Sep 8 2008
Stepan Company and Nalco Holding Company announced today the formation of a joint venture to globally market custom engineered chemical solutions for increased production of crude oil and gas from existing fields. The dramatic increase in the price of crude oil has created renewed interest in enhanced oil recovery (EOR) technologies.
Operating under the Tiorco brand, the joint venture provides an integrated sales and service channel that benefits from Nalco's extensive reach in global upstream energy markets, its recently acquired EOR polymer and reservoir expertise and Stepan's global surfactant technology and manufacturing capabilities. Tiorco will also serve as a primary sales and engineering service channel for Nalco's BrightWater(R) Reservoir Efficiency Technology.
"The Nalco/Stepan joint venture further strengthens Tiorco as the clear leader in chemical EOR engineering and operations," said Steve Taylor, Nalco Group Vice President and President, Energy Services. "It also provides a strong base from which we can continue to develop and commercialize proprietary offerings that help our customers to succeed. In simplified terms, we will be able to both 'fix' reservoirs to improve sweep efficiency and also 'clean' them from most of the oil in place over time."
F. Quinn Stepan, Jr., President and Chief Executive Officer of Stepan Company, said the joint venture provides an opportunity to accelerate growth of chemical enhanced oil recovery. In existing fields, the majority of oil remains in place after primary and secondary oil recovery technologies are utilized. "Polymers and surfactants will help the oil industry maximize production from existing fields. We are confident this partnership will contribute significantly to the growth of the surfactant market," Stepan said.
The joint venture will be equally owned and controlled by Nalco and Stepan. Most of the value generation will be captured directly by the two partners.
"Prior to creation of the Tiorco joint venture, customers assembled components of their EOR projects on a piece-by-piece basis," noted J. Erik Fyrwald, Nalco Chairman, President and Chief Executive Officer. "This joint venture creates the first unified approach to the EOR market, allowing us to identify and implement synergistic solutions that optimize oil recovery for our customers. We will be able to identify target reservoirs for EOR projects, to objectively establish technical recommendations for the reservoirs, to implement agreed solutions and to monitor results."