Schlumberger expands artificial lift facility
  from: Asian Oil & Gas
  by: John Mueller
  Friday, October 27, 2006

Oilfield services giant Schlumberger recently celebrated the official opening of its substantially expanded artificial lift product facility in Singapore. John Mueller reports.

Manohar Khiatani, director of the logistics and transport cluster at Singapore Economic Development Board, officiated as guest of honour, and Don Sweet, president, Artificial Lift, Schlumberger, unveiled the commemorative plaque.

Singapore Economic Development Board chairman Teo Ming Kian said he saw Schlumberger's decision to expand in Singapore as 'a firm endorsement of Singapore's attractiveness as a location for oil and gas equipment manufacturing. We thank Schlumberger for its confidence in Singapore and look forward to deepening our long-standing relationship even further.'

Schlumberger's Don Sweet spoke of his company's a long history of development and success at this Benoi Crescent facility. 'Singapore provides economic advantages as well as geographic and logistic advantages to major oil and gas development activities,' said Sweet. This expansion project was launched with a groundbreaking ceremony on 25 November last year. Prior to expansion Schlumberger had two buildings, one for the assembly of ESPs and the other for the manufacture of parts. This plant expansion adds a third building, additional machinery and equipment to increase the production of ESP systems.

The plant currently has a total workforce of 626, of which 85 have been added this year as a result of the plant expansion and increase in production activities.

Electric submersible pumps are one of many methods of artificial lift - a range of technical solutions deployed to improve or enable production in wells where the bottomhole pressure is not sufficient for the wells to flow naturally. The vast majority of the world's wells require artificial lift, so it is a growing segment of the oilfield industry.

The Schlumberger Singapore Artificial Lift Product Centre, then registered as Reda Production Systems, first started operations in Singapore in 1970 as a warehouse in a rented facility to sell ESPs and parts to Indonesia. This business rapidly evolved from warehousing to assembly and repair and the market expanded to all of Asia, Middle East, Europe and Africa. To meet the strong growth in demand for ESPs, the first facility for assembly, 7 Benoi Crescent, was built in 1980, and the second facility for the manufacture of components including a foundry to produce castings, 5 Benoi Crescent, was built four years later. Schlumberger says the plant has continued to expand year after year due to strong product demand.

In his speech at the opening of the expanded facility, the EDB's Manohar Khiatani stressed the importance of the oil and gas industry to Singapore. 'Like Schlumberger, it has a long and distinguished history,' he said. 'We have been a hub for oil and gas exploration and production in the region, ever since the forerunner of the Shell Company used Singapore as the centre from which to manage its growing activity in Southeast Asia. That was over 110 years ago.'

Today, he added, Singapore had a 'comprehensive oil and gas ecosystem' in place, including oil majors, drilling contractors, specialised equipment manufacturers, oilfield service providers and offshore engineering companies. The island republic is the undisputed world leader in the construction of jack-up oil rigs and the conversion of FPSOs, with a dominant share of more than 70%. It also boasts the largest base of oil and gas equipment manufacturing companies in Asia, like Schlumberger, making sophisticated products such as downhole tools and equipment, wellheads, christmas trees and drill bits.

According to Manohar Khiatani, the offshore and oilfield equipment industry is one of the fastest growing sectors in Singapore. 'The combined output of the offshore and oilfield equipment sectors grew by an impressive 68% in 2005 to hit a record high of $4 billion,' he noted. 'These sectors currently employ over 9000 people in Singapore. And the prospects of this industry continue to look bright. Shipyards and equipment manufacturers are investing heavily in expanding their manufacturing operations in Singapore to address the booming demand for their products. As an indication, the total order books of our two leading shipyards, Keppel Offshore & Marine and SembCorp Marine, are full to 2011 and stand at a record $15 billion.

'In Singapore, companies such as Schlumberger find a cost-competitive and efficient business environment, with strong infrastructure and comprehensive supporting industries,' he added. 'While these are very important factors, I would say the paramount reason that this industry has been so successful in Singapore is due to our highly skilled and productive workforce that is grounded on a strong engineering foundation.

'Building upon these strengths, Singapore is hence determined to move up the value chain into more engineering, product design and research & development activities. It was for this reason that we embarked on a strategy to develop specialised capabilities and manpower to meet the stringent and specific demands of the oil and gas industry.

'Our commitment is evident from our establishment in 2004 of the Centre for Offshore Research & Engineering (Core) to spearhead joint R&D and manpower development with industry. Our local university, NTU, introduced a final-year specialisation for marine and offshore engineering in July 2004. Another milestone was the introduction this year of a two-year offshore oil and gas technology specialisation for mechanical engineers at the National University of Singapore.'

Congratulating Schlumberger on the opening of its expanded production facility - the work was completed in just six months - Khiatani concluded:

'We believe that the development of specialised engineering talent, together with Singapore's excellent research infrastructure and strong intellectual property protection regime will enable global leaders such as Schlumberger to undertake the research and development of new technologies required to meet the challenges of extracting hydrocarbons from deeper and more complex oil and gas fields.' AOG

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