Joel Eacker – Senior VP, MENA & Asia Pacific Operations for Energy & Industries, CH2M, UAE
Joel Eacker reveals how, as a service company, CHM2 is working to position itself as a solutions provider to its clients in the region; the importance of the Middle East for their energy and industries business; and their ambition to use a distributive business model to leverage global capabilities for Middle East operations.
Mr Eacker, in May 2016, you became Senior Vice President of MENA and Asia Pacific Operations for Energy and Industries at CH2M, following an extensive career with the company. What particular mission were you set upon your recent appointment?
CH2M needs to consider how we can help the National Oil Companies (NOCs) and International Oil Companies (IOCs) to be more efficient, reduce the net cost of their capital investments and, crucially, offer delivery certainty.
My mandate is to look at both the MENA and Asia Pacific regions and gain an appreciation, in both our energy, and advanced technologies and industries markets, of the current investment trends and consider how CH2M should be responding so as to best serve our clients and various shareholders.
When it comes to the oil and gas industry, the market is undergoing a significant restructuring. My role is to imagine a future where the price of oil remains at USD 50 to 60 a barrel for the long-term. Against that background, CH2M needs to consider how we can help the National Oil Companies (NOCs) and International Oil Companies (IOCs) to be more efficient, reduce the net cost of their capital investments, and crucially, to offer delivery certainty.
In his first statement to the press since becoming CEO of the Abu Dhabi National Oil Company (ADNOC), H.E. Dr. Sultan Al Jaber, stressed the importance of operational efficiency, which can often mean cost-cutting. What challenges do you foresee, in such an environment, for a company such as CH2M?
There is certainly a drive to be more efficient during these challenging market conditions. However, a focus on operational efficiency does not necessarily mean cheaper prices – it can also mean smarter solutions. CH2M draws on a significant stock of expertise and experience, for instance, through working with BP on their Prudhoe Bay oil field operations located on Alaska’s North Slope. We have worked on asset management at one of the largest fields in the world. We are now looking to see how we can transfer some of the know-how we have gained from helping BP to be more efficient, to potentially help NOCs in the Middle East. There will certainly be an increasing focus on cost-cutting, which is understandable due to the current oil price climate, but we are convinced that there is room for innovation and improved operational efficiency. This is something we are committed to working with our clients on.
As a service company, we look to combine having the best people with an ethical, sustainable and long-term approach to business. What sets us apart is that we are an employee-owned company. Having our employees as owners of the business provides us with a different mind-set. Perhaps as a natural extension of this, we also have a strong client focus. CH2M has won numerous awards for its ethical and sustainable approach. Our social responsibilities, at a corporate level, matter to both our people and our clients. The current downturn in oil prices means that service companies need to think strategically and position themselves as solutions providers to our clients. This is precisely what CH2M is doing: we want to the service company of choice for the oil and gas industry in the Middle East.
What are some of the major projects that you are currently working on in this region?
Our two largest NOC clients in this region are ADNOC and Saudi Aramco. Notwithstanding a focus on consolidation, both are still investing considerably during the downturn.
Notably, we have been working hand-in-hand with Al Hosn Gas on the Shah Gas Development in UAE – the largest sour gas project in the world – providing program management expertise to supply more affordable electricity to Abu Dhabi’s growing population. This is a critical contributor to Abu Dhabi’s economy as well. This has been one of the largest projects that CH2M has ever worked on. At its peak, it employed over 130 of our employees. Today, we are helping Al Hosn Gas to further develop its gas gathering capabilities and are interested in supporting them with their next expansion stage of the Shah Gas project.
In Iraq, we are working for Shell, Petronas and the South Oil Company (SOC); SOC is an Iraqi company responsible for the oil in the South of Iraq. With them, we are working on their Common Seawater Supply Project (CSSP), which is a multibillion development program.
We also collaborate with a number of EPC companies; we have service offerings where we work directly with the NOCs, and other instances we work directly with contractors and the IOCs.
CH2M´s strategy for long-term sustainable growth has been based on expanding business into new geographies. In this context, what is the strategic importance of the Middle East to your business today?
When it comes to our energy and industries business, we have two key regions: the Middle East and North America. We have been active in the oil and gas industry in the Middle East for over 20 years. We are committed to this region and are looking to expand our operations further. Our biggest market has traditionally been the UAE, but we also have a strong presence in Iraq and Saudi Arabia, and are also active in Oman. We are looking to expand our footprint into Kuwait, as well as increase our presence in Qatar.
The Middle East is a leader in terms of using its existing capabilities and expanding them into different areas. I have always been impressed by the extremely well developed infrastructure and longer-term thinking in countries such as the UAE, Qatar and Saudi Arabia. Such countries are looking at the bigger picture and are not overly focused on quarterly results. Cconsequently, clients are willing to spend money to invest in technological improvements. Certainly, a number of approaches that have been used in this region could be utilized in other markets.
Hong Namkoong, VP and MD (UAE) of Samsung Engineering, was telling us how fulfilling local content requirements in this region was a key factor to winning work. To what extent is Emiratization, or Saudization a key part of CH2M´s strategy?
We have always cherished the fact that, while we are a global company, we truly care about our local clients in each market. Indeed, our motto is ‘global capabilities, local execution’. In this regard, we always look to work as much as possible with the local contractors and local talent. This ties in very much with Dr. Sultan Al Jaber´s leadership vision and in fact, we have cultivated a strong relationship with ADNOC: the very first PMC contract awarded by ADNOC went to CH2M 15 years ago.
As part of our work in Saudi Arabia, we have ambitious Saudization targets that we intend to surpass. We employ a large number of regional staff. Not only because it is the correct way to work, but also because it is makes sense from an economic perspective.
What is your five-year vision for CH2M´s energy and industries operations in the Middle East?
We are ideally equipped to support this region’s penchant for megaprojects. While, admittedly, our business in the Middle East is facing particular challenges during these difficult times, and we have had a number of contracts which clients have chosen not to pursue, we are confident in our commitment to be in the Middle East for the long-term. CH2M will therefore see through any short-term difficulties.
There are a number of priorities for us. We are very interested in helping Iraq sustain and even increase their production levels. We are keen to play a role in Saudi Arabia´s 2030 vision, both on the energy side, as well as from an industrial and infrastructure perspective. We want to sustain our relations with ADNOC and its Group of Companies. In five years’ time, I would also like us to have entered the offshore space. Today, we are seen as an extremely robust upstream onshore oil provider. We want to be more of an infrastructure and offshore provider. We also want to increase our presence as an asset manager in the Middle East, helping clients with their operations and overall long-term management of their assets.
Lastly, our objective is to expand our industry business, pursuing data centres and focusing on areas such as pharmaceuticals and chemicals. We are already active in such fields globally, but have yet to truly deliver such services in the Middle East. Our ambition is to use a distributive business model, mobilizing our people in both Europe and North America, for the benefit of this region. By combining our technical centres in Portland for our advanced technology business, in Greenville for our pharmaceutical and chemicals business, in Houston for our oil and gas business and in Krakow through our global design centre, we will be able to provide technical expertise at the most competitive price.