More Petrofac offices to open across the region, reveals CEO
Petrofac International will expand its portfolio to downstream construction as well
Sharjah-based Petrofac International will expand its portfolio to downstream construction as well, Maroun Semaan, president and CEO told Oil&Gas Middle East.
The service company, which has so far specialised in upstream hydrocarbon engineering and construction will bid for more refineries and petrochemical plants in the coming years, he said.
“As part of our future growth strategy, we will be increasing our focus on the mid-to-downstream segment of the markets, as well,” he said.
Semaan co-founded Petrofac in 1991, and the company won highly technical projects including an enhanced oil recovery project in the south of Oman, last year.
The CEO said the company was bidding for two packages in Shell’s Pearl GTL project in Qatar, in order to increase its presence in the highly lucrative gas industry.
The engineering and construction division (EC) headed by Semaan will also be expanding its presence with offices in certain markets already identified, he said, without adding any more.
Petrofac International, which is primarily the EC division, has offices so far in Sharjah, UAE; Woking, UK and Mumbai, India. High oil prices boosted the net profits of Petrofac Limited, the parent company, 64% to US $75.4 million last year from $46.1 million in 2004.
Semaan believes the oil industry is spending as much as it is earning, with a slew of massive projects and expansions. When asked if this kind of price and expenditure was sustainable, he said, the hydrocarbon business inherently was cyclical, so all companies were aware that this phase would not last forever. “It is fairly obvious this level of expenditure cannot last indefinitely. The industry will have to even itself out, in terms of spending versus earning, which is gradually happening,” he said. However, Semaan also sees these projects as essential to the industry. The recession between the 1980s and 2000, effectively ruled out any maintenance or construction of facilities. To keep up with high levels of production, the industry has to invest the amount it is [doing] today, he said. All service companies and EPC contractors declared record profits last year, as a result of high oil prices. But many have also said that they are unable to keep up with the demand in the market, due to a severe crunch in resources, primarily manpower and materials.
Semaan said all service companies were also very worried about spreading themselves thin over projects across the region. He said the last one-month, in particular has been very worrying, as the demand for resources has surged to unprecedented levels. “But the last one-month [March] has seen such a tremendous demand for manpower and materials, that it has begun seriously affecting the companies. We are closely monitoring the situation and taking it into consideration, both in our bids and project time schedules,” he said.
Companies are scouting for skilled persons and recruiting on a fast-track basis, he said. The hydrocarbon industry could also borrow skill sets from similar industries like power or petrochemicals, he added. Having worked in the hydrocarbon construction industry for just under three decades, Semaan says that the industry has finally arrived in terms of sophistication and technology usage.
But, the CEO is apprehensive of the available quality of people in the industry to carry out the work.
“The industry today is a lot more sophisticated, as projects are bigger and more complex. But, the downside of all this rapid development is that the skill sets are not matching the demands made by the industry.
“The quality of people is not as high as it should be in an industry as advanced and critical as this,” he said.
Read the full interview in Oil&Gas Middle East magazine