The global oil and gas industry this year is set for the strongest ramp up in exploration and production efforts not seen for nearly a quarter of a century according to the CEO of Abu Dhabi’s long-established oilfield services company AlMansoori Specialized Engineering.
Nabil Al Alawi made this bold assumption based on the strong signals of recovery that he sees coming out from the North American oil and gas industry.
“2011 is a time when the oil industry is starting to go into one of its boom years again, we go through valleys, we go up and down, so 2010 has been the bottom of the valley and now we are starting to have this boom time again,” he said.
“Because of that we are gearing ourselves for this growth, budgeting ourselves appropriately to handle the demand of the industry.”
“We believe in the next 2-3 years there will be continuous huge growth that probably the industry has not seen in the last 20 years,” he added.
Al Alawi who was speaking to Oil & Gas Middle East during AlMansoori’s Open Day at the end of March said that the company hopes to hire between 500 and 700 new staff this year.
His buoyant sentiments seem to be backed up by the latest Moody’s ratings report on the outlook for the global oil and gas exploration and production industry, which upgraded the sector from “stable” to “positive”.
The April 5 report by the credit rating agency added that higher oil prices pushed even higher by the Middle East and North Africa unrest have stimulated the E&P industry with North American oil rig counts reaching their highest levels in 25 years.
“The American and Canadian oil and gas industry is extremely sensitive to financial changes or business changes because they are spot markets whereas over here we are long-term contract markets, we don’t feel the changes so much but over there as soon as there’s a little bit of change you can sense this, Al Alawi explained.
He gives the example of the Canadian oil and gas drilling scene which is said to have over 700 drilling rigs deployed and working at any one time. He says that Canada has not experienced this kind of drilling activity in the last 20 years and which he extrapolates signals the strong demand for equipment and services from companies such as AlMansoori.
“When we budget normally on a year-to-year basis in our 5-year strategy, normally in the first quarter we normally don’t feel the growth of what we budget for – it will happen right in the middle of the year – but because of this boom from January, the growth is tremendous,” he explains.
The hyperactive E&P scene in North America is mirrored by the growth in similar activity in places such Kurdistan in Iraq where AlMansoori has been operating for six years.
Southern Iraq and the entire Gulf region is ramping up activity, even Bahrain despite its current political problems is experiencing strong growth according to the AlMansoori boss.
“And of course you can see the huge demand in the south of Iraq, Kurdistan, Saudi Arabia is really looking at their budget and the rig counts.
Bahrain of course with the exception of its political issues is in a growth mode, Qatar is in growth mode, the UAE and Abu Dhabi with its projects is [seeing] incredible growth, Oman is trying to sustain as much as it can. The whole area is in a very, very accelerated growth which is very good for our services.
Corex PVT facility opens at almansoori
AlMansoori’s Open Day held in March presented an opportunity for it to announce and open the PVT (Pressure, Volume and Temperature measurements) facility of the newest arrival to its ever-expanding portfolio of oil field service companies, Corex of the UK.
The company, established in the mid 70s specialises in analysing core samples from oil and gas reservoirs.
Graham Robertson, director of Corex attended the event and explained to Oil & Gas Middle East just how important core analysis is for exploration and production work in the region.
“A core is the only time you really see your reservoir, it doesn’t matter if you drill a hole and run any number of tools down, you won’t see the reservoir until you take a core sample,” he explained.
Robertson explained that core sample analysis greatly helps oil field operators make better judgements as to the quality of the reservoirs they are prospecting.
“We are continuing to make measurements on core to try and validate what they [operators] do when they are drilling and also you can run a test in the laboratory at a fraction of the cost you can do at the well site.
Although he admits that core analysis is not exactly an easy service to sell to clients due to its very technical nature, he expresses some frustration at the level of uptake for it in the region.
“It still amazes me that some people will drill wells without having done it in a laboratory environment first and it really does work. We’ve had situations where we’ve quadrupled people’s production by advising them of the best way to drill a well,” Robertson explained.
“This region is quite unique, when we’re in the North Sea and we say to people ‘we can help you improve your production because you might have formation damage’, everyone wants to do it because it produces more oil more quickly.
“When I come and present to people here, sometimes the answer is ‘if we need more we can just open the tap a bit more or we can drill another well’, it’s very different to the North Sea environment. We haven’t really caught the interest yet.
“I’d say we have two sorts of clients and if you compare this to the medical industry, you’ve got the people that go to the gym and they try and stay fit so they don’t have to go to the doctor and there’s the other people who wait till they have a heart attack and they go to the doctor. What we try to do is convert more clients to do lab-based work in advance of having problems of formation damage on the well in advance.”
AlMansoori support
Corex’s approach to internationalisation has been to engage in local projects to gain local credibility and to establish strong client relationships.
Robertson explained that AlMansoori’s well testing service was capturing core samples but prior to working with Corex, it was subcontracting the analysis of the samples as it did not have the equipment or expertise to undertake such work which undermined the oil field service provider’s project bidding capabilities in projects in and around the region.
“Now they don’t have to,” said Robertson, “they’ve got us to do that in-house testing so that’s why we’ve put state-of-the-art PVT here.”
A major advantage for establishing local core analysis presence is that
PVT samples do not have to be transported to better-equipped testing facilities on commercial or cargo air transport which usually have strict transit regulations on high-pressure oil and gas samples.
“Our model has been to get high-tech PVT here. We have also put in a routine core analysis facility here and a special core analysis facility. At the moment we haven’t put formation damage into Abu Dhabi, I would very much like to do it,” Robertson explained.
He believes in order to build client relationships, one must be on the same frequency as them.
“One of the things that Corex try to do, is relationship marketing. Our services don’t sell on their own, it’s not like order-taking, you have to build up a technical relationship with the client, the people that come here today are so knowledgeable, they are so technically sound, they come and they want to talk technical.
“What AlMansoori’s done for us is having been here a long time and being well-established themselves they’ve allowed us to come in and have an associated relationship and then we’ve been able to come in with a technical [background] and build technical relationships which is what we’re trying to do,” Robertson said.
