Weatherford eyes Egypt growth with a new approach

Weatherford International, a global oil and gas technologies services company, is in the midst of a transformation that is aimed at turning the company around and achieving savings of US$1 billion.  

With that backdrop, Walid Yassin, vice president for North Africa at Weatherford, spoke with Pipeline Magazine’s Nadia Saleem about the company’s regional plans at the launch of its new consolidated Cairo offices and headquarters. 

The company has been operating at full capacity in Egypt with five facilities, each with their own cost and challenges, Yasin said. Any growth would have resulted in safety and quality issues, despite plenty of prospects.  

Meanwhile, the new facility combines all the operations in one location, resulting in efficiencies, streamlined capabilities and expansion of work space along with a ramp-up in quality standards with the help of new technologies.

“The structure we have today, will definitely help us improve our service quality, gain market share and grow our business in the country,” Yassin said, adding that “We have a very big opportunity to grow in Egypt and this is just the start.”

The facility has provided a significant cost benefit to the company – about $1.5 million as a start, which will boost Weatherford’s competitive edge. 

While not being a regional hub, the Egypt facility will be able to support administrative operations across North Africa. Weatherford also has a large facility in Algeria, which is on its way to being upgrading, in addition to two facilities in Tunisia, and one each in Morocco and Mauritania. 

“There are no boundaries between our regional facilities, and we can support with tools across the facilities,” Yassin said. 

“One priority with the new facility was not cost but to improve service quality and apply the high service quality standards we have. This was our own initiative to help us move towards the next step of growth.”

Next Steps

The next step in Weatherford’s plan is to bring more product lines to Egypt from the company’s diversified portfolio. Currently, it has 10-12 product lines in Egypt, leaving scope to bring a lot more products that are required in the market. Egypt is an important market for Weatherford, where it is active in key projects. 

“It’s one of the few markets in the world where we see huge oil and gas activities, especially in the niche offshore market. All of our focus is in North Africa and within Middle East, Egypt is seeing newcomers and rigs coming in. In reality, it does match with Weatherford policy of 2019, which is revenue growth and when you need revenue growth, you go to the market which is growing,” Walid said.

The government of Egypt in February announced a second bidding round for exploration and production blocks, which saw the return of major oil and gas companies as well as attracted new players. 

Following regulatory reforms that encourage foreign investment and a landmark gas discovery of Zohr – the largest gas reserve in the Mediterranean Sea’s Shorouq concession, international companies are increasingly attracted to Egypt’s energy market. 

Weatherford’s main focus in the country is also on offshore projects. “There are major offshore opportunities opening up now on the back of Zohr. Our main focus is offshore technology. We do have in our portfolio technology that can really help the offshore market,” Yassin said.

Offshore operations and technology can become costly for operators, and this is where Weatherford technology plays a key role. 

“We have technologies that can make operations very safe and also very competitive in terms of cost savings,” Yassin said. These include Vero, advanced tubular/casing running for offshore, Magnus for directional drilling, ForeSite computing platform and the One-trip system, which is a deep completion system in drilling that can usually take four to five trips, compounding challenges.

Yassin said the company has at least one contact/order with every single operating rig in the country for all the product lines it has. “We are very well presented in Egypt, where each project is of equal importance to us. At least one of each product and service is represented with one of the clients,” he said.

While enjoying performance success with Weatherford’s fully mechanised case running services at the Zohr field, the company is looking to introduce new product lines such as direct drilling, wellhead and pressure pumping. These were absent in Egypt previously mainly because of space limitations, which are now lifted. 

Modernisation support 

Egypt’s Ministry of Petroleum and Mineral Resources has undertaken steps to modernise the industry, in which some international companies are taking part.  

“We have a lot of discussions with the Ministry on these projects. There is a big wave with the government and the oil and gas ministry and the issue we are discussing with them is how we can make this happen and take it to the next level of modernisation,” Yassin said.

These discussions include forming a legal framework that addresses data privacy and telecommunications issues. Different authorities will need to come together and make one law for digitalisation as all of the infrastructure in Egypt is being upgraded or built to the new standards, Yassin said. 

Additionally, and an important aspect of the cooperation with the Ministry, are programmes for training and competency assessment. 

“The Ministry now has a fast-track system where they have identified the next generation of management in Egypt and they requested all of the operators in Egypt, the international companies, to somehow support this because they really want to train people to the best standards,” Yassin said. 

New projects, new approach 

As Weatherford looks to grow its Egypt business, the company is “bidding for everything and every project.” Yassin said that as service providers, the company is presently working with every operator in the country. While updating its product portfolio of services that the company can provide in Egypt with each customer, Weatherford has also upgraded its sales force in the country to have a long pre-engagement period with customers. 

“All of this is going on and should bear fruit for us very soon. We are approaching everyone in a new light – it’s a value proposition. We don’t just provide quotations, but we give value propositions by studying each project. We look to become partners, not just suppliers,” he said. 

The company is targeting more than 20 per cent of revenue growth year-on-year for North Africa, following two years of flat growth. 

Its new facility is meant to play a major role in achieving this growth, as Egypt is expected to account for 12 per cent of the overall 20 per cent growth. Egypt is Weatherford’s second biggest market after Algeria, but with this anticipated growth, it will be equal to Algeria, Yassin said.

In approaching clients and projects, the company identifies an opportunity, builds a business case for it, brings the relevant technology on the ground and pursues it, if it presents value. 

Some of Weatherford’s leading-edge technology is deployed in the offshore, deep-water projects, which are very sensitive and also money and time consuming. 

“With the new technology that we are bringing, we will make sure to do wells in the most efficient and competitive way. We bring a lot of experience here and we are investing in Egypt and the people – we have good talent in our portfolio here and globally, which gives us a wealth of experience,” Yassin said.

Weatherford’s key advantage in the country is the extent of experience and history, while backing this up with strong technology in areas of completions, artificial lift, platform for communications and digitalisation. 

“Our history here is one of the best advantage we have; we know the market and the customer.  We also have a good geographical spread all over the country,” Yassin said.