In an exclusive interview, Vice President of Halliburton North Africa Hisham Ismail gives Egypt Oil and Gas insightful information on future steps in the industry.
Can you tell me a bit about yourself and your role at Halliburton Egypt?
I have a responsibility towards everything related to business in the North African region.
I believe that the road to success in business and life is commitment. For example, Halliburton is very committed to its employees. We, in Halliburton, believe that investing in human development is crucial to the success of any business and to do so requires commitment. Our strength as a company at the moment is the number of contracts we have acquired, but our success as a company over the next five years will depend on our investment in human development. Personally, I have been able to achieve where I am today through leading by example in terms of my absolute commitment to the company, the customers, and to my colleagues. When I was a business development manager, I developed a theme that eventually spread throughout all of Halliburton Egypt: relationship backed by service quality. I believe that I was able to accomplish a lot in only a few years by developing a good relationship with customers and colleagues alike, as well as being a leader of a team that is committed to provide adequate professional service quality.
What do Halliburton’s activities in Egypt consist of?
Halliburton was first registered in Egypt in 1968 servicing the upstream and downstream sectors of the oil and gas industry. Currently, Halliburton is catering to more than 50 oil and gas operators in Egypt (JVs ,IOCs, and NOCs) through four different main bases: Cairo-Kattamia (main office), Matrouh, Abu Rudeis, and the Ras Shukher base. Furthermore, Halliburton Egypt has different satellite bases that are close to our customer’s operation areas (Karama, Salam Base, Sumpetco, Amria, Abu Qir, and Port Said), to enhance Halliburton’s footprint and to cover market fragmentation. Halliburton Egypt’s head count is now close to 1500 employees of which almost 98% are nationals, working in different product service lines.
Can you tell me about Halliburton’s operation in Egypt? What services do you offer?
Halliburton Egypt covers many of the disciplines in the oil and gas industry including:
Testing and Subsea
Boots & Coots (Stimulation & well intervention)
Wireline & Perforations services
Drilling Bits & Coring
Landmark Software and Services
Consulting & Project Management
What products and/or services are most popular here in Egypt?
Halliburton is a pioneer provider in pumping, fracking, well placement, well intervention, cementing, drilling fluids and completion services. Over the years, we have consistently achieved great successes in major projects with our clients, which include the following successful projects: 2X project and Horizontal drilling (Apache), BP and BG HPHT wells, running complex completion in the Mediterranean gas wells, as well as providing reliable services and enhancing production with several operators in the western and eastern deserts.
We sustain a strong market share on both high and low-end markets as well as develop technical solutions to address and resolve customers’ challenges.
What should the government do to increase efficiency and promote renewed investment and momentum in the sector?
Egypt is going through a series of different changes, which require modifications of existing laws and investment encouragements. The current oil and gas laws for the conventional resources will not be suitable for the unconventional exploration and production process. Many countries across the globe realized such differences and are either in the process of changing or have already modified their laws accordingly. Egypt will be required by investors to do similar changes.
On another front, there is an increasing local demand for energy, which will only be resolved through more production and reserves enhancement. However, huge foreign investments are needed to support active exploration and development drilling. In order to attract such pricey investments, the Egyptian government has to provide a better environment in terms of the following: political stability, security, clearer regulations, and infrastructure (communications, roads, etc).
EGPC and EGAS release a couple of new bid rounds every year covering the western and eastern deserts, the Gulf of Suez, Sinai, the Nile Delta and the Mediterranean. We need to study what attractive offers are available in other areas like West Africa, Asia Pacific, and include new terms in our future offering.
Can you tell me about any of your current projects?
Our main current projects are:
The horizontal drilling and shale gas with Apache’s JVs
Smart completion technology with ENI group
Simultaneously running two of the highest profile projects in the HPHT drilling with BP and BG (introducing our latest drilling technology through different Product Service Lines)
In order to promoting different fracking and stimulation techniques for several operators to enhance productivity Halliburton, works with all of Egypt’s oil and gas companies in two directions: the first is to increase the production of the brown fields and the second is to help in unlocking the potential of unconventional plays.
Regarding the brown fields, Halliburton worked with the Egyptian market to help enhance the awareness of the importance of high-end technology to increase the production of its brown fields. Many companies in Egypt are now considering and/or drilling horizontal wells as a fit-for-purpose approach for field developments. Also, Halliburton used the technology of transversal fracturing accompanied with the horizontal drilling for the first time in Egypt, with Khalada/Apache. This proved to be a successful and achievable brown field solution for increasing field production and reaching difficult oil. In addition, Halliburton contributed to the introduction of the infinite conductivity fracturing called the “conductor fracturing” method, which is applied in Egypt and has resulted in increasing well deliverability.
Concerning unconventional plays, Halliburton is working very closely with the Ministry, EGPC, and the oil and gas companies to discover, book, drill, and promote this very important reserve for Egypt. Between workshops, seminars, evaluation of existing wells, and drilling new wells, this potential will soon be unleashed for the benefit of Egypt.
What challenges do you face in your operations here?
The Egyptian market is a price driven market at the low and medium end, which makes it difficult to provide the latest technology at certain market segments.
There is also a great demand for resources in several other geographies (Middle East and Asia Pacific) rendering it difficult to compete with other locations in order to secure the required resources (especially when other locations can provide better margins with better pricing).
Cash issues with several operators is still impacting our financial performance, although positive signs-steps can be observed.
What edge do you have over your competitors in the service market?
Halliburton always differentiates itself from competitors in two main different domains: people and technology.
We hire, train, retain, and attract the best people in the market. We have a dedicated knowledgeable team that we are proud of. They constitute the most important pillar in Halliburton’s structure. The second is the fit-for-purpose technology. Halliburton does not introduce technology in the market for the sake of having new technology. We go through a couple of major steps before we launch new technologies in the market. We first start by internally evaluating our technology implementation strategy. In this step we discuss and decide whether or not this technology fits the Egyptian market. Once we are all convinced of the benefits of this new technology, we invite our customers to technical seminars to demonstrate the technology’s value. Finally, we work with our customers in optimizing the application of the newly introduced technology. These are the factors that make us unique in the market.
Do you feel the industry is plagued by stagnation due to delayed payments?
There are definitely negative effects to delayed payments. The extent of these negative impacts depends on different operators and how they choose to handle the deferral. In certain cases, major operators maintained their active plans (2013/2014), while others—who are small size operators—are far more affected and reduced their plans accordingly. We still believe that having a clear schedule of paying old debts will send a positive signal to the operating companies and will encourage others to invest in Egypt, and I believe this is what is happening now.
Were your operations impacted by any of the recent unrest?
Because the majority of our operations are located in remote areas, away from the unrest, there were no major setbacks. However, we occasionally face challenges, in the form of delays on our end, when sending explosives and radioactive materials to rig sites.
Do you face any problems in importing equipment?
No, we don’t face any problems importing equipment under the customer umbrella. It’s important to mention however, that there is a cycle time of 7 to 30 days for the customer and EGPC to grant the duty exemption prior to the clearance. Also, we don’t have an import license to enable direct importation without a customer umbrella.
Tell me about your software and services tailored to unconventional exploration. Do you feel that Egypt has potential in the realm of unconventional?
I think I touched on this in the previous questions and answers. Halliburton is globally considered a leader of unconventional plays developments. We develop methodologies of evaluation like “ShaleXpert” and “ShaleBasin” software that analyze and enhance understanding of the potential of these unconventional plays. These are also implemented in Egypt. The full implementation process takes place through a step-by-step approach to ensure proper evaluation. Halliburton is in full partnership with the Egyptian government regarding the unconventional, and very soon the market will hear very good news.
What are Halliburton Egypt’s goals for the upcoming year of 2014?
Developing our market share is an ongoing objective. This can be done only through our competent, well-trained and developed workforce, and also through our strong customer relations and our latest fit for purpose technologies.
We also believe that the unconventional plays (shale gas and oil) will add a lot of value to Egypt’s reserves and hence, we are working with the EGPC, EGAS , and the Ministry of Petroleum and Mineral Resources to provide the technical support required to assess and validate the existing reserves and provide the best production techniques. In brief, our goal has been always to be market leaders in brown fields and the unconventional field in Egypt, and will continue to be our goal. We believe that people and technology will continue to put Halliburton Egypt where it deserves to be in the market. We have the best people and technology to continue to be the most preferred service provider.