Powering Weatherford for the future

Weatherford’s new President and CEO Girish K. Saligram spoke exclusively to Julian Walker about empowering the Company for the future and embracing the energy transition.

Girish Saligram has certainly had a different start to life as a new CEO when he took over in October last year during a global pandemic.

When I spoke to him in Houston, he had been in the new job for just over two months, but it was clear that he was relishing the challenge ahead of him, and throughout my interview, Saligram knew the direction Weatherford should take going forward.

“It has been a whirlwind start and very different from what I would have expected before COVID-19. Instead of getting on a plane and going to our offices around the world, I have been based in Houston at my computer screen meeting everyone virtually,” said Saligram.

Despite the challenges of taking over during a pandemic, Saligram noted: “It has been a fun start, and I’m incredibly impressed with the team. The commitment, dedication, and focus of our entire employee base globally has been so impressive. There’s been a lot of learning while I come up to speed on our portfolio, geographies, and customers.”

Saligram summed it up when he said: “I am really happy to be here, and I feel it is a huge privilege to have this opportunity to lead this terrific company.”

Long-Term Goals

One of the first things Saligram talked about was what he saw as Weatherford‘s main goal going forward.

“Our long-term goal is getting the company to the point where we can be sustainably profitable and generate free cash flow. How we achieve that is something that we will be laying out in detail over the next several months and working with all of our teams around the world.”

The new CEO was adamant that he wants Weatherford to be “a place where everyone comes in every day and feels empowered, engaged, and excited to be a part of delivering to our customers.”

Saligram pointed out that Weatherford is “very critical to the energy needs of the world and what we do is incredibly important.”

In fact, Weatherford will play a critical role in the energy transition that is underway, according to Saligram.

“I want to say there is a recognition at Weatherford that there is an energy transition underway. It’s happening right now. We have to recognise two things: the current oil and gas production of the world is still going to account for a very significant portion of the world’s energy supply, at least for the foreseeable future. And our responsibility is to help our customers make that production a lot more sustainable, effective, and efficient, and help them further their decarbonisation goals.”

Saligram added: “In fact, we have been a big contributor to the energy transition as we have a lot of technologies and services that fit into energy transition. I’m very excited about our production optimization software as an example. We’ve got many things that we do to bring the convergence of automation and artificial intelligence software. We are also not just focused on decarbonising but improving safety and efficiency as well. As we look at the transition phase, we see ourselves fitting in many different places, such as Carbon Capture Utilisation and Storage, or CCUS, which we see as a big part of this transition. We have technologies that play a significant part in the CCUS space. If you look at renewable energies like geothermal, as an example, we’ve got a portfolio that can be a significant factor in that space.” Saligram reiterated the point that Weatherford has got a solid technology portfolio.

“We recognise that there’s an opportunity with the energy transition. Our job now is to figure out how exactly we operate in a way that generates sustainable profitability.”

COVID-19 Impact

The COVID-19 pandemic has had such an impact and has changed the oil and gas industry dynamics in so many ways.

“The human toll and suffering that the pandemic has racked up are unimaginable and just devastating on a variety of different levels.

The pandemic has forced our industry to adopt new technologies and new ways of working,” Saligram said.

“One of the things that is interesting for our industry is that we have always tended to have work done at our production sites around the world. Now this notion of remote operation, where you can have someone sit behind a screen and manage things that happen on the ground, I think that’s a fundamental game-changer from a cost standpoint and a safety standpoint. It also changes the game when we look at one of the challenges that we continue to face in the industry: the lack of skilled workers. Now we can deploy our extremely skilled personnel on a global basis, without having them needing to get on a plane as it can all be done remotely.”

Saligram elaborated on the fact that there are a lot of things that the pandemic will lead to in making a big difference.

“If we look at it from a macro standpoint, then COVID-19 has induced a downturn that has caused everyone to sit back, reflect and say, we have got to have a business model that allows us to be flexible. We have always been a cyclical industry, but the cycles have typically been longer. Now the cycles are getting a little bit shorter, so that ability to be flexible within a cycle is essential,” explained Saligram.

Weatherford’s new CEO feels that any business now has to be sustainable and generate the right returns.

“We must also take stock of the notion of lower for longer, and that’s going to be here to stay. Whatever that turns out to be or whatever the time frame turns out to be, the concept that we have to build a sustainable business that generates the right returns will be key. No one in our industry is banking that volume will return, and then all will be well. Industry-wide, we’ve got to have a sustainable business model at lower prices for a longer period. The third aspect is this notion that we just talked about: remote collaboration within the workforce. I think that’s going to be significant.”

Importance of Partnerships

“Partnerships have always been a vital part of how we have done business. As an example, we have a joint venture in Saudi Arabia that’s over 40 years old. It is a very effective partnership, and it has done well both for ourselves, our partners, and, most importantly, for our customer Saudi Aramco,” said Saligram.

One significant area for Weatherford’s CEO is the ability to differentiate.

“What has become very important is maintaining a differentiated portfolio and continuing to innovate. To do this, you have to invest in talent, you’ve got to invest in capability, and you’ve got to invest in really driving that innovation. And that’s something that we have done, and we will continue to do while ensuring there is a market need for new solutions,” explained Saligram.

He added: “I feel tying a commercial need to innovation is something that’s going to be very important. Innovation flourishes when you’ve got the right environment. You have got to have the ability for people to want to innovate and to take a little bit of a risk. I want to create that culture, and I think it is going to be an important factor for us as we advance.”

According to Saligram, to maintain a differentiation in terms of technology, Weatherford will have to look at partnerships and collaboration with its customers and its partners and bring everyone together in one ecosystem.

“We must continue to deliver for our customers in a way that is differentiated from our peers. You’ve got to match that up, though, with execution, as it is not enough to say I have the best technology or I have the best product. We have to earn the right to work with our customers every single day,” he stated.

Saligram emphasised: “We do recognize that we have a solid position in certain product lines, and we have a firm position in certain geographies. What I want to look at is how we make the intersection of the two a lot stronger in as many places as we possibly can, while at the same time understanding that we can’t try to be everything to everyone everywhere.”

Middle East Growth Opportunity

The Middle East region is one of Weatherford’s most significant markets, according to Saligram.

“We have been fortunate in the Middle East region, where we have been very successful. This success is due to the strong leadership team we have on the ground.”

“In the Middle East, we are looking at local investment, which is an important factor. We have a manufacturing facility in Abu Dhabi that is world-class. We will continue to focus on this facility to drive local content and deliver value to our customers in a speedy fashion. In Saudi Arabia, with our joint venture that I talked about earlier, it’s about having that local capability for that local content, but also then coupling that with local leadership and expertise. Having people on the ground who can make decisions fast is vital,” he added.

Saligram noted: “I am very pleased with what the team has done in the Middle East, and we will continue to push on and focus on local content and investment.

Challenges Ahead

Saligram touched on some of the challenges that he expects to face in the coming years.

“We do see challenges ahead around the world and in the Middle East, especially. One is the increase in gas production and helping customers monetize and capitalise on the gas potential but deal with it sustainably. There is also a growing shift towards unconventional production as well in a couple of places, which present significant challenges but also opportunities for customers.”

Saligram ended by saying that Weatherford is “focused on bringing technologies and solutions to bear, and this is where the global nature of our business comes into play. Having done similar things in other geographies helps us translate those successes in other parts of the world.”