Neither five million land mines nor security threats will hinder Sahara Petroleum Services Company S.A.E (Sapesco) from exploiting the lands of the second largest oil reserves country, Iraq. Kurdistan is the next station in the series of Sapesco’s ongoing expansions. Eng. Mamdouh Mahfouz, Sapesco’s President shares the new expansion plans and reveals exclusively to Egypt Oil & Gas Newspaper, for the first time, Sapesco’s 2008 plan to establish the Sahara Petroleum Service Holding Company.

A flood of international expansions
First of all, we have to address the question, “why do we expand abroad?” Sapesco’s market share is in the average of 65-70% of the market, which is considered as the saturation limit. Hence, if we plan to grow more, then we have to look for the opportunities abroad.

The most recent progress made this year is the plan to head to Kurdistan. “Iraq is the second largest country in terms of oil and gas reserves and that is why Sapesco has chosen Kurdistan as the next step in the series of expansions. Simply, it is the land of great potentials,” said Mahfouz. As a beginning, market surveys have been conducted to study the feasibility of this plan. This region holds more than 20 international operating concessions and bid rounds have been announced to revive the exploration activity once again.

Asked about the security threats in such a country, Mahfouz confirmed that the ideas of war and safety unstability are not the barriers as many investors believe. Kurdistan enjoys a status of independence and security to a great extent, added Mahfouz. “The main problem Sapesco will face in this region is the land mines. There are approximately five million mines in Kurdistan,” clarified Mahfouz.

However, this will not be the blockade; Sapesco was first recognized for its mine clearance service which was provided in 1970 for oil companies operating in the Western Desert during that time. Although this service is no longer executed by the company as the Egyptian army forces took the responsibility, Sapesco still maintain its connections with mine clearance experts who will deal with this problem in Kurdistan.

“Compared to our achievements in Libya, I believe that there are more potential in this province and Kurdistan will be a landmark for Sapesco,” highlighted Mahfouz.

The execution of this ideology of expanding has first started in 1994. Sapesco inaugurated its branch in Syria and since then, it has provided its high quality services, which were the lead to get the company classified as one of the top service companies in Syria. This experience has inspired the company team to consider more expansions in the Middle East region. The second Sapesco’s expansion flag was set on the Libyan territories. Despite the status of embargo imposed on this society; foreign companies and investors were not easily authorized to conduct their operations in this country, Sapesco found out its way to reserve its place in this rich-petroleum country in 2005. Since the launch of Tripoli branch, the volume of the company’s activities has been tremendously increasing and the 2006-2007 revenues were beyond our expectations. Libya has recently experienced a kind of change in its laws and regulations concerning foreign investment, which has given the space for more foreign investments to penetrate in the Libyan market. This has created a spirit of competition between the foreign operating companies, which was the challenge for Sapesco.  The price factor was not the tool to attract contractors. On the contrary, sometimes we lost deals due to our high price. As a matter of fact, quality and new technologies was the company’s target. Sapesco has brought up-to-date technologies to Libya and Egypt and it was the first company, outside USA, to implement the first deep water drilling project in Libya.  Nowadays, Sapesco is approximately providing in Libya all the services implemented in Egypt.

In 2006, SAPESCO was officially registered as a 100% Egyptian company operating in Saudi Arabia.

Operating in the Egyptian petroleum sector for more than 20 years, Mahfouz believes that the major constraint it is facing is the skill shortage. This is not a domestic problem; skill shortage has become a common lacking factor worldwide. “The only mean to generate skilled labour cadre is to pay more attention to petroleum engineering graduates, intensify the number of training courses offered, and at the same time, provide attractive work packages similar to the ones offered by other companies abroad to avoid/eliminate the problem of skilled personnel drain.”

Sahara Petroleum Service Corporation
“This is one of our dreams; this corporation is to increase our market share and serve Sapesco’s target to become the leading service company, not only in Egypt, but also in the Middle East region and North Africa,” Mahfouz shed light on the vitality of this mega corporation.

Sapesco’s President added that through Sahara Petroleum Service Corporation, the companies operating under the Sahara Group, which are Sahara Oil & Gas, DREXEL, Valve & Tools, WEMCO, and MOVA will witness a wave of more cooperation, strength, mergers, which will lead to fulfill our vision of maintaining our stand in the market as the leading private petroleum service company in Egypt, Libya and Syria as well as opening new markets in the region.

SAPESCO’s 2008 plans
Besides expansion and penetration of new markets, Sapesco has its financial and revenue objectives determined annually. Last year, the company achieved 105% of the budget figure for 2007 and this year, the profit is expected to witness more increase of approximately 35%. “We will continue our effort to present services to clients at the highest international standards in safe and environmentally conscious manner. We will keep on investing in our main assets, People & Equipment, as we consider them the motivation behind any achievement,” added Mahfouz.

Not ignoring the significance of the company’s social responsibility, Sapeasco is contributing this year to an awareness campaign about the driving safety rules and road accidents in Egypt. The rate of deaths and injures resulting from vehicles accidents has been noticeably increasing in Egypt over the past few years. Sapesco has adopted a new training program for the company’s drivers, which is serving the theme of this campaign.

“I have always believed that being part of this society, we have duties to pay back. We should have a positive and effective role to ameliorate the society we are living in,” said Mahfouz. Sapesco has been active in many social responsibility projects; such as renovating public schools, providing medical equipments and ambulances to hospitals…etc. It is worth mentioning that Sapesco is one of few petroleum companies that owns a charity organization, Sahara Charity Organization through which it fulfils its goals of better serving the community.

By: Yomna Bassiouni