Solving Saudi Arabia’s unique drilling challenges

Saudi Arabia

Yousef Al Eidi, drill bits regional director in Saudi Arabia and Bahrain for Varel Energy Solutions, and Arsalan Mirza, PCE regional manager in Saudi Arabia, talk to The Energy Year about developing location-specific drilling products for the Saudi market and the advantages of having domestic manufacturing capabilities. Varel Energy Solutions is a manufacturer of downhole drilling and completions products.

We understand you recently developed the “Tuwaiq” drill bit. What needs does this product try to address?
Yousef AL EIDI: We developed the Tuwaiq product line specifically for Saudi Arabia to address the unique drilling challenges here. We hired a local designer to work with Aramco drilling engineers to understand their needs, as the formations in Saudi Arabia are different from anywhere else. We focused our engineering team on tailoring the product to local conditions.
Each bit in the line is designed for specific production scenarios, such as unconventional gas, for example. We design distinct cutters, nozzles and blades. It’s a bit like Formula One, where each race requires a unique car design adapted to the track.
Aramco has requested the product and we’re running tests with them, aiming for a launch by the end of 2024. Our goal is to achieve around 15% market share in the next year. While we’re currently focused on Saudi Arabia, we may expand the idea to other GCC countries in the future.

What other plans does the company have to gain market share?
Arsalan MIRZA: On the PCE [primary cementing equipment] side, our strategy involves balancing performance with cost. In drilling, if a programme is working, people are reluctant to change it. With cementing, if it works and gets to the target zone, it’s already accepted, and people don’t want to touch it. However, given the constant pressure to reduce operating costs, we need to develop solutions that maintain performance while lowering costs.
We work closely with engineers and wellhead integrity teams to address challenges and come up with solutions. In some cases, we offer solutions that are only available in Saudi Arabia, such as low-friction centralisers ideal for local wellhead designs. To remain in close touch with Saudi Arabia, our COO is now based in Dubai and our C-level executives frequently visit the country.

Does Varel Energy Solutions manufacture its equipment in Saudi Arabia?
AM: Our drill bits are manufactured locally at our facility. On the PCE side, we are partnered with Enpro to manufacture in the country. It’s our engineering designs and our products, but we license them to handle the manufacturing.
Enpro has been doing it for almost 15 years now. They manage the contract, and we have the IKTVA [In-Kingdow Total Value Add] score through them, but the engineering and the quality control all come from Varel. We currently have a total of 45 employees in Saudi Arabia, and there are plans to increase this number. Our partner has a facility with around 300 people working six days a week, which shows the scale of the operation.

To what extent is your Saudi business oriented towards supporting Aramco?
YE: Working towards solving drilling issues for Aramco has allowed us to penetrate a market we didn’t have access to before and has helped us grow in Saudi Arabia. With our technology, we have developed products suited for Aramco’s needs, such as their shift away from metallic and towards fibreglass. We are the only ones integrating such technology. We have to stay aligned with their objectives and act quickly because Aramco dictates the market, and if we don’t keep up, we risk missing out on opportunities.

How does Varel differentiate itself from competitors in the GCC?
YE: Competing solely on price compromises quality, and we don’t do that. We differentiate by offering application engineering and 24/7 technical support, fully understanding our customers’ problems.
Our team is made up of qualified professionals with the right experience and education. We don’t just hire anyone and train them – we look for people with specific qualifications, and then we add our own expertise to refine their skills. It’s more expensive, but our approach is to prioritise quality over quantity.
Through experience, we have learned that hiring experienced and knowledgeable people is crucial for long-term growth. When markets boom, some people may enter the industry without the right background, but when things crash, they disappear. That’s why we focus on keeping experienced professionals who help us grow through all conditions.

How does Varel combine in-house technology with external collaborations?
YE: For drill bits, we develop our technology internally to keep our models and designs confidential. However, we also use external technologies to develop our products. We collaborate with sector partners such as SLB and also look to industries outside oil and gas, such as automotive, to incorporate new ideas.
For example, we’re exploring bottom-water technologies, which are fast-moving and highly technical, with applications for reducing friction and wear. Our primary focus will be the Saudi market, with plans to eventually expand in the GCC. Our manufacturing platform in Saudi Arabia will support the GCC and offer faster delivery compared to shipping from our facilities in the US.

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