5 Minutes With: Dick McAdamby Yasmin Helal on Jan 10, 2017
What is the most notable difference that you see in the regional industry now compared to that in the 1980s?
The sector in those days was still dominated by the seven majors - Exxon Mobil, BP, Shell, etc. As a consequence, the available products were entirely from the US, Europe or Japan. Now, the market has grown so much in size and has become so competitive, importing products from everywhere on the planet including China, India and Mexico. So there has been a shift from buying just American products to choosing from a global selection.
Do you feel the regional industry has become more focussed on return on investment?
Yes. In those days, regional players in the oil and gas sector were very loyal to certain companies. Any product that had the GE brand on it, for instance, was highly desired here in the GCC. In its simplest form, that was true of the cars as well. In the 1980s, the cars on the streets were all American. Today, this is obviously not the case.
What do you think is the rest of the world’s opinion about the oil and gas sector in the Middle East?
Compared to the other regions of the world, I think these days the oil and gas sector in this region has cutting-edge technology in terms of products and progress. For example, the Abu Dhabi funds are about $3tn and there is so much resource behind them. I remember going to an ADNOC seminar, which were the very early days of horizontal drilling. This was at a time when the global industry hardly knew about it. In Abu Dhabi, they were already doing it. So I think that here in the region they want the best of technology, which they can afford to buy. The rest of the world can clearly see these indications.
Will SPX-Flow be undergoing any major change in the corporate strategy in 2017?
I think that 2017 is going to be a flat year over 2016 here in the region, which is a good thing. Elsewhere, the market is still down. Here, Bahrain will build a new refinery this year; Oman has the Duqm project, which is one of the biggest projects in the world; Kuwait is building a refinery; there is the East-West pipeline in Saudi; and there are also a lot of new projects happening in Abu Dhabi.
How is your company surviving the decline in oil prices?
With the downturn, we had to address our capacity for manufacturing facilities elsewhere in the world (in terms of headcount), but not in the GCC. Despite the global decline, the region has been one of the success stories in the last two years. This is mainly because of the huge funds and reserves of the regional NOCs. Additionally, their plans are not just for the short-term, rather they extend those for 25 years. Thus, the current market condition is just a bump in the road.
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