The evolving role of geophysical surveying in the MENA regionJuly 5, 2023
Moath Al Rawi, CEO and president of The Arabian Geophysical and Surveying Company (ARGAS), talks to The Energy Year about the company’s activities and business drivers, how it diversified its services to different industries and how geophysical and geological services are critical for Saudi Vision 2030. ARGAS is a geophysical surveying company.
Please tell us about ARGAS’ legacy and main activity.
ARGAS investigates the Earth’s surface and subsurface through understanding its geological and geophysical properties. We use our data to identify pockets of potential wealth and to assess its probability and volumes. Exploring oil and gas has been our core activity since 1966. It’s the cornerstone of our main operations and capabilities and strategically will not be less than 50% of our portfolio, regardless of our quest for diversification.
ARGAS was created 60 years ago to localise critical geoscience knowledge and services for Aramco. Our objective is to ensure the immediate and timely availability of geophysical data acquisition capabilities to support the development of the oil and gas industry in the kingdom. Today, ARGAS is actually the oldest company in the world performing seismic data acquisition.
The Arabian Geophysical and Surveying Company was established as a semi-government joint venture in 1966 under the supervision of what was previously named the Ministry of Petroleum. It was one of the very first entities with a purpose to nationalise critical oil-related activities to position the kingdom as a leader in the oil and gas industry.
Since its inception, ARGAS has provided seismic and non-seismic services to multiple customers in our region, including national oil companies, such as Aramco and ADNOC, and many others, including international and independent oil producers outside Saudi Arabia. We are committed to all customers in Egypt, Oman, the UAE, Libya, Iraq and many other territories, and they are all treated with the same level of importance.
What are the main drivers behind your regional strategy?
We are proudly one of the very few Saudi national oilfield service companies to have organically grown and expanded operations beyond the boundaries of Saudi Arabia, if not the only one. We are proud to be the ambassador of Saudi oil and gas at a global level, and we shall continue opening new markets to transfer Saudi Arabia’s leading exploration knowledge to the world.
We operate in Oman, Egypt, the UAE and Kuwait and have collaborations in Iraq, Libya, Algeria and the Caspian region. We provide a wide range of geological and geophysical services for oil and gas and non-oil and gas, such as geothermal energy exploration, mining, carbon storage, earthquake monitoring and geohazard analysis.
We use different types of measurements and methods and provide seismic and non-seismic services. For instance, we are in talks in Oman to explore geothermal energy and are engaged in mining discussions in Egypt. We were the first and only company to have conducted data acquisition for geothermal energy in Saudi Arabia.
Having said that, seismic services for energy exploration are still our “bread and butter,” and therefore, we have recently signed memoranda of collaboration in Pakistan and Canada.
How has the company diversified its services into new sectors?
Since its inception 60 years ago, ARGAS has focused mainly on oil and gas. This was our mandate, and therefore, we focused on seismic services and data acquisition via seismic methods for reasons including deeper targets, environmental challenges, and health and safety concerns. Seismic was the way and the rightful focus.
However, the world has changed a lot since 1966. Our mandate evolved, and our vision and capabilities did too. We adopted our geological and geophysical knowledge to different applications beyond the energy sector. The extraction of every possible form of wealth on Earth is related to geoscience, including the wealth of the surface and that below it.
We deploy our 60 years of knowledge and resources to seismic and non-seismic surveying across sectors to enable energy exploration and all else that is needed to sustain the energy transition process, such as critical minerals required to develop renewable and sustainable energies.
We perform services on land, offshore and in the air for different sectors and industries. We recognise that every innovative initiative related to carbon storage, mining, geothermal and underground water management are impossible without geoscience and our services. We work with governmental and private partners to provide seamless subsurface analysis, monitoring and risk control (and analysis) to help illuminate the subsurface.
How are geophysical services helping Saudi Arabia find new energy sources?
ARGAS has recently completed the very first imaging of a potential structure for geothermal energy in Saudi Arabia, an essential energy source for sustaining a well-diversified energy mix. Our mandate is to deliver geoscientific information to reduce risk and improve certainty. Moreover, our services are essential for finding and evaluating minerals.
Energy diversification is not possible without the minerals that play a critical role in manufacturing the tools and equipment required to capture renewable energy. Obviously, the availability of minerals drives the development of infrastructure required to transit to sustainable energy sources.
As the kingdom seeks to diversify its sources of energy, we aim to play a role in evaluating the potential of natural resources. In addition, we developed other critical capabilities to review geotechnical risks and to provide geohazard analysis related to strategic projects.
What are some of the non-energy-related markets the company is currently working in?
We are working with multiple authorities to provide our services for underground water storage and management. We review water channels, analyse geohazard risks, provide flood and earthquake monitoring, and take measurements that help us understand our Earth and environment. This is all geoscience and a part of our services.
We also provide surveying and GIS services. We are planning some strategic real estate and urban development projects, which we may combine with our geotechnical knowledge to define subsurface risk and potential archaeological concerns.
What is ARGAS’ strategy for remaining a leading innovator and incorporating new technologies?
Innovation is possible only when multiple disciplines come together. Geophysics must cross with geology, and both must endorse mathematics, engineering and so forth. I think it would be arrogant to think that one organisation can innovate alone.
I have spent my life talking about competitive advantage. I think those days are gone. Easy solutions are already presented. Our industries require new seamless and comprehensive solutions. I believe it’s now time to talk about collaborative advantage. Innovative seamless solutions require collaboration and strategic alliances.
Therefore, in 2021, ARGAS created a new senior leadership position called chief collaboration officer, who reports directly to me. We aim to endorse and empower collaboration with small research units aimed at developing breakthrough technologies around the world.
We are developing small entrepreneurial houses driven by curiosity and passion that large organisations cannot create. We support their solutions, import them into our organisation and provide field testing, validation and feedback.
With this approach, ARGAS will be positioned to fully develop future solutions, expand our services and offer unique and seamless solutions with our partners that no one could have created alone.
What are the most critical elements marking the differences between data acquisition companies?
The critical component of ARGAS’ philosophy is the integrity of the data we acquire. Anyone may acquire data or collect samples, but the integrity of processes and standard operating procedures controls the quality of outputs. We set standards to control external noises and cross check our equipment’s integrity to ensure that we acquire accurate and sound data.
Most companies in our business utilise the same type of sensors or active sources. We differentiate ourselves through our process integrity and our provision of advisory feedback to our customers, which influences survey design and improves the imaging of their targets at an optimum cost and with optimum methods.
Most of our customers control their exploration expenses based on commodity prices, for example, the price of oil. Therefore, producers tend to cut expenses when the price of oil is recovering from a downturn. They are running behind a moving target. Customers tend to go cheap to reduce their capital expenses.
Competition is healthy. It drives evolution, but commoditising services comes at the cost of safety, the environment and the integrity of data. The loss of data integrity could be the reason behind the decrease in exploration success or the poorer reserves replacement ratio from new fields. Compromising data integrity costs a lot. We do not play this game, and we will remain disciplined and continue to say no to bad business.
What is your view on empowering local content through international diversity?
We add value to the communities where we operate. It’s in our values to ensure that we create economic sustainability. We do this by developing local content through the localisation of our spending and through the development of our local workforce. We do this everywhere, not just in the kingdom. As an example, we’re proud that 86% of our spending in Oman is local. In Egypt, we have around 94% local content.
However, we are challenged to do this without compromising our desire for diversity and inclusion. We often shift people from Oman to Saudi Arabia, from Saudi Arabia to Egypt and so on. We do this because having one closed ecosystem is not healthy. Teams need to breathe, share knowledge, expand their horizons and experience different operations.
How has the price of oil shaped the current trends driving oil and gas exploration?
Unfortunately, most of our customers base their spending on commodity prices. They build their investments around a short-term moving target. They expect that today’s rate will pay back their capitalised investment.
Now since the oil prices are high, we have noticed an increase in demand. The high oil price is due to different reasons. One is global demand for energy and reserves. However, as soon as commodity prices decrease, many companies make budget cuts. This has shaped our industry to the extent that it has impacted upstream development and engineering capabilities. Investment should be sustainable to a degree. Otherwise, we may be heading towards serious energy insecurity.
How do you assess Saudi Arabia’s economic performance in recent years?
Among the G20 economies, Saudi Arabia has had the highest GDP growth in recent years. This indicates significant growth that comes not only from government spending but is in fact sustainable growth produced with strong participation from the private sector and foreign investors.
I believe that the recent economic regulations and attractive investment laws have resulted in creating a healthy environment for investors. ARGAS as a national champion may (and should) enjoy an advantage in the kingdom and beyond. However, ARGAS will continue enjoying its independence at arm’s length to fulfil its mandate for Vision 2030.