Brian O’Halloran, manufacturing director of Al Saidi Group, talks to The Energy Year about the company’s strategy for diversifying while enhancing its value chain and the manufacturing and service opportunities in the Saudi oilfield chemicals and oilfield services sectors. Al Saidi Group is a diversified group offering end-to-end oilfield chemical solutions and oilfield services.
What opportunities do you identify in the drilling sector in Saudi Arabia?
Drilling contractors probably represent the highest growth sector right now. The Middle East has just passed the US in terms of the number of active rigs for the first time ever. We’re seeing an additional 30-40 rigs every year, and there are huge ambitions for drilling in Saudi Arabia.
We know that a lot of these drilling contractors’ source through global sourcing centres. Vision 2030, IKTVA [in-kingdom total value add] and Saudisation requirements mean that these organisations will need to work harder to localise their sourcing, both for products and services, and this presents opportunities for us.
We started penetrating this market by manufacturing shaker screens, which are consumable items that every rig needs. We partnered with the largest private OEM, the US company Continental Wire Cloth, to service the local market. Following phase one, we will be able to produce around 3,000 screens per month. We’re also going to introduce robotics into the manufacturing process to reach a production capacity of 6,000 screens per month.
What is your value proposition to potential partners that want to tap the Saudi market?
We have commercialisation contracts with Saudi Aramco and certain universities to produce and market certain products which they develop at lab scale but don’t have the ability to scale for the market. This shows our partners that they’re picking someone who has technical and manufacturing capabilities and has the know-how to sell a product.
I think what’s unique about us is that there are not many companies that cater to the upstream, midstream and downstream. That includes the large service companies, drilling contractors and downstream operators. This huge range of customers gives us market access and makes us attractive to international partners. Our network is strong, and our reach is broad.
What innovations is the company introducing in the pipeline performance segment?
At some point every production pipeline needs to reduce pump pressure or push more oil in the same line, so operators add a drag reducer. We’ve recently partnered with a US company to introduce a new powder drag reducer.
North America’s fracking operations have moved away from liquid drag reducers. They’ve gone to powder, which reduces the volume and therefore the freight and storage requirements of the product. This dry drag reducer also has a superior shelf life compared to liquid alternatives, and it has the added advantage of reducing the product’s overall carbon footprint.
How can digitalisation help optimise the chemical market’s openness?
Saudi Arabia has been an enthusiastic adopter of digitalisation across many sectors. The government has been at the forefront of developing some of the most advanced applications which integrate services across different sectors. Digitalisation in the oil and gas sector is growing very rapidly, and there will be huge benefits from the increased and better use of the huge volumes of data now being gathered.
The sector would benefit from a dedicated e-commerce platform that connects buyers and sellers. Our sales teams today use WhatsApp and LinkedIn, along with their extensive networks developed over years in the industry, but there is no dedicated e-commerce platform in Saudi Arabia for the chemical industry.
We might be importing products that a new company on the market is now manufacturing locally, but it might take a conference or an event to find out about them. Local knowledge and experienced procurement and purchasing professionals are the best sources for obtaining such information, and they don’t like sharing their sources.
We need to see more digitalisation in the industry. Such an e-commerce initiative needs to come from the government because only then will people be comfortable sharing information.
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