The new facility in Kattameya is part of a transformation process by Weatherford that started two years ago. Spanning across 40,800 square meters and employing approximately 230 people, the cost-effective initiative is estimated to save approximately $1.5 million per year for one of the biggest international oil and natural gas service companies operating in the Egyptian petroleum sector.
The facility delivers various life-of-well technologies, such as drilling rental tools, tubular running equipment, liner hangers, cementing products, completion systems, managed pressure drilling, fishing tools, and a fully loaded and certified machine shop.
Weatherford presented the new facility to the guests of the opening ceremony, led by Eng. Mohamed Moanes, the Egyptian Ministry of Petroleum’s First Undersecretary for Gas Affairs; Eng. Abed Ezz El Regal, CEO of the Egyptian General Petroleum Corporation (EGPC); and Eng. Osama El Bakly, CEO of the Egyptian Natural Gas Holding Company (EGAS).
“We had world-class machine shops everywhere, but getting them together creates more efficiency,” said Mark McCollum, Weatheford President and CEO.
“The key thing for machine shop services is having the correct license, and it has to meet global standards, to renew it yearly, after going through strict auditing requirements. We are the only ones in Egypt to have all those multiple variations of licenses here in Egypt,” commented Walid Yassin, Weatherford Vice President – North Africa.
Eng. Mohamed Moanes, the Egyptian Ministry of Petroleum’s First Undersecretary for Gas Affairs spoke to Egypt Oil & Gas on the sidelines of the tour, and explained that the new facility plays a part in sector’s modernization. “Once we have everything collected together, we are going to save time and do something better in order to make the production more efficient. This is going to work the most with the exploration and production (E&P) companies and drilling and completion (D&C) companies,” Moanes added.
Moving to the liner hanger department, Bassem Nour Eldin, Liner Hanger Operations Manager, explained that last year, “Weatherford ran the first 13 3/8-in liner in a well in the Noor gas field. It was the first that has ever been run in deep water here, and this due to our transformation and the availability of the equipment at all times, and we successfully ran it without any issues.” Moreover, the company’s staff explained that the Vero Automated Connection Integrity System is being applied in the Zohr gas field, in cooperation with the Balaeim Petroleum Company (PETROBEL), allowing for automation to increase operations efficiency.
Meanwhile, Saeed Abdel Moniem, Operations General Manager at Khalda Petroleum Company, told Egypt Oil & Gas that the artificial lift presented in the new facility has been successfully tried before in Egypt, noting that, “The new facility is excellent because it has everything in one place, everything is here.”
Presenting the completion department, Weatherford’s staff explained that it serves customers in the areas of completion, gas lift, and thru-tubing services, through the new and more fit-for-purpose area than what they had before. It gathers bucking machines, pressure test, and inspection in one area, before sending the equipment out to customers. “The pressure test facility is ready and working with 360-degree camera, cranes also cover the entire facility. In the past it took time to move to the machine shops, but now it is all here,” added Yassin.
When asked by the CEO of EGPC about the safety measurements and precautions at the new building, Weatherford Vice President for North Africa said, “the facility itself is built in a way that allows it to stand in one single structure, so there are not much pillars as you can see. Of course, we also have all the safety standards in regards to escape routes and signs. By using overhead cranes in the right place, we are also avoiding many problems.”
“The entire facility is regularly tested for ISO certificates, [the American Petroleum Institute] API standards, and the Lean Six Sigma standards as well. There are also fire detectors everywhere with a central automatic alarm and extinguishing system, plus the portable system, and H2S detectors,” according to Yassin.
Abed Ezz El Regal, CEO of the Egyptian General Petroleum Corporation (EGPC), told Egypt Oil & Gas that expanding the presence of international oil companies (IOCs) and their activities in Egypt reflect their trust and the environment for investing in Egypt. Secondly, they are expanding the activities in the market with IOCs as well. They are advancing and improving their existence and they are willing to invest and stay in Egypt. They have an optimistic vision regarding the upcoming bid.
Weatherford has also invited partners to audit the facility, the company’s staff explained, and throughout the tour, which included other departments and warehouses, the staff highlighted that the focus is shifting to efficiency, and that all records are being computerized and stored on the cloud, replacing paperwork, thus saving time and enhancing asset integrity.
Egypt Oil & Gas then spoke to Mark McCollum, Weatherford President and CEO, on the sidelines of the event and asked about the prospects for the new technologies he mentioned in his presentation, led by Tr1P, the system Weatherford calls the world’s first and only remote-activated, single-trip deep-water completion solution.
“The Single Tr1p Completion System is in its first stage gate of commercialization, where it has been running a series of wells under specific conditions. The new technology runs upper and lower completion in one a single trip, and it is designed for offshore environments. We are running more tests to use it in more broad applications,” said McCollum.
“Tr1p has been run in the North Sea, where we were able to save Shell about $150 million on 20 wells, and in Nigeria and it has been highly successful, saving 72 hours of rig time.” McCollum expects “it could achieve the same success here in Egypt.”
“We already introduced the Magnus™ Rotary Steerable System (RSS) and there will be some trial runs for it. Magnus is a Push-the-Bit system replacing a different one that we previously had that is still used in some applications, but it is not necessarily cost-effective as many customers would like it to be. It had to be repaired quite a bit as it had multiple tools. The Magnus is a simpler system, which takes all the best technologies out there and combine them,” McCollum told Egypt Oil & Gas.
When asked about the trial runs for the Magnus, the CEO of Weatherford said, “We have drilled several tests in the United States, in the Permian Basin and the Eagle Ford Basin where we did in fact drill an entire well with one tool.
“We also had successful tests in Saudi Arabia, where we have been able to steer through multiple challenging geologies with one single tool, and in Mexico, we used it offshore and drilled successful wells there as well.
“It is a highly adaptable system and is easy to repair, so the operating cost is significantly lower, and we are still trying to refine the edges. What we found is that from an efficiency standpoint, having to take tools on and off the rig, replacing any broken parts, wastes a lot of time, but using one tool that can drill the lateral sections, the curves and everything, saves all that time spent in switching tools. I believe the Magnus will be a game changer here in Egypt,” McCollum affirmed.
Another system that was presented during the launching ceremony of the new facility that Weatherford is introducing and is in talks for using it in offshore rigs is the Vero Automated Connection Integrity System. “It uses auto-tongs. Previously, tongs would collapse and then the rig crew would spin a chain and twist the pipe that connects them, so instead of having this mechanical process, it is now automated. Laser is used to make sure that everything is perfect and pipes are symmetrical and sealed, to avoid any leak. This eliminates the risk of bad pipes and saves about 10% in time,” said the CEO.
Another Weatherford system that uses automation and artificial intelligence is the ForeSite platform. “What the system does is that once the wells are producing, whether with mechanical rod lifts or electronic submersible pumps, it provides information that lets operators know how the equipment is performing, failing or out of balance, allowing for preventive maintenance. It can also, with the use of advanced technologies, monitor the flow in the oil and water cut, and know if it is producing too much, starting to scale, or if production is going down, McCollum added.
“Actually, it can automatically inject chemicals to the well, which enhances precision and efficiency. Because customers can monitor everything, they have the ability to plan. No well is on one lift for its entire life, users will know exactly when to shift to different forms and get it done before the well stops and halts production for a period of time,” he further explained.
“Google and IBM are partners with us in that technology, and for our company, with lower global oil prices, more emphasis from investors in Wall Street is on returns and cash flows, and it is all about production. The biggest single thing that can be done to generate better returns is getting production up and cheaper, and that is where we can help, and where Weatherford is leading from a technology point of view, and we are pretty excited about that,” McCollum stated.
Egypt as an Investment Target
Fredrico Justus, President of Eastern Hemisphere at Weatherford, told Egypt Oil & Gas that he first met the Egyptian Minister of Petroleum, Tarek El Molla, during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2016), when the minister shed light on Egypt’s extraordinary potential.
“I then came to Egypt for the first time for the first edition of the Egypt Petroleum Show (EGYPS 2017). At that time, our base was still fragmented and not yet efficient, so we decided to have integrated operations here in Egypt, and in two years, the facility is up and running,” said Justus.
Justus told Egypt Oil & Gas about what he considers a very successful transformation process that the company has been going through ever since McCollum came on board as a CEO in March 2017. The transformation set the way Weatherford plans to operate in Egypt, as it began operating in a more efficient way. Being integrated into a single place with a single management, Justus sees the base brings efficiency and boosts competitiveness to the market, also offering a platform where anyone can grow their business in a sustainable way which is aligned with the current strategies towards the growth in the oil and gas activities.
“We saw big discoveries in Egypt and we hope to see more operators coming to the country moving forward. Weatherford will now be better positioned to benefit from more activities and investments in the Egyptian market,” Justus said.
Looking at the existing activities in the Egyptian petroleum sector, Justus believes that from a commercial viewpoint, being more competitive and having a lower cost basis for operations makes the company more attractive, which is ultimately helping to grow its market share, and increases its chances in obtaining more contracts.
Discussing the top solutions and technologies that the company has been working on over the last two years during the downturn in the oil market, Justus explained that Weatherford has introduced the Managed Pressure Drilling (MPD) to the Zohr gas field, and will now be introducing the Vero Automated Connection Integrity System. Afterwards, Tr1P is the most likely to make it to the Egypt market, as there are now negotiations to apply it.
Justus also emphasized that because Weatherford really values the Egyptian market, he expects all the technologies to be coming here soon, even the Maguns, although the company is yet to have contracts for logging-while-drilling (LWD) and rotary steerable systems (RSS) in Egypt.