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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Mubadala Petroleum: Delivering exceptional growth and performance

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Formed in 2012, Mubadala Petroleum — a wholly-owned subsidiary of Mubadala Investment Company owned by the Government of the Emirate of Abu Dhabi — has already established itself as a leading international, upstream oil and gas exploration and production company. The Abu Dhabi-headquartered firm manages assets and operations in nine countries notably in the Middle East and Southeast Asia.


Mubadala Petroleum’s current portfolio consists of a number of major projects, including the world class Dolphin Gas Project in the Middle East, which supplies gas to the UAE and Oman; enhanced oil recovery production in Oman; and operated assets in Southeast Asia, including exploration, development and production activities in Thailand, Indonesia, Malaysia and Vietnam.


In the first half of 2018, Mubadala Petroleum marked its entry into Egypt through the acquisition of a 10-per cent interest from Eni in the Shorouk concession, which contains the giant Zohr gas field. The company has also added to its portfolio two exploration blocks in Indonesia, both with gas potential, and announced the creation of a new joint venture with Gazprom-Neft in Russia to develop and produce oil reserves in Western Siberia.


In the following Q&A interview with Oman Daily Observer, Dr Bakheet al Katheeri, CEO, Mubadala Petroleum, discusses some of the company’s most high-profile investments and business partnerships that are set to position Mubadala Petroleum for strong growth going forward.


An oil and gas industry veteran with over 20 years of experience, Dr Al Katheeri was appointed CEO of Mubadala Petroleum in 2017, where he continues to expand and strengthen the company’s global footprint across Southeast Asia, the MENA region and the United States.


Q. Tell us about Mubadala Petroleum and its current operations. What is the size of your current business portfolio?


A: We are a wholly owned subsidiary of Mubadala Investment Company (Mubadala) which is owned by the Government of Abu Dhabi. Mubadala has a global portfolio valued at more than $125 billion and invests in a variety of sectors including technology, aerospace, healthcare and energy.


Mubadala Petroleum builds on the UAE’s traditional strengths in the oil and gas sector, and our active base is rooted in the Dolphin gas project. Today, we manage and operate assets across nine countries with a primary focus on the Middle East and Southeast Asia, centred on oil and gas exploration, development and production. We hold strong operatorship positions in Southeast Asia and are currently the second largest crude oil operator in the Gulf of Thailand. In Malaysia, our recently sanctioned Pegaga gas project will also be a significant contributor of feed gas to the Malaysia LNG complex.


Q. What is the current production of Mubadala Petroleum? Do you have future expansion plans?


A: In 2017, we produced an average of 320,000 barrels of oil equivalent per day (boepd). However, our recent entry into the Zohr gas project offshore Egypt boosts that production significantly by about 20,000 boepd, based on our share of current field production. The contribution from Zohr will increase over time as the field ramps up to plateau production level by end 2019.


Alongside Egypt, Mubadala Petroleum intends to mark its entry into Russia, as we progress the acquisition of a 44-per cent interest in Gazprom Neft-Vostok, the operator of several oil fields in Western Siberia. Proven and probable oil reserves in these fields amount to approximately 300 million barrels, and oil production in 2017 averaged 33,000 boepd. Once finalised, this investment will be another significant milestone in our long-term growth strategy, as we seek to further build on our expertise and capabilities.


In addition, we are also working towards growing our existing portfolio, especially as an operator in Southeast Asia, to improve our efficiency, and ensure that our business remains agile and robust. This year in Indonesia, we added two exploration blocks to our existing portfolio in the country, which includes the producing Ruby gas field. In Thailand, production from our three operated fields makes us the second largest crude oil operator in the Gulf of Thailand.


In Malaysia, our focus is on the safe development and delivery of our operated Pegaga gas project, which was sanctioned in March of this year. Together with our partners, we expect to invest over $1 billion in this development, with first gas anticipated by late 2021.


We are pleased with all of our partnerships and projects today. However, we are actively exploring new opportunities to grow and upgrade our portfolio in line with our business strategy, by investing in projects which we believe will generate value for our shareholders and the stakeholders with whom we do business.


Q. What is the size of your current operations in Oman and how big is your business portfolio in the country?


A: We are fortunate to have a long and successful experience of doing business both in and with Oman. The Dolphin gas project in which Mubadala Petroleum manages Mubadala’s 51 per cent interest, was the first intercountry gas project in the region, and today, it continues to deliver gas to the UAE and Oman.


Also, we participate as an active partner, in the Mukhaizna heavy oil development of Block 53 in south-central Oman.


Mukhaizna today utilises the most extensive steam flood system in the region, and by the end of 2017, the field was producing around 120,000 barrels of oil per day (bopd). We continue to work alongside our joint venture partners, which include the operator Occidental Petroleum, to maximise the value of the project for us and the country.


Beyond these two projects, we are always looking for opportunities to develop our business and partnerships in Oman and to build on the successful relationships we have developed over the years.


Q. How has innovation changed your industry and operations? Moreover, how has it impacted your company’s performance?


A: Globally the oil and gas industry is going through significant change. We have weathered the storm of the recent low prices and seen more stability in the market within the last year.


However, there are three major trends which are foremost on my mind for the industry.


Firstly, on the investment front, current investment priorities in the industry have visibly shifted towards a focus on shorter-term, quicker payback. With such priorities, the challenge for us as operators lies in creating and positioning the attractiveness to develop larger projects which the industry needs to sustain itself and meet growing demand in the longer term.


On the technology front, digitisation and the role of technology are changing what we can do in the field and the way we run our operations. Safety is an example as it remains the top priority for Mubadala Petroleum as a responsible operator and me personally. The use of technology is playing an increasing role in enhancing and increasing safety aspects, through automation and real-time monitoring, while allowing us to maximise our efficiency and how we develop our business in the future.


Finally, the availability of talented people is another main priority for us as a company. We need to ensure that we have enough people, of the right talent coming into our industry who can use and understand this new technology and drive our business forward.


We have created an agile and resilient business that can adapt to the new realities our industry faces, and we look forward to a continuation of our growth and success along with our partners and stakeholders in the future.


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