MI SWACO introduces new technologies for the deep water activities

Due to acknowledging foreign experience, Hazem El Shaife, MI Swaco Country Manager emphasizes that new technologies in Egypt and the Middle East are always subjected to prices, not all the operators see the value of new technologies especially at the beginning awing to its high-cost

What are  MI SWACO latest technologies introduced to the Egyptian market?
We introduced two new technologies very recently for Shell and Bp in the deep water of the Mediterranean sea. One of them is PRESSPRO RT real-time hydraulics system. The PressPro RT technology service provides wellbore pressure management data to facilitate improved decision making, drilling fluid costs, Kick detection and reductions in non-productive time (NPT). It Complements PWD (does not replace) And can be used when PWD tool is not available. This is the first time this technology is introduced to the Egyptian market and it has been successfully used in various parts of the world ( US , Canada, UK, Norway,…) The PRESSPRO RT service gives you more control in critical-well situations, “Critical” seems to be a popular term in today’s drilling environment. With water depths approaching 10,000 ft, bottom-hole temperatures exceeding 450°F, extended-reach wells and exceptionally narrow pressure windows, there’s very little that’s routine about many of the wells currently being drilled. These applications can wreak havoc on drilling-fluid properties, which must be constantly monitored and adjusted to handle rapidly changing wellbore conditions. Failure to address even one fluid property could quickly lead to a host of difficulties. Even using the incorrect tripping speed during a casing run can bring on expensive headaches. An unnecessary trip in 8,000 ft of water, a fractured formation, lost circulation or stuck pipe cannot only escalate already high drilling costs, but also result in serious safety and environmental problems. M-I’s new PRESSPRO RT service provides unprecedented wellsite engineering support with a unique, specifically designed suite of software implemented by a specially trained M-I critical-well analyst. The proprietary programs use surface measurements to calculate downhole pressure and corresponding fluid properties during both drilling and tripping —all in real-time. This is the only technology that not only provides up-to the- second Equivalent Static or Equivalent Circulating Densities (ESDs and ECDs) at any point in the wellbore during drilling, but also delivers surge and swab pressure measurements, Equivalent Dynamic Density (EDD) — while tripping drill pipe and/or setting casing. PRESSPRO RT is one more example of why M-I is the industry’s undisputed leader in developing solutions for today’s demanding drilling environments.

RHELIANT is the other new technology , It is a non-aqueous system with the flat rheology you can trust to reduce expensive mud losses and protect the well . This system was introduced to BP and we have been working with them on it for almost a year . Basically,  The RHELIANT system’s flat rheology profile works over a broad range of seafloor, bottom-hole circulating and flow-line temperatures and pressures.   it’s Features  Flat rheological profile over a wide temperature range, Reduced Barite sag potential,  Less dilution/maintenance ,  Improved hole cleaning,  cuttings suspension and  Reduced pressure spikes.
Operators would Benefit from  Reduced fluid  and well-construction costs,  Improved ECD management , Minimized formation fractures,  Reduced environmental costs, greater safety

Optimized drilling efficiency,  Significantly reduced whole-mud losses.
Shell and other operators in the Mediterranean are watching for this system’s performance and if it proved success with BP, they will also start to using it. This technology is also new in the Egyptian market and it took a year to test it and it will be used  within the coming few days.
M-I is the solutions company , we work with all our customers to find solutions that would improve their drilling performance and add value to their operations. New technologies in Egypt and the Middle East are always subjected to prices, not all the operators see the value of new technologies especially when it is newly introduced and prefer to wait till it proves success before making the decision to use it.

How do you position yourself as one of the main service providers in the deep water operations in the upcoming years in Egypt?
We have invested a lot in infra structure that would support deepwater drilling operations, trained our engineers and got them the exposure and experience required, provided our customer with experienced hands that start planning for each well very well in advance and you can look at it from now, numbers will talk, BP , IEOC and Shell are the majors according to the number of concessions they have.  And we’ve been BP’s service provider since they started in the deepwater, IEOC we have been working with them from the start as well and to Shell too; 7 years with BP,  3 years with Shell and over 7 years with IEOC in the Med. We have worked with Hess , North Alamein , and a lot more operators  , We are looking to continue working with all Operators in Egypt to provide the best in class service.

Characterized by a wide diversity of services, what is the most applicable/demanded service in Egypt?
Drilling Fluids services is the most wanted, Fluids to drilling is like the blood to your body. Egypt today as we speak has over 65 rigs in drilling mode and over 25 in workover. I think drilling fluids services is vital and needed.

Being in the Egyptian market for 35 years, what is different about MI SWACO compared to other companies operating in Egypt? and what is your market share?
Service quality and value added to our customers. Loyality from our employees to MI Swaco is second to none , most of our work force has been with the company for a very long number of years. Besides, we are very good at what we do. All the people working in the sector are known and we select the right people to work with us, M-I consider people the main company’s asset and always pays attention to their training and requirements to make sure they go back home safe
During the recession, we didn’t let anybody go even though the size of activity has gone down dramatically , we knew this drop is a short term and we maintained our investment in our people. We have used this to our advantage and started sending our engineers to other countries to help out and get more experience and exposure which would surely reflect on our performance here

As for the market share, it should be looked at from two sides: rig counts, and revenue wise. We are the leaders in both and have been the leaders for in the Egyptian market for over 25 years, Thanks to our top quality management commitment and vision. My boss who hired me 20 years ago had a long term vision , investing in people , service quality and infra structure, this investment has positioned us in the lead and has shown our customer the value we could add t o their operations. I can not give definite numbers but  The market share to MI, we are the leaders locally and worldwide. We have seen surveys done by third party that proves that we are number one in terms of  market share  and revenues . on Global basis  It is higher than our two main competitors combined.

What were your major projects in 2009?
Managing the recession was the big task for MI SWACO in 2009 like all the other companies. It was about how to manage our people and capital effectively.
Egypt rig market was negatively affected in 2009 by about 40% drop in activity which is considered a huge drop because the rig count is related to all the other parts of the upstream operations. Nevertheless, we successfully won again  two new big deep water  contracts with BP and Shell despite the difficulties we faced.
Concerning the capital crunch in Egypt during the economic crisis, the country was slightly affected compared to the other countries worldwide. The banking system in Egypt proved to be one of the best systems in the world, however, no one can deny that Egypt was not affected by the economic crisis in all industries  and even the Suez canal and tourism in Egypt were affected as well as many other fields.

Can you compare your revenues in 2009 to 2008 and 2007?
The best year for MI SWACO worldwide and Egypt was 2008 as our revenue reached $5.5b on global basis, The recession started to affect project in December 2008 as most projects were planned for well in advance.. While in 2009, the value was decreased compared to 2008 worldwide  and in Egypt s well. This was hugely affected by the great drop in activity in US and Canada along with the oil prices crunch.
Regarding 2010, I believe it will improve over 2009 by 10 to 15% but it all depends on the deep water in Egypt and worldwide as the operators company are exploring in difficult areas , the easy oil has been discovered

On the light of the minority number of deepwater operators compared to the offshore operators, do you think it is going to be very challenging for you as a service company? 
It depends on how many of those service company could accomplish the demands of the operators , provide service quality , have the infrastructure locally and globally to support those projects and improve operator’s performance in a safe manner . I think there are only two companies in Egypt which could fulfill these demands in deepwater. There is no deepwater operator who may risk to get a service company which may set them back even for one hour!

Are you considering the expansion of your services fleet in Egypt? How?
Yes, We are as a company. Egypt has got tremendous opportunities for all our business lines offerings. In the past, we were not successful in selling ourselves as one company as we have four different services. And it was about every team working by its own, but now, we are realizing the value of synergies among all business line and the value added to our customers.

MI SWACO is well known for its drilling fluids services, shall there be focus on your other services in Egypt?
We deal with anything related to fluids: drilling fluid, Solids control Equipment, drilling and production waste management , cleaning up tools, completion fluids and Production chemicals. Our competitors are trying to follow our footsteps and began to perform in solids control but they don’t have a waste management company. we are the only company which manufacturers our solids control while the other companies are outsourcing. I think it’s an advantage for us.
We are not targeting the full control over the market but we want to show the value added awing to managing all what relates to fluids which at the end results in less cost and more value for the operator.

How do you see the cooperation between the Foreign Service companies relying on local agent companies as partners in Egypt?
It depends on the vision of the local services companies whether they consider it long term cooperation or it’s only a step for them to learn the know how and then they could provide the service on their own.
From my experience, here in Egypt, I don’t think it is a successful strategy. You can look at the foreign service companies which depended on local agents, at first they wanted a local agent to facilitate registration , take care of logistics and distribution in the local market and how it is operating. Then, they build their own knowhow and their own experienced local staffs that they could rely on and could manage their own business. Therefore, I believe that it is better than being in long term cooperation. For MI SWACO, we have no local agent except for the first five years.

What else do you want to stress on?
I want to emphasis that MI pays a great deal of attention to QHSE . the safety of our staff has the top priority. They are our asset and  we want them to always go back home safely; this is our number one priority.We also pay a good attention to the environmental regulations and quality regulations.

What are MI SWACO updates or recent news?
Regardless of our expansion and preparation to a new infrastructure, we have a new lab and two new workshop to service our equipments and tools in the free zone in Alexandria. There is a bid news coming up in the next few days that will strengthen our position locally and Globally.

By Ahmed Morsy


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