El-Khazindar: Aiming to take service quality to the next level

Operating in Egypt since 1937, Yasser El-Khazindar, Vice President and General Manager – East Mediterranean of Schlumberger, stressed that despite the variation of ranks from one market segment to another, Schlumberger currently holds the top rank in the Egyptian market segments altogether

Did Schlumberger have to modify its pricing list to cope with the global economic crisis?
Schlumberger depends for its revenues on the size of the oil and gas exploration and production budgets of its customers. The global economic crisis led to lower oil and gas commodity prices, which in turn led to lower customer budgets. As a result, Schlumberger chose to respond positively to customer requests for lower pricing, achieving this through negotiation that respected both customer and Schlumberger considerations.

How far have the service companies been affected by downsizing operations in Egypt during 2009?
We have seen similar cycles in the past. We are in a continuous process of adjusting our resources to meet our customers’ operational requirements. When activity dropped during the earlier part of 2009, we responded by adjusting to these new activity levels.

When do you expect a recovery? In Egypt in particular, and worldwide
During the later part of 2009, we have seen stabilization in the activity levels and now we are seeing some positive signs of improvement. Considering that international agencies like the IMF are now suggesting a worldwide GDP growth of four percent, global oil demand has been revised up to over 86 million bpd in 2010. With higher commodity prices, this has led to a certain confidence for our customers in terms of maintaining their investments. We expect activity to gradually pick up during 2010 and continue on an uptrend in 2011.

What was the volume of your investments in 2009? (Compared to the years of 2008 and 2007)
What differentiates Schlumberger from most companies is its continuous commitment to investment in R&D, even in adverse economic conditions. In 2009 Schlumberger investments continued at the same level as the previous years with approximately $800 million US dollars invested in R&D.

How much would be the volume of your investments this year?
Our 2010 investments are expected to remain at the same 2009 levels.

What were Schlumberger’s major projects in Egypt in 2009?
In my opinion any exploration project is a major project. In 2009 Schlumberger was involved in most of the exploration projects in the Mediterranean, Western Desert, Nile Delta and Gulf of Suez regions, be it with our wireline logging, our drilling and measurements, our cementing and stimulation or our well testing services. Those projects were also supported by our data and consulting services as well as our Information Solutions product lines.

Schlumberger laid off hundreds of US workers last year… was this case in Egypt?
As mentioned earlier, we adjusted the size of our workforce to match the operational requirements of our customers with only a minimal reduction in headcount.

How do you evaluate the competition between service companies in Egypt?
Like in all other countries, competition in Egypt is fierce. Schlumberger has been working in Egypt since 1937 and has a long and impressive record in the industry. In addition Schlumberger has the trust of all operators, large and small, to meet and exceed their expectations, especially in difficult and critical operations. As such we are always happy to offer our products and services to all clients. In the process of doing that, we respect all our competitors, local and international, and are happy to engage with them in a fair competition.

You were ranked 1st in the list of 10 world’s largest oilfield services companies, in terms of 2008 revenues ($27.16 billion). Have you succeeded to keep this rank in 2009?
Yes indeed we have. Although worldwide revenues were 16% lower in 2009 compared to 2008, we still maintained our position as the leading oilfield services company in the world.

What is your rank in the Egyptian market?
This rank varies from one market segment to another, but if we add all those in which we offer services together, we would also hold the top rank in Egypt.

HSE is playing an integral role in the sector. What are Schlumberger ethics and contributions concerning this vital topic?
HSE is integral to our work culture. The foundation is leadership, commitment and accountability from top management. We believe that all loss can be prevented and that prevention of accidents is good business.
One program that we are particularly proud of is an observation and Intervention program.
This program is primarily addressing human factors and change behavior. The focus is on individuals while working and is conducted to identify both unsafe and safe acts, behaviors and practice. The focus is on people.
As a recognized industry leader in HSE, we work closely with all our customers to improve our performance. As part of our commitment towards reducing driving related accidents, we have teamed-up with a number of customers to train and increase the awareness of individuals in the industry as well as outside the industry on driving & Journey management. These campaigns were run very successfully during 2009 and we intend to continue these efforts in 2010.

You were exposed to various petroleum sectors, such as India, USA, UAE, Qatar and Yemen
How different are these sectors compared to the Egyptian one?
Off course each place is a bit different. The Egyptian market is very fascinating as it incorporates a very wide range of work environment ranging from simple wells to very high profile deep water wells. I am privileged to have worked and lived in all these countries.
Each one of these assignments has added a lot to my knowledge and experience. I feel honored to bring back all this experience to my home country.

Currently being the VP & General Manager of the East Mediterranean region, what did you learn from your wide/diverse experience and want to apply in Egypt?
The main reason why Schlumberger tends to move employees around the various countries and continents is to ensure that they get the highest exposure to different work environments, and experience different working conditions and lifestyles. The idea is to try and spread the “right” practices around the world and in the process to eliminate the “wrong” ones. My last assignment before coming back home was in the USA and the one thing that I intend to implement here is the strong HSE culture, particularly in driving.
People should not wear seat belts or adhere to speed limits just because it is a legal or employment requirement; it should be part of their day to day behavior. I would love to see our employees taking these habits back home to their families and making them a part of their daily life, especially outside of working hours.

What was your first decision as VP and General Manager?
As you are aware, I started my current assignment in March 2009, right at the time when the effects of the economic crisis were becoming visible in the Egyptian oil sector activities. As such, my first order of business had to be to work on optimizing the resources to ensure that they are in line with our activity.

Is there a plan to expand your fleet in Egypt, Middle East and Africa Region?
In Schlumberger, we adapt and respond to the short term market conditions but we also continue investing for the long term. Considering the positive signs we see in the marketplace, our plan is to continue recruiting talents and expanding our fleet.

What is Schlumberger Egypt plan for 2010?
To continue working closely with our customers and offer solutions that would address to their requirements and challenges. To provide our customers with outstanding service quality and keeping the focus on HSE will continue during the year.
Our people and our technology are at the core of our values in Schlumberger. We will continue the investment in training and development of our people. We are also bringing in new technologies and upgrading the existing facilities.

How do you see service quality performance in Egypt?
We use a number of indicators including reliability and efficiency indicators to measure our service quality performance. As a company we primarily measure our rig-related performance, as this has the greatest cost impact on our customers.
Our indicators have steadily improved in comparison to previous years and progress was recorded across most of our product lines. Obviously there are always areas where we can improve – this is something that we are addressing in 2010. A number of initiatives are underway to take service quality to the next level.

A closing statement exclusive to Egypt Oil & Gas.
As mentioned earlier, Schlumberger has been committed to the Egyptian oil and gas industry since 1937, which is 73 years ago now. We believe that this sector has very solid roots in the ground and has a very strong potential especially with the efforts that the government is putting in supporting it and in encouraging further investment in it.
Schlumberger is very excited about the future of the oil sector in Egypt and intends to be an integral contributor to its growth and success. We have done this in the past through the use of state of the art technology and superior service quality. We intend to continue doing so for at least another 73 years.

By Mohamed Fouad


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