QCON interview:broad horizonsby Arabian Oil & Gas Staff on Mar 13, 2016
Qatar is home to a growing number of contracting companies, some established to take advantage of the pre-2022 World Cup construction boom, while others have been here for decades.
One such company that is firmly rooted in Qatar, is Qcon. Established in 1975, initially as a maintenance company, the firm diversified over the years, moving to fabrication related off-shore structures, evolving into construction and, eventually offering a full spectrum of engineering, procurement and construction (EPC) services.
Mazen Abu Naba’a, Qcon’s managing director, has held his position since 2006 and has been in the country for 49 years, with origins in Palestine. He explains the company’s core focus, which covers diverse areas: “Today we have three core businesses under one umbrella. The principal competency of Qcon started with maintenance and we have expanded regionally into maintenance shutdown and normal maintenance, manpower supply and modification works – that is a major part of the company.
“The second part is cyclic, such as building off-shore marine platforms and, the third part is project management in terms of construction projects and engineering procurement and construction (EPC),” he explains.
The projects that Qcon has worked on are mainly oil and gas. In terms of maintenance this includes RasGas and on the construction side, the Dolphin Gas project, ($220mn), Qatargas Jetty Boil-Off Gas (JBOG) Project, and also work on Barzan among others, too numerous to list.
While the ongoing uncertainty in the region around the fluctuating oil price has the market hesitant around investment and there is a definite ‘wait and see’ attitude, Abu Naba’a assures that the drop in oil price has not been detrimental to his business.
He elaborates: “The price drop is not hitting us directly – where it is hitting us is more from a client attitude, in terms of asking to renegotiate the prices on existing contracts. These contracts were won on a competitive basis but nevertheless, expectation is that somehow there is a reason for reduction,” he says.
“Construction in Qatar did not change and actually it has gone up – creating a dilemma to manage it [the perception]. We are talking about eroded margins more than eroded business,” he adds.
“The oil price crunch is forcing everyone to be price sensitive, with some companies reducing profit in an effort to maintain their workforce to get through this phase, to weather this period. To mitigate that, we look regionally for compensation for work volume,” he explains and continues: “On the oil and gas construction side there is shrinkage, as most of the plants are already mature and operating, leaving a few projects that everyone is fighting over.
“This is leading to lower margins, with contract terms and conditions becoming one-sided in favour of the client, creating additional intrinsic commercial risk to contractors.”
- Special Report: Predictive intelligence
- Oman's energy sector makes modest gains
- Adept wellheads key to sector's total wellness
- Digitalised future for the GCC
- Case Study: Going digital
- Comment: Apt time for new strategies
- Comment: Strategy for success
- Qatar builds on LNG strength
- Life Lessons: Passion for profession
- Need of the hour: gas pricing reform