Stepping into the ring

[L-R] Tawfiq Abu Soud, Karim Khairy Nasr, Issam Sharara and Terry Willis
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How does a company without a proven background in the local oil and gas business enter the industry? Oil & Gas Middle East sat down with four industry experts to see how that barrier can be overcome

The Panel

Tawfiq Abu Soud
Executive director of infrastructure, water and power at Drake & Scull International. He is looking to expand the company’s construction and engineering portfolio into the upstream oil and gas business.

Karim Khairy Nasr
Operations manager, Middle East, TecWell. Nasr spent nine years with Hallibuton as an E-Line engineer, and now represents the Norwegian acoustic logging company from the Abu Dhabi base in Mussafah.

Issam Sharara
VP international business development, Middle East, Cudd Energy Services. Cudd offers a broad range of technical and specialised oilfield services to companies engaged in the E&P activities.
pressure pumping, hydraulic workover, coiled tubing and well control services.

Terry Willis
Managing director of the Energy Industries Council – A UK based trade association. The EIC provides services to help member companies expand their business in the oil, gas and power sectors in the region.

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If national oil companies demand local experience as a prerequisite, how do new firms penetrate the market?

Issam Sharara: Where a contract calls for local experience and local services, we have gone into joint venture with a local company or our existing local agent for that specific project. When a local base is demanded we can activate that local joint venture relationship.

Tawfiq Abu Soud: That may work when you already have oil and gas projects on your portfolio, but without that experience it is much harder to even qualify. This means only existing companies will get work, and no newcomers can enter the market. That in itself is bad for competition and ultimately bad for the oil companies. Of course, when you are specialised to the extent that you are the only person in the market that can do what you do, you don’t have a problem entering any markets. They need you. However, if you are in EPC the oil companies can throw up barriers to new entrants because they think there are already enough players in the market.

Terry Willis: A good example here is Petrofac. Having previously not secured any upstream work in Abu Dhabi, despite an impressive regional portfolio, in September 2008 they signed a joint venture agreement with Mubadala. Since then they have secured around $7 billion worth of Abu Dhabi projects.

Essentially, if you have something to offer and something to give, then finding the right partner is the key, and there are plenty of success stories out there.

Tawfiq Abu Soud: We have on our staff a tremendous wealth of experience in the oil and gas industry.

However, in spite of this, the only way we can penetrate the market is to partner with already well established players in the market and the major EPCs. The biggest problem we are facing is with Western companies. The American and European firms seem reluctant, whereas we have been very successful with the Asian companies who are more willing to play ball.