Welcome Reception Sponsor Exhibitors Supporting Partners

#OilfieldMinerals

Welcome Reception Sponsor Exhibitors

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©IMFORMED 2018 | imformed.com

Introduction

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Introduction

AT A GLANCE

A-Z GUIDE

WHICH MINERALS

FOR WHICH

MARKETS

• Leading industrial minerals

• Main raw material feedstock

• Key specified chemical component

• World production

• Main source countries

• Leading consuming markets

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Introduction

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Introduction

Industrial minerals & the oilfield market

Market Outlook


A wide range of vital applications

• Drilling

• Well

cementing

• Stimulation

• Production

• Surface

prep/cleaning


A wide range of minerals used

Market Outlook


Attapulgite

Barite

Bauxite

Bentonite

Borates

Calcium carbonate

Calcium chloride

Diatomite

Garnet

Gilsonite

Graphite

Gypsum

Haematite

Hectorite

Ilmenite

Iron oxide

Kaolin

Lignite

Lime

Magnesia

Magnesium silicate

Magnesium chloride

Mica

Perlite

Potassium chloride

Salt

Sepiolite

Silica sand

Soda ash

Sodium silicate

Vermiculite

Zinc oxide

Zirconia Source: OGP/IPIECA


Market Outlook


Function Mineral

Weighting agents

high SG; help offset pressure; control

liquid flow into wellbore from

formation; keep the hole open

barite, haematite, calcium

carbonate

Bridging agents

plug pore spaces at wellbore,

restricting invasion of solids and fluids

into the formation

calcium carbonate, salt

Viscosifiers

Carry cuttings to surface; build a cake

against permeable formations;

lubricates drill string.

sodium bentonite, treated calcium

bentonite for freshwater muds;

attapulgite and sepiolite for

saltwater muds; organophillic

clays for oil muds

Stabilisers

Prevents dissolution of formation

Gilsonite, salt, gypsum

For a wide range of applications


Market Outlook


Function Mineral

Lost circulation materials

used to plug or seal pores and cracks

in the formation

Gilsonite, mica, diatomite,

expanded perlite and vermiculite

(bentonites, organophilic clays)

Cross-linker

Hydrated polymers or gels (guar gum)

are cross linked by borate ions to

provide increased viscosity. Benefits

include, good proppant transport,

stable fluid rheology at high

temperatures, low fluid loss, and good

clean up properties.

sodium borates

Lubricants

Lubrication of drill bit and drill pipe

graphite, bentonite

Proppants

Hold open fractures to enable oil and

gas flow (conductivity)

silica sand, calcined bauxite,

calcined kaolin, magnesium silicate

Drilling fluids market

Market Outlook


North America

Latin America

Middle East

CIS

Africa

Europe

Asia Pacific China

Source: IHS 2017

Oilfield chemicals market:

regionial share by value Drilling fluids market:

onshore v offshore

Market value estimated to grow from US$7.6bn to US$10.01bn by 2025

Offshore

40%

Onshore

60%

Source: Grand View Research 2017

Middle East oilfield mineral sources: examples

Market Outlook


Barite

China

India

Morocco

Pakistan

Thailand

Turkey

Vietnam

Bentonite

Egypt

India

Iran

Spain

Turkey

USA

Oil price driver

Market Outlook


Source: OilPrice.com 2018

EIA STEO forecasts 18 Jan. 2018

Brent crude average

$60/b 2018

$61/b 2019

WTI crude average

$56/b 2018

$57/b 2019

EIA: oil price outlook

Market Outlook


Source: EIA 2017

GDP drivers for energy demand

Market Outlook


Source: EIA 2017

Market Outlook


Source: Baker Hughes/WTRG Economics 2018

Market Outlook

©IMFORMED 2018 | imformed.com Source: Baker Hughes/WTRG Economics 2018

Middle East rig count Jan. 2018

Market Outlook


Source: Baker Hughes 2018

Middle East rig count 1995-2017

Market Outlook

©IMFORMED 2018 | imformed.com Source: Baker Hughes/WTRG Economics 2018

Middle East oil rig count 2014-17

Market Outlook


Source: Qamar Energy 2017

UAE

Kuwait

Oman

Qatar

Saudi Arabia

Others

Iraq

Middle East gas rig count 2014-17

Market Outlook



UAE Kuwait

Oman

Qatar

Saudi Arabia

Others

Middle East v US rig count 2014-17

Market Outlook



Middle East

USA

EIA Outlook – key takeaways

Market Outlook


• 2015 to 2040, world energy consumption increases by 28%, with >50%

attributed to non-OECD Asia (including China and India), where strong

economic growth drives increasing demand for energy

• Natural gas is world’s fastest growing fossil fuel, increasing by

1.4%/year, compared with liquid’s 0.7%/year growth and virtually no

growth in coal use (0.1%/year)

• Cumulative sales of plug-in electric vehicles (PEVs) worldwide reached

1.2 million in 2015 or less than 1% of the light duty vehicles (LDV)

stock.

• World natural gas production rises by 146 billion cf/d. The largest

increases occur in the Middle East from its large proved gas reserves,

and from the USA and China from their large shale gas resources.

• World liquefied natural gas (LNG) trade is projected to nearly triple,

from 32 billion cf/d to 84 billion cf/d

IEA: key takeaways

Market Outlook


• The USA is turning into the undisputed global leader for oil & gas

• Solar PV is on track to be the cheapest source of new electricity in

many countries

• China’s new drive to “make the skies blue again” is recasting its

role in energy

• The future is “electrifying”, spurred by cooling, electric vehicles &

digitalisation

• Consumption of natural gas rises by nearly 20% to 2030 in the

Sustainable Development Scenario and remains broadly at this

level to 2040.

EIA: energy consumption outlook

Market Outlook


Source: EIA 2017

EIA: increases in natural gas output

Market Outlook


Source: EIA 2017

IEA: US becomes net gas exporter

Market Outlook


Source: IEA 2017

US oil and gas production

IEA: Shifting energy demand centres

Market Outlook


Source: IEA 2017

• Middle East, Asia is fast becoming major energy consumers

• USA is fast becoming a major exporter

IEA: Shifting energy demand mix

Market Outlook


Source: IEA 2017

• Low-carbon sources & natural gas meet 85% of the increase in global

demand

• China’s switch to a new economic model & a cleaner energy mix drives

global trends

IEA: Acknowledgement to EV growth

Market Outlook


Source: IEA 2017

EVs slowing the pace of growth in global oil demand: however, trucks,

aviation, shipping & petrochemicals keep oil on a rising trend

“EVs are coming fast, but it’s still too early to write oil’s obituary”

Upstream investment to come

Market Outlook


Source: Wood Mackenzie 2018

Wood Mackenzie outlook Jan. 2018

“Most companies will maintain a highly cautious

approach to exploration for a while yet. Competition for

the best opportunities will be fierce. Industry investment

and well counts will remain stubbornly low in 2018.”

“The majors will be the explorers to watch…they know that conventional exploration will be needed for long-term renewal. The majors sense a bottom-of-the-cycle opportunity to build acreage at low cost. Their exploration cuts have been less deep and their overall market share will continue to grow.”

Upstream investment to come

Market Outlook


Source: Patrick Schorn, Schlumberger 2017

Patrick Schorn, Executive Vice President, New Ventures, Schlumberger

Middle East GDP drivers for energy demand

Market Outlook


Source: Focus Economics 2018

https://www.focus-economics.com/sites/default/files/wysiwyg_images/focuseconomics_mena_january_2018-01_1.jpg

Middle East power demand fed by gas

Market Outlook


Source: Siemens Middle East Power Outlook 2017

• Population is increasing faster

than power demand; Kuwait,

Oman, Qatar, Saudi Arabia

and the UAE growing at 3.5%

• Power demand is expected to

grow by 3.3 % each year until

2035

• 277 gigawatts of new capacity

required by 2035

• Gas expected to be largest

source for power at 60% of

installed capacity through 2035

BP: Middle East outlook to 2035

Market Outlook


• Maintains role as world’s top oil exporter; volumes rising from 21 Mb/d in

2015 to nearly 27 Mb/d in 2035

• Largest oil producing region, making up more than a third (32%) of the

world’s oil supply, to rise to 37% in 2035.

• Oil production expected to rise by 29% or 9 Mb/d by 2035, with growth in

Saudi Arabia, Iraq and Iran.

• Natural gas accounts for more than half of the growth in the region’s

energy consumption; energy consumption rises almost 50% by 2035.

• By 2035, fossil fuels still make up 95% of demand, with the share of

natural gas rising from 50% to 52%. Oil’s share falls from 48% to

42%.The share of non-fossil fuels in the region’s energy mix rises from

only 1% today to more than 5% by 2035. Source: BP 2017

EIA: Middle East short term outlook

Market Outlook


• In addition to growth in China and India, EIA expects petroleum and

other liquid fuels consumption growth in the Middle East to rise in

2018 and 2019, with increases of 0.1 million b/d in 2018 and 0.2

million b/d in 2019.

• Saudi Arabia continues to see increasing domestic petroleum

consumption despite the expansion of natural gas use for electric

power generation. Saudi Arabia’s direct burn of crude oil for electric

power generation will remain at roughly the 2017 level through

2019.

IEA: Iran gas drive

• With a focus on developing the South Pars field, Iran is set for a

major expansion of natural gas production

• Iran leads gas output growth in the Middle East, adding 150bn cubic

metres a year to the region's gas supply in the period to 2040.

Market Outlook


Jeff Miller, CEO, Halliburton

“I am very excited about the way 2018 is shaping up.

Commodity prices have moved up. North America

unconventional activity should be very busy, international

markets are starting to show signs of life (driven primarily by improved

performance in the Middle East, the North Sea and Latin America.)

In the Middle East/Asia region, [2017] revenue increased by 12%...primarily

driven by increased drilling and stimulation activity in the Middle East with

increased activity in Algeria and Egypt.

In 2018, what I’m most excited about internationally would certainly be the

North Sea and the Middle East.”

Market Outlook


Paal Kibsgaard, Chairman and CEO,

Schlumberger

“2017 marked the beginning of the oil market recovery with

supply and demand moving into balance and oil prices

steadily increasing over the course of the year.

We expect another year of robust growth in North America shale oil

production, which will be required to maintain the balance in the global oil

market.

The international market is poised for growth for the first time in four years

with a forecast of 5% increase in E&P spend. Spearheaded by solid

underlying activity increases and market share gains in the Middle East,

Russia, Asia and the North Sea.”

Market Outlook


Lorenzo Simonelli Chairman and CEO,

Baker Hughes

“Our outlook remains positive.

Early indications of customer capital spending are encouraging,

particularly for our short-cycle businesses. The recent strength

in commodity price has underscored this view.

2018 and beyond, it’s clear that coming out of the most recent downturn,

the market and our customers’ expectations have structurally changed.

Oil and gas service providers have and will continue to look at ways of

improving efficiency and cost for customers, regardless of where the price

of oil and gas may move.”

HE Dr Sultan Ahmed Al Jaber, UAE minister of

state and ADNOC Group CEO

Market Outlook


“This economic growth will continue to drive

energy consumption, which will expand by at

least 25% by 2040.

As we diversify the energy mix, hydrocarbons will continue to play a vital

role in meeting demand.

By the end of this year, global demand for oil alone is set to break the

threshold of 100 million barrels per day.”

ADNOC’s 2030 strategy plans to expand gas production by accessing

undeveloped tight reservoirs; the Hail, Ghasha and Dalma project taps

into Abu Dhabi’s Upper Jurassic Arab formation, which is estimated to

hold trillions of cubic feet of recoverable gas.

Amin Nasser, CEO, Aramco

Market Outlook


“We plan to invest more than $300 billion over the coming decade to

reinforce our preeminent position in oil, and pursue a large

exploration and production program centering on conventional

and unconventional gas resources.”

Unconventional gas is the preferred fuel for power generation and water desalination

because of its increased efficiency and cleaner burning qualities compared to other fossil

fuels.

Saudi Arabia plans to be among the first countries outside North America to use shale gas for

domestic power generation.

Active exploration programme for unconventional gas resources focusing on three areas in

Saudi Arabia: the Northwest, South Ghawar and the Rub’ al-Kha

“The full unconventional gas value chain such as site development, rig preparation, drilling,

fracking, completion, well tie-in, production and maintenance is poised to grow rapidly

between now and 2021.”

Technology developed includes use of seawater-based fracturing fluids and the use of resin-

bonded local sand as proppants combined with the channel fracturing technique.

Conclusions: Reasons to be cheerful

Market Outlook


• Oil price and GDP drivers very positive to boost energy demand,

especially in ME, China, India.

• Hydrocarbons still majority share of energy mix, with gas increasing to

around a 25% share at expense of coal and oil

• EVs are coming, but too early to have more than limited impact

• Rig activity is rising and upstream investments, with some caution,

returning

• Rapid rise in power demand in ME to be met by gas as preferred

energy source, driving exploration and development of unconventional

resources

• Oil service majors very upbeat for 2018/19 outlook, especially USA but

also international hotspots including ME

• Positive prospects for oilfield minerals demand!

Introduction


Programme – Tuesday Morning

INTRODUCTION | OVERVIEWS

09.00 Introduction & Market Overview

Ismene Clarke, Director & Mike O’Driscoll, Director, IMFORMED, UK

09.30 The complexity and functionality of oil based drilling fluids and their mineral additives

Michael Tate, Technical Sales Manager, RheoMinerals Inc., USA

10.00 COFFEE

BARITE

11.00 Sustainability in drilling barite specifications

John Newcaster, Director Southwest, The Cumberland Group Inc., USA

11.30 Barite supply from Turkey and Middle East markets

Fatma Akgun, Deputy General Manager-Business Development, Ado Mining, Turkey

12.00 LUNCH

Introduction


Programme – Tuesday Afternoon

PROCESSING

14.00 A revolutionary new concept in barite and bentonite processing: Mobility and Modularity

Jean-Francois Maréchal, Managing Director, Poittemill, France

14.30 Processing developments for oilfield minerals

Herve Guicherd, Director Business Development Minerals, ST Equipment & Technology LLC,

France

15.00 PANEL DISCUSSION: Key challenges for the oilfield mineral market outlook

Mike O’Driscoll, Director, IMFORMED, UK

Jean-Francois Maréchal, Managing Director, Poittemill, France

Herve Guicherd, Director Business Development Minerals, ST Equipment & Technology LLC, France

John Newcaster, Director Southwest, The Cumberland Group Inc., USA

Pickard Trepess, Managing Director, FRAC PT FZE, UAE

15.45 Refreshments & Close of Day 1

KEYNOTE DISCUSSION PANEL

Moderator

Mike O’Driscoll Director, IMFORMED, UK

Panellists

Jean-Francois Maréchal Managing Director, Poittemill, France

Herve Guicherd Director Business Development Minerals, ST

Equipment & Technology LLC, France

John Newcaster Director Southwest, The Cumberland Group Inc.,

USA

Pickard Trepess Managing Director, FRAC PT FZE, UAE

Status & outlook for the market

PLEASE JOIN IN! Questions & comments most

welcome from the audience

Please state your name & affiliation


Introduction


Programme – Wednesday Morning

PROPPANTS

09.00 Proppant utilisation and outlook in the Middle East

Pickard Trepess, Managing Director, FRAC PT FZE, UAE

09.30 The Good, the Bad and the Ugly of ceramic proppant manufacturers in China

Viviana Trevino, President, Changqing Proppant Corp., China

10.00 COFFEE

POZZOLAN | GILSONITE

11.00 Natural pozzolanic material and its application in oil well cementing

Dionysios Kotinis, General Manager, Imerys Minerals Arabia LLC, Saudi Arabia

11.30 Iranian Gilsonite supply and application in oilfield markets

H. Nezam Zadeh, Managing Director, Payapa Setak Inc., Iran

12.00 LUNCH & CLOSE OF CONFERENCE


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