Keys to success in Kuwait’s drilling marketJune 14, 2023
Lynus Kalister, CEO and managing director of Zenith Group, talks to The Energy Year about the extent of the company’s environmental solutions and the key pillars of success for its foray into Kuwait’s oil and gas sector. Zenith Group is the oil and gas subsidiary of the Bahman Group.
What have been the key growth milestones for Zenith Group?
Zenith Group is a proud member of the Bahman Group of companies, a privately owned Kuwaiti business conglomerate that started 60 years ago as a trading house. We were one of the pioneers in establishing trade relationships with China and Germany. Over the last two decades, we have expanded into real estate, and our current real estate portfolio consists of mixed-use towers, luxury residential towers and shopping complexes located at various prime locations in Kuwait.
Our group had a collective vision to marshal our resources in order to contribute to the development of the oil and gas sector, the main pillar of the Kuwait economy. Starting a new business, especially in this sector, was a challenge due to the stringent pre-qualification procedures. We strategised that the optimum way forward would be to form technical partnerships with the pioneers and experts in the field of operations.
During the initial phase of our oil sector market assessment, a huge drilling programme was announced by KOC. We utilised this programme as our springboard to embark into the drilling business. In our maiden venture itself, we were able to successfully secure a drilling contract of significant value, comprising four rigs – two 1,500-hp and two 750-hp rigs, which are currently deployed in medium-depth drilling and workover operations in southeast Kuwait fields of KOC.
Further bolstering the group’s presence in the drilling sector, we were able to convert another substantial contract with KOC, expanding the fleet of rigs by adding four additional 750-hp rigs in the next couple of years. Currently, the Bahman Group owns and operates a total of eight rigs, solidifying their growing success in the Kuwaiti drilling market. Our success in the drilling segment gave us the onus to expand across the value chain, for which we established a joint venture with an international firm specialising in coiled tubing and cementing. We are looking forward to being part of the upcoming cementing and coiled tubing tenders.
How comprehensive are Zenith Group’s environmental solutions and what specific services do you provide in this field?
Being an established drilling contractor, we identified an opportunity to treat the oil-based mud cuttings generated as a byproduct during the drilling operations. For this prospect, we formed a joint venture with a leading technology partner, one of the predominant players in providing environmental solutions worldwide. Our underlying philosophy is to develop, build, operate and maintain these types of projects, which utilise state-of-the-art process technologies such as thermo-mechanical cutting cleaning (TCC) and thermal desorption units (TDU). Currently, we have two plants in northern Kuwait that cater exclusively to the treatment of OBM Cuttings for the recovery of water, oil and solids.
In the near future, we have strategic plans to venture into the field of soil remediation services, and we are fully prepared and equipped to seize any opportunities that arise in this domain.
What is the growth strategy for Zenith Group?
Our growth strategy has always been to form strategic alliances with other companies who are specialists in specific exploration and production areas, to target niche projects in both the upstream and downstream in order to assimilate the best practices and develop our local competencies. Since new regulations make local participation a priority, given they have a competent partner, we have a very interesting window for further expansion.
Our business model has always been to be a market disruptor and provide unsurpassed services directly to the end client. Our strategic analysis of the Kuwait market suggested that the best way to do this would be through build-own-operate [BOO] projects, as well as operation and maintenance contracts.
Under the aegis of a partnership agreement with a globally renowned firm specialising in plants and process EPC, we participated and are currently the lowest bidder for a contract of considerable value to provide a steam generation and injection plant on a BOO basis, which was rolled out as a part of the KOC Vision 2035. The core focus of our EPC services division will not be to target massive EPC contracts but rather to expand into niche areas where technology and technical competency reign supreme.
What have been the key pillars of success of your foray into the oil and gas sector?
Focusing on building expertise in drilling technology, enhancing operational integrity and efficiency, engaging with our customers for brainstorming performance improvement and carrying out a decisive capital management strategy have been critical to our success in the drilling sector. In the same way, we are now developing our EPC capacities, following our philosophy of not subcontracting anything and building our ability through organic growth, partnerships, or acquisitions, to service all the segmented verticals of the contract scope.
We intend to replicate the same methodology to all the services and projects which we are currently in the process of developing such as directional drilling, MPD [managed pressure drilling], enhanced oil recovery, PCP [progressing cavity pump] and SRP [sucker rod pump] services, well intervention services, mud engineering services, offshore OBM [oil-based mud] treatment and operational digitalisation.
What are the key strategic priorities for Zenith Group?
Consolidation is our foremost priority as we develop a strategic approach that combines our financial strength and discipline with a dynamic portfolio encompassing our companies, assets, manufacturing capabilities and products. This approach will enable us to seize the upcoming opportunities in the oil and gas sector in Kuwait and the MENA region. Additionally, we are fully committed to fostering competency and self-sufficiency by integrating, training and leveraging our local Kuwaiti talent pool of engineers, innovators and businessmen, who will be instrumental in propelling us towards success.
In the coming years, Zenith Group will serve as the umbrella organisation for all oil and gas-related activities within the Bahman Group. This means that our various subsidiaries currently operating in the oil and gas sector, such as Apex Energy (our API-certified machine shop and manufacturing/fabrication facility), ENEXT Global Oil Field Equipment Supplies and Drilling Tools and Inspections Companies, will fall under the purview of Zenith Group.
Expanding our regional footprint through both organic and inorganic growth opportunities in adjacent geographies is a key focus. We will use our operational expertise and financial capabilities, particularly in terms of additional drilling programmes, to position ourselves for growth in countries such as Saudi Arabia, Oman, Qatar, Algeria and India.
Our long-term vision is to become a leading regional player by establishing a world-class, multi-vertical energy technology company. This will be achieved by harnessing our core competency in innovative personnel and cutting-edge technology. Currently, we have secured USD 600 million in contracts, and our goal is to double that figure by 2025. At that point, we may explore alternative funding avenues to catalyse our growth.