AkzoNobel explains how it is supporting oilfield service customers in tough times.
Unless you have spent the past two years on a deserted island without access to any form of news, there is no denying that the industry has made a dramatic shift.
Remember the good ol’ days when everyone was printing money at a US$100+ per barrel oil price? High-value innovation was thriving and the sky was the limit. For obvious reasons that has all changed – and so have industry providers.
AkzoNobel is embracing that change. Instead of solely focusing on the most advanced solutions for niche challenges and applications, the majority of the company’s efforts today are aimed at fine-tuning its product range and optimising its supply chain to align with the demand for more cost-effective oilfield products.
“But,” notes global marketing manager for Oilfield Applications Jeroen Pul, “We haven’t lost our high-tech edge; we have just changed our focus to best serve our customers in the current environment.”
A new reality, a new attitude
Market outlooks and oil price predictions change more frequently than the direction of the wind. Even though the general consensus is that the market has bottomed out, it will likely take a long time before things “get back to normal” – if they ever do. Everyone has a healthy obsession with following the oil price, the key leading indicator for our industry. But nowadays, quips Pul, “if we had a penny for every time we got asked what will happen with the market, we would have a record year!” The uncomfortable truth is that few have a clue.
Realising it needed to adapt to these new market conditions, Pul says that AkzoNobel has transformed itself into a more flexible supplier in every sense of the word. By listening and adjusting to what its customers expect, he notes that “we want to make sure we are seen as a partner in both boom and bust periods. Because when everyone has bad cards it is up to the players to make the difference.”
As ever, price is a key differentiator. A big change in how the company operated was needed, he says, because for many years it had “a reputation for being really good, but also expensive.” In the past, many factors drove price – one of the largest of which was full plant capacity. Since then, the company has added substantial manufacturing capacity at key locations in Houston and Sweden and adopted a competitive mind-set at the same time. “When a customer calls us today they may be surprised about what we can offer and the co-operative conversation they will have,” adds sales manager for oilfield EMEIA Adrian Zuberbühler. “Luckily, it is relatively easy to fix a problem you have created yourself.”
Scale is king
Given that most service companies are looking for the ultimate cost/performance solution, “cheap” is not always the way to go. It might offer initial cost benefits, but one rarely gets rewarded with superior performance – the old saying applies that “If you pay peanuts, you get monkeys.” The wiser decision is to go with a trusted supplier, and one of the biggest players in the game. With AkzoNobel’s unmatched manufacturing capacity in fatty amines and related ethoxylates, it believes there is no one in the industry more capable of producing high-quality, field-proven products at the best possible cost.
Specifically, when it comes to corrosion inhibitors in the famed Armohib range, “We have specific solutions at the best price out there for every level of performance need and job sophistication,” Zuberbühler adds.
For example, for higher-end performance, AkzoNobel supplies imidazolines such as Armohib CI-219, offering excellent oilfield corrosion inhibition performance in many different formulations. Imidazolines are very effective film-forming amines and their solubility can be modified by neutralisation with different organic acids.
The polyamidoamine-imidazolines it provides, such as Armohib CI-41, on the other hand are more economical and efficient products that can be formulated to work in both oil and water phases. They show high film persistency against the attack of corrosive fluids.
Measured by production capacity, AkzoNobel is the global leader in fatty amines. It offers a broad portfolio of fatty acids, providing different alkyl chain lengths and solubility characteristics, and clients can choose between coco, oleic (animal or vegetable origin) and tallow, as well as individual fractions of these.
It also offers ethoxylated versions of these fatty amines. Compared to imidazolines they form somewhat weaker films. However, fatty amines are very economical and used in many oilfield applications. For example, diamines (Duomeen T) and ethoxylated diamines (Ethoduomeen T/22) are effective refinery corrosion inhibitors.
In addition, there are corrosion inhibitors with a very specific function, such as Armohib CI-5174 – a poly-amine for CO2- and H2S corrosion with a lower foam profile than standard type fatty acid imidazoline and coco benzalkonium chloride actives. It also offers far better brine stability than standard corrosion inhibitors (see Fig 1).
Besides a huge production capacity, AkzoNobel is also making new ground in the development of corrosion inhibition technology, through its own chemistry experts and a partnership with the University of Manchester, focused on the fundamental understanding of how film-forming corrosion inhibitors work (see Fig 2).
“What’s interesting is that even though we have been selling corrosion inhibitors for decades and they’re a well-integrated part of the oilfield production process, we still don't really know for sure how our chemistry reacts with oilfield steel casings and pipelines in the presence of complex aqueous/crude oil formulations,” Pul explains.
“For example, what are the structure-function relationships that mediate adsorption and lead to inhibition of corrosion processes on carbon steel surfaces? AkzoNobel is studying these processes through sophisticated experiments and computational chemistry through our corrosion partnership with the University’s School of Materials. With this dedicated academic research in hand we are beginning to better understand the fundamentals of corrosion in oilfield and we are looking forward to using this knowledge to develop improved, next-generation product,” he said.
Essential ingredients only
Even in the good times – but especially in the bad times – people are always looking to dip in someone else’s profit pool. According to Pul, AkzoNobel Surface Chemistry “made a strategic decision not to do this and focus strictly on supplying chemistry ingredients to oil service companies around the world. This is a really important part of our value proposition and strategy, because no customer would want a forward integrated supplier competing with them.”
Although it only plays a small role early on in the oilfield value chain, AkzoNobel’s chemistry skills are essential ingredients for its oilfield customers to run a productive and profitable business. “It is really our capability as ‘molecule benders’ that gives us our competitive edge,” he adds. “We leave the formulation and application up to our customers.”
Working together is winning together
“Being competitive on pricing and not competing with our customers are ‘hygiene factors’ to us,” explains Pul. At the end of the day, what pays the bills for service company customers is getting the job done effectively – this is why the company sees its value proposition as first and foremost aimed at helping them to deliver world-class productivity consistently.
Its portfolio of products with advanced functionalities allows customers to select the solution that best fits their specific needs in any drilling, production, stimulation or cementing oilfield application. In addition, AkzoNobel has a long track record of partnering with customers to work on exclusive innovations for specific challenges, for example on extreme performance requirements or reducing the environmental impact of oilfield operations – creating new formulations based on its core belief of “winning together.”
Whether the market is up or down, AkzoNobel believes that its chemistry capabilities can offer customers the headwind they need to win. Not yet convinced? Zuberbühler is not shy to put his money where his mouth is and is offering readers an additional 5% discount on top of an already competitive list price for any new customers or additional business with current ones just to proof his point. “I expect to get a lot of calls and emails following this golden ticket opportunity,” he says.
Contact: Adrian Zuberbühler, Sales Manager Oilfield EMEIA