Shift up in AngolaMarch 28, 2018
Jean-Marc Lopez, Halliburton’s managing director for Angola, the Republic of Congo and the Democratic Republic of the Congo, talks to TOGY about the mid-term outlook for the Angolan market, the need for a natural gas regime in the country and the investment climate. All of Halliburton’s business segments are represented in Angola, from well intervention and completion services to field and reservoir modelling, drilling and evaluation.
• On outlook: “2017 was a challenging year for the industry in the Angola region, and we expect a slow path to recovery in 2018 but remain optimistic as we move forward. There are big changes in the country at the political level that give us hope such as an increased effort to tackle issues.”
• On the business climate: “From the government leadership team to the Sonangol board of directors, we see dynamic decision making taking place. Good leadership will improve the environment for our industry.”
• On gas development: “Until better terms and conditions are defined for exploration and production there will be a challenge in local investment. However, I know there is work being done to address this issue which gives us great hope for the future.”
• On new projects: “We urgently need to start exploration. This work is going to take two to three years to complete and the projects behind that will take five to seven years. The projects sanctioned today will not start for seven to 10 years.”
Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our interview with Jean-Marc Lopez below.
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How has the Angolan market shifted over the past year?
2017 was a challenging year for the industry in the Angola region, and we expect a slow path to recovery in 2018 but remain optimistic as we move forward. There are big changes in the country at the political level that give us hope such as an increased effort to tackle issues. From the government leadership team to the Sonangol board of directors, we see dynamic decision making taking place. Good leadership will improve the environment for our industry, but this is going to take time, and we do not expect to see full recovery for Halliburton’s operation in Angola until mid-2019. However, Halliburton is well prepared for the obstacles ahead and our cost structure is already aligned with the workload.
One of my biggest areas of focus, which is also top of mind for local government officials, is improving nationalisation. We are working diligently to have local talent at all levels of our regional operations. To do this, we are providing leadership training to equip employees with the necessary skills to be promoted. I’m pleased to say, for the first time, we have four managers who are nationals. We’ve seen great success through our training, and now I am bringing other high-potential talent to the frontline as leaders so they gain exposure for the future and help continue to grow our pipeline of local employees.
Of course we are also focused on increasing our market share and will continue to fight for work here. I believe our effort to collaborate and engineer solutions to maximise asset value for our customers sets Halliburton apart from our competition and puts us in the best place to succeed.
Is your projection for 2018 a reflection for Angola or do you think it applies to Halliburton worldwide?
Today, it is a reflection of Angola. Perhaps in 2015 or 2016, it was a reflection of the oil price, but today it is a reflection of Angola. Exploration activity hasn’t returned at the level of previous years.
There are several projects in the pipeline that can quickly produce, but there are many wells that have yet to restart and then there is the negative impact from exploration that did not take place for many years.
What work is Halliburton involved in regarding gas around the world and are there technologies that could be applied in Angola if the rights were granted to operators?
Halliburton has numerous products and services that could benefit the local natural gas market – the issue is that until better terms and conditions are defined for exploration and production there will be a challenge in local investment. However, I know there is work being done to address this issue which gives us great hope for the future.
Do you think that the benefits of the slowly rising oil prices are not yet being felt in Angola?
The issues we face in Angola more are related to terms and conditions and cash challenges than the oil price. The local regulatory framework will make the biggest changes in the country.
During the downturn, companies learned to be more efficient which helps in a lower cost per barrel environment. The question is whether these good habits can be maintained. I have been in the industry for 29 years and this is a very cyclical business. We must learn from the actions that led us to where we are today for the benefit of our future.
What do you want to see for Halliburton in the next few years?
I want the leadership team to be 50% nationals, and I want more nationals to lead the organisation.
Secondly, we urgently need to start exploration. This work is going to take two to three years to complete and the projects behind that will take five to seven years. The projects sanctioned today will not start for seven to 10 years.
Angola has a lot of gas and it needs to decide how to produce it. I believe the local government is working on the improvement within Sonangol and we can start to see a positive impacts because they approved many contracts recently.
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