TOGY talks to
Building on Egypt’s momentumJune 25, 2019
Waleed Lotfy, chairman and managing director of Petrojet, talks to TOGY about new momentum in the Egyptian oil and gas industry and the strategy involved in the company’s record revenues and recent MoUs with internationals. Petrojet is a construction group active regionally in projects in oil, gas, petrochemicals, infrastructure and civil works.
How do you view the energy industry’s momentum?
The relatively stable trend in oil prices is encouraging. Producers are starting to talk big about commitments to increase spending; however, a reflection of this in the facts on the ground is yet to be seen. Additionally, the current turmoil in the Arabian Gulf is also a big concern.
Nevertheless, if we move to the Egyptian case, current reforms in the sector are key to the growing momentum we are all witnessing. The reforms primarily aim to develop comprehensive changes in various activities of the petroleum sector, in order to eventually increase its contribution to the development of the country. We can do this by working more efficiently, attracting more investments and developing human resources.
By 2021, the sector will achieve optimal economic utilisation of all natural resources and capacities to contribute to the sustainable development of Egypt. Egypt will become a regional hub for oil and gas trading. The petroleum sector will become a role model for other sectors in modernisation and development terms. Our role is to build on this momentum, and we are doing that.
What is your take on the Egyptian downstream sector and how is Petrojet contributing to enhancing the transformative industries in Egypt?
Even though Egypt has a developed infrastructure for oil and gas, we still need to develop more in order to realise the objectives of the modernisation programme, and most importantly, transform Egypt into a regional hub for oil and gas trading. In order to realise this ambition, a very ambitious plan for developing downstream projects is in place. Numerous projects are already in the pipeline, i.e. refining and petrochemical complexes, expansion of pipeline grids, provision of natural gas to communities, etc.
To cope with this super-fast pace, we are always developing and rigging ourselves up with resources and latest technologies. For over 44 years, we have prided ourselves on being the strong construction arm of the Egyptian petroleum sector. The sustainability of this role is a key core value in Petrojet.
With the recent progress in both greenfield and brownfield refining projects, what are the challenges in realising the sector’s full potential?
The national plan to develop the Egyptian refining capacity is a key part of transforming Egypt into a regional hub for oil and gas trading. Numerous brownfield and greenfield development projects are in the pipeline, such as the Assiut National Oil Processing Company (ANOPC) project to establish a diesel production complex, Midor’s expansion, Red Sea Refining and Petrochemicals Project, Nasr Petroleum Hydrocracker, Alexandria Petroleum Expansion and others. Obviously, providing the necessary finance for these projects is the most important challenge.
Petrojet achieved a new record in revenues in 2018, exceeding EUR 1.3 billion, with 12% year-on-year growth. What was the strategy behind this growth?
Where we want to go is clearly identified in our five-year strategic plan. We have clear objectives, and work hard to achieve them on all fronts. To achieve this record revenue, we worked across the whole value chain. We made sure that every single resource is optimally utilised. We invested in training our people. We invested in purchasing new construction equipment and applying new technologies. We developed all of our workshops across Egypt.
We developed new clients inside and outside Egypt. We integrated more with sister companies inside the petroleum sector to achieve optimal use of resources. We also managed to expand our regional operation with new projects in Saudi Arabia, the UAE, Iraq, Algeria, Oman, Jordan and Kuwait. We currently generate around 28% of our revenues from regional projects.
Additionally, we opened new work fronts in other industries to utilise spare capacities beyond the actual need of petroleum sector projects. It is a proven fact that Petrojet stands today atop the podium with frontline infrastructure contractors in Egypt.
Which projects have you been part of in the past year and which are Petrojet’s most emblematic projects, such as manufacturing Zohr’s offshore platform ahead of schedule?
Beyond doubt, Zohr is the greatest project we have proudly executed over the past two years, not only for Petrojet and the Egyptian petroleum sector, but for the whole of Egypt. Let’s not forget other landmark projects such as the development of a gas treatment plant at Burullus in the West Nile Delta, the Assiut CCR [continuous catalytic reformer] and the ANRPC CCR, the SUMED project in Ain Sokhna and the 165-kilometre gas pipeline from El Tina to the New Administrative Capital.
We are also near completion of another national mega-project: the Ismailia tunnels under the Suez Canal. We have also executed some large-scale projects like the Timimoun Gas Project in Algeria and the Siba gas plant in Iraq.
As an EPC firm in the Egyptian hydrocarbons industry, where are you seeing the greatest demand for your services?
The main reason for the inception of Petrojet is to provide integrated EPC services across the whole value chain of the Egyptian hydrocarbons industry. Our ideology is built on that, and this will always remain our first priority.
Looking at the huge development plans inside the petroleum sector, we can comfortably establish that this area will remain our first destination. Nevertheless, our resources and capabilities are growing at a fast pace, and we are always in search of new opportunities and markets to utilise these spare capacities.
What is the significance of your recent MoUs with BHGE and Schlumberger?
A nice quote is that “the only constant in life is change, so we have to learn to embrace it.” In order to maintain the company’s growth and secure its sustainability, we need to take long strides to keep developing. One of the most practical ways is through win-win collaborations with frontline international players, to learn from them and localise niche products and services that are necessary in the modern world.
What is your local vs. international activity balance, and where do you see more international growth coming in the near future?
Based on our revenues, we have proudly advanced 19 ranks on the Engineering News Record’s (ENR) 2018 list of the Top 250 Global Contractors. 28% of these revenues were generated from projects outside Egypt. After two years of inactivity, we see great potential building up in Iraq. Libya was since 2004 one of our biggest and most favoured markets outside Egypt. We are closely monitoring the situation and looking forward with great enthusiasm to reactivating our strong presence there.
Africa is definitely the next top destination for everyone, and we are no exception. We are pushing hard with a number of initiatives in selected countries across the continent.
What are your expectations for 2019?
I expect a very busy year, thanks to the numerous projects emerging inside and outside Egypt. When you look back at the unconditional dedication and loyalty our people have shown last year, I can say the sky is the limit.