Weatherford in KSA

The company has operated in Saudi Arabia for four decades and is organised around three main divisions: The Contract Drilling Rigs division, which has been operational for 15 years; Traditional Product and Services Lines, which operates under a joint venture (JV) with the Al-Rushaid Group since 1979; and finally Non-Traditional Products and Service Lines, under a Weatherford Branch company and several agency agreements.

“Our greatest challenge in KSA is to ensure that we provide the specialised tools, equipment and personnel that meet customer requirements dependably and consistently. In addition to a comprehensive quality management system, we closely monitor our performance at all levels and employ a wide range of key performance indicators that provide specific feedback as to how we are performing in each of our product and service lines. This information serves as the catalyst for corrective actions and continuous improvement in Saudi Arabia,” says Geryk Thomas, vice president and general manager, Weatherford Saudi Arabia.
 

Another formidable challenge is the recruitment and retention of highly skilled and competent personnel, explains Thomas.

“Historically, many oil service companies in Saudi have relied to a great extent on imported skilled labour due to the mistaken belief that Saudis were simply not available. Civic and social awareness as well as practical business considerations led Weatherford Saudi and Weatherford Al-Rushaid to aggressively embrace and pursue our policy of recruiting and training up locally sourced talent. We are extremely proud of the success of our Saudization initiative and the percentages of Saudis in skilled labour and management positions continues to climb at a pace that is well above the industry norm.”

Now that the oil price has dropped, Weatherford expects to see a minor reduction in demand for contract drilling rigs in the Kingdom, although the demand is more elastic than one would expect.

“We are anticipating some reduction in contract drilling rigs in Saudi, although it would be incorrect to assume that the reductions are tied exclusively to the drop in oil price. Some rigs are at the end of their contracts while others will be replaced due to technical requirements. Experience has shown that the industry in Saudi is far less reactionary in terms of knee jerk responses to the unpredictable rise and fall of commodity prices.”

The outlook for Weatherford’s business in Saudi Arabia for 2009 and beyond remains very positive, says Thomas.

“Our optimism is based upon strong market fundamentals and the fact that Weatherford has a documented track record of adding value to our customer’s objectives and this commitment has not wavered since our arrival in the 1970’s. We are a solid corporate citizen that is fully committed to our Saudization effort and we will continue to expand our local footprint, with a renewed focus on deep gas projects.”

2009 will not herald a break with Weatherford’s strategy in Saudi Arabia, and the emphasis will retain the hallmarks of adding value through collaboration he adds.

“Personally one of my major objectives will be to continue to focus on the introduction of cutting edge technologies that will create added value for our customers as well as creating new and exciting challenges for our employees. There is huge scope in Saudi Arabia to do this in both greenfield and brownfield sites. Of course, it’s an exciting environment and developing tailored solutions is fantastically rewarding.”

“We are totally committed to the Saudi market. We are currently investing some US$60 million in purchasing land in the industrial area and the construction of a 100,000 m2 operations facility, which should be completed by the first quarter of 2010,” explains Charles Kreuz, vice president of operations, Weatherford.

“We believe that we will be able to expand our market share and presence in Saudi Arabia exponentially over the coming two-three year period,” he adds.

Weatherford’s plans to expand in the country will focus on areas such as wireline, directional drilling, petrophysics, mud logging, project management, rigless intervention, cementing and stimulation services.

“The future for Saudi Arabia is excellent, with their investment plans for upstream oil and gas developments being among the largest anywhere in the world. We hope to continue be an integral player relative to that extension,” adds Kreuz.

“The fundamental strength and dynamic of the upstream industry is conductive to further expansion and development of our product and service offerings. Weatherford will now put considerable emphasis on recruiting, training and career development and progression of Saudi nationals,” concludes Thomas.