By Mariana Somensi
The private sector represents a solid ground in Egypt’s economic path. Given its remarkable presence, the oil and gas industry has built key partnerships for private investment and has invited prominent international oil companies (IOCs) to build the foundations of its prosperous energy market. The welcoming environment recently encouraged the privately held and wholly owned subsidiary of Emirates National Oil Company (ENOC), Dragon Oil, to bet its cards in the Egyptian resources.
Dragon Oil has successful exploration and production (E&P) operations in Africa and Asia. The company operates in Turkmenistan, Iraq, Algeria, Tunisia and Egypt, both in the oil and gas sectors. Egypt Oil & Gas sat with Ali Rashid Al Jarwan, the company’s CEO, and discussed Dragon Oil’s operations and aspirations for exploration, development, and production in the Egyptian oil and gas domains.
The interview began with a brief overview of the company’s activities and expectations in Egypt. Dragon Oil fully owns the East Zeit Bay offshore concession, located southern the Gulf of Suez. The concession covers an area of 93 square kilometers and lies in shallow waters ranging in depth from 10 to 40 meters. “We are in the process of starting high resolution 2D seismic and our commitment is to drill two wells,” Al Jarwan disclosed. “We still have to explore, and although we do not expect a major discovery, we hope that we come out with a discovery good enough for us to expand,” he added.
When asked about what attracts Dragon Oil to Egypt, Al Jarwan affirmed that the company sees the country as prospective for the future of oil and gas. “Egypt is really diversified in terms of natural resources, and we would like to stay. We need the government’s guidance and we look at being a good partner, assessing technicalities, geology, and prospects, in order to build something that contributes to the economy of Egypt.”
East Zeit Bay is the company’s initial entry in the Egyptian market and Dragon Oil looks forward to be involved in future rounds of bidding. “Onshore, we are interested in the Western Desert; so we will be involved in the new offers of the government in the area,” he disclosed.
In order to strengthen the company’s operations in Egypt, Al Jarwan highlighted the government’s role in facilitating the private participation in the oil and gas sector. “Previously, our challenge [in Egypt] consisted of mobilizing resources, as well as some approvals that took a long time. However, we appreciate the government’s aspiration to do things quickly and with less routine, which helps us. It is a combination of our efforts and the government’s.”
Moving on, Egypt Oil & Gas asked about the advantages Dragon Oil brings to overcome the highly competitive market. “Now we are going through a transformation to improve our capabilities, so we have world-class expertise, exploration, reservoir development, drilling, and project management,” the CEO answered. He further explained that Dragon Oil has become a cost-effective company, which, as a commercial enterprise, looks at increasing its profit making. “Since we were established on commercial bases, profitability is a key factor and driver for us. Our company’s character relies on agility, so we go fast to our target with an integrated team. We develop good understanding of the prospect and we manage any challenges we have.”
Additionally, the company adopted an Enterprise Risk Management (ERM) framework in 2012 and developed a methodology to reduce and mitigate potential business risks in the execution of the company’s strategies. “We have a good risk management developed for each region. Our business risk factors could be technical, where we mobilize our best resources to analyze the problem, or they could be economical. In this case, we manage the economic uncertainty and cost management through innovation,” he explained.
Dragon Oil’s is a global and innovative company, which is achieved through a diversified team with an international workforce, Al Jarwan pointed out. “It creates a good environment for managing and for challenges. We believe innovation is key to manage challenges, including adequate cost management, always making sure we maintain the profitability.” When it comes to innovation, Dragon Oil’s Head believes Egypt is a fruitful land. “We are happy to see the professional strength of the Egyptian people. There is a lot of great minds in technology,” he stated.
Private Sector Participation
When asked about how the private sector can contribute to the petroleum industry in Egypt, Al Jarwan stressed that “eventually, the private sector will bring sustainable impacts to the flourishing economy.” According to him, the Egyptian government has showed encouragement and cooperation with private companies and consistent measures to encourage new partnerships. “Everything starts with collaboration, and we believe that Egypt has the right environment and encouragement to the private sector right now. I believe there is a lot of potential for contributions and economic impact by opening up to private companies like Dragon Oil.”
In closing, Al Jarwan reaffirmed the company’s commitment to its E&P operations in Egypt. “We aim to improve quality and use innovative technologies to open up and unlock potential for oil production. What we hear from the government is that they are promoting and engaging more serious companies, as Dragon Oil. We are ambitious to explore, produce, make business, and contribute to the Egyptian economy.”