Amine Zouioueche, Country Chief Executive, Burea Veritas Algeria
The country director of french leading certification company, Bureau Veritas, discusses the strategic importance of Algeria for the company, as well as the place of certification and HSE in the country and the solution Bureau Veritas will provide to Sonatrach within its 2015-2019 strategic plan.
We have participated in Bureau Veritas‘ growth worldwide since the beginning of this year. Algeria is no exception, our commercial successes are present and we plan on one to two years of busy activity.
Regarding Algeria, 2013 was not as outstanding as in other markets. This for a very simple reason: Bureau Veritas Algeria is not involved in the preliminary stages of FEED as well as project preparation. On the other hand we intervene directly during the implementation, so there is a gap between the year in which the contract is signed between the client and the maître d’ouvrage and our intervention, which can go from 12 to 18 months, before we receive any feedback.
Compared to 2015, we respond to a lot of tendering proposals, however the number of projects in the first trimester is decreasing. This makes the competition fiercer and the customer more demanding: there is a rise in qualitative range on the market that sorts this competition.
Bureau Veritas cannot implement itself exclusively on perfectly legislated markets. Our added value exists to strengthen decisions taken by the legislator, and ensure that they are both respected and regulated. It is there to prove that what is done in Algeria is done well, both vis-à-vis the local and international legislation seeing as Bureau Veritas works on an international standards basis, regardless of which Bureau Veritas‘ offshoot, in Algeria or elsewhere. From there we work to promote the value of our certifications and controls, locally and internationally.
The oil and gas sector represents approximately 80 percent of our turnover, which is normal given the structure of the Algerian national economy. However, we are working very hard to reduce this ratio and bring it to around 50 percent. We seek to diversify, particularly in infrastructure, the agricultural and the environment sectors.
Today we are talking about certification, training, implementation of good practices, Lean Management, Supply Chain Management, etc. All this is of great interest for us, which is why we created two new departments in 2015: construction and inspection/training, both of them linked to the infrastructure department as well as the HSR department that affects the environment (impact assessments, etc.).
We are diversifying lot as to reduce the importance of the oil and gas in our portfolio, not quantitatively or qualitatively, but by increasing the volume of other activities.
This strategy is much less related to the current state of the oil market, or to the decreasing price per barrel, than the natural economical growth of Algeria. The country economically growing and has the need to ensure that its assets are properly valued. Therefore there is an important need for regulation and control.
This diversification will be especially rolled out in the areas of Industrial Chemistry and Pharmaceuticals, food processing, infrastructure as well as with all SMEs and SMIs, thus mitigating risks across multiple business lines.
Do your customers mainly come from the public sector or do you also work with private, international or local actors?
We work with everyone. Naturally, we work a lot with Sonatrach and its associations in all Streams. Essentially the whole sector falls under the same legislation. The code of laws of this market is de facto enforced on the whole sector of activity, so the approach is therefore identical.
How do these actors react with the implementation of these certifications in Algeria? Has the education and awareness for these standards been easy?
The legislator is now fussy about its assets, on his ten-year warranties and on the fit-for-service facilities. It appears that the oil and gas actors of have had no trouble in setting up the various devices required by law in terms of quality.
First, it seems important to emphasize the fact that this plan does not come as a surprise; Sonatrach has already led more ambitious plans in the past. However, this one has been thought about for longer, since it affects production improvement projects by optimizing existing assets, in order to ensure greater profitability. This is something quite commendable and innovative for Sonatrach.
For example, Capex projects are a natural continuation of the group’s activities, which has never stopped investing since 1963. However there has been some change on the Opex projects. The executive decree of December 23rd, 2014 signed by the Prime Minister, will allow the ARH to have full visibility on classified establishments of the hydrocarbons sector and this from the perspective of environmental issues, risks towards employees and facilities, technical inspection of equipment, operational validity… Until the each of their energetic balances improve. All this will be included in a report that will be submitted to the agency (ARH) in the next twelve months, with an obligation to comply to the most demanding standards in the sector within the next five years.
In order to achieve this, Bureau Veritas has a “one stop shop” concept that gives the opportunity to answer to all these requirements within our portfolio, which will certainly introduce us to more opportunities in the near future.
It is obvious that Algeria, today, does not have anything to replace its oil, at least not in terms of income, which are too strategically important for the country and especially on the short term. The oil and gas remain the most reliable source of growth for the national economy.
The challenge for Sonatrach is huge, because adapting this type of strategy is not a decision to be taken lightly. However, I do not doubt that they will achieve what is expected.
How do Bureau Veritas‘ certifications reflect the needs of the sector, especially concerning certifications of national enterprises?
I would not discriminate between public and private companies in terms of certification ratios, it is more or less balanced. Many employers have understood that by operating on the international market they had to accept its conditions, and to implement and apply them to their various departments. Recognized international standard certifications give confidence to all parties and bring the necessary visibility needed for trading and understanding each other in implementing a single or many projects.
Today the certification market is motivated by competition, and all for the better, especially if it is local. However, the larger structuring projects have not enabled local companies enough emergence needed in order to be exposed to the subcontracting market, and therefore some form of competition, which has not, on the local level, promoted the idea of quality. But this is drastically changing.
In Algeria certification is already required for critical development sectors, such as Oil and Gas, Pharmaceuticals, Health, Finance, Mechanical etc., to be eligible to respond to tendering offers concerning the provision of services or equipment. This is already a significant factor for the promotion of certification if more local businesses are capable of responding to it.
What innovative solutions do you intend to develop in order to acquire a key position in this market and expand the business relationship with Sonatrach? More specifically, how do you register your HSE (Health Security Environment) activities within Algerian hydrocarbon sector?
The culture of certification is in place, as well as HSE. Sonatrach‘s challenge is not to reach the level of certification, but to maintain it. This is also the challenge for Sonelgaz: they’ve decided to aim for the mastering of yields from their many facilities, and are acting towards it, but the real challenge will be to sustain the effort until the end of their development plans, in economic conditions characterized by a low price per barrel and increased stress on local needs.
For us, the ability to rely on our experience in 160 countries with 900 offices and 600 laboratories around the world means that we are fortunate to have all the profiles on an internal basis, as well as experience on the most technologically modern practices of the oil and gas sector. Bureau Veritas is therefore ready to meet the needs of Sonatrach, we are easily able to accommodate their demands.
Bureau Veritas is currently undergoing redeployment in Algeria; we are focused on listening to our customers as they themselves are undergoing changes. We went to audit them for free to be able to understand what they plan on doing, to keep them informed and up to date as well as to show them that we do not come only once a year and that our relationship with them is the most important thing for us.
We manage regional databases that allow us to create cores within our teams in order to be permanently closer to these constantly fluctuating markets.
We work with seriousness and dedication to create a real proximity with our customers. We display ourselves in such a way as to gain the confidence of all our partners, both here as well as internationally.
The question would rather be “what to do in Algeria to participate in its growth”! Based on either a demographic point of view or that of energetic resources, mining, or agriculture, there is no doubt concerning the opportunity.
USD 70 billion in imports is the first motivation, the restoration of the balance of exports will either have to happen with more exports or by reducing importation as to favour the production facilities in the country.
With this the state will protect national production as opposed to imports of the same product, this is already happening in the pharmaceutical and in the energy sectors.
Now one must understand that Algeria is a country that has a very substantial legal basis, therefore an aged fiscal and legal regulations system is necessary before moving forward, this would save a lot of disappointment in the future.
There are many examples of internationally renowned enterprises or SMEs that have settled in Algeria for 40 years, there is a method of operation to be considered however it is quickly adopted.