A Kuwaiti services provider punching above its weight

Kuwait

Aiman Al Khabbaz, country director for Kuwait at National Energy Services Reunited (NESR), talks to The Energy Year about the power of localisation, capturing a growing share of KOC’s oilfield services business and protecting margins with strong supply chains. NESR is a Nasdaq-listed international oilfield and production services provider.

What is the impact on the oilfield services business environment in Kuwait following KOC’s adoption of new contract models?
In some aspects, the contract model shift at KOC feels very different. Historically, their contracting framework was focused on securing services with limited scope for innovation and risk-taking. Now, by introducing more flexible, risk-sharing models, they are attracting new players and encouraging existing ones to bring in expertise from around the world, as well as leading innovation in areas such as EOR.
You still have the standard contracts for services, which make up the majority of the work. In addition, you have the new model, which offers flexibility in splitting the value of efficiency gains, which is crucial for performance-driven results. Although it brings higher risks, many players are willing to adapt because they can now also bring in their personnel and technologies, increasing efficiency and pushing the operational envelope.

With more global players entering Kuwait, how is NESR staying ahead of the competition?
We focus on winning contracts by remaining lean and efficient, while offering solid service delivery. There is no room for outsized margins without performance and cost control; everyone is streamlining operations to win.
The only way to compete is to have a strong supply chain, and I personally handpicked our supply chain team so we can leverage local knowledge. My management team in Kuwait is entirely local, with each member bringing in domain-specific expertise in construction, chemistry and a wide variety of other disciplines. This expertise complements the broader operational team and our strong track record of execution.
International players often underestimate the power of localisation. In Kuwait, being local gives you a competitive edge when navigating client expectations, regulations and operational norms. Although localisation isn’t explicitly rewarded in KOC’s contract criteria, given that it is all about price, local content allows us to remain efficient and responsive, which ultimately helps reduce costs.

How are you leveraging R&D and innovation in your operations in Kuwait?
We are building on lessons learned in Saudi Arabia, particularly through the NESR Oilfield Research & Innovation Center, a multi-disciplinary ecosystem that includes leading academics from King Fahd University of Petroleum and Minerals, leading technical experts from our key customers, NESR’s strategic partnerships and venture capital portfolio companies – from the oil and gas sector and beyond – and also our research scientists.
My goal is to replicate this heavily localised model in Kuwait and bring researchers and partners into our tech labs, including an engineer with a strong research background whom we have recently hired for this.
Despite its resource wealth, Kuwait lacks educational centres focused on oilfield research, so our aim is to fill that gap by creating a technical platform where engineering graduates can apply their education directly in Kuwait’s core industry. I see this as a long-term investment in domestic intellectual property and human capital, with patriotic aims in supporting Kuwait’s most strategic sector.

What specific technologies are you bringing into Kuwait from NESR’s wider network?
While we haven’t fully launched our technologies in Kuwait yet, discussions are well underway, especially in water treatment. Our NEDA [NESR Environmental & Decarbonization Applications] portfolio, which encompasses internal innovation and investment partnerships in areas such as water, flare management, methane and geothermal, is being evaluated by KOC, with one of our high-potential local team leaders engaging with the company directly to support the process.
In addition, in Houston, we have the best unconventional laboratory and centre of excellence, which is geared towards shale and hard-to-find oil and gas globally. We are helping our customers in Argentina and Bolivia, among other countries, and believe we can do something significant in Kuwait in that regard. Eventually, everyone will look at their source rock and develop new reserves accordingly, so it is very important to have those decades of experience in the US to bring the technology here.

How is NESR incorporating ESG considerations into its operations in Kuwait?
We need to diversify the services we provide in each of the countries where we are present. Within the NEDA segment, our current focus in Kuwait is on water, but we are establishing a technology lab through the recently announced Ahmadi Innovation Valley, which includes NESR alongside other international players and will also conduct sustainability-focused R&D. Water is our near-term goal – we expect to begin trials and projects with KOC shortly – and frontier opportunities, such as carbon capture, are part of our five-year roadmap.
NESR has already made progress on carbon capture elsewhere. Our team is very inspired by the flagship carbon capture EOR pilot that we delivered in Indonesia, and I think we could replicate this complex operation here in the pursuit of de-risking various reservoirs for full-scale CCUS implementation. We are also exploring methane monitoring, with a trial with KOC already scheduled. ESG is not just a checkbox; it is a pillar of our long-term strategy and an enabler for our customers to drastically reduce their own Scope 1 emissions.

What is the weight of Kuwait within NESR’s long-term regional strategy?
Kuwait is a key market in our long-term regional strategy as it is, simply put, a growth engine for NESR. Since entering the market in 2017, we have consistently grown. KOC initially awards smaller contracts to new entrants, but our renewals are now of larger scope and value, which underscores our ability to invest locally and execute.
Our Kuwait portfolio is one of the most diversified within NESR’s Middle East footprint, which also speaks to the faith that our esteemed customers have put in NESR to bring additional capabilities into the country. Our focus is to consolidate all the segments, with our expertise and lessons learned over the years, in Kuwait. We believe that, as a strong national player who is here for the very long term, we can play a key role in helping KOC and KPC achieve their goals.
That said, Saudi Arabia remains a very large market, especially in fracturing, where NESR holds a leadership position. It will take time to reach that level in Kuwait, but undoubtedly we can do it. All other service areas are expanding in size and opportunity, and we are building a sustainable business here that is aligned with KOC’s push to ramp up production capacity.

You recently won slickline contracts in Kuwait and Oman worth USD 200 million. Do you expect to encounter any particular challenges?
It always comes down to execution and supply chain, and the recent slickline award comes on the back of prior successes. For the testing contract previously awarded, we built the right team, and now we are KOC’s top testing services provider. We also cover a large part of their cementing requirements.
Over the past years, we have managed to become the largest slickline company in most countries where we operate, thanks to our solid expertise and know-how. We can replicate those results in Oman and Kuwait and become the number one slickline provider in the region.

What does success look like for NESR in Kuwait over the next few years?
NESR was created to challenge the large, international service providers and prove that local providers can punch above their weight. That is the goal we continue to pursue, and Kuwait will be a major part of that journey. The country is ramping up production after lagging in recent years, so we are ready to help it catch up.
The influx of interest from international companies confirms Kuwait’s emergence as a key market. With our technology integration and supply chain strategies, we are positioning NESR as a critical player in meeting both national and regional production targets.

Read our latest insights on:

• Argentina
• Indonesia
• Kuwait
• Oman
• Saudi Arabia