Osama Halim – Area Manager, Egypt and Libya, Halliburton
Osama Halim, Halliburton’s area manager for Egypt and Libya, discusses his first impressions of his home country after having worked in the international oil and gas industry for two decades; the innovative and tailored solutions that Halliburton is bringing to Egypt through collaboration with their customers, most notably on the Apollonia project, and his hopes for Egypt as the country seeks to modernize its oil and gas industry.
Osama, after spending nearly two decades of your oil and gas career outside of Egypt, what brought you back to Egypt and what are your first impressions of the industry here?
“Despite Egypt’s proximity to the Middle East, the oil and gas market here is very different”
Having worked in the oil and gas sector in a number of countries, including the US and other countries in the Middle East, what struck me first when I returned was the fact that, despite Egypt’s proximity to the Middle East, the oil and gas market here is very different. It is a common misconception that Egypt is just another Middle Eastern country. In fact, the oil and gas market here is similar to the North American market, which is very transactional. Local economic and petroleum investments including activity depend heavily on the commodity prices.
This is why the first thing I did when I returned was to closely analyze the market, as well as Halliburton operations here. There are a lot of prospects in Egypt, which the Zohr discovery made visible. The discovery of deepwater gas was a huge eye-opener not just for Egypt but for the world. Beyond that, Egypt is a big country and there are still many unexplored areas in the West Nile Delta, the Western Desert and Upper Egypt – and a lot of investment is needed. The main question for Egypt, however; is how to attract that investment.
Ultimately, the last drop of oil will likely come from the Middle East and North Africa, because of one reason: the cost of lifting the oil in the Middle East is so low. That means that investors will continue to invest here until the end. Comparing Egypt and the Gulf countries, it is possible that Egypt may have even more potential because it is still underexplored compared to the Gulf. The Zohr discovery is an excellent example – especially when you consider that there are huge prospects of oil below the gas too. Besides oil and gas, Egypt also has huge potential for alternative energy like solar and wind energy. I personally have solar panels powering my heaters and some of the electricity at my house. Solar power is definitely another underutilized energy source in Egypt.
What is the strategic significance of Halliburton operations in Egypt?
Halliburton has been in Egypt for almost 50 years. We have substantial investments in Egypt and are in Egypt to stay. It is a good market and because of the talented workforce here, this office has been functioning as a hub for Halliburton to hire, train and send people across the entire region and eastern hemisphere.
Our office here has around 1,000 employees, with Egyptians comprising almost 98 percent. Basically 99 percent of the management team is Egyptian. Everyone has been trained overseas, which shows the confidence we, as Halliburton, have in Egypt.
As an Egyptian working for an American company, I have a desire to see Halliburton succeed in Egypt but I also want to see my country succeed, which depends on investment from international companies like Halliburton.
Ultimately, a healthy environment for investment requires two factors. The first is security – people will not invest in a country where they feel insecure. By security, I mean physical security as well as financial security. Not only must you trust that you can walk safely down the street to work, you must also be able to trust that you can put your money safely in the country.
The second is the growth prospects available in that country – the amount of money that an investor can make. In that sense, Egypt has a lot of flexibility that many other countries do not allow, because the country recognizes that it needs to work hard to attract more investment and human capital.
It is interesting that you mention that the Halliburton Egyptian office acts as a sort of training hub in the region because we have noticed that many regional managers in the Middle East are actually Egyptian. What explains the success that Egyptians have seen in the industry?
I think passion and commitment are key to the success of Egyptian talent in the oil and gas industry. This may be partly due to the situation of the country – because it is difficult to find good employment here, Egyptians abroad are even more motivated to go the extra mile in their jobs. For me personally, between a person with excellent education and training but no passion, and a person with perhaps a more average background but a lot of passion for the job, I will always choose the latter.
With that said, we have almost one thousand degreed employees in our Egypt office and we place great value on education.
At Halliburton, we have a very structured system for hiring, training, developing and promoting, which we are very proud of. We divide people into management and technical tracks and we promote on merit, not seniority. This is an area in which the Ministry of Petroleum and Mineral Resources is also interested in potentially collaborating with us.
We also have relationships with universities; I personally give lectures at the American University in Cairo (AUC) and the Suez Canal University. It is important to bridge the gap between academic education, and technical and applied training. If we want oil and gas workers to come from universities well-prepared for the field, we need to bring the field to academia and students to the field. Last year, I started a training program for students at Halliburton in Egypt, where we trained 150 students, after which we offered the best ones paid internships with us. This year, we will also participate in some of the university hiring shows.
With the oil and gas industry seeing a downturn in the past few years – and service providers in particular being squeezed by their clients – how has Halliburton Egypt fared during this time?
It has not been easy. We had to make workforce adjustments due to reduced customer activity but have tried to maximize cost-effectiveness in an effort to minimize the elimination of positions. We believe that a central pillar of our business is our people. To lose talent in order to cut short-term costs is not optimal and hinders us from being able to ramp up production again when the industry picks up.
Being cost-effective also means learning how to do more for less. Oil prices may well stay at USD 50 or 60 a barrel for the next few years, so efficiency is really the name of the game. I believe this can only be achieved in two ways – through technology and the people using the technology. Without a well-trained staff, you cannot drive the technology, regardless of how advanced or innovative it is.
As a technology provider, the Halliburton value proposition is that we collaborate and engineer solutions to maximize the asset value of our customers. This is what I push my team to focus on every day.
Can you give us a concrete example of this value proposition in Egypt?
As you know, unconventionals is a huge market in the US and Halliburton is a leader in hydraulic fracturing there. When Egypt started thinking about unconventionals, one customer submitted a proposal for a well in the Apollonia formation – which covers almost 50 percent of the Western Desert – we were in discussion with them at an early phase to see how we could maximize the assets’ value and provide the lowest cost per BOE for the new field.
Fracturing is typically done by importing proppant to frack the well, which would require US dollars. We were aware of the foreign reserves problem that Egypt was facing, so we wanted to see how we could mitigate the cost of imported materials. Eventually, we discovered a mine that had a type of local, natural sand, which we tested in our Houston laboratories and in collaboration with our MENA research center located in Saudi Arabia. With the customer’s help, we proved that this local sand is API-certified and could be used in the well.
As a result, we drilled the first ever unconventional well in Egypt and fracked it in a multi-stage horizontal well using local natural sand – thereby lowering the cost significantly by around 30 percent. This does not just benefit the customer; by eliminating the need for spending foreign currency, it also saves millions of pounds within the country. This success is really a testament to our value proposition. It would have been very easy to say, “we have this great technology in the US and we will simply import it into Egypt”. Instead we discussed and collaborated with our clients here to understand what their challenges were and to provide the best and most cost-effective solutions.
Now we are in discussions with the customer to drill a third well in addition to a second well with a different company in Egypt.
As an Egyptian working for an American company in Egypt, do you think it is the right time to invest in Egypt?
“You cannot convince people by words alone – you have to convince investors by showing them that you are serious about making concrete changes to building a healthy investment environment.”
People invest after they do their own investigation and decide that the country will give them the best returns. You cannot convince people by words alone – you have to convince investors by showing them that you are serious about making concrete changes to building a healthy investment environment. Only then will investors come. When our global senior vice president Eric Carre attended the Egypt Petroleum Show (EGYPS) 2017 in February, he said, “these guys are serious about this.”
I personally believe now is the right time to invest in Egypt, for two reasons: H.E. President Sisi and his Cabinet are serious about implementing the necessary reforms. Even if we are not there yet, the intention and strategy are there, which you can see in some of the major infrastructure projects that are being finished in the country. The success of EGYPS is the second reason – having over 10,000 delegates arrive and leave safely from the show is a huge testament that Egypt is ready for major investments.
The country cannot be developed without making hard decisions and taking serious steps. As an Egyptian, I hope we manage to do it. It will take time, but Egyptians are very positive people who have survived harsh challenges the past few decades have brought. For this reason, I am confident that we will succeed.