Hossam Awadalla; Mohamed Kamal – Chairman and Managing Director; General Manager, Gharib Oil Services, Egypt
Mohamed Kamal, General Manager of Gharib Company, discusses the transformation strategy he is implementing with the support and encouragement of Chairman Eng. Hossam Awadalla in order to build Gharib Group as an integrated oil and gas company providing oilfield services, the challenges and opportunities he sees in Egypt’s oil and gas sector, and his expectations for the company’s future growth.
Can you first provide our international audience with an introduction to Gharib Oil Services?
“Egypt is a very diverse oil and gas country with many different types of field classifications, so companies need to understand the market very well. In particular, fields might also change so that wells start as naturally flowing and later require artificial lift.”
Gharib Oil Services was founded in 1985 by the late Saleh Awadalla, the owner of the company, as a specialist Egyptian company in slickline operations. Subsequently, they enlarged their activities to Syria and Saudi Arabia, working there for around a decade until fairly recently, where unforeseen circumstances led them to refocus their business on the local Egyptian market. Now, the Chairman and President of the company is Hassam Awadalla and I have beengeneral manager since August 2016.
With Chairman Awadalla’s support, in the past eight months, we have been implementing a new philosophy to restructure and improve the company. As Chairman Awadalla owns four distinct oil and gas companies – Gharib Oil Services, Gharib Oilfield, Sphinx, and Gharib Integrated – the vision is for us to incorporate all of them into a parent group, Gharib Group, providing a full range of oilfield services to the national and international industry.
The first step was to expand Gharib Oil Services’ portfolio of services into additional activities such as coiled tubing, well testing, perforation, case logs, open-hole logs, drilling and work over. We want to be able to offer an integrated service and act as a one-stop shop to handle turnkey projects for our clients, whether entirely in-house or through some subcontracted services.
Recently, under the guidance of the Chairman, we have merged ‘Gharib Oil Services’ into ‘Gharib Integrated Oil Services’ as a step towards establishing GHARIB Group.
As part of a larger consortium, we have also made a bid for a concession under Ganoub El Wadi Company (GANOPE) and we are awaiting the commercial evaluation results. The Awadalla family used to operate the Burg Al Arab concession but this was sold in 2015. The company is now looking to reenter the E&P sector, both onshore and offshore.
Another key element of the restructuring is preparing the company for internationalization We are in the process of prequalifying the company to work in countries like Bahrain, Kuwait and Saudi Arabia, as part of our mission to transform Gharib into an international company.
The restructuring of any company is either about minimizing costs or maximizing potential. We are restructuring the Gharib companies not to minimize cost but to maximize our potential, considering cost optimization with the purpose of benefiting all parties.
That sounds like a huge undertaking but very positive for the group. What are the key elements of achieving this plan?
In order to achieve all these targets and goals, we have to first strengthen the infrastructure, which is why we are restructuring the organization. What is very valuable under Chairman Hossam is that he does not treat his employees like a commodity. He invests in his people and he does not let go of them during downturns – like during low oil prices – if he has a choice. the training of our employees will therefore be a very critical element as ultimately they determine the success of the company. As one very small example, since I joined, I found that the various department managers were functioning as individuals within their own silos instead of as a multidisciplinary team, which is not effective. I would like to improve the teamwork within the company and to change the current hierarchical structure into a flatter, more collaborative structure under the umbrella of the C-level suite. We currently have around 200 employees, mostly technicians with around ten engineers and five very experienced managers, each with over 25 years of experience. I would therefore like to define training metrics for them in order to optimize their performance.
I would also like for everyone in the company to be exposed to skills and training outside of their immediate area of expertise. For instance, it is useful for engineers to receive management training specially tailored to engineers to improve their managerial skills, and for administrative workers to be taught the basics of the oil and gas industry to improve their technical background, so that everyone understands the roles and needs of their colleagues. This will build a more cohesive organization and allow us to capitalize on the synergies between different departments. To complement this, I will also institute a social sharing day where all employees can gather in a public venue to discuss their work as well as their needs (if any) with the purpose to improve their morale and share their company experiences.
Teamwork is essential especially in the oil industry because it is such a risky business. Cooperation and collaboration is essential so that risks can be minimized and gains shared. On a larger level, we are also willing to cooperate with other service companies, for instance, in a consortium, so that we can further augment our capabilities to handle even larger tenders.
What is the scope and extent of your current operations?
We are the local leader of slickline operations in Egypt – and in fact, most of the expertise within our competitors are former employees! We currently have twelve contracts with a variety of companies; we work with domestic and international companies as well as companies of all sizes. We do our best to maintain excellent relationships with our clients. Operationally, we maintain the highest standards. In terms of finances, due to the recent foreign reserves issue, there have been some struggles relating to payments but we do our best to accommodate our clients’ needs. The goal is always to negotiate to find the best solution according to contract terms.
Egypt is a very diverse oil and gas country with many different types of field classifications, so companies need to understand the market very well. In particular, fields might also change so that wells start as naturally flowing and later require artificial lift. Service companies need to be able to assess the well accurately and adapt their tools and expertise to that well.
Having extensive experience in this industry, what are some of the challenges you believe the Egyptian sector still needs to tackle?
One of the main disadvantages of local companies, frankly speaking, is the absence of investment in R&D. This is critical in order for companies to access the latest technology from around the world and to maximize our capacity, but the reality is that R&D is costly and requires significant expertise. That said, I recognize the benefit of this and in fact, my longer-term vision for Gharib Group is to build up R&D capabilities.
More broadly speaking, the foreign currency issue is an obvious one. Egypt cannot work alone – we require investment to support the country. Foreign investors cannot have confidence in Egypt unless the investment climate is stable and positive, so the currency issue is a political one as well. We are very optimistic, however, because of the commitment H.E. President Sisi and H.E. Minister of Petroleum Tarek El Molla have made that these economic issues will improve substantially this year so that 2017 will be a very good year for the country.
There is definitely more oil and gas potential in Egypt. As I mentioned, we are currently bidding on one of the GANOPE concessions in the Red Sea and we are looking for onshore concessions as well. As an engineer, I find the Western Desert very interesting. There is a lot of oil there unexplored but there are also technical challenges as the geological formation there is tighter than the Gulf region. However, a lot can be done both to increase production from existing fields and to maximize production from new fields.
What do you hope to achieve for Gharib Group in the next few years?
In the short term, I hope our restructuring plan will be successful in making Gharib Group a success story in Egypt by applying advanced and latest technologies, so we can deal such types of formations. Within five years, I would like to see Gharib Group as one of the largest companies in E&P and oilfield services. Even longer-term, within a decade, I hope to have built Gharib Group, together with Chairman Hossam, into one of the biggest companies in Egypt!
On a more personal note, can you tell us a bit more about your background?
I graduated in 1985 from the Faculty of Engineering of Cairo University and began my career in the joint venture company, Suez Oil Company (SUCO), where I worked on over three fields for 22 years. After that, I wanted to gain a different experience, so I moved to an E&P company, Sahara Oil and Gas under the Sahara Petroleum Investment Group (SPIC), where I spent eight years working directly on a number of their concessions, beginning as petroleum engineering manager and eventually being promoted to GM and MD of North Bahareya Petroleum Company (NORPETCO) In August 2016, I decided to make another career move into the services sector and joined Gharib.
I would like to say I had put a plan in place and followed it every five years but it was really about finding and seizing opportunities. I did want to experience different sectors to have a more well-rounded and diversified career and I think having worked in JV, E&P and OFS companies, I have a really holistic understanding of the industry.
A final message?
Firstly, to our Gulf neighbors, I would like to say: Egypt will become one of the largest countries attracting investments, which will ensure that Egypt has the experienced companies that can support our neighboring countries to achieve their goals and open new opportunities in the field of petroleum services and investments.
For foreign investors, I would like to emphasize that there is a lot of potential here in Egypt, in terms of oil and gas, and also minerals like gold! Please focus on Egypt. We are safe and we are welcoming investors. We need the support of foreign investors here in Egypt.
Finally: Gharib Group is here to help you. We will welcome anyone coming to Egypt to contribute their best to our country!