Added value in diversified industries

Oman

Murtaza Jariwala, CEO and managing director of Vanguard Engineering & Oilfield Services, talks to The Energy Year about how developments in Oman’s upstream boost demand for the company’s manufactured products and the benefits of its digital solutions for oil and gas projects.

How do you see the upstream sector uptick impacting your company’s business activities?
Vanguard is primarily a solutions provider to oil and gas companies and to the supply chain behind them, from oilfield service providers to product manufacturing companies. When these companies get more contracts, they require more equipment to be manufactured. That gives us more work.
Moreover, when new blocks are being developed, the companies there require new equipment. We directly supply mechanical, electrical, instrumentation and automation solutions in, for example, artificial lifts or well-completion packages such as OCTG [oil country tubular goods] to an array of companies. All these services will surely benefit from the positive upstream momentum the domestic industry is experiencing.

Can you give us a breakdown of your current activities and contracts?
We have multiple long-term contracts and orders for OCTG, artificial lift, wellheads, gas compression, separators and manifolds that we supply to some of the oil and gas operators in Oman – such as Occidental Petroleum, PDO, Daleel Petroleum, OQEP, CC Energy Development and ARA Petroleum – that are existing from 2010 onwards, and some will be valid till 2030. Furthermore, we have been working with PDO, for whom we installed heat exchangers made with a special alloy steel material, and we delivered them quickly. They were very satisfied with them, and now they are looking at a very large expansion in the Qarn Alam area (Block 64).
These systems are used to cool down the temperature of the oil before it enters into the surface facility for treatment. They reduce the heat from the oil, which comes from the ground at 180 degrees Celsius or more, and is then fed into facilities which are designed for a standard 80 degrees Celsius. These systems are used in many projects but the added value that we brought was the timely delivery of the devices compared to the competition, and we did this without compromising on the high quality standards we always maintain. As PDO is planning a significant expansion, we will be one of the parties considered to provide heat exchangers to them.

What is Vanguard’s digital offer for the oil and gas sector?
In 2020, we launched a new concept called TOPS (totally optimised product sourcing), which optimises the way clients receive the final product they need. This sourcing is a very interactive experience, and it was positively received by several players, including not only clients but also suppliers and students. The latter managed to learn a lot about how the oil industry works and how Vanguard tackles its challenges. TOPS helped people identify either what areas of activities they want to be involved in or find the solutions they were looking for.
Then in 2020 we also started a sister company of Vanguard, Ascension Technology, to bring machine learning and artificial intelligence solutions to the oil and gas sector. In October 2022, we finished a pilot project with our partner from the US to provide a software solution to various oil and gas operators in Oman and the GCC region.
The solution will primarily help them increase their production for EOR projects by optimising their waterflooding. The software allows you to run a model in a few minutes, and you can keep changing the options to see what the result would be. This flexibility represents a consistent added value to the reservoir engineers when they are making quick decisions.
Machine learning software works with data. Such software is very data hungry, and the more data you provide it with, the more accurate its outcomes become. This solution is completely cloud based, and we host the data at the Oman Data Park, so there are no data residency issues.
Now that the pilot project is over, an oil operator asked us to extend its scope to a much larger area, given its encouraging results. After that we can start thinking about applying it in fields. The process before that point will be long because it is something really revolutionary for the oil and gas industry. Thus, it will need in-depth validation before coming fully on line, but we are optimistic that, by the end of 2023, we will see something really substantial in merit.

What would you identify as the company’s key competitive advantages?
We position ourselves as a turnkey solutions provider, which is an added value by default and even more so if you have manufacturing capabilities, like we do. We even received an award from Daleel for our ICV [in-country value] contribution in the OCTG segment. When you operate in the oilfield services sector, supply is paramount because it is a field where there are always emergencies and where, as I used to say, companies needed equipment yesterday.
The pandemic further stressed this condition. It was a challenge but also an opportunity to reinforce our position as a solid local choice for companies that needed a partner, as shown by the agreements we signed in the last few years with various oilfield product and services companies to be one of their global ICV partners.
This is what we are doing: we are helping companies that are providing services or products to the oil companies in Oman to manufacture most of the goods here, and we are doing so without requiring them to invest because we already have the equipment, the machinery, the technology and the certifications. We are ready to manufacture what they need and deliver it on time.

What are the main opportunities and challenges associated with your plans to expand beyond Oman’s borders?
We are looking at working in the UAE by partnering with a local company in Abu Dhabi because we see the UAE as the global marketplace for the region in terms of relationships with technology partners, investors and potential customers to attract manufacturing to Oman and to fill both my shops and manufacturing facilities here. It would be a win-win situation for everyone if we expand our business.
Regarding the challenges, one is the workforce, namely finding competent people to execute work on time. Furthermore, when you enter a new country, there is always a two- to three-year period during which you have to stabilise and set up your activities. We are about to enter that phase and are ready to go through that learning curve and build solid relationships.
Finally, most foreign investors and technology partners are a little sceptical because our neighbouring countries offer very attractive frameworks regarding, for instance, clear regulations in the power sector. We, along with other local companies, must play a role in ensuring they see the benefits on the business side first.

Can you walk us through Vanguard’s strategy for ensuring its future growth?
We are diversifying from the oil and gas industry. Thanks to our manufacturing capabilities, we have the required flexibility to add new industrial segments to our portfolio. We are exploring opportunities in sustainability products and related defence industries, as well as renewables. We are gearing ourselves up to enter these segments by adding new technologies in manufacturing to target multiple industries.
As a sector, manufacturing is going through a major transition itself due to so-called additive manufacturing or 3D printing. We are looking at this with interest but also caution since, on the one hand, it makes targeting multiple industries easier, while on the other hand, it needs some work to be done before being delivered or finished.
What we want to do is create real added value. To this aim we are looking, from 2023 onwards, to close some technological partnership deals to upgrade our manufacturing capabilities. We see plenty of manufacturing opportunities coming in the near future which are very promising.
We are still setting up, identifying, picking and choosing what we want, and planning how we will target those opportunities, while focusing on the areas where we can grow even more.

About Vanguard
Vanguard Engineering & Oilfield Services assists oil and gas, power, water, mining and transport industries to extract, treat, process, operate and transport their products by providing innovative engineered technologies and solutions to cater to various projects in Oman and the region.

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