Improvements in Oman’s oil and gas market

Oman

Murtaza Firoz Jariwala, managing director of Vanguard Engineering & Oilfield Services, talks to TOGY about positive changes in Oman’s oil and gas market and the importance of diversification for niche-driven companies. Vanguard Engineering & Oilfield Services manufactures and installs custom technologies for upstream projects in Oman and the region.

How has Oman’s oil and gas industry changed since the downturn in oil prices?
The number of oil companies is increasing. Incoming oil companies are going to bring in more requirements, volume, challenges and business environments. It is going to be interesting. Although business is still low, the way we all operate has changed drastically. The downturn has completely changed the model. Companies that realise this and are changing are surviving.
Shell is coming in, and Eni is going to be producing soon. Eni is expecting rigs to start drilling offshore in February 2020. They will drill one shallow well and one deep well. Once the drilling takes place, we will provide our services and products. Everyone is focused on the expected rise in volume.
Oman Oil is growing drastically. They are going to be near PDO’s range in the next five years. That will be a big game-changer. We are bidding for many projects with them in various areas.

What makes Oman an attractive location for oil and gas activity?
The country has done a great job setting up infrastructure. It is just a matter of capitalising on it. The nation has not produced very much, and there are under-utilised fields. It is a good situation for us to be in.
Oman has always been a leader in addressing complex problems. Companies use Oman for experimentation, not just with EOR but for equipment used further down the field. We did a project last year with PDO for heat exchangers that involved high-spec material for a very special application. PDO is producing oil from the Qarn Alam field utilising steam injection. They need to cool it down before they pump it into the facility. We placed the heat exchanger right at the wellhead.

How do you assess the business model in Oman in comparison with the region?
The feedback I get from my contacts in ADNOC is that Oman has a very different business model. Here, the model is through EPC contractors or consultants. In the UAE, ADNOC buys a lot directly from vendors. Vanguard is comfortable with that model. When the oil and gas operator is directly connected with the vendors, the margins are better and business transactions are less stressful.
In our case, through our new TOPS [Totally Optimised Product Sourcing] Process we are replacing the consultant’s function to a great extent with the integrity of our sourcing and delivery.

How has your company diversified in order to remain competitive?
We witnessed a growth of over 30-40% in major sectors we have been developing in the last two years. We are now delivering special services that we did not offer before, such as gas compression for Oxy. We are doing the first phase of the gas compression project, which includes supply with a bit of value addition. As things move forward, we will do turnkey local manufactured products. The project, which lasts for more than a year, will be complete by July [2020].
We recently added tubulars to our products. Tubulars are a very important lifeline for an oil company. We have partnered with Daleel Petroleum Company on a five-year contract in this regard. We stocked and managed their inventory costs. They really value having the product on a timely basis to cater to their well loading and drilling plans.
We are launching a new concept called TOPS, which stands for Totally Optimised Product Sourcing. The idea is unique. We are optimising the way clients get the final product they require. We will be launching this in March 2020. It is much anticipated by our clients. At the end of the day, all buyers want a solution to get products as fast as possible.
Companies can give tangible value to a client, but there is always an intangible product that has more value. For instance, when a customer purchases a valve, they can buy it from anywhere. However, when you give them a valve with the right pricing, quality, delivery time and correct specifications, you optimise the process. That’s what we are doing with TOPS.
Vanguard has recently signed an agreement with the ENRA Group from Malaysia for partnering within the region.
The ENRA Group provides Single Point Mooring (SPM) and floating storage services and offers a complete range of services that includes designing, fabrication and construction, installation, leasing, removal and reinstatement and refurbishment of SPM and floating storage systems.

How has Vanguard Engineering & Oilfield Services supported renewable energy projects?
We provided some equipment solutions to GlassPoint for the Miraah solar project. However, GlassPoint did not continue with PDO into the third phase. We were hoping there would be more work.
We have a subsidiary company called Unicorn International that provides power and energy solutions. They perform energy audits for various power generation, distribution and transmission companies. They are currently completing a 1.3 MW solar power plant for Majees Industrial in Sohar.
Unicorn is doing some projects with Etisalat for data centres and data automation areas in the UAE. It also did some energy audits for their regional setup. They are very happy with the results and want to work with us on more contracts.

Are you looking to expand into regional markets?
We have a lot of products and partnerships in the region. We want to capitalise on them and get into their countries. We are already working with some well-known and well-serviced oilfield companies in Qatar. We are becoming their regional manufacturing base. Additionally, we are trying to set up facilities in the UAE as part of our long-term plans, possibly in late 2020. We have identified and shortlisted a list of partners to dialogue with, mostly in Abu Dhabi.
In Kuwait, we are doing some work with KOC [Kuwait Oil Company] through oilfield products and service companies. We are looking to supply them with thermal packers and special downhole tools for their enhanced oil recovery (EOR) fields, where they are planning on using steam injection. We are looking at doing some customised packages for the project. We have a lot of experience with thermal through work with Occidental Petroleum. We completed a seven-year contract with them that was recently renewed.

How does your company stay competitive?
There has always been competition from other companies in the region, primarily from the UAE. The Omani market has always been small in comparison to the region. Our competition covers a much wider region and product base. They are much larger companies.
We operate in micro niche segments. We focus on our area of expertise and we want to remain there.
However, the added value which our new TOPS process delivers will incorporate significant intelligence into our customers’ real needs.

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