The company’s vice president for the Middle East and Eurasia is in good spirits thanks to another year of robust growth (third quarter financials reported in October show the company’s Middle Eastern revenues grew 3% year on year), but also because he believes his whole geographical remit is fertile ground for the advanced technologies and applications that fall within Halliburton’s arsenal.
Hugentobler returned to the Middle East from his Moscow posting in April of this year and says the footprint he’s responsible for now is as dynamic and exciting an upstream landscape as anyone could hope for.
“I spent a few years based in Russia and overseeing the CIS region. That was a really exciting environment. That whole region is going to blossom someday.
They just can’t continue to produce at levels they are happy with without bringing in the technical expertise of companies like Halliburton. They have been effective so far, but the coming decades will certainly be an exciting time, particularly for us, there,” he says.
The trends driving the demand for more advanced exploration and production techniques and technologies vary from region to region, but certain themes are underpinning the increased spending across the board.
“Although we are seeing production capacity increases and more intensive drilling programmes all over the world, that’s not necessarily tightly correlated with our growth per se,” he explains.
“We’ve always seen our value proposition in the technology and know-how side of the business, so technology adoption is the key for us.
A lot of people assume that growth and business is tied to the rig count, but we are doing a lot of rigless work here, including interventions to prolong the life of a field and working closely with the operators to develop fields more efficiently.”
The efficiency theme is also, Hugentobler says, key to what the company brings to the table. “Drilling effectively and efficiently really are two completely different things. By approaching a programme efficiently we are talking about everything from bringing down drilling times, improving safety right through to ensuring we do not damage the reservoir.
One of the advantages we have over smaller firms is the strength and robustness of our management systems which ensure the whole gamut of the programme is optimised,” he says.
Article continues on next page …
Unconventionals
Hugentobler says the unparalleled game-changer in the industry over the past few years has been the approach and wide-scale exploitation of unconventional resources. Although famed for its abundant and enormous conventional oil and gas fields, he adds the Middle East could, in the near future, be a hotbed of exciting unconventional activity too.
“Technology wise I think we are at the beginning of a whole different approach to gas everywhere, but unconventionals could certainly be big here.
The desire to exploit gas deposits for use domestically already exists. That’s going to be a big deal, and that will be a strong growth area for service companies.”
Hugentobler adds that the evolution of unconventional drilling and production has been quite interesting.
“Once upon a time you would just drill the well and frack it. Then the industry moved into horizontal drilling as a fairly standard practice, and now we’re seeing multi-stage fracturing, which provides operators new options for completing horizontal multi-zone wellbores to enable highly accurate placement of fractures, with minimal or no intervention.”
People won’t naturally put unconventionals and the Middle East together, but Hugentobler says the appetite he’s sensing is potentially huge.
“It could be through sand, shales, very tight gas. This gas has always been here, but it’s not a bookable reserve until it’s exploitable. This is a critical trend and something where we are in a great position to help. Domestic demand in the GCC is expected to keep growing to fuel industrial applications such as manufacturing, and utilities for power generation and desalination.”
There is a perception that in doing everything to a higher standard, working, drilling and producing more efficiently then oilfield service companies become victims of their own success as other areas of the business decline.
“That’s just not been the case in our experience at all. It’s analogous to the IT and technology sectors in that regard. The more complex the technology gets, the greater capabilities grow and new opportunities and applications open up and so more and innovative technology keeps being created,” enthuses Hugentobler.
Article continues on next page …
Tech Talk
Technological innovation and application in the Middle East is today often at the vanguard of industry capabilities, and is benefitting from the influx of research and development investment which has been flooding into the region, through university tie-ups, vocational training institutes and pure research facilities in conjunction with the biggest names in the upstream business.
“The Middle East is extremely forward thinking, and in some cases really inventive. One example that really springs to mind is a new-age control room or operations centre for the oil and gas industry and Halliburton have been involved in that.
It allows experts to sit and monitor and manage everything across multiple oilfields, right down to turning off a choke valve, to monitoring gas pressures and acts more like an enterprise-wide mission control which really is cutting edge,” Hugentobler reveals.
“Aramco have been very forward thinking in this regard. That’s one of the reasons we have a research centre in Saudi Arabia. The lessons there are definitely being used all over the world and its vital for us to keep inventing and improving.
At some point technology is mimicked to a reasonably good extent so we have to stay ahead of that with constantly evolving and improving offerings.”
Hugentobler says that technology development is very much the company’s core business, but lateral expansions, such as the acquisition of Multi-Chem continue to add value to the package customers can expect from Halliburton.
Multi-Chem is associated with chemicals in the reservoir and also in pipelines. Rather than bring in the chemical specialists once a problem has been detected, Hugentobler explains that the Multi-Chem designs custom chemical solutions which can be deployed ahead of production commencement in order to ensure production operates at its fullest potential and alleviate any potential problems before they arise.
“For example, if you have hydrates, gas trying to come out or water – these chemicals can remedy that. It’s all geared around production control.
Essentially it facilitates predictable production and reduces blockages within the system. We are a new entrant into that market but one we think could be very exciting here, and certainly another valuable string to our bow,” he says.
Article continues on next page …
Outlook
Within the Middle East, Hugentobler says all countries have been performing to expectation, but Oman in particular has stood out with strong growth.
“Oman has exceeded our expectations and there is a lot of activity there. The Omani’s have for years had a bigger degree of foreign investment and that, to an extent has driven some of the higher-end technology solutions procured there.
We saw a similar trend in Qatar a few years ago when the foreign capital flowed in for the giant gas field development and LNG projects.”
He also cites buoyant conditions in Saudi Arabia as a strong performing market. “Saudi Arabia just continues to grow. Aramco does a very good job of driving their resourcing and capital spending,” he says.
That strong growth is being matched by continued investment in the Middle East by Halliburton, and Hugentobler says the company is recruiting across his entire Middle East and Eurasia remit. “Our investment in the Middle East is all going into facilities, technology and people,” he says.
“Something interesting is the method and success we are having with local recruitment in key areas,” he explains. “I left the Middle East in 2008 and now I’m back I’ve noticed a marked difference in the success our national recruitment schemes are doing. It’s clearly been a learning curve and we have got much better at it.
We have excellent mentoring and nurturing programmes for recruits that join us and they have performed very well, and these internal management systems bring new recruits right up to our own high standards in a very systematic way.”
Hugentobler says that 2013 is all largely booked in and planned, and the numbers show the company can expect to continue to see healthy growth in the region. “Looking at the various analysts expectations for 2013, the Middle East is projected to be as strong or stronger for growth than any region apart from perhaps Latin America.”
“That means we are on track to meet expectations. There is growth everywhere right now. We’ve done well this year. Over the full year the growth has exceeded the targets that we had, and we foresee a very robust 2013,” he concludes.
