Egypt’s embrace of new technologies

Egypt

Walid Yassin, Weatherford’s vice-president for North Africa, talks to TOGY about positive changes to the investment framework in Egypt and the country’s ability to become a global gas player, as well as how Weatherford is restructuring to streamline processes and services. Weatherford is a global provider of oilfield services and technologies.

What is your view of the latest changes to the framework to attract more investment into Egypt’s oil and gas industry?
The Egyptian oil and gas sector has been evolving very well and rapidly. I would say it’s the most rapid evolution in the global market. In North Africa, Egypt has the most exploration activities. Every bid round is successful, and this is mainly due to the latest framework changes: new PSAs, laws and regulations that are very accommodating. The Egyptian strategy changed and the government implemented new measures to encourage investments, specifically in the oil and gas sector.
Every international operator is present in Egypt in one way or another, either as a silent partner, a joint-venture partner or a main operator. That tells you a lot about the policies that the government is implementing to encourage this influx of investment into Egypt.
There is a lot of offshore activity as well, which is unlike any other location, with a key focus on the East Mediterranean. The Zohr mega-field discovery was a game changer. Now we also have the Noor field, and there is talk of more fields like these. For any company, this is very encouraging.

As Egypt is becoming the East Mediterranean energy hub, do you see the country and the region competing gas-wise with the Qatars and the Russias?
Indeed, this is the strategy and this is what Egypt is aiming for. As we speak, we are gas self-sufficient; Egypt has stopped gas imports. There are now very ambitious pipeline and processing facilities projects as well. That is not to mention the remarkable achievement of Zohr, a deepwater field that started production ahead of schedule, which is unheard of globally.
There are major steps being taken by the country’s leadership towards this goal of becoming the East Mediterranean energy hub. The latest agreements with other East Mediterranean countries show the will is there.

Is Zohr’s success setting the benchmark for upcoming projects, such as in the Red Sea?
That is very correct. This is something we discuss with the local management in my area of operations, North Africa. The remarkable achievement in Egypt has been taken as a lesson across all of these countries, specifically in Algeria. They are starting offshore exploration for the first time this year, or next year at the latest. They are driven by the successes of Zohr and Noor; these are encouraging projects for the region. They want to be in the spotlight like Egypt is today.

As Weatherford is in the midst of a restructuring process, could you discuss its main highlights?
We are a global company with a long history, and have been growing steadily in Egypt since the ‘70s. Our portfolio covers all kinds of oil and gas services. We can provide anything related to drilling or exploration.
In 2017, we had a major change of management, and our new CEO, Mark A. McCollum, was appointed. He came with a new mindset and embarked on global transformational ideas for how we can streamline our services, processes and quality. This applies at the global scale: There is no difference between what we do in Egypt and what we do elsewhere in the world. The service quality has to be exactly the same regardless of where we operate, and it is driving more success and growing market shares.
We partnered with McKinsey RTS to help us in that transformation journey. We started this programme one year and two months ago, and we are already ahead of schedule. Our goal is to finalise the first stage of the transformation by the end of 2019.
This should help us to generate almost USD 1 billion of free cashflow. That’s our main goal and, while doing this, we are reviewing our processes and streamlining everything we do globally. We will do our business in a more reliable way, also focusing on technology advancements, strategy alignment and, above all, people skills enhancements with the next generation of oil and gas services.

What scope of your services are available in Egypt and the region?
Whatever services are required for a well to be drilled, we can provide them, for onshore or offshore operations. While we sold drilling rigs in other countries, in Egypt we still have them.
Across our North Africa Geozone, we have some sort of contract or agreement with every single operator. In the range of services that we offer, which is very wide, our trademark is well represented within those countries. We can provide all kinds of upstream services. We have 70% of our portfolio available in Egypt, and 100% of the portfolio available in North Africa.

Are you looking at introducing any new services or technologies this year?
We are definitely looking at introducing new services. We introduced RFID [radio-frequency identification] technology to the Egyptian market this year. This is a remotely operated tool using infrared. You can basically drop the RFID tag downhole, and send orders electronically streaming down the hole to the wire, open the blades and close the blades, move things around. You don’t have to do multiple trips and you save a lot of money and time.
We are now completing business studies for several projects that should come by Q3 [2019], mainly related to regular canalisation systems. In digitalisation, we are going to the next generation – IoT, cloud computing – and tying everything together through a unique platform that has already been launched globally, the ForeSite platform. We are focusing on Egypt and Algeria, as they are big markets. Through this platform, you can tie everything together and view it from anywhere in the world. You can control well production from your tablet or mobile phone.

How receptive is Egypt to new technologies compared to other countries in the region?
Egypt is embracing these new technologies. Now that we have the criteria, Egypt is really growing, and this is now becoming a decisive factor for investors, to see the country moving in this direction.
We are in the study phase with different operators, the ministry and other stakeholders. We are working on determining the best approach to move this forward. It’s a very ambitious plan, but most of the facilities have been upgraded, the pipelines are using the latest technology and the platform to connect exists. We are in a stage of discussing the “how,” but the will is definitely there.

What capabilities does Weatherford bring to mature fields?
We have a whole range of products, services and technologies for these specific projects. There is a specific rigless intervention system that has proven to be very successful in other North African countries and that we want to bring here. That is a very small-diameter equipment that can be run without a rig. It can be run on a slickline unit, e-line unit, even e-logging, so you can log in and do the intervention or intermediate work without a rig.
We are the only company that has all kinds of artificial lift systems at the global scale. There are nine or 10 artificial lift methods globally, and we are the only company that produces the entire range. We provide all kinds of solutions, controlling them remotely or locally. We can use the ForeSite software to control the pump speed, maintain the same production level and so forth.

What are some other examples of technology that allows clients to drill better, faster and cheaper?
That is key: coming up with the technology that gives you faster production, faster returns on investment and the most economical and safe solution. All of this is the driver of our R&D direction. As an example of a new technology that is a game changer, we have the one-trip completion system. In offshore rigs we can now run the entire completion in a single trip. The depth of the well doesn’t matter. This could previously take up to a month; we can do it in a few days now.
Another one is the Vero system, which is used for offshore casing and tubular running services. It is a highly advanced and highly mechanised system. It’s much safer and the connection integrity is very constant, with the proper torque range. It actually gives a longer duration, and it saves a lot of time.
There is also the new-generation MPD [managed pressure drilling] service, which is unique to Weatherford. This is a system used to drill the well in a very contained environment. You can control the pressure in and out as you go, and you can produce while drilling, so the return on investment is almost immediate.
There are many other systems such as the Renaissance system, a rigless intervention system that is already being deployed in Tunisia and Algeria and very soon in Egypt. You can do a lot – intervention, well integrity, etc. – without a rig.

What would you say is Weatherford’s value proposition?
We don’t provide tenders or quotations; we provide value propositions. That’s our motto. We always provide a value proposition to the customer. We align with the customer, we understand the needs of the customer and align our strategy. Based on that, we submit our value proposition, using our wide portfolio and experience.

What is your vision for Weatherford in Egypt in 2019?
This month, we are unveiling a brand-new facility in Egypt, purpose-built for our needs. It is built on the Six Sigma principles, which involve running operations in a lean way. This facility has high safety standards, the most advanced environmental control measures, fibre optics and electronics. It’s a big investment, which speaks to our very optimistic vision for Egypt. We believe this market is consolidated and will grow. This is why we are investing in people, equipment, material and new facilities.
We are moving from our old facility and building a new one in Abu Rudeis. We have another facility in the Salam base, we have existing facilities in the Shukeir area and we have [facilities in] free zones in different locations such as Alexandria. That tells you that we are interested in improving quality and also believe we have a great future in Egypt.
The Weatherford group is looking to Egypt in a very specific way, because we know the future is here, both offshore and onshore. The number of rigs is increasing. Our presence is increasing as well. Weatherford believes that Egypt is the future; it’s one of the important future prospects for Weatherford’s global business.

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