New tech to provide new solutions: PDO
German-headquartered global chemicals company Oxea, a wholly owned subsidiary of Oman Oil Company (OOC) — the Omani government’s energy investment vehicle — has received an upgrade of its Corporate Family Rating (CFR) by international rating agency Moody’s to B2 from B3.
Oxea, which is based in the German city of Monheim Am Rhein, is a global manufacturer of oxo intermediates and oxo derivatives, such as alcohols, polyols, carboxylic acids, specialty esters, and amines. These products are used for the production of high-quality coatings, lubricants, cosmetics and pharmaceutical products, flavourings and fragrances, printing inks and plastics.
Moody’s also upgraded the rating of Oxea’s EUR 475 million and $500 million senior secured term loans to B2 from B3. The outlook on all ratings was described as stable.
“The upgrade reflects Oxea’s better than expected operating performance over the past twelve months, including safely completing the turnaround at the plant in Oberhausen, Germany,” said Oxea in a statement.
“Moody’s decision was also supported by Oxea’s leading market position as a global merchant producer of oxo chemicals with a track record of maintaining and growing its market share across a diverse product line. Moody’s cited a good liquidity profile and a strong shareholder as additional factors contributing to the rating increase,” it noted.
Stefan Schmidt, Oxea’s Chief Financial Officer, commented: “We are pleased that in recognition of Oxea’s sustained strong performance, Moody’s has upgraded our credit ratings to B2. It acknowledges the significant deleveraging over the past two years and the success of our selective growth strategy driven by our CEO Dr Salim al Huthaili. This further encourages us to continue to invest in the expansion of our global capacities to support the attractive market growth for oxo derivatives.”
Oxea was acquired by Oman Oil Company in December 2013, a move that effectively catapulted Muscat-based OOC into the ranks of the world’s top chemicals producers. Oxea operates a global network of plants offering a total production capacity of over 1.3 million tonnes per annum of oxo intermediates and oxo derivatives.
Oman Oil Company’s longer-term vision behind the acquisition of Oxea is to utilise the chemical giant’s platform to expand its chemicals portfolio and evolve into one of the world’s leading chemicals companies. It seeks to achieve this by leveraging its geographical proximity to competitive raw materials in the region, as well as its location as a gateway to the emerging markets of Asia. Petroleum Development Oman’s (PDO) Corporate New Technology Implementation (UCT) team is striving to overcome the challenges of aged and increasingly complex reservoirs as Oman’s production of oil crosses over 50 years.
Technology implementation has become a key enabler in the Company’s journey of cost saving and unlocking production opportunities. PDO generates $4 for every $1 it spends on new technology implementation and this makes it a key enabler to fostering a more efficient and cost-effective organisation, commented Head of New Technology Implementation, Dawood al Qassabi (pictured).
The cost of production has also risen significantly, from $2-3 a barrel in the early days to as much as $22-25 a barrel in some fields today the oil that is being extracted today is not as easy to produce as it was, with the need to tackling deeper and more challenging reservoirs and extracting heavier oil.
One example of the many initiatives that the team is focusing on is the solution to the challenge of water which comes to the surface during oil production. On average, nine barrels of water are produced for every barrel of oil and so the disposal, treatment and back injection of this water are key challenges to manage and resolve. That means, along with the around 600,000 barrels that PDO produces as a daily average, between four to five million barrels of water are also produced.
“The specifications of this produced water vary in terms of salinity, oil content, heavy minerals and metals etc. The water produced from each field is unique. Most of the four to five million barrels of water a day are a burden to us, but we can generate value out of some of it,” explained Al Qassabi.
For example, when reservoirs age, their pressure drops and other techniques of production are used, one of which relies on water. So PDO treats the produced water and then injects it back into the reservoir to sweep the oil towards the production well and maintain pressure.
PDO has also garnered international attention for its award-winning, innovative Nimr Reed Beds project. Here, about 1.5 million barrels of produced water are filtered through a man-made wetland each day. This is a low-power, environmentally friendly concept that uses reeds to decontaminate the water from the oil naturally. The water treated in this project ends up containing only a minute content of oil which means it can be used for different activities such as bio saline agriculture, and brick making.