By Nadine Abou el Atta
As Egypt’s hydrocarbon industry enters a new dawn of promised prosperity, the question still remains about the perception of the private sector. In efforts to understand how global players view the local market in terms of potential and performance, Egypt oil & Gas sat with Rami Qasem, the President and Chief Executive Officer for the MENAT & India region at BHGE.
The interview began by highlighting the company’s edge in light of its new orientation. Last year, Baker Hughes and GE’s oil and gas business have successfully combined to form Baker Hughes, a GE company (BHGE). The company is the first and only company to bring together industry-leading equipment, services, and digital solutions across the entire spectrum of oil and gas development – from upstream, to midstream, to downstream.
“By drawing from GE’s technology expertise and the capabilities of Baker Hughes in oilfield services, BHGE is able to provide best-in-class physical and digital technology solutions to drive customer productivity,” Qasem highlighted. He went on to add: “This is a breakthrough for the service industry due to our unique offering and differentiating technology. With operations in over 120 countries, BHGE’s global scale, local know-how and commitment to service continues to be a leading force in the industry.”
What can you tell us about BHGE’s future plans of expansion in Egypt?
BHGE has always been a key partner to Egypt’s oil and gas sector. Our presence dates back to the early 1900s when we were part of the country’s first oil discovery. Egypt holds some of the world’s largest oil discoveries and as the world’s only fullstream company we have a major role to play in the development of its natural resources.
We currently have a workforce of over 600
in-country and continue to increase our local capabilities through our engagement in large-scale projects that are driving further local impact. Most recently BHGE was awarded with a major contract for subsea oilfield equipment for phase 2 of the giant Zohr gas field offshore Egypt, we will provide project management, engineering procurement, fabrication, construction, testing and transportation of a subsea production system.
The award underlines the global scope and breadth of BHGE’s fullstream portfolio and local capabilities, with engineering support for the project coming from the UK, Italy and Norway. The steel structures will be manufactured in Alexandria, supporting local employment in Egypt, as well as the UK, Norway and Italy. Project management services will also be supported from Egypt and from the UK.
Leveraging decades of expertise in-country and growing its local manufacturing ecosystem, BHGE is committed to helping secure Egypt’s energy future through the development of local talent and efficiency-driven solutions.
How does the company’s technology and strengths affect its market share and presence in the industry?
In today’s oil and gas industry, innovation is paramount to staying ahead, especially when it comes to expensive offshore operations. We are continuously looking for ways to increase the industry’s access to new technologies and strengthen operational efficiencies.
Collaboration and partnership are key components to our success. We are working closely with our E&P customers to co-create new solutions that can increase efficiency, optimize production and improve ultimate recovery.
In Egypt, BHGE is helping customers develop energy reserves with latest technologies at a cost-effective manner and in a safe and compliant environment which has positioned us as the best-in-class company in providing complex technology solutions in the most efficient way.
How does Egypt compare to other countries BHGE operates in, in terms of growth prospects, potential market share, and general outlook?
With Egypt being the largest non-OPEC oil producer in Africa and the second-largest dry natural gas producer on the continent, BHGE fully understands the strategic role of Egypt in Africa and the Middle East region. Oil and gas is one of the most dynamic industries in Egypt, and hydrocarbon production is by far the largest single industrial activity, representing approximately 1% of Egypt’s GDP.
The Egyptian government encourages international oil companies (IOC) to participate in the oil and gas sector, and currently more than 50 IOCs are operating in Egypt.
We have been a major player and partner in the industry throughout the full cycle for decades and we continue to invest in our people and technology to support the demands of our customers in the country.
BGHE has been focused on localization and in-country value programs, can you elaborate on the company’s approach and philosophy in this regard?
Localization is transforming how producers and oil services companies are operating around the world. Increasingly, value-add is generated in the same country where the hydrocarbon resource is based. BHGE has been an early proponent of localization, realizing the win-win benefits it brings to both BHGE and the local markets it serves.
In Egypt, we are partnering with Petrojet, a leading EPC services provider, to locally manufacture API Certified Sucker Rod pumping units. The units have been fabricated and assembled in Petrojet’s workshop in Idku, Alexandria. Petrojet is considered the first partner for GE Well Performance Services (WPS) outside the United States for building surface-well pumps that have served oil fields in Egypt, the region and Europe. To date, more than 1,170 units have been assembled in Egypt.
Moreover, our industry has grown significantly across the globe, and it makes it more compelling from a commercial and sustainability point of view to locate more of the manufacturing, training and repair operations in the markets that we are invested in. For instance our Drill Bit Manufacturing Plant in Saudi Arabia is producing polycrystalline diamond compact (PDC) bits that are made entirely in the Kingdom. We now export these “Made in Saudi” bits to over 40 countries, which is helping create jobs and boost the local supply chain ecosystem.
Being closer to our customers has always been an important part of our strategy and we take pride in our growing regional footprint as well as commitment to technology transfer, working to raise manufacturing standards across the local supply chain, and creating new, higher-skilled jobs for the local workforce.
How do you see Zohr’s impact on the industry and the Egyptian economy?
Zohr which is the largest natural gas field ever discovered in the Mediterranean was discovered by Eni in August of 2015. With a potential of 850 billion cubic meters of gas in place, not only will Zohr be able to satisfy almost all the total domestic gas demand for the coming decades, but it will also allow Egypt to return to being an energy exporter.
With this discovery, the Zohr gas field will help strengthen Egypt’s energy ecosystem by creating a gas surplus to support the growth witnessed across sectors as well as drive economic and industrial development in the longer term.
Generally speaking, how can the private sector positively impact the local petroleum industry and economic welfare?
The private sector already plays an integral role in the economy, providing the lion’s share of employment. In my opinion, there is significant potential for private sector investment to meet the country’s growing demand for energy and fostering a dynamic economy. There is also ample scope for the private sector to address skills mismatch challenges, and enhance training.
Egypt is a country rich in young, talented human capital, therefore we are always keen to promote localization and to create job opportunities to leverage their skills to better serve the market. We continue to invest in the workforce of the country, for example we have the Field Engineers’ Lead Program which develops and invests in talented petroleum engineers through learning and international assignments. Additionally, we are looking for partnerships to help build local supply chains, which in turn help build capabilities, create jobs and positive economic returns.
Ensuring a predictable and attractive investment climate would help attract significant foreign direct investment and better utilization of the country’s oil and gas resource base. In the longer term, Egypt faces the challenge of transitioning to a more environmentally sustainable economic model. A range of energy efficiency and renewable investments are already financially viable under current conditions in the industrial, commercial, and residential sectors, especially if accompanied by more coherent regulation and better monitoring and enforcement.