Is There Still Opportunity in MENA for O&G Companies?

The industry is still coming around from what has been a rollercoaster cycle for the Oil and Gas market. I’ve been writing articles like this one for years about how companies are ‘cautiously optimistic’ (spoiler alert, that gets mentioned later here, too) and how the good times are returning.

In the most recent global crash, every major oil nation suffered. However, the resources on offer in the Middle East made sure it wasn’t hit as hard as the likes of the West Texas operators who needed a high oil price to continue trading.

We’ve seen that reflected in hiring as well. We’ve been working with clients across the Middle East consistently for the last few years, but I wanted to know if that meant the market was saturated; if the Middle East was where opportunities were long gone for new companies.

To find the answer to this, I spoke with Charlie Sinclair, owner and CEO of Kaizen Partners llc. Charlie has over 44 years in the O&G industry working for companies like Baker Oil Tools, Halliburton (Otis) and Interwell, 25 of which came in the Middle East. He and his company Kaizen now specialise in consulting for technology-focused SMEs looking to gain entry to the region. His speciality is within the Well Intervention market.

So, who better to ask about what the region still has to offer?

The State of Play

We first talked about the current situation in MENA and what the mood and general business landscape was for companies. I wanted to know if it really had made a full recovery. “Some say it [the O&G crash] didn’t hit us in the Middle East, but it certainly did”. However, he went on to say that “the mood is currently cautiously optimistic, both here in the MENA region and in the North Sea.”

One indication of optimism in O&G is movement within the drilling sector. Whilst there was previously a huge number of dormant rigs around the world, “that’s now not the case” and “rigs are back in demand”. An increase in demand for rigs, means an upturn in drilling and exploration – a sure sign that the industry is slowly but surely on the upturn.

MENA: Much Left to Give?

It’s never been a secret that the Middle East has been a land of opportunity for O&G companies. But as that’s been the case for so long, does it have any more opportunities to give new companies or technologies? Yes, according to Charlie. “I believe it has [got more to give], if you have something unique to offer that will add value to those companies [in MENA] and their operations”.

What he means by that is having something similar to the other vendors in the market, just isn’t enough. He believes that opportunities are there for companies who can genuinely bring something new to the table. “There still are a lot of openings for those that are not ‘me too’ companies, for those who have something innovative, high tech and can demonstrate real value with their offering”.

If a technology provider can prove their worth, or their technology’s worth/value at least, then operating companies are willing to try it. In his experience, companies like Aramco in Saudi Arabia and PDO in Oman have always been “very open to any O&G Well Intervention service company that wants to introduce their technology”, assuming that that technology can prove it adds value to their operations. The reason for this is a simple one: “they just want to get the most out of their resources in as cost effective a manner as is feasible, under operationally safe conditions”.

Opportunity in Oman

Charlie spoke highly of lots of territories in MENA but centred on Oman as a particularly exciting marketplace for “new” technology providers. In part, due to the uniquely challenging geology in that region. For example, “Look at the Mukhaizna field in Oman, consisting of five or six hundred geo-thermal flood wells. There are currently very few solutions in the marketplace that can handle those types of downhole conditions. Fields/areas like these prove both challenging and exciting to the innovators of new technology”.

When it comes to innovation, Unconventional field developments have caused a stir in recent years, in particular the current shale revolution in the US. I asked if Charlie thought we were going to see something similar in MENA.

He said, “Time will tell and there’s a lot of considerations to take into account. However, I personally believe that it is an inevitable addition to this marketplace although it’ll take time”. Perhaps one indicator that the shale revolution is moving from Odessa to Oman is Saudi Aramco’s relatively new unconventional division. If that is the case, then it could represent a big opportunity for those smaller technology providers who have enjoyed so much success in Texas transitioning to MENA, which would be exactly where Charlie and Kaizen Partners can come in to help. 

Still Room for USPs

Whilst the Middle East is undoubtedly a mature market, it’s nowhere near saturated. Operators in the region are all-too-happy to listen to, and look at, new technology if that technology has a demonstrable benefit.

So, as companies continue with their ‘cautiously optimistic’ growth plans, it would be remiss not to include the Middle East in there. If you’ve got a great product with a fantastic value proposition, then the region is as open for business as ever.

Thanks to Charlie Sinclair and Kaizen Partners for their contributions to this article. Kaizen Partners are based in Dubai and specialise in helping new businesses break into the Middle East region. You can contact Charlie on LinkedIn or at Charlie.sinclair@kaizenpartnersllc.com for more information about their services.