Shell to bring in R&D in enhanced recovery

  • Business
  • Wednesday, 06 Jun 2012

KUALA LUMPUR: Royal Dutch Shell plc will bring in research and development capabilities to develop chemical enhanced oil recovery (EOR) technology as one of the key strengths of Malaysia, said chief executive officer Peter Voser.

This is following a 30-year deal worth RM37.3bil that it signed with Petroliam Nasional Bhd (Petronas) in January. The deal will see the implementation of the world's largest EOR projects offshore Sabah and Sarawak.

Voser said the company was pleased with its partnership with Petronas and was currently working on Gumusut-Kakap offshore field.

“A few months ago, we've signed the extension of 30 years for two large areas to apply the latest technology on enhanced oil recovery. This will be the first EOR on chemical basis on offshore,” he said at a briefing yesterday.

Separately, he said Shell was also working on new exploration. “We are looking to expand in the long-term in Malaysia. We are very pleased with the progress over the past two years.”

Earlier, in his keynote address, Voser said further exploration of the liquefied natural gas (LNG) should continue to yield new opportunities for Malaysia as well as Indonesia and Brunei.

“Thailand has become an LNG importer and several other Asean countries are preparing to do so, including Malaysia, Indonesia and the Phillipines. This is one of reasons why global LNG demand is expected to double in the next decade,” he said.

Voser said the growth in global suppliers of LNG and its flexibility advantage were brought into sharp relief after the devastating earthquake in Japan a year ago.

“To cover the immediate shortfall in Japan's energy suppliers, LNG cargoes were quickly diverted from countries around the world, including Russia, Australia, South Korea and Nigeria,” he said.

Today, Japan was investing heavily to lock in LNG supplies to replace its nuclear-generating capacity which would contribute towards new opportunities for suppliers, Voser said.

“Strong demand growth is possible in part because global liquefaction capacity has increased by around 40% over the past three years. Much of that increase has come from Qatar, which has become the world's largest LNG supplier,” he said, adding that it was a great news for Asia as about 40% of Qatar's LNG was reserved for Asian markets through long-term contracts.

Voser said Asia should further benefit from the LNG industry's latest technological innovation when Shell started to produce LNG at sea.

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