Hisham El Grawany – Area Manager (North Africa), DNV GL, Egypt
Hisham El Grawany, Area Manager (North Africa) of DNV GL, tells us about DNV GL’s value proposition as a service provider partner of choice to the oil and gas industry; their commitment to Egypt both as a domestic market and a hub for expansion into the African continent; and the relevance of digitalization to the North African market.
Hisham, can you tell us where DNV GL’s business is today in North Africa and specifically Egypt?
“DNV GL is very committed to Egypt. Four years ago, even when things were difficult, the company had plans to invest significantly in the Mediterranean.”
Within North Africa, DNV GL is presently working in Algeria and Egypt. Coming to Egypt specifically, DNV GL has been established here for many decades, beginning in the maritime sector. We entered the oil and gas sector here in the late-1970s with our first job being the certification of two platforms for General Petroleum Company (GPC). We were one of the first to offer such certification services for the oil and gas industry here. Our operations here have expanded since and we consider various NOCs, IOCs and joint-venture (JV) companies as clients.
The cornerstone of our development in Egypt was perhaps the independent verification and certification services we offered to Burullus Gas Company (a JV company between EGPC, former BG – SHELL – and Petronas) in 2002 for their deepwater projects. We were the first to introduce this service to Egypt and we continue to work on their offshore facilities today. This is a huge mega-project and we are pleased to have maintained a longstanding relationship with them.
Between 2005 and 2012, we also delivered one of the biggest projects in Egypt for Gulf of Suez Petroleum Company (GUPCO) in asset integrity management. Today, we continue to contribute our expertise and services to both offshore and onshore projects, and most notably, we are working on Phase I of the Zohr field with marine warranty surveys and other activities.
We are also present in the downstream sector with an ongoing inspection and certification project for Egyptian Refining Company (ERC), as well as a certification project for Western Desert Operating Petroleum Company (WEPCO).
DNV GL prides ourselves on bringing new ideas to the industry, differentiating ourselves from the competition, and adding value to our clients’ operations – along the entire value chain of the industry. Therefore, DNV GL invests around 5 percent of our annual revenues on R&D. Many of the industry’s actual working standards have been set by DNV GL. We have also initiated the Joint Investment Project (JIP). Many of our research and innovation activities are done in collaboration with industry partners and other research institutes. Because we are independent, we can bring together parties who would otherwise not collaborate. The end result is often a new technical standard or recommended practice that is shared with the entire industry
We have a fully established office in Egypt with over 80 people working in the oil and gas segment, of which half are permanent full-time employees and half are external expertise. DNVGL in Egypt also have around 20 employees working in the maritime segment; ten in the business assurance team; and one business development person for renewable energy.
In the past few years, the global oil industry has been undergoing some challenges as a result of the low oil price. How has DNV GL Egypt managed to weather the storm?
The past four to five years have been characterized by low activity from the IOCs and overall price and investment instability. The priority was for us to complete all open projects to fulfill our client obligations. Then we looked at the market to see how we could adapt our service offerings to their needs.
The positive thing about the oil and gas industry is its maturity. Companies and managers understand the industry dynamics and the risks, as well as its long-term nature. They may have lacked the time and money for capex in the past few years but they recognize that production is oncoming, demand will return and it is a good opportunity for them to reevaluate their assets. They therefore started looking at OPEX and there are many areas here we can contribute to, like production integrity, asset integrity and quantitative risk assessments (QRAs). We have done a few OPEX projects with RASHPETCO, for instance.
We have this flexibility because of DNV GL’s ‘glocal’ mentality. We combine global support with local presence, and I am also very proud of my strong and supportive team here in DNV GL Egypt.
During difficult times, companies do need to consider cost reduction programs and DNV GL is no different. We have reduced head count to some extent but as a company, our people are our assets so this is never our first response, typically a last resort. Even then, we have done it on a very small scale with a focus on offering early retirement to people already approaching retirement.
You mentioned that DNV GL is working on some of the largest projects in Egypt like the West Delta Deep Marine terminal and the Zohr supergiant gas field. What expertise are you bringing to these important projects?
In Egypt and also within our global organization, we are used to deliver the full scope of DNV GL’s capabilities and expertise. For instance, on the Zohr project, we are handling the contract for marine warranty services by DNV GL in Egypt in addition to fully collaborating with DNV GL Milan office to support project deliverables within other required activities. This is something DNV GL Global CEO Remi Eriksen has expressly committed to during the recent Offshore Mediterranean Conference (OMC), where he was very impressed by the conviction shown by H.E. Minister of Petroleum Tarek El Molla. He pointed out that since the government is looking to integrate Egypt into the Eastern Mediterranean as an energy hub, we should also do our part to offer integrated services to support these various projects being initiated here, using Egypt as a focal point but with a global perspective. It is about how we can support our clients here in the best way possible.
Another megaproject we have been working on is with BP in West Nile Delta through the global agreement BP & DNV GL have globally. The DNV GL Egypt office is being used to run the project activities in coordination with other DNV GL offices worldwide.
As part of our development specially for communication efficiency, we have implemented a new digital tool called ‘iI2’, which enables easy coordination of all the people working on the project as well as all the documents and data that need to be shared.
There are many challenges to handle such megaprojects. One of the challenges is the competent resources that are invested in them. We do not face any problem with this because we are a mature organization and have already worked with IOCs on megaprojects before in the North Sea, the Gulf of Mexico and Houston, US.
Meeting the project schedule is another challenge; although the owner and the EPC contractors are the drivers behind schedule, considering the fact that our role is to take quality standards extremely seriously, without any compromises to quality, we communicated our specifications, expectations and requirements in advance to the owner & EPC contractors to make sure that they are well prepared instead of interrupting the flow of their project or delaying completion with any negative surprises at the end. This is what we did with fast-track projects like Zohr: many documents needed to be reviewed by our UK and other international offices, and we took the initiative to send the contractors a list of documents required to be reviewed in advance to minimize ambiguity and margin for error.
On a broader note, DNV GL’s CEO Remi Eriksen has said that digitalization is the future of the company. Why is this so important to the company and is this idea relevant to North Africa and Egypt in particular?
Absolutely. Digitalization does not mean simply having new or state-of-the-art facilities. It is about utilizing existing or old facilities to be fit-for-service and to do more with less. Instead of spending more and more on new equipment, infrastructure or projects, if something is fit-for-service, increases accuracy and can be operated remotely, this option needs to be offered to our clients. We believe it is our customers’ rights to be given better solutions.
For instance, having worked on independent verification and certification for Burullus since 2002, we had collected 14 years of information about their deepwater facilities. The question was how to utilize this information to assess whether these older assets were still in good shape. Digitalization and data management allow us to support our clients without asking them to invest in expensive, sophisticated solutions. It also enables continuity within the organization and systematizes the client relationships and data collected. Now future projects with our recent clients will not have to depend on persons; it will depend on data and knowledge.
The local market definitely sees the value in digitalization. A positive feature of the Egyptian environment is that from the very beginning, many of the key players have been JVs, which brings employees from IOCs and NOCs together. This allows for the sharing of experiences and technology transfer, which is a win-win situation. There are many areas where digitalization can benefit the further development of our clients, our company and our country.
Moving forward, what is the continuous importance of Egypt for DNV GL globally?
DNV GL is very committed to Egypt. Four years ago, even when things were difficult, the company had plans to invest significantly in the Mediterranean. We have strong long-term relationships with our clients here and we expected that more opportunities and projects will arise in the future, and this has been realized in the last year. Egypt’s successful track record in oil and gas suggests that the country will keep going.
During the downtime, senior management advised me to focus on staff development and training, because we were not fully utilized. As a result, I mobilized many of my team to more active locations for them to gain global experience and skills, and also conducted a lot of classroom training. This shows the level of investment we have made into our team and presence here.
Furthermore, Egypt also fits within the company’s strategy to invest and develop further in Africa. Egypt is the obvious hub for expansion into the continent because we have a lot of qualified staff working in English, French and Spanish, who are also very familiar with African countries. Egypt has had a good relationship with most African countries for a long time so there are no travel or trade barriers. The office here is also mature enough to act as an anchor.
Finally, Egypt is not just well-positioned as a hub for Africa but is increasingly acting as a hub for the Eastern Mediterranean region. The country has the infrastructure ready, with two LNG facilities, transport links like the Suez Canal as well as many national contractors like Enppi and Petrojet that can deliver local projects to international standards. This reduces the cost of investment for foreign companies. There are also refineries and gas terminals. Egypt’s geostrategic location within the Eastern Mediterranean, with neighboring countries all looking to develop their own petroleum assets, is ideal. The last critical factor is the cooperation Egypt has built with her neighbors. When it comes to business, there needs to be a very clear strategy outlined from the very beginning and Egypt has done this. There are clear benefits for all stakeholders, domestic and international, to develop Egypt as a regional energy hub.
As you have highlighted, DNV GL prides itself on delivering value to its clients along the entire value chain. As Egypt sets out to achieve its ambition of being a regional energy hub, how will DNV GL support the country?
DNV GL’s philosophy is to treat our clients as partners. This applies to all the countries we work in.
DNV GL’s management in this area are all Egyptians, so we care about our country’s development and success. Egypt is looking for the transfer of knowledge and experience to her people and this is entirely aligned with DNV GL’s policy of assembling local teams to train them to lead the local business.
As a service provider spending 5 percent of our turnover on R&D, we are well-positioned to help Egypt with any challenges they may face. For instance, when we heard that a long offshore pipeline will need to be constructed for Zohr, we decided to organize a Pipeline Day Seminar in Egypt, bringing our Global Pipeline Director, our Offshore Pipeline Expert in addition to Liv Hovem, DNV GL senior vice president and regional manager for Europe, Africa, Middle East and India to conduct an open seminar to share our expertise – free of charge.
We are one of the best service providers to Egypt because we see our work here as a true win-win partnership for both parties. Therefore, we are loyal to our clients and our clients are also loyal to us.
As an Egyptian working for an international company, do you have a final message for potential investors?
I believe we have passed the pain to gain, and now we are on the right track. Many challenges have been solved – and many challenges should be seen as opportunities. For instance, the currency devaluation does affect Egyptians but it also provides a boost to the local industry. The country has made admirable, sustainable progress and I see even more success on the horizon.