Cautious optimism is the order of the day for Qatar and the UAE’s most dynamic drilling service providers
Drilling service providers had to tackle a hostile environment in 2009. From reduced exploration work and a tight cost-control mindset from the National Oil Companies across the region, the sector picked up again in Q4 2009. With hopes pinned on a busier year across the region, Oil & Gas Middle East met two of the region’s fastest growing providers to sound out where demand is expected to be strongest.
Qatar Focus
Mohammad Yacob Al-Sayed, Al-Shaheen Well Services CEO, says that an oil price that has stabilised could see activity in the region pick up, though demand increases are likely to be sluggish as OPEC members curtail their production ambitions.
“The price range of $70 to $80 is suitable for GCC countries to reactivate drilling activity.
However, since GCC countries are proportionately bigger suppliers of oil globally, I think they are looking for more stabilisation in the price in order to go back to the drilling activities.”
Al-Sayed adds that whilst a return to the boom period seen two to three years ago is unlikely, this year could see an upswing in projects advancing.
“2010 will be a slow year due to supply exceeding the demand for oil in global markets, which will cause the slow down of the drilling and well services activity. However, by the third quarter of 2010 there is the expectation that demand for oil will increase. This will be due to the start up of hundreds of energy production facilities and refineries which were planned and built around the globe during the boom times.”
A focus on its home turf in Qatar has insulated Al Shaheen from the steepest of activity declines, and will remain a robust market, says the CEO. “The state of Qatar was less affected than other markets, both in the region and particularly worldwide. The growth rate in Qatar is much higher than elsewhere, which has helped to offset the worst of the recessionary down turn.”
The most resilient service line from the Al Shaheen stable has been directional drilling packages, notably directional drilling surveys and logging while drilling. “We have been expanding our offering in this market thanks to a strong product line of technologies available to support these services.
Deploying these services can solve many problems for end-users and allow operators to improve their success in complicated reservoir areas – which was impossible just a few years back,” notes Al-Sayed.
UAE and beyond
Foroohar Farzadnia is corporate business development and marketing director at the UAE’s largest homegrown oilfield service company, AlMansoori Specialized Engineering. “The firm has played a leading role in bringing new technologies and cutting edge services to the Middle East, and has recently renewed its efforts to go global. The company today has over 1300 employees working in 19 countries providing a variety of oilfield services and producing specialised products for the upstream industry,” he says.
In 2008, the company dissected into two independent stand-alone holding companies to streamline the management of the businesses of the company. These are: AlMansoori Petroleum Services (AMPS) for managing the business units of the oilfield services group and AlMansoori Petroleum Industries (AMPI) for managing the business units of the manufacturing/fabrication group.
“While our area of operations has traditionally been in the Middle East, we are currently expanding our operations into North Africa, the Far East and South East Asia as well,” comments Farzadnia.
Locally the early signs of recovery are becoming more evident, he adds. “In the GCC rigs that went idle in 2009 are coming back into service and some of the projects that were suspended will come back into play this year. With all the information we have, I think the MENA drilling industry can probably expect growth of 5 -10% over the course of the coming year.”
Important lessons have been learned during the crunch last year, and Farzadnia says that offering clients more than a portfolio of services will be the key to unlocking the potential of the recovering sector.
“From discussions across the board with upstream project managers and oil companies, the thing we will be focusing on is being an integrated energy solution provider to the sector.
“Most companies want their services and equipment provision to be bundled; essentially delivering a one-stop shop solution so they have one point of contact. This is easier for them to manage and it’s a more cost-effective solution too,” he concluded.
