Data for growthSeptember 13, 2018
Khaleel Hussain, vice-president for major projects at Diyar United, talks to TOGY about challenges facing technology companies in Kuwait, how a shift towards local content has benefitted the market and the implementation of smart petrol stations in the region. Diyar United is a systems integrator that offers technological services to upstream and downstream operations in the Middle East.
• On Kuwait’s receptiveness to new technologies: “The thinking here is always about tried and tested rather than new. That is something that has to change in terms of approach. Client organisations have to be more open to innovation and take more risks in terms of trying something they have never done before.”
• On local content: “Lately, there has been a lot of encouragement from the government for local content, but it is mostly coming through for small businesses. It is mostly for soft areas, such as services that do not require extensive investment, engineering or development. The focus is not on the hard-core local content that is needed to address challenges in the oil, water, soil and corrosion sectors.”
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What are the main concerns of oil and gas operators at the moment?
There is a broad range of challenges in the oil and gas industry right now. Everybody is trying to use technology to bring together data and information to address the challenges they are facing and optimise production and operations. It is a great challenge to apply big data concepts and analysis, trying to understand how the data is behaving and what you can get from it. We are in tune with this.
Everything that could potentially lead to increasing production or enhancing performance is based on the quality of data. This is why for many of the concepts adopted by our customers recently, such as data integrity, they have wanted to make sure that the data is not only available, but it is genuine, authentic and certified. Looking at the parts of technology that are our focus, such as digital oilfields, it is crucial that you have correct data feeding into the system.
How receptive is the market to the latest technologies?
The thinking here is always about tried and tested rather than new. That is something that has to change in terms of approach. Client organisations have to be more open to innovation and take more risks in terms of trying something they have never done before.
Our clients are applying new technologies. However, we would like them to be faster in their positioning. For example, instead of going through a pilot period, they could try out these new technologies straight away. We understand that when technology is expensive, it is prudent to do a pilot. However, we would like to see them shorten the time taken to initiate a pilot and evaluate it.
We would also like to see companies making the best out of the new technologies they have acquired. It seems to take years from implementation of technology before it is completely integrated in the work processes. It takes a lot of effort to understand and manage the change.
Are KOC and other production companies continuing to spend on technologies to enhance efficiencies and reduce costs now that oil prices have rebounded?
I think the intention of any owner or operator is to minimise cost and maximise production. It does not matter how much the oil price is; they will always be keen on cutting costs. Even when oil was USD 120 per barrel, price negotiations to reduce costs were very active.
That said, it is too early to see how they will react to this. The market’s reaction does not come very quickly. Even when oil prices went down, the reaction was not very fast.
Is it easy for a company to diversify its operations in Kuwait?
Our focus is on being a leading technology company. However, we would like to engage in some areas that are closely tied to being a services company providing technology. We would like to get involved in a number of areas where we could perhaps be more hands-on. It could be drilling, well testing or taking care of corrosion issues. We are also looking into engineering opportunities.
Developing references with a client is very difficult. In terms of capability and technology, there are many things that we can do, but unfortunately with the way contracting is structured and the way tenders are issued, there is a requirement to have a lot of experience. It is a slow and painful path. Based on our experience, opportunities develop much faster outside of Kuwait.
Has the move towards local content helped the growth of local companies?
Lately, there has been a lot of encouragement from the government for local content, but it is mostly coming through for small businesses. It is mostly for soft areas, such as services that do not require extensive investment, engineering or development. The focus is not on the hard-core local content that is needed to address challenges in the oil, water, soil and corrosion sectors.
Being an IT company that seeks to diversify, we need to have endorsements and to compete with international companies in many areas. This is why KNPC came up with an initiative for local companies. KNPC says that they spent KWD 4.5 billion [USD 14.9 billion] out of KWD 16.3 billion [USD 53.8 billion] between 2012 and 2016 on local content in Kuwait.
The challenge that we face is how we can benefit from it in all areas. We know that there are initiatives giving local companies preferential treatment in different segments, but I do not know if IT is one of them. It would be nice to have a stated target for a portion of that.
Overall, we feel that local companies need to be enabled. They need to be given the chance to work on small projects, such as small municipal projects, to gain experience and have the chance to lead. They could also sponsor industrial developments and manufacturing capabilities. These cost a lot of money to develop.
Could you give us an update on the rollout of smart petrol stations in the country?
This has been set up as a soft launch and has not been announced to the public yet. We are working on a marketing campaign with the client. They want to make sure it works perfectly when they launch since it is an integration of a variety of technologies, especially for payment methods.
It uses applications on smartphones, which is a concept that is not very mature in Kuwait. It needs to appeal to the public. One also needs to make sure that it works 100%. The system infrastructure is already working. The stations, machines, all the hardware and the background systems are set. Even the mobile applications are already tried and tested. The client just needs to launch the platform.
How lucrative have smart petrol stations been in the UAE?
Technically, it has been very successful. We have more stations right now. The concept opened the horizon to provide more services, such as supermarkets, in every station.
We are seeing the same thing in filling stations operated by the private companies in Kuwait. They are concentrating on establishing outlets for sales other than fuelling.
Our services include network monitoring and insuring continuous operations of all components of the system. We have a local support base to guarantee smooth services to customers.
What are the company’s current activities and key recent milestones?
We provide IT solutions and services from security to solution integration, taken from different leading suppliers of technology. We add value by customising and integrating these solutions to help our customers grow their businesses and address their challenges. We are the leading systems integrator in Kuwait.
While we cover almost all industries, we want to grow by concentrating on oil and gas in terms of IT. We license and support the various software that we provide to our major customer in Kuwait.
We collaborate with major players to assist us in this. We provide services in production reservoir management and subsurface network and focus on data analysis. Everything circles around how this data can be utilised.
Diyar is now growing into a regional company, and a stronger one. We are proud to say that over the last years we had a significant rise in revenue, a portion of that is thanks to our oil and gas division.
Right now we want to consolidate what we have. We want to capitalise on what we know and provide more services in these areas. However, we are keeping our eye on any new developments in the industry, mainly in terms of data management. Perhaps we will enter into some joint ventures that will allow us to present stronger references. That is something we are willing to consider.
Our five-year plan is to double the size of the company. Whether it be in utilities, oil and gas, education, government, hospitals or healthcare, we are neutral about working with any industry. We would like to serve all vertical industries and are not limiting our growth targets to a specific sector.
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