider who can move assets between frac sites as required is likely to be better placed than an equipment supplier looking for a series of individual sales. Low-energy/High-recovery Desalination In theory, produced water could make a substantial contribution to reducing water scarcity in waterstressed states such as Texas and California. In practice, however, desalinating produced water for off-site reuse is likely to remain a fringe market unless lower energy zero liquid discharge technologies can be developed. This is a challenge in terms of thermodynamics, because as you drive the water out of a salt solution, the energy required rises exponentially. If a more efficient system could be developed, that would make the treatment and sale of produced water to off-site users more competitive with reinjection, and there would be a strong market. Chemicals and Technologies As the water to oil ratio rises, the cost of managing produced water becomes a greater determinant of the viability of a well. This suggests that technologies which enable producers to strip the oil out of produced water more efficiently will enjoy a growing market. This is as much an opportunity for those who understand water chemistry as it is for those who specialize in process engineering. Conclusion The total value of the produced water market is set to grow from $5.0 billion in 2010 to $9.9 billion in 2025 a compound annual growth rate of 4.7%. The produced water treatment equipment market, however, is set to grow from $693 million in 2010 to $2.9 billion in 2025 a compound annual growth rate of 10.1%. Desalination technologies a market currently worth $59 million a year will enjoy the fastest growth rate, averaging 20.4% per year. 40 July - September 2013

43 Health An Overview of Lung Cancer What Is Lung Cancer? Lung cancer is the uncontrolled growth of abnormal cells that start off in one or both lungs; usually in the cells that line the air passages. The abnormal cells do not develop into healthy lung tissue, they divide rapidly and form tumors. As tumors become larger and more numerous, they undermine the lung s ability to provide the bloodstream with oxygen. Tumors that remain in one place and do not appear to spread are known as benign tumors. Malignant tumors, the more dangerous ones, spread to other parts of the body either through the bloodstream or the lymphatic system. Metastasis refers to cancer spreading beyond its site of origin to other parts of the body. When cancer spreads it is much harder to treat successfully. Primary lung cancer originates in the lungs, while secondary lung cancer starts somewhere else in the body, metastasizes, and reaches the lungs. They are considered different types of cancers and are not treated in the same way. According to the National Cancer Institute, by the end of 2012 there will have been 226,160 new lung cancer diagnoses and 160,340 lung-cancer related deaths in the USA. According to the World Health Organization (WHO), 7.6 million deaths globally each year are caused by cancer; cancer represents 13% of all global deaths. As seen below, lung cancer is by far the number one cancer killer. July - September

44 Total deaths worldwide caused by cancer each year: Lung cancer - 1,370,000 deaths Stomach cancer - 736,000 deaths Liver cancer - 695,000 deaths Colorectal cancer - 608,000 deaths Breast cancer - 458,000 deaths Cervical cancer - 275,000 deaths The American Cancer Society says that lung cancer makes up 14% of all newly diagnosed cancers in the USA today. It adds that annually, more patients die from lung cancer alone than prostate, breast and colon cancers combined (in the USA). An American man s lifetime risk of developing lung cancer is 1 in 13; for a woman the risk is 1 in 16. These risk figures are for all US adults, including smokers, exsmokers and non-smokers. The risk for a regular smoker is dramatically higher. Most lung cancer patients are over the age of 60 years when they are diagnosed. Lung cancer takes several years to reach a level where symptoms are felt and the sufferer decides to seek medical help. What causes cancer? Cancer is ultimately the result of cells that uncontrollably grow and do not die. Normal cells in the body follow an orderly path of growth, division, and death. Programmed cell death is called apoptosis, and when this process breaks down, cancer begins to form. Unlike regular cells, cancer cells do not experience programmatic death and instead continue to grow and divide. This leads to a mass of abnormal cells that grows out of control. Lung cancer occurs when a lung cell s gene mutation makes the cell unable to correct DNA damage and unable to commit suicide. Mutations can occur for a variety of reasons. Most lung cancers are the result of inhaling carcinogenic substances. Carcinogens Carcinogens are a class of substances that are directly responsible for damaging DNA, promoting or aiding cancer. Tobacco, asbestos, arsenic, radiation such as gamma and x-rays, the sun, and compounds in car exhaust fumes are all examples of carcinogens. When our bodies are exposed to carcinogens, free radicals are formed that try to steal electrons from other molecules in the body. These free radicals damage cells and affect their ability to function and divide normally. About 87% of lung cancers are related to smoking and inhaling the carcinogens in tobacco smoke. Even exposure to second-hand smoke can damage cells so that cancer forms. Genes Cancer can be the result of a genetic predisposition that is inherited from family members. It is possible to be born with certain genetic mutations or a fault in a gene that makes one statistically more likely to develop cancer later in life. Genetic predispositions are thought to either directly cause lung cancer or greatly increase one s chances of developing lung cancer from exposure to certain environmental factors. What are the symptoms of lung cancer? Cancer symptoms are quite varied and depend on where the cancer is located, where it has spread, and how big the tumor is. Lung cancer symptoms may take years before appearing, usually after the disease is in an advanced stage. Many symptoms of lung cancer affect the chest and air passages. These include persistent or intense coughing, pain in the chest shoulder, or back from coughing, changes in color of the mucus that is coughed up from the lower airways (sputum), difficulty breathing and swallowing, hoarseness of the voice, harsh sounds while breathing (stridor), chronic bronchitis or pneumonia, coughing up blood, or blood in the sputum. If the lung cancer spreads, or metastasizes, additional symptoms can present themselves in the newly affected area. Swollen or enlarged lymph nodes are common and likely to be present early. If cancer spreads to the brain, patients may experience vertigo, headaches, or seizures. In addition, the liver may become enlarged and cause jaundice and bones can become painful, brittle, and broken. It is also possible for the cancer to infect the adrenal glands resulting in hormone level changes. As lung cancer cells spread and use more of the body s energy, it is possible to present symptoms that may also be associated with many other ailments. These include fever, fatigue, unexplained weight loss, pain in joints or bones, problems with 42 July - September 2013

45 brain function and memory, swelling in the neck or face, general weakness, bleeding and blood clots. How is lung cancer treated? Lung cancer treatments depend on the type of cancer, the stage of the cancer (how much it has spread), age, health status, and additional personal characteristics. As there is usually no single treatment for cancer, patients often receive a combination of therapies and palliative care. The main lung cancer treatments are surgery, chemotherapy, and/or radiation. However, there also have been recent developments in the fields of immunotherapy, hormone therapy, and gene therapy. How can lung cancer be prevented? Cancers that are closely linked to certain behaviors are the easiest to prevent. For example, choosing not to smoke tobacco or drink alcohol significantly lowers the risk of several types of cancer - most notably lung, throat, mouth, and liver cancer. Even if you are a current tobacco user, quitting can still greatly reduce your chances of getting cancer. The most important preventive measure you can take to avoid lung cancer is to quit smoking. Exposure to tobacco smoke is not the only risk factor for lung cancer though. Those who have come into contact with asbestos, radon, and secondhand smoke also have an increased risk of developing lung cancer. In addition, having a family member who developed lung cancer without being exposed to carcinogens could mean that you have a genetic predisposition for developing the disease, increasing your overall risk. Lung Cancer in Kuwait The Kuwait Cancer Control Center (KCCC) confirmed in a study (covering the period between ) that there were 704 new cases of lung cancer, which constitutes 5.4 percent of all cancers in Kuwait during that period. The prevalence of cancer among Kuwaitis is around 9.3 for every 100,000 people, and 7.8 for every 100,000 people among non-kuwaitis, which means that the ratio of Kuwaitis exceeds other nationalities. According to the GCC Union for Combating Cancer, between 40 and 60 people are diagnosed with lung cancer in Kuwait every year, of which 80 percent are smokers. Lung cancer constitutes 13 percent of all cancer cases in Kuwait, and it is the fourth most widely spread cancer after lymphatic cancer, leukemia and head and neck cancer. July - September

46 Hi-Tech Samsung Announces 5G Data Breakthrough Wireless Bioabsorbable Circuits Could Kill Bacteria Samsung Electronics recently said it had successfully tested super-fast fifth-generation (5G) wireless technology that would eventually allow users to download an entire movie in one second. The South Korean giant said the test had witnessed data transmission of more than one gigabyte per second over a distance of two kilometers. The new technology, which will not be ready for the commercial market before 2020 at the earliest, would offer transmitting speeds up to several hundred times faster than existing 4G networks, it said in a statement. That will permit users to transmit massive data files including high quality digital movies practically without limitation, it said. As a result, subscribers will be able to enjoy a wide range of services such as 3D movies and games, real-time streaming of ultra high-definition (UHD) content, and remote medical services, it added. Samsung said it had found a way to harness millimeter-wave bands which have proved to be a sticking point for the mobile industry to date. The test used 64 antenna elements, which the tech titan said overcame the issue of unfavorable propagation characteristics that have prevented data travelling across long distances using the bands. Remote-controlled, dissolvable electronic implants have been created that could help attack microbes, provide pain relief and stimulate bone growth. The spread of bacteria resistant to antibiotics popularly called superbugs is threatening to put the clock back 100 years to the time when routine, minor surgery was life-threatening. Some medical experts are warning that otherwise straightforward operations could soon become deadly unless new ways to fend off these infections are found. Bacteria often evolve clever ways of evading chemical assaults, but they will always struggle to resist the old-fashioned way of killing them: heating them up. This is just one potential application of the bio-absorbable electronic circuits made by John Rogers of the University of Illinois at Urbana-Champaign and his co-workers. The idea itself is not new: Rogers and others have previously reported biodegradable flexible circuits and electronic devices that can be safely laid directly onto skin. But their success in making their circuits wireless could prove crucial to many potential applications, especially in medicine. As well as deterring bacteria, Rogers says that implantable, bio-absorbable RF electronics could be used to stimulate nerves for pain relief, and to stimulate bone re-growth, a process long proven to work when electrodes are placed on the skin or directly on the bone. Conceivably they could also be used to precisely control drug release from implanted reservoirs. 44 July - September 2013

47 Scientists Create Human Embryos to Make Stem Cells Biggest void in space is 1 billion light years across For the first time, scientists have created human embryos that are genetic copies of living people and used them to make stem cells a feat that paves the way for treating a range of diseases with personalized body tissues but also ignites fears of human cloning. If replicated in other labs, the methods would allow researchers to fashion human embryonic stem cells that are custom-made for patients with Alzheimer s disease, diabetes and other health problems. Theoretically capable of reproducing themselves indefinitely, these stem cells could be used to grow replacements for a wide variety of diseased cells those of the blood, skin, heart, brain, muscles, nerves and more that would not risk rejection by the patient s immune system. The approach the researchers used called somatic cell nuclear transfer effectively strips an egg of its chromosomes and packs it instead with DNA from a donor. Nurtured by a stew of nourishing chemicals and zapped with two jolts of electrical current, many of the eggs began to divide and grew for five to six days. At that point, the embryos had 64 to 200 cells, including a dense inner cell mass from which stem cells were extracted. Researchers said their methods were so efficient that they could create at least one embryonic stem cell line from each batch of eggs donated by 10 female volunteers. In one case, a single donor produced eight eggs of such exceptional quality that researchers were able to derive four embryonic stem cell lines. Radio astronomers have found the biggest hole ever seen in the universe. The void, which is nearly a billion light years across, is empty of both normal matter and dark matter. The finding challenges theories of large-scale structure formation in the universe. Lawrence Rudnick and colleagues of the University of Minnesota in Minneapolis, US, stumbled upon the void by accident. Rudnick s team had been studying data from a survey carried out by the Very Large Array radio telescope in New Mexico, also in the US. Rudnick s team started looking for radio sources such as radio galaxies and quasars in the direction of the cold spot. Radio sources track the distribution of mass in the universe, says Rudnick. They are the signposts for galaxies, clusters of galaxies and dark matter. The team was in for a surprise. They saw little or no radio sources in a volume that is about 280 megaparsecs or nearly a billion light years in diameter. The lack of radio sources means that there are no galaxies or clusters in that volume, and the fact that the CMB is cold there suggests the region lacks dark matter, too. The void, which is about 6 billion to 10 billion light years away, is considerably larger than any found before. Until now, optical surveys have found no voids larger than 80 megaparsecs wide - making the new hole 40 times larger in volume than the previous record holder. July - September

48 Internal Event KOC Recognized as Top Blood Donor KOC was recently honored as one of the top blood donors in a private ceremony that was recently held at the Crown Plaza Hotel on the occasion of World Blood Donor Day. The event took place under the auspices of the Minister of Health Dr. Mohammad Al-Hefi. In a speech he delivered on the occasion, Minister Al-Hefi expressed satisfaction over the successes that were obtained by the State of Kuwait in the domain of blood donation and providing the sick and injured with safe blood. Meanwhile, Ministry of Health Director for Blood Transfer Services, Dr. Reem Al-Radhwan, confirmed that many lives have been saved thanks to the selfless efforts of those who have donated their blood. The KOC award was received by the Head of the Medical Laboratories at Ahmadi Hospital Shaker Al-Mutawa, who expressed sincere gratitude towards the Ministry s initiative of honoring the Company in appreciation of its vital role and active contribution in the blood donation campaigns. Countries around the world celebrate World Blood Donor Day on June 24 of each year in a bid to shed light on the need for safe blood and express gratitude for those who voluntarily donate their blood with the sole aim of saving the lives of others. In related news, Ahmadi Hospital recently organized its annual Blood Donation Campaign amid a huge response from KOC staff, patients and those entitled to receive medical care at the Hospital, which includes citizens and expatriates working in the oil sector. The Hospital s Acting Director, Dr. Khaled Al-Suweilem, accompanied by TL and Head of Ahmadi Hospital Laboratories Shaker Al-Mutawa, commended the efforts of the medical staff in facilitating and organizing the blood donation campaign. Dr. Al-Suweilem said that the act of donating blood should be considered a noble gesture by people who sacrifice their blood in order to help unknown individuals who badly need it in order to save their lives. This, he said, gives added value to the campaign and the selfless act of donating blood. He maintained that the donated blood is transferred by Ahmadi Hospital to the Kuwait Central Blood Bank to cover the demands of hospitals, based on a long history of cooperation between both parties. It is worth mentioning that Ahmadi Hospital was a pioneer in playing such a humanitarian role and is ranked among the 10 first partners of the Kuwait Central Blood Bank which also responds to the requests of Ahmadi Hospital in emergency cases. 46 July - September 2013

49 External Report Untouched Water in Mine May Be 2.6 Billion Years Old Nearly 1.5 miles beneath Earth s surface, scientists have discovered pockets of water that have remained in isolation for more than a billion years. What you see in that picture above is probably some of the oldest water on the planet, and scientists say it could be teeming with microscopic life. The ancient water bubbling up from the floor of a zinc and copper mine near Timmins in Canada s Ontario province looks crystal clear, but it would not make a cool refreshing drink. Scientists say it is warm to the touch and much saltier than seawater. The water is also rich in dissolved hydrogen and methane gas as well as noble gases and their isotopes. The chemical reactions of the gases could build up enough energy to support life that has been hidden from the sun for more than a billion years, a team of researchers report in a study published in the journal Nature. Scientists have already found evidence of microbes living in much younger but similarly isolated underground waters in a mine in South Africa. Barbara Sherwood Lollar, an Earth sciences professor at the University of Toronto and a coauthor on the paper, has been studying the water in the Timmins mine for more than a decade. She suspected it was probably very old, but she had never been able to put a number on it. Enter a team of British scientists who had developed a way of telling the age of water by measuring how many isotopes of noble gases had built up in it over time. Using this technique, they concluded that the water is 1 billion to 2.6 billion years old. This knocked my socks off, Sherwood Lollar said. These are some of the oldest waters that have ever been identified. The ancient water was trapped in a network of fractures in granite-like rock that is also billions of years old. Microscopic amounts of very old water and gas have been found before, but in this mine, the old isolated water was trickling out of the rock at nearly 2 liters per minute. If it is as old as 2.6 billion years, it could have been trapped at the same time that the rock formed, Sherwood Lollar said. Back then the entire area was covered by ocean waters, and the floor of the mine would have been the ocean floor. The lead author of the study, Greg Holland of Lancaster University, thinks the discovery of this ancient water, and its potential to support life, could affect the search for other types of life on Earth, and on Mars. We have identified a way in which planets can create and preserve an environment friendly to microbial life for billions of years, he said in a statement. This is regardless of how inhospitable the surface might be, opening up the possibility of similar environments on the subsurface of Mars. July - September

50 KOC Celebrates Earth Hour KOC celebrated Earth Hour recently with a symbolic event that was organized in front of the Company s Main Office in Ahmadi. A number of senior officials, employees and volunteers were in attendance during the event. While candles were lit for an hour on the occasion, Ahmadi Services Group Manager Ismael Al-Khawari said that the KOC initiative was intended to deliver a message about Kuwait s participation with countries around the world in order to help contribute in spreading the message about the importance of conserving energy. Turning off lights throughout various locations is one way of spreading that information. Lights were turned off throughout KOC buildings, such as the General Management, Main Office, Ahmadi Governorate s premises and other buildings throughout Ahmadi, in addition to decorative lights along streets, which were also turned off. Al-Khawari stressed the importance of Kuwait adopting positive behaviors while avoiding any activities that can harm the environment. KOC s celebration of Earth Hour coincided with other activities in Kuwait on the occasion of Earth Day, organized at the Jaber Al-Ahmad International Stadium, under the patronage of the Minister of Information and Minister of State for Youth Affairs Sheikh Salman Al-Homoud. A group of young Kuwaiti volunteers, in cooperation with the Global Warming Team of the Voluntary Work Center, put on the event under the theme of The World Challenge to Save the Planet. About Earth Hour Earth Hour is a worldwide event organized by the World Wide Fund for Nature (WWF) that is held every year. Earth Hour encourages households and businesses to turn off their non-essential lights for one hour to raise awareness about the need to take action on climate change. The Earth Hour event was conceived by WWF and Leo Burnett, and first took place in 2007 in Sydney when 2.2 million residents participated by turning off all non-essential lights. Following Sydney s lead, many other cities around the world adopted the event in At the global media launch for Earth Hour 2013, CEO and Co-Founder Andy Ridley spoke about the movement s significant environmental outcomes beyond the hour: People from all walks of life, from all nations around the world, are the lifeblood of the Earth Hour interconnected global community. They have proven time and time again that if you believe in something strongly enough, you can achieve amazing things. These stories aren t unique, this is happening all over the world, he said. 48 July - September 2013

51 1973 Ahmadi Public Gardens

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