A culture of contractor led turnkey projects is hampering innovation and quality in the Middle East’s oil & gas companies, according to Jens Winklemann, managing director of process automation company Endress and Hauser.
“It is quite difficult to get new technology into the market because the contractor will just buy what’s written in the specification and nothing more. He will not pay anything extra for an extra option, for something better for the end user. For example the Adnoc group of companies don’t get the best equipment they could get for their operations, for their safety, for reliability. Due to this concept the end user often does not get the best equipment, he gets something which only just fulfils the purpose and the specification but it could be better,” he said.
Due to the way that contracts in the Middle East are structured, contractors will often ‘copy and paste’ the resources they have used in previous projects into their new projects. Winklemann feels that this culture discourages investment in higher quality products which could ultimately increase efficiency, workplace safety and profitability.
Winklemann believes that end users need to be more assertive in their demands from contractors in order to drive innovation.
“Very often in the Middle East we deal with lump sum turnkey contracts. The contractor sees only his contract and he is not interested in anything further. Usually they have an 18 month contract and they don’t care what happens to the project after that time,” he said.
