‘Shell in the Middle East’ joins Ceri Powell, outgoing Vice President for Shell’s Exploration Business in the Middle East, Caspian and South Asia, on a field visit to a Syria Shell seismic survey camp in the country’s southern desert before she heads off to The Hague to take up her new role as Global Head of Strategy for the Royal Dutch Shell Group. Shell was recently awarded Blocks 13 and 15 on the South Syria Platform to explore for hydrocarbons in an area of some 14,000 square kilometres. Ceri visits the camp after the its first HSE (Health, Safety and Environment) audit has been carried out.

During her busy schedule in Syria, Ceri takes time to talk to ‘Shell in the Middle East’ about her love of field operations, for meeting operations staff on the ground and the boom in Shell’s exploration activities in the Middle East, North Africa and beyond over the last four years. She also talks about her passion for adhering to strict HSE standards to keep people safe at all times, and her desire to play a strong role in helping to develop the career paths of young staff of all nationalities, both male and female, to work in the energy sector ...

As Ceri Powell prepares to move to a new job as Head of Global Strategy for the Royal Dutch Shell Group, leaving her position as Vice President for Exploration for the Middle East, Caspian and South Asia, she looks back to the time when she started her current job. At that time Shell Exploration had just introduced its new operating model as a truly global business.

Ceri says, “When I started the job Shell had a relatively small exploration portfolio in the region, with a steady onshore exploration programme at PDO [Petroleum Development Oman, in which Shell holds a 34 per cent shareholding], which has been going on for over 50 years, some onshore exploration in Abu Dhabi with ADCO [Abu Dhabi Company for Onshore Oil Operations, Shell with a 9.5 per cent shareholding], and some onshore exploration in Egypt, where we were drilling no more than one to two wells a year.

“When I look back at this small portfolio it was at odds with Shell’s ambitions and strategy to grow its business in the Middle East. However, over the last four years we have had an enormous growth in exploration activities in the Middle East, North Africa and the Caspian.

“Today, we are deep in the Syrian desert and it is with great pride that I am here on a field visit to one of the new ventures that has been set up in these last four years. I came to Syria to meet Syria Shell’s Exploration Manager, Jean-Michel Larroque, and his team and to visit our operations to see for myself how seismic acquisition was being conducted on the ground.

“I also wanted to compare, from my own experience in our other new regional exploration campaigns, in Algeria, Libya, Saudi Arabia and Egypt, how these operations were being carried out and whether the lessons we have learned from those desert mobilisations have been taken into account here in Syria,” she says.

The timing for the visit was optimal as Shell has just completed its first HSE (Health, Safety and Environment) audit, called a start-up audit, of the seismic crew which has highlighted the areas that need to be improved and where action has to be taken.

“I have been pleased with the way that the seismic contractor, Geofizyka Torun [GT], has responded to the audit and has addressed and closed action items from that audit,” says Ceri. “I have also been impressed with the quality of the staff working here on the seismic operations, especially the Syrian staff, many of whom come from the local towns of Palmyra and Deir ez Zor.

“Many of these people are experienced in the oil and gas industry through the long presence that AFPC [Al Furat Petroleum Company, Shell with a 33 per cent shareholding] and other oil and gas companies have had in this area. Many of the staff speak good English, which is definitely a bonus from the communications angle.” The day before Ceri had spent some time reviewing the Journey Management System and the verification of the IVMS (In Vehicle Monitoring System), which has been installed in all vehicles involved in seismic acquisition operations. The IVMS is a safety compliance tracking system which records various activities in a vehicle. On arrival back at base camp the drivers have to report to the Journey Manager’s office and hand over their IVMS keys which are inserted into a computer with specialised reading and recording software.

“Together with the Journey Management staff and the drivers I tracked the way they had dealt with their journeys during the day, whether they had been speeding, whether all the passengers in the vehicle had been wearing seat-belts, whether or not there had been any sudden changes of speed or direction, and so on,” she says. “The results showed a very high quality of driving and safety standards on this operation in Syria. In fact, it is better than I have seen anywhere to date in my sphere of operations.”

Things are going well in Syria. The blocks are located in the far south of Syria, near the Iraqi and Jordanian borders, so there are some security issues which are being managed, but the terrain is flat and poses no major problems for seismic acquisition operations. It is expected that drilling will start some time in 2009.

Ceri goes on to say, “It is not just here in Syria that new exploration activities have started up but right across the Middle East and beyond. If I look at the new ventures which we have set up over the last four years there has been a real revival of deep desert exploration. We have Syria, which has just started, and we have Libya, which was set up in 2005 with a small office of five people and now Shell Libya employs over 140 people.

“There we have finalised the major part of our seismic acquisition operation and the first well has just been spudded. Our original five-block concession in Libya’s Sirte Basin extends to over 20,000 square kilometres and we have bid successfully for a further adjacent concession of some 2,000 square kilometres.

“This will be real frontier drilling as only one or two wells have been drilled in the deep, high-pressure and high-temperature zones we are targeting for deep gas to supply Libya’s existing LNG [Liquefied Natural Gas] plant at Marsa El Brega and also to find sufficient volumes to build a new LNG plant to boost exports.

“Shell has also started two other new ventures in North Africa, in Algeria and Tunisia. In Algeria seismic acquisition has been completed in Shell’s two concessions that cover an area of some 32,000 square kilometres, and we are drillling our second well.

“In Egypt there has been a real growth in exploration, both onshore and offshore, but we have undergone a positive renaissance in the onshore exploration business there. Shell is now spending in excess of US $50 million a year drilling between nine and 12 wells a year, whereas four years ago we were just drilling one to two wells a year.

“We started with the renewal of licences in 2004 then gained a very large tract of land in West Sitra to the southwest of Shell Egypt’s heartland, the Badr El-Din concession. We then extended our NEAG [North East Abu Gharadig] concession area.

“Interestingly for Shell, we also agreed with the Egyptian authorities to explore for gas in formations below the previous floor of our oil exploration licence in the Badr El-Din concession. This has proved to be successful in terms of discoveries and very efficient as we can pay for the wells by drilling development wells into the oil-bearing formations and then, using the same drilling rig, drill deeper down into the lower gas bearing formations.

“So costs are greatly reduced with much higher levels of efficiency in terms of staffing, a lower HSE exposure and discovered hydrocarbons can be brought into production faster, sometimes as quickly as a week, as the production infrastructure is already in place.

“The lesson I have taken from Egypt is to be bold with seismic surveying. Previously we had always just acquired a small quantity of 2D seismic, but in 2005 Matthias Bichsel, Shell’s Global Vice President of Exploration, and I changed the strategy and went ahead with an acquisition campaign for thousands of kilometres of 3D seismic. Our strategy was that if you made the investment upfront then prospects will follow. We know the geology in that basin, we have first-rate Egyptian exploration staff and we know that there is a working hydrocarbon system as we have been producing from the area for years.

“The result of this new strategy is that we have managed to ramp up exploration activities and drill new exploration wells. We have achieved a success rate of over 50 per cent because we shot the 3D seismic upfront which gave us the data we needed to identify potential hydrocarbon reservoirs with much greater accuracy. “The results speak for themselves. Production from our operations in Egypt, through BAPETCO [Badr El-Din Petroleum Company, a 50-50 joint venture between Shell and the Egyptian General Petroleum Company], our operating company on the ground, has stabilised at 100,000 barrels of oil equivalent per day [boed]. This is as a result of production from new exploration discoveries offsetting the aggressive natural decline of the fields, which is as high as 20 per cent a year.

“Also in Egypt, but offshore in the Nile Delta, we have deepwater exploration drilling in our NEMED [North East Mediterranean Deepwater] concession and shallow water drilling in our Northwest Damietta concession.

“Shell’s strategy in the NEMED concession has undergone a change since 2004, and recently we have been looking for alternative plays to test in the Nile Delta. Along with our existing partner, Petronas, we have been joined by a new strategic partner ONGC [Oil and National Gas Company] of India.

“We are now exploring the intra-salt and pre-salt formations. Shell drilled one well into this play in 2007 and will be drilling more wells over the next few years. However, this sort of drilling requires long lead times as you need to work 12 to 18 months ahead to get a suitable drilling rig for these deep waters,” she says. Moving on to talk about Saudi Arabia, “Shell has entered into a mammoth exploration campaign in the Rub ’al Khali [Empty Quarter], and further south PDO is ramping up expenditure and resources to grow its exploration activities in Oman, carrying out more and more new exploration drilling.”

Ceri says, “The joint venture we set up in Saudi Arabia, the South Rub Al-Khali Company [SRAK], was critical for Shell where the two exploration contract areas, at over 200,000 square kilometres, represent 10 per cent of the total land mass of the Kingdom.

“These two areas are being explored in this joint venture between Shell and Saudi Aramco. So far we have drilled three wells in Contract Area 2 to establish the working hydrocarbon system and have several more wells planned. In Contract Area 1 we are about to drill our first well and we are all very excited as we go forward. “This is a very difficult area with hostile weather conditions, temperatures of up to 50 degrees centigrade, difficult terrain, sand dunes over 100 metres high and a long way, over 500 kilometres in places, from the nearest established centre of civilisation.

“Mobilisation has not been without its challenges. In some cases equipment, such as drilling rigs, has had to be brought in from Dubai. This has involved organising convoys of several hundred vehicles which have had to deliver their heavy loads to the well site thousands of kilometres away over roads which, at the end of the journey, we have to build through the desert to get the equipment to the well sites.

“Shell’s partnership with Saudi Aramco is something we cherish and both companies are learning from each other. It is a great opportunity for Shell to work with the world’s largest resource holder for both oil and gas.

“I have high hopes for this venture and am sure that if we persevere with the technical know-how of two great companies we will be successful,” she says.

Outside of the Middle East and North Africa, but still within her area of responsibility, Shell has two ventures in the Caspian, one in Azerbaijan, the other in Kazakhstan. In Azerbaijan Shell holds a small shareholding in a shallow water exploration operation.

“In Kazakhstan,” says Ceri, “Shell is involved in an exciting joint venture with KMT, the offshore arm of the national oil company KMG, and Oman Oil. The operation is in very shallow waters, not deeper than eight metres, which has its own challenges in that special barges have to be used for the drilling rigs. The also have to be able to withstand the icy conditions of the region.

“We accelerated drilling activities by a year into 2007, built a supply base, mobilised helicopters and personnel and started operations without a single LTI [Lost Time Incident], not even a cut finger.

“The well we drilled, Khazar 1, has been a big-cat discovery, with Shell’s share estimated at over 100 million barrels of oil equivalent.

“We are following up this success with a 3D seismic campaign and a second well in 2008 which we hope will take this discovery to commercial production as soon as possible.

“South Asia is also a part of my territory. There we have operations in Pakistan and are currently involved in a partnership with ENI, drilling a deep onshore well in the Kirthar area.”

She then moves on to talk about her time in Shell, more particularly about being a senior woman and a technical professional working in the energy business in the Middle East.

“My time in the Middle East has been a phenomenal challenge,” she says. “Breaking through some of the barriers has been a great experience and I hope that my career, in the region and in Shell, over the last four years will serve to set an example to the many women working in the energy industry and to those wishing to join it. The message is that you can achieve the highest of goals if you put your mind to it.

“I am particularly proud of being appointed as a Board Member of the South Rub Al Khali Company Limited, a Saudi Arabian company, and to date I am the only female Board Member. This achievement could not have been made possible without the co-operation and assistance of my colleagues in Saudi Aramco and the Saudi Ministry of Petroleum and Mineral Resources.

“During my time in the region I have been treated with the greatest respect. I have never felt any difficulties with any of my colleagues, local or expatriate, and I hope that I can act as a role model for other young females coming up through the Shell system and, indeed, other companies in the region.

“I believe that my role has shown that it is possible to be a woman leader, not just in the energy business, but in business in the Middle East. I try to use that visibility whenever I can to promote women professionals in industry, and also women in Shell. However, it goes further than that as I have a passion not only to develop female staff but young staff of all genders and nationalities,” she says.

We are joined on the field trip in Syria by a young man, Paul Janssen, who has been working with Syria Shell’s Geophysical Team in Rijswijk. He is a graduate and has been with Shell for less than a year.

“We have brought Paul to see the field operations in Syria for himself and to learn about HSE, to learn about operational activities so he is not simply looking at the world from his desk in an office,” she says. “I would like to replicate this sort of practical learning experience in all of the exploration activities we have throughout the region.

“As a result, young people of many different nationalities are also going out into the field with Shell to learn about drilling, seismic survey acquisition and so forth. In Saudi Arabia we have a young Lebanese engineer who is doing the same thing. He is working on the high-pressure, high-temperature deep well we are drilling in the Rub ’al Khali. This is work he is undertaking during his first 18 months working for Shell and it will give him a fantastic grounding in field operations and real hands-on experience, which he will take with him right through his career.”

As Ceri moves on from the Middle East to her new job in The Hague at Shell’s Head Office, she is looking forward to her new position as Global Head of Strategy for the Royal Dutch Shell Group.

“This will involve developing a holistic view of all the Group’s activities, both upstream and downstream, to develop new strategies to take the Group forward into the future.

“At the same time I intend to take my operational experience into that role so that as we are developing global strategies I want to use my field experience to quantify what it means for the people on the ground, such as the people here in the deserts of Arabia. In other words, I want to try to be a link between the Group at the highest levels to all of the people on the ground who are conducting operations every day.

“I think that link is a little tenuous at the moment and I would like to think that in my new role over the next few years I will be able to strengthen it and help make the strategies which are developed at the highest level more action-oriented and operationally focused.

“When I move there is one thing I will not leave behind and that is my passion for the importance that must be given to HSE standards. All these new exploration ventures expose Shell staff and its contractors and sub-contractors to so many potential HSE incidents.

“I have committed to my teams in the field, across the regions, that I will return to the field on HSE audits during my time in Global Strategy. We need this commitment from senior management within the Group if we are to develop the culture of HSE to which Shell aspires, to keep people safe, to run our operations efficiently and to achieve Shell’s Goal Zero policy, which is currently being rolled out globally, which is to cause ‘no hurt to people, no harm to the environment’,” concludes Ceri.