Local advantages in upstream services

Kuwait

Mohammad Al Salem, CEO of Senergy Holding, talks to The Energy Year about the evolution of the company’s footprint in Kuwait in recent years and the advantages local players have over international companies within upstream services. Senergy Holding is a Kuwaiti-based company that specialises in engineering and contracting services and invests in oil and gas services companies.

How has the footprint of the company in Kuwait been evolving in the past couple of years?
In the past three years, Senergy has gone through a major transformation. We started a new strategy for the Senergy group of companies to turn around the company and get into the growth cycle again. One of the main pillars of our strategy is to enhance our footprint in Kuwait.
As a result, our business has been growing steadily. The market is picking up and has recovered nicely. Senergy was well prepared to secure work during this market upturn.

What is your strategy to enhance your presence in Kuwait?
We split the business into two lines: oilfield services and construction and engineering, which is developing now within our subsidiary, Gulf International. Oilfield services, and formation evaluation services in particular, are our legacy core strengths. We’ve now tried to diversify, adding more service lines in addition to our core service, which is the logging business. We can comfortably compete with the international companies as far as the service offerings and the quality of the service. In terms of diversification, we are looking into further developing other service lines, such as drilling and slickline services.
In construction and engineering, we started approximately two years ago. Since then, we have been busy building some muscle. We have located the right resources, and we have been competing in some major projects here such as surface facility projects, mostly for KOC.

Which are the key challenges to adding new services to your portfolio?
The key difficulties are Kuwait’s long contracting cycles. It puts a lot of strain on the businesses and takes a long time until a contract is signed. Also, awarding the tenders to the lowest bidder is counterproductive most of the time. I believe it is time to review this outdated law.
The other challenge is to find and attract the right people with the right expertise.

What are the advantages of local players vis à vis international companies when it comes to upstream services?
Local players are more cost-efficient. It’s a clear advantage for our clients, and they do take good advantage of this. However, over the years, internationals have learned how to deal with these market conditions. They’re also reducing prices. Therefore, we are now more focused on augmenting the value-added services in a number of ways. Aside from that, our clients come to us because they know we’re here. That availability and commitment to the country, from my point of view, is priceless to our clients.

Which have been the key pillars of success for Senergy over the years?
The key lesson learned is resilience. You have to play your cards carefully. The nature of the oil and gas business is tough and full of ups and downs. The competition is fierce, and you have to be resilient in this business in order to survive. After the 2008 shock, the company suffered a lot in many different aspects. It being where it is now shows resilience. Having that spirit is the key for survival and growth. Being able to address risks and build the right capabilities is absolutely crucial.

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