Opportunities in an evolving industrySeptember 23, 2020
Ali Vezvaei, vice-chairman of Ecolog International, talks to The Energy Year about areas of opportunity in the evolving global energy industry and the regions expected to drive new growth. Ecolog International provides a diverse range of services and solutions ranging from engineering and construction to cyber security and water solutions.
What is your outlook for the global energy industry going forward?
The double effect of Covid-19 with restricted mobility and lower oil demand on one side and the global economic downturn on the other side created opportunities for companies such as Ecolog to see how we can best support the oil and gas industry to cut costs and stay resilient.
We looked at three fronts: on the energy side by integrating more and more smart renewables, on the water side by integrating sustainable and smart solutions to replace fuel with solar, and on the upstream drilling and waste management side to reduce the cost of water and water treatment. These areas have been on the radar of energy companies around the world, now more pronouncedly than ever.
Even though the crude price pressure continues to have an impact on the industry, the oil and gas sector will remain a fundamental part of the energy mix going forward and consolidation plus technology will play a key role in ensuring resilience.
How have Ecolog’s offerings evolved in 2020 in light of the Covid-19 pandemic and global economic recession?
Like many other companies around the world, we strive to have a diversified portfolio. Ours ranges from integrated services to logistics to our Eco-Care division, which offers screening and diagnostics, smart disinfection and rapid response services to help countries maintain economic continuity in the wake of the natural disasters and pandemics such as Covid-19.
While our oil and gas division has clearly been impacted, the Eco-Care division has seen a strong uptick in activity and remains in high demand. We have been successfully mobilising our assets and supporting our people in countries heavily hit by the crisis.
We have been providing Covid-19 screening and diagnostics under a nationwide testing programme in Luxembourg and we are proud to be one of the only companies in the world that has been entrusted to do something at this scale. Additionally, three major airports in Germany – Munich, Nurnberg and Memmingen – have recently entrusted us to perform Covid-19 testing for people coming back from different destinations. All in all, it has been a busy year for us.
How did you manage to maintain employee buy-in and improve workforce engagement during the past couple of months?
We are fortunate to have good employees and that our people have been with the company for a long time. They are engaged in various projects across the globe, from Basra to Uganda to Mozambique to Ras Laffan. Not all of them have been equally impacted due to the downturn. We are also extremely flexible in terms of providing the opportunity for our employees to move between our different projects and there are many cross-divisional opportunities within our organisation.
What organisational changes did you have to make to optimise the company’s performance?
We implemented some crucial changes: We decided to reduce waste and build leaner business processes as we both by choice and due to limitations cut down on unnecessary travel, which – for an organisation like ours with nearly 12,000 employees – has resulted in notable cost savings. We are also using more digital platforms, which has been a positive change. Optimising travel, doubling down on the use of digital infrastructure and investing in technology have been instrumental for us to navigate business during the past couple of months.
Which regions do you expect to drive new growth in the global energy industry?
We have a widespread and rapidly increasing footprint across the globe, including in Africa, Europe and North America. In energy, we see the biggest growth opportunities in Africa and then the Middle East. The most mature integration of renewables into the oil and gas industry is taking place in North America and the Middle East. Africa has also put in place ambitious plans to increase renewable energy.
As an organisation, once you start to integrate renewables into your energy mix, you can enhance your facility management practices by driving down the cost of electricity, cooling and many other items considerably. The same applies to technology adoption. Oman is a great example: The country has been very successful in the integration of pioneering upstream water treatment solutions and reduced water cut at oil and gasfields by 80-90%. Energy Development Oman and OQ are driving a very rigorous sustainable energy programme.
Nigeria certainly has opportunities to offer. Mozambique is a place where we are engaged with some upstream gas projects and it continues to be challenging and promising as a longer-term prospect. West Africa offers a great deal of opportunities too but frontier exploration places require deep pockets.
It is very hard to make predictions today. I would continue to rely on opportunities in the Middle East as the region still enjoys one of the lowest production costs in the world. Maintaining existing assets and combatting depletion will drive new opportunities for services companies while the need for potential enhancement solutions to address depletion in places such as the Gulf will continue to generate mandatory investments. Look at gas uplift in Qatar, gas injection in Saudi Arabia and solar-powered EOR in Oman; maintenance of assets will continue to drive business.