The cutting edge of Saudi drilling and well completion

Saudi Arabia

Tarek Kachouri, managing director of Sawafi Al Jazeera, talks to The Energy Year about the company’s forward-thinking approach to technological advancements and its pivotal role in fostering manufacturing expertise for tools essential to global directional drilling and well completion products and services.

What challenges does the Jafurah unconventional gas development present from an upstream services perspective?
The Unconventional Department in Aramco is anticipated to be the fastest-growing division and will focus primarily on the Jafurah and South Ghawar projects. The drilling operations in these areas are not without their challenges.
We grapple with extreme reservoir conditions marked by high temperatures, pressures and vibrations. Moreover, there’s an added layer of technological intricacy due to the need for extended lateral sections, compounded by the stringent KPIs that need to be met.
This complex landscape means that the market has predominantly been under the sway of the big four service providers from a services standpoint. With respect to the completion phase, operations are heavily reliant on the lump sum turnkey model, particularly fracking services. This approach, while efficient, calls for considerable capital expenditure and demands extensive asset utilisation.
At Sawafi, we’re deeply committed to developing a complete solution. While we recognise this development may take some time, we’re not remaining idle. In the interim, we’re engaging in collaborations with the unconventional engineering team to build solutions that seamlessly augment and enhance the existing setup. Our vision is clear: to continuously innovate and contribute effectively to the dynamic landscape of unconventional drilling and completion.

How is Sawafi working to differentiate its approach to technology development from competitors?
Sawafi Al Jazeera brings uniquely tailored innovative solutions to the global upstream oil and gas sector together with deeply integrated Golden Circle principles.
Our “why” centres on elevating the well-being of communities globally; our “how” is underscored by our sustainable approach to channelling oil and gas resources to the world; our “what” is manifested in our collaboration with partners to offer region-specific solutions, all the while leveraging innovative solutions and harnessing the skills of their exceptional workforce.
Sawafi takes a distinct approach to technology development that sets us apart from other players. Firstly, it’s vital to mention that we are in active partnerships with a majority of service providers in the upstream sector. Rather than seeing them as mere competitors, we view them as collaborators with whom we can jointly deliver our Golden Circle values to the global community.
Our difference lies in our commitment to a basin-specific strategy. By this we mean that we work closely with our partners to collaboratively devise solutions that are uniquely tailored to the needs of our customers in specific basins. This strategy not only allows us to craft custom-made solutions but also facilitates an environment of fair and boundaryless collaboration with our partners.
By cultivating such an environment, we’re able to innovate and craft niche solutions that hold immense value for our clients. Moreover, this collaborative strategy positions us in a way that we can sidestep the pitfalls of price wars. This in turn ensures we have the resources and the focus to continue our investments in cutting-edge technologies, which further reinforces our commitment to excellence and innovation.

How is Sawafi developing its technology roadmap?
At Sawafi, our vision for the future is deeply rooted in innovation and technological advancement. We’ve developed a 10-year technology roadmap, with the intent of expanding our capabilities to offer a comprehensive suite of products and services that span drilling, completion, well intervention and production optimisation.
A vital step towards realising this vision is to solidify strategic partnerships. Our aim is to integrate technology that can serve both the Saudi Arabian and global markets, covering every phase of an upstream well’s lifecycle—from the initial exploration to its eventual plug and abandonment.
However, our partnership criteria is stringent; any collaboration must align economically with our overarching mission to stand out as a technological game-changer offering niche products and services.
Our commitment to research and development is evident. We have state-of-the-art R&D centres located in global tech hubs: Houston, Aberdeen and Dhahran. This “technological triangle” not only puts us at the forefront of industry advancements but also facilitates rapid knowledge transfer.
We can gather valuable insights from each hub and accelerate the pace at which we address and adapt to technological demands. The Q3 2023 launch of our Digital R&D lab in Dhahran Techno Valley further underscores our dedication to this cause.
The strategic positioning of our R&D centres ensures seamless collaboration and knowledge-sharing, enabling us to customise our R&D efforts to the unique characteristics and requirements of Saudi Arabia. In essence we’re gearing up to lead the way, driving innovation while tailoring solutions to the regional market.
However, our partnerships and internal developments aren’t just about growing independently; they are also about synergies. With every new partnership and internal evolution within our R&D centres, we’re not just adding to our potential – we’re multiplying our potential.
This cohesive approach accelerates our pace, enriches our collective knowledge and refines our product offerings. By ensuring effective communication between our research hubs, we can tailor our R&D efforts to serve the unique requirements of Saudi Arabia while fostering a collaborative ecosystem that leads to superior and harmonised solutions.

What were the business drivers behind the Newsco acquisition?
The decision to acquire Newsco was both symbolic and strategic in nature. We proudly marked a historic moment by becoming the first Saudi company to successfully execute a full acquisition of ownership in directional drilling technologies, securing its associated trademarks and intellectual properties.
This acquisition was more than a mere business transaction; this move represented a clear declaration of our global aspirations and competencies. It seamlessly aligns with our expansive technology roadmap.
Our forward-thinking vision has always been to amplify our drilling capabilities, and in Newsco – with its storied legacy and exclusive technological and service propositions – we found the perfect partner to fulfil this ambition.
Newsco stands out as a luminary in the North American landscape. The company is renowned for its expertise in global directional drilling and MWD [measurement while drilling] services. Its wide-ranging capabilities, which include comprehensive fabrication and maintenance programmes, state-of-the-art remote drilling systems and its own proprietary positive displacement mud motors, positioned it as an invaluable asset for us.
We’re currently engaging proactively with Saudi Aramco, focusing on the integration and application of this wholly Saudi-owned technology in Aramco’s well operations. This partnership not only reflects our commitment to innovation but also our dedication to fostering domestic technological growth and leadership.

What is the activity update on the upcoming Sawafi Borets manufacturing facility at the King Salman Energy Park (SPARK)?
In 2021 we had the ground-breaking ceremony for the 21,000-square-metre manufacturing and assembly centre at the King Salman Energy Park. It is fully dedicated to Sawafi Borets’ ESP [electrical submersible pump] line and will have a capacity of 500 ESPs per year. We aim to inaugurate it in Q3 2023 at full capacity.
By 2025 we aim to cover 100% of Sawafi Borets’ ESP demand from Saudi Arabia with this facility. Hopefully, with the right setup, capabilities and capacity to cover the local market, we will also be able to help Levare International, as a JV partner, cover the demand for the GCC region’s markets as well.

What is your competitive advantage that will enable you to gain more market share in the ESP business?
The competitive edge of our ESP business line is a strategic mix of innovative technology, a focus on sustainability and solid partnership synergies. At the core of our ambitions lies Aramco’s challenging 10-to-1 target: envisioning an ESP that offers a decade-long operational life with a swift one-day replacement time. This lofty goal propels our relentless drive for innovation and our quest for superior product efficiency and durability.
The collaboration with Levare International in 2017 was a game-changer. As the global frontrunner in ESP development, Levare has given us state-of-the-art technology and a reservoir of knowledge and expertise. This partnership enables us to stay agile and pivot quickly to emerging market demands.
In our relentless pursuit of technological differentiation and superior solutions, we have pioneered permanent magnet motors in Saudi Arabia. This groundbreaking technology substantially reduces the energy consumption of ESP motors, making these motors a sustainable and efficient alternative in the competitive ESP landscape.
However, our efforts exceed the mere profit motive. We are true advocates for sustainable and environmentally conscious business practices. The significant reduction in electricity consumption from our advanced motor technology plays an instrumental role in our joint sustainability projects with Aramco.
Further strengthening our competitive stance, we are deeply engaged with Aramco’s R&D arm and our partners to develop a rigless ESP solution. With increasing demand for this innovative solution in the Saudi market, our forward-looking initiatives solidly position us to efficiently supply this solution.

What are the next steps in the company’s ambitions to manufacture a complete downhole tool line in Saudi Arabia?
We’re embarking on an ambitious project: the Art Centre for Sawafi, an establishment that will span a 50,000-square metre area within SPARK. This facility will be the epicentre of innovative manufacturing, housing all our joint ventures and business operations that align with our comprehensive technology roadmap. We eagerly anticipate the commencement of this landmark project, with a ground-breaking ceremony slated for 2024.
In the realm of drilling, Sawafi is forging ahead with its vision of developing a wholly Saudi-owned bottomhole assembly system that stretches from the foundational depths to the surface.
Our current portfolio boasts proprietary directional drilling systems, encompassing MWD and drilling motors, along with a specialised reamers business line, which is a testament to our rich industry legacy. Our overarching goal is to localise the manufacturing of the entire range here in Saudi Arabia.
On the well completions front, our focus is on casing and cementing accessory equipment. This strategic direction is highlighted by our recent acquisition of a significant stake in the UK-based company Vulcan Completion Products.

How does the acquisition of a major stake in the UK’s Vulcan affect your strategy for tapping into the well completion business?
The company recently acquired a major stake in Vulcan, a UK-based engineering solutions provider for well completion, with the aim of manufacturing its products in Saudi Arabia.
Products such as casing accessories are already approved by Saudi Aramco and are currently produced in Saudi Arabia.
We are looking for partnerships for the non-metallic piping and casing segments as part of our niche technology strategy. The casing market has high entry barriers due to high inventories, high competition and low margins.

How do you combine Saudisation with the human resources dynamics of a global company?
Adding value to the country is not only adding manufacturing capabilities but also transferring knowledge to the local people. We have Saudis across the company in all the departments, from operations to management. We are developing internships to prepare the ground for our new employees’ development, which will bring value to the country.
We’re trying to develop further, but we also don’t want to lose the international diversity of the oil and gas industry. Since we are a global company and have an HQ and a subsidiary in the UK and a fully owned company in Houston, we have around 200 employees across the world from more than 13 nationalities. We are trying to be as diverse as possible from a nationality and gender perspective.

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