"The best way to deal with problems that arise in places such as Sudan and Iraq is local know-how."

Aiman BOHENDI General Manager Eastern National Oilfield Services

in figures

Year company founded2004

Kuwait Oil Company’s 2020 production target4 million barrels of oil per day

Oilfield services go local

July 13, 2015

Aiman Bohendi, general manager of Eastern National Oilfield Services, talks to TOGY about how locals can compete with global players and meet the challenges of the region. Bohendi discusses the inherently competitive business environment being created as international oilfield service companies flock to Kuwait to take part in Kuwait Oil Company’s 2020 production target of 4 million barrels of oil per day.

Will local or international oilfield services companies play a bigger role in helping Kuwait Oil Company (KOC) achieve its 2020-production target of 4 million barrels of oil per day?
High technology is no longer monopolised by international players. Local services companies can now provide the same services at a lower price and KOC is beginning to realise their importance. Domestic contractors are supplying KOC’s demand, as they can afford to operate at a lower cost due to their limited overheads. Reaching KOC’s oil production target is a realistic but challenging goal. In order to ensure efficiency, KOC’s upstream arm must capitalise on experienced companies that have successfully navigated similar challenges in other markets.

What obstacles do services firms face when operating in places with recently tumultuous histories such as Iraq and South Sudan?
The majority of operations are feasible throughout the Middle East, only logistics and security issues present significant challenges. When companies entered Iraq, following the war and political troubles, it was not a country with well-structured processes, laws, and procedures. Iraq’s environment has changed since 2005.

Entering Sudan was more complicated because of the embargo and limits on international players in terms of logistics as well as sea and airfreight transportation. Operating in Sudan represents a very serious challenge for firms.

While the country has changed a great deal since the creation of South Sudan in 2011, the nation is still rife with opportunities for service providers. The competition is not quite as high in Sudan as in other Middle Eastern and North African oil provinces.

The best way to deal with problems that arise in places such as Sudan and Iraq is local know-how. Having local personnel who used to work or were trained by larger international companies is key.

 

Many local players in our sector are not big enough to train their own personnel. Most small-to-medium services firms employ experienced engineers who are leaders in their field. Upper management personnel trained by international companies, with experience and technical capabilities are in high demand.

How can local oilfield services companies compete with bigger international firms?
With the exception of the international oilfield service companies, all oilfield-logging companies concentrate on cased-hole services, which are usually required after the drilling phase is completed and the well is set for production.

Regional and local companies usually do not employ technologically advanced “open” hole services, such as vertical seismic profiles, formation testing and sampling, formation imaging, micro-imaging and down-hole seismic because assets for these services are very expensive. Technological advancements are always being and local players prefer not to invest in assets that can just as easily become outdated.

What problems do local firms face in terms of access to personnel and technology?
Local firms already a great deal of access to personnel who have been trained by some of the best international services companies in the industry. Experienced workers tend to pass from one company to another, making retention rather than availability an issue.

Technology presents a very relevant local limitation, both in terms of the cost and access to advanced assets. Many technologies are patented by the companies that developed them. Some assets, however, are available on the market since they are out of patent or are not monopolised by a certain company. Local firms can partner with different product centres in order to start providing technologically advanced services to clients as a work-around.

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