Svein Sollund – CEO, AGR, Abu Dhabi
Svein Sollund, CEO of AGR, reveals how AGR has successfully completed over 500 well projects in 25 countries and over 1000 reservoir studies in all possible environments on six continents; how the Middle East is the region where they have seen the most activity by their clients, in part due to the lifting costs; and how, given the state of the oil market, the Middle East can in particular benefit from AGR´s combined engineering and software solutions for maximizing oil recovery.
Mr Sollund, you became CEO of AGR nine months ago, having been with the company since 2008. What is your particular vision for the group and how dependent is it on the current price of oil?
AGR is an oilfield service company. In many respects, we are like an oil company without any oil. All the disciplines you will find in an oil company, from well construction and drilling engineering project management, to reservoir and field management, enhancing productivity, you will find at AGR.
In 2014, we were acquired by the private-equity firm, Silverfleet Capital. Back then, the market was still booming and our business was experiencing a positive growth momentum. Right after the new owners took control, oil prices witnessed a dramatic drop, resulting in AGR modifying its business strategy.
I took over as CEO in August 2015, having been part of AGR’s executive team for eight years. My ambition was and continues to be to ensure that our business remains resilient even during these turbulent times. It is too easy to simply wait for the prices of oil to return to previous levels – we decided to take a proactive response by streamlining the business to remain profitable even with the price of oil at USD 40 or USD 50 per barrel.
Since 2000, AGR has completed over 500 well projects in 25 countries on six continents in various environments from onshore, offshore, deepwater, High Pressure High Temperature, to remote and environmentally sensitive locations. As a result, we have a tremendous amount of experienced people within the company. We have been very careful to retain such a skill base, while still streamlining the organization. We have also focused on increasing the integration and skills transfer between our teams in Norway (in Oslo, Stavanger and Trondheim), the UK (in Aberdeen and Guildford), APAC (Perth), UAE (Dubai and Abu Dhabi) and the Americas (Houston and Bogota). By managing the global knowledge and procedures that we have developed through working with some of the leading oil companies in the world, we will quickly be able to capitalize on our resources pool once the market returns to growth.
AGR operates in all the major oil hubs around the world, including Norway, the UK, Africa, the Americas, Australia, and the United Arab Emirates. How have you seen these different regional businesses evolve in the past couple of years?
While our Norwegian business has clearly taken a hit, we are still drilling wells there. In difficult times, exploration wells are typically the first to be sacrificed, but we have plans to drill two exploration wells over this summer, which is very good news. Field development and production optimization remains a core focus for our Reservoir Management division supporting our clients to safely and cost effectively increase production from their assets. Our teams are increasingly supporting operators on intervention and asset integrity projects as well as in some instances abandonment and decommissioning engineering.
On the United Kingdom Continental Shelf, we have developed an innovative strategy engaging in a consortium by working with financiers, rig-owners and service suppliers to facilitate a cost-effective process of drilling new wells.
The economic climate, however, has also caused a number of fields to be relinquished, which creates an opportunity for new players to the North Sea. Our Reservoir Management team in UK are active providing our clients with support in due diligence, field assessments and Competent Person’s Reports to aid with evaluating new assets and raising capital.
Australia has long been ahead of the curve when it comes to drilling. AGR has been working with Sinopec in this market, decommissioning a certain number of fields and achieving particularly good results.
The Middle East is the region where we have seen the most activity, in part due to the fact that production costs here remain competitive. Here the focus has been on onshore, but over the next 10 to 15 years, we anticipate a growth in offshore projects, which is an area where AGR is particularly strong and we are therefore keen to leverage our expertise here.
What other trends do you see emerging in this region?
As AGR’s Middle East Director, Iain Morrison, can attest to, both production and rig count are increasing in the Gulf region, most notably with the Abu Dhabi National Oil Company (ADNOC) planning to increase production to 3.5 million barrels per day by 2018. The crucial thing that AGR provides is operational efficiency with high focus on HSEQ, which is precisely what ADNOC is looking for. We have worked on enhanced oil recovery and drilling efficiency projects in the region.
When we interviewed the Norwegian ambassador to the UAE, H.E. Jens Eikaas, he emphasized that Norwegian companies are known for their advanced and specialist technologies and this is one of the best assets they can offer countries such as the UAE. What is your perspective on this?
Norway and the UAE share many similarities. Both are rather small countries with large unproduced reserves available. Oil and gas fields play an important role in both countries’ economies. Both countries are also innovators and are willing to explore new approaches and methodologies. Traditionally, Norway has put a lot of emphasis on the recovery process, and I am glad to see a similar trend occurring in the GCC. AGR clients benefit from our teams having previously worked long-term for operating companies and thus combining subsurface knowledge with risk management experience. This enables them to take a holistic view to reservoir, well management and production optimization, working towards increased oil recovery (IOR) and enhanced oil recovery (EOR).
Our software solutions are designed to help engineering and management teams achieve greater efficiencies and improve operational performance. In partnership with our software users, we develop technologies that help simplify their automatization process of well data capture. AGR’s software technologies contribute to significant cost savings, risk assessment and increased productivity through optimized processes and improved knowledge management. Fundamentally, the purpose of our software solutions is to enable its users to create value from available data.
What particular features help to differentiate AGR from other oilfield service companies?
Our people are our strongest differentiating and unique selling point at AGR. We are proud to say that their knowledge, experience and desire to support our clients is second to none. We attach a lot of importance to integrating AGR´s drilling and reservoir engineering skills, just as importantly, we interact a lot with other service providers. The high level of integration between our various departments is what allows AGR to act as one-stop solution for our clients requiring consultancy for the entire life cycle of their upstream assets. Regarding the well operations, we are experts in sourcing the most optimal business models by securing rig, delivering logistics and supply chain support and covering the entire procurement resulting in lower drilling costs.
Maintaining excellent Health, Safety and the Environment (HSE) standards is also at the heart of everything we do.
Last year, AGR’s TRACS Training, run in partnership with the University of Aberdeen, was shortlisted in the ‘Education Partnership 2015 Award’ category at Getenergy Awards in London. What advice would you give to the next generation considering a future in the oil and gas industry?
First of all, I hope they are interested in pursuing a career in the oil and gas industry. We do not want to see a lost generation in this industry. The demand for energy will remain present and the current skills and knowledge must be taken care of in order to secure sustainability. In the current environment, unfortunately training is often the first area to be sacrificed by companies. If we are to truly engage the next generation, the focus must be on practical scenarios, and not exclusively on the theory. What our training does, is offer bespoke training for those active in the upstream oil industry as well as graduates.
AGR’s TRACS Training division is actively involved in several post graduate projects by teaching and tutoring MSc, MEng and BEng students within petroleum engineering and geosciences at the UK universities. An example of knowledge transfer is the recent work with Abu Dhabi Marine Operating Company which involved secondment of their technical staff working side by side with our engineers in our offices. The incentive for the clients was to develop these well qualified and highly motivated staff, allowing them to experience and contribute in their own active consultancy project while also learning from technical experts at AGR. This allows teams to shadow experienced oil and gas practitioners and helps them to develop solid work practices and new skills, and provides a model for them to adopt a similar approach to others in passing on their own skills. The projects on completion are later taken back to the secondi’s home company, resulting in better project practices and implementation.