The right time to grow in the UAEApril 27, 2021
Sunny Kurian, chairman of Astra Engineering & Construction, and Harish Muhammed Bashir, the company’s general manager, talk to The Energy Year about opportunities the company sees in the UAE market and its plans for expansion. Astra Engineering & Construction provides turnkey EPC services, project management, construction, fabrication and installation, commissioning and field technical services for the oil and gas industry.
Tell us about the company’s establishment and your current strategy.
Harish Muhammed BASHIR: Astra Engineering was established four years ago with the aim of becoming a reliable EPC partner for our customers. We started with operations in Dubai and the Northern Emirates and have quickly expanded our footprint into Abu Dhabi as well. At the moment, we are executing several projects for key operators in the UAE like ADNOC, Dubai Petroleum Establishment and Dubai Supply Authority, to name a few.
Sunny KURIAN: Recently, in 2020, we relocated most of our assets to Abu Dhabi, where we see maximum growth potential and aim to increase our market share in the coming years. Picking up on a statement by Dr. Sultan Ahmed Al Jaber, ADNOC is committed to investing USD 122 billion over the next five years to boost oil and gas output, which will see many projects coming out and we are positioning ourselves to be able to capitalise on this increased project activity.
How do you plan to grow your capabilities and market share in Abu Dhabi?
HMB: We have all of the necessary qualifications, so we are now qualified by ADNOC. We also have a good ICV [in-country value] score. We are not new to ADNOC as we already did some works in the Bab-Habshan oilfield, primarily mechanical construction.
As part of our expansion plans in Abu Dhabi, we recently bought a yard in the ICAD-3 industrial area to support our operations, increasing our manpower as well as increasing our operational office space in the city of Abu Dhabi.
SK: Our target is to triple our capacity by year-end, seeing increased requirements from ADNOC’s upcoming projects. We pride ourselves on implementation and doing things on time. In current times, getting your work done on time is a tricky affair. Covid has seen many major players reduce their oil and gas construction workforce in Abu Dhabi in the first half of 2020, which has resulted in a shortage of manpower on projects. Mobilising manpower while ensuring all Covid protocols are followed is a challenging affair which Astra successfully managed in the later part of 2020.
How are you planning to benefit from ADNOC’s plans to increase oil and gas output capacity to 5 million bopd?
SK: All projects need to be built! Hence they will need construction, and here we expect a lot of work for us. The main challenge we need to overcome is getting the right staff in place.
Furthermore, there is a shortage of companies in the region like us – mid-sized EPC players that are based in the UAE. We tick the right boxes in terms of the cost base and ICV requirements. We are light, we are set to grow and now is the right timing for this business development. In fact, we see many enquiries coming to us. We are receiving a lot of enquiries from global EPC companies for subcontracts as well.
What are your ongoing projects?
HMB: We are presently working at ADNOC’s onshore Bab oilfield until the year’s end – supporting China’s CPECC on piping works at stations and wellheads. We expect this association and contract to expand into other activities like electrical and instrumentation works as well. So, every now and then, we are getting new orders.
In addition, we have direct orders from Dubai Petroleum and also won a major installation contract for a package for Canada’s Thermo Design Engineering. That is ongoing.
Are there any specific projects that you are bidding for at the moment?
HMB: ADNOC has massive expansion plans for the Asab, Bu Hasa and Bab fields and we are bidding for various EPC contracts there. Starting now, we will be getting direct bids for the rest of the year, most probably by the third quarter of 2021. Additionally, we are supporting Petrofac, CPECC and Técnicas Reunidas for new construction projects.
How did the Covid-19 pandemic affect your way of doing business?
SK: We kept running our operations smoothly, respecting and adhering to all Covid protocols. We have everything on the cloud, so all the company’s staff members were able to work no matter where they were.
As a positive outcome of the pandemic, Covid-19 definitely accelerated the digital transformation of the company, and as a small company we managed to do everything in a timely manner.
What do you see as new growth drivers going forward?
HMB: We do get opportunities from the solar energy sector. These are particularly for the fabrication and installation works. This is on our radar and once our ICAD yard is fully available we will see growth from such contracts as well.