Drilling Bonanza! Interview with Al Mansoori
CEO Nabil Al Alawi says Saudi can't get enough drilling gear
Oil & Gas Middle East finds Al Mansoori’s chief executive Nabil Al Alawi in the most buoyant of moods.
Nabil Al Alawi, CEO of the UAE’s largest homegrown oilfield service company, Al Mansoori Specialized Engineering, has never been one to shy away from bullish predictions, always tinged with a sheen of generous optimism.
Of course, when Oil & Gas Middle East caught up with him recently, he was his usual exuberant self and by the sounds of things, has had his forecast right on the money.
In December last year Al Alawi collected his Lifetime Achievement Award at the annual Oil & Gas Middle East Awards, and said at the time he was expecting double digit growth across the business for the year ahead. His targets, he says, are being achieved and the business is experiencing another year of massive growth.
“Business is on track,” says Al Alawi. “We are very pleased with the overall performance. We have won almost all of the new business and contract renewals we were targeting, and it has been an excellent year for maintaining our important long-term contracts.”
Al Alawi attributes the health of the business to the predominance of long- term contracts the company has managed to secure. “We are very fortunate because the overwhelming majority of our customers are signed up for multi-year contracts , so a lot of the business year-to-year is rollover volumes,” he explains. “We have a very strong strategic outlook about how we handle these long-term deals.”
The business model is borne out in his company mantra “For Al Mansoori – Once in, Never Out.”
“We view a successful relationship as one where we are embedded into our clients business. Our policy is to never leave that partnership,” Al Alawi beams.
In order to build that corporate culture Al Alawi ensures every employee is issued with a pin-badge with an Arabic inscription on it, which says Tawajed, which means you have to be physically present, and Tawasul, which means continuous communication.
“This philosophy is the key to getting, and staying embedded with clients. The saying “out of sight, out of mind” rings true here too. With a new client, if you are constantly present, always involved, available and on-hand to them, then you are always in their mind.
It’s also the best way to meet and exceed their expectations, because you have a feeling and a sense of what is always expected of you in every situation, which can vary from client to client,” explains Al Alawi.
Combining communication and presence is the key to a winning relationship he says. “This is no different in any walk of life. If families don’t spend enough time together and communicate properly, that institution breaks down. I apply the same reasoning to commercial activities and it has been hugely successful.”
Al Alawi stresses that good customer service is the bedrock of the returning business which has seen the firm prosper. “I personally oversee the customer care initiatives which all staff at Al Mansoori undertake as part of our own internal three step program. Knowing how to take care of customers cannot be left to chance,” he emphasizes.
“Proper customer service is not about fulfilling contractual obligations. It is giving the customer his expectation, not what is written on a piece of paper. This crosses many cultural issues.
Some people’s expectations are to the letter of the contract, others believe that the contract is just the beginning of and the relationship must build from that as a starting point,” says the chief executive.
Al Alawi adds that Al Mansoori’s hugely diverse workforce finds an echo in the company’s client varied client list, with different clients all coming with different expectations.
“We have the oil majors as clients, and to be honest the American, European and Middle Eastern companies have completely different cultural expectations from a business relationship and that is completely ingrained in their own working cultures,” he says.
Learning the clients’ expectations is the hardest thing to master. “We are such a diverse company with a wide range of nationalities and cultures under one umbrella. It is vital for me to ensure that the client receives the same level of service and has his expectation no matter where the employee is from or what he has been used to in the past.”
The CEO says he has been personally overseeing and enforcing processes and systems which deliver consistent delivery of a product or service. “I’ve spent a lot of time invested in developing and enforcing our process and systems are adhered to rigidly so that the client experience is the same. I’ve been doing this for thirty odd years and now think I’ve got it pretty fine-tuned!”
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Al Alawi says that forging ahead and building business in Northern Iraq has proved an immensely successful platform which delivers a regular flow of lucrative business.
“Clients we have in Kurdistan in the North of Iraq, have always been very supportive of us. Previously there were very few service companies with our portfolio operating in Kurdistan. The major international companies were afraid of being blacklisted in the south by operating there.
“Those companies operating in the Kurdistan region have been excellent customers, and its proved quite a good bit of business because the companies scrapping it out in the south have been undercutting each other to the point where I don’t think the work is particularly attractive or profitable,” he reveals.
“The competition is so intense that I believe the rates being worked today are below what I am contracted for in the Kurdistan region. I have been told that 80% of the companies that have gone in are losing money. They have underestimated the cost of security quite drastically when they signed those contracts.”
The pitfalls of operating in Iraq have not plagued the Al Mansoori teams working there to date, and contrary to the problems other oilfield service companies have reported regarding getting paid in a timely fashion, Al Alawi says that his customers in Iraq are among the most prompt in the region.
“We have had absolutely no problems getting paid in Kursdistan. They are having problems selling the oil, but to be honest with you, if I could rank the best paymasters in the world, number one is Saudi Aramco, number two are my clients in Kurdistan,” he says.
The potential for more work in Iraq is, of course huge, but the CEO says that for the tyime being he is more than content to remain primarily a Kurdistan player.
“People talk about the high cost of doing business in Iraq, but that doesn’t take account of the fact that in the Kurdistan Region of Iraq there is a totally different security situation.
“Long before the fall of Saddam the North had a no-fly zone, effectively protecting the area to be run almost as its own country. Walking the streets of Kurdistan at 3am is one of safest places you can be. Honestly, there are areas in the gulf which are, or at least feel, less safe than most of Kurdistan today,” Al Alawi insists.
In contrast to a sector which often euphemises the risks of working in Iraq, Al Alawi is candid about security as a piouint of principle, and dismisses the idea of working in the South.
“I’m not stock driven, I’m not quick gain driven. My main concern is receiving, and then having to make the phone call to an employee’s family because we sent him somewhere dangerous and he’s paid the ultimate price,” he says concisely.
“It’s not difficult to encourage people to go. Contractors’ rates, bonuses and incentives are easy to dangle and readily accepted. But at the end of the day there are moral issues, and me and my partners feel responsible for our employees. If I won’t go, I won’t send someone either. That’s the only ethical decision that needs to be made in my book.”
With oil hovering around $120 a barrel Al Alawi says the industry is busy and that the drilling services parts of the Al Mansoori empire is particularly buoyant.
“However, it’s not just the drilling segments which are performing well.
In order to drill and produce people have to maintain their assets. Production levels are at maximum across the board, and that puts a lot of strain on infrastructure and equipment doing the heavy work. That means maintenance is doing very well too.” In addition to solid demand and pricing levels, Al Alawi says geopolitical and economic factors are playing their part.
“Of course, the political climate is has ramifications for behavior and business in the region. Knowing that there is a high probability Iran will not be delivering its 4m bpd of production, countries that have spare production capacity are ramping everything up to maximum. This means that right now demand for our services is huge.”
An indication of the markets health happened recently during a meeting with a senior Saudi Aramco VP.
“He said to me: “bring all the equipment you can and we will work it,”That was a fantastic feeling.” Al Alawi beams.