Vision of growth
Halliburton is one of the world’s largest providers of products and services to the global energy industry, with corporate headquarters in Houston and in Dubai. It employs more than 60,000 people, representing more than 140 nationalities working in approximately 80 countries.
Ahmed Kenawi, Senior Vice President, Middle East and North Africa Region, notes that the Middle East is an extremely important region for Halliburton, for both the company’s short-term objectives and its long-term vision.
“Halliburton has had a presence in the Middle East and North Africa region for many years,” he says. “We were logging in Saudi Arabia in the 1940s, more than 65 years ago. We value the stability of the business through global economic fluctuations, and the significant growth opportunities that the region has to offer. These are two key reasons why Halliburton has a strong interest in growing our footprint and business platform in the ME/NA region.”
Halliburton was founded in 1919 by Erle P. Halliburton as a cementing company, but over the last almost 100 years it has grown tremendously. It now serves the upstream oil and natural gas industry throughout the life cycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, to well construction and completion, to optimising production through the entire life of the field.
It has two divisions: the Drilling and Evaluation Division, and the Completion and Production Division, with 12 product service lines between them. One additional business line, Consulting and Project Management, is the nucleus of Halliburton’s integrated services strategy and works across both divisions.
Halliburton has a clear vision of what it is as a company and what it aspires to be. “The Halliburton vision is to deliver a customer experience second to none, as globally competitive, creative, and ethical thought leaders,” Kenawi says. Halliburton executes through collaboration, innovation, and process excellence to create value for its customers.
• builds a reputation for distinctive health, safety, environment and service quality performance by emphasizing process assurance and process execution
• maintains long-term, sustainable customer relationships that help it meet the specific needs of a regional and global client base
• understands that the reservoir is the source of all value, and has the resources and expertise to provide the right solutions to increase access to hydrocarbons and improve recovery
• is a credible, reliable service provider that matches actions to words—it gets the job done
• is an effective innovator, applying pragmatic technology that delivers results
• is balanced, both geographically and in its product and service portfolio, to serve and support its customers cost-effectively
• epitomizes excellence in integration, using technology to link its global network to maximize results
To achieve its vision, Halliburton has a firm strategy that represents a long-term plan of action. “Every year, Halliburton executes the strategic-planning process, which is critical to the company’s long-term growth and sustainability,” Kenawi says. “During this process, we map out the three- and five-year strategies, focusing on developing the strategic plan, building a supporting financial plan, and developing a talent-management and succession plan.” Every Halliburton employee must understand and fully commit to the strategy, taking ownership of its execution to meet the company’s strategic objectives. This is one of the reasons for Halliburton’s success, Kenawi believes.
The ultimate goal of the company’s strategy is to secure its position of leadership as an energy service company by leveraging its existing strengths; balancing its global platform of products, services, technology and markets; and establishing a distinctive competitive position that provides sustainable growth over time.
Halliburton focuses on three key market segments—deep water, mature fields and unconventional resources—and this focus has produced superior results in recent years.
It is easy to see the progress made by Halliburton in unconventional resources. The company has maintained market leadership in North America, with performance that has exceeded expectations. Before the recent decline in market conditions, growth was twice what had been anticipated, and service intensity has been higher than expected.
“We deliver the lowest cost per barrel of oil equivalent—the result of our surface efficiency combined with our subsurface insight and customised chemistries,” Kenawi says. “Although unconventional resources are still a relatively small part of our business internationally, we are growing this segment of our business. There is a willingness to innovate in these markets, and new technologies are being adopted rapidly. For example, we have successfully introduced our CYPHER Seismic-to-Stimulation Service in the Middle East region, and recently executed the first hydraulic fracturing job with seawater in Saudi Arabia, as well as a second job that used local sand as the proppant.”
The second key area is mature fields, which account for more than 70 percent of the world’s oil and gas production, with many in the secondary or tertiary production phases. The Halliburton strategy in this segment is focused on integrated solutions that enable customers to realise greater recovery potential by improving performance on existing wells, optimising reservoir management, and identifying new profitable areas in the reservoir. The company’s integrated project management strategy in mature fields is paying off with significant project awards, and with a robust pipeline of integrated project management contracts, it is well-positioned for growth.
The final key area is deep water. In the last decade, 60 percent of global oil discoveries have been in deep water. Although the Middle East and North Africa have few opportunities in this arena, the region still merits attention, Kenawi noted. In this challenging arena, the strategic aim is to grow market share by employing leading-edge capabilities to help eliminate uncertainties and ensure ultra-reliability for customers at every stage of the exploration and development process. There have been headwinds in the deepwater market as a result of higher costs and lower energy prices, leading operators to shift investment from deep water to land in search of better returns. However, Halliburton continues to gain share in this slower-growth environment.
“Our integrated service capabilities, infrastructure and technologies mean that we are well-positioned to outgrow the market, as we have over the past three years,” Kenawi says. “We will continue to leverage the investments we have made in these areas to drive growth. Furthermore, we are well-positioned to navigate any market conditions. The experience and commitment of our management team, our highly skilled people, and our innovative technologies will continue to enable us to execute our strategy and deliver value to our stakeholders.”
Since the days of Halliburton logging in Saudi Arabia in the 1940s, there have been massive changes in the energy industry globally. One of the biggest has been the increasingly important role played by technology. The exploitation of hydrocarbons is becoming more difficult—well paths are more deviated, wells are deeper and hotter, and have higher pressures. Also, traditionally, hydrocarbons have been found in conventional reservoirs, like carbonates or clastic reservoirs. But now, attention is being shifted to recovery from the source rocks in unconventional reservoirs. The economics of effectively and efficiently developing an unconventional reservoir are challenging. Technology is helping address all these issues.
New technologies are enabling Halliburton to go to the most hostile environments to record data for full evaluation of a reservoir’s potential. With new drilling technology, Halliburton can now accurately place wells with the high precision required to maximise reservoir connectivity, and with new technology it can now effectively stimulate unconventional wells to make the economics of recovery a viable proposition. Halliburton has a number of world records and market-leading technologies that demonstrate its commitment to working in these extreme environments and new arenas, across the oilfield life cycle.
“Halliburton has a reputation for getting the job done,” Kenawi says, “and that’s what sets us apart from others in the industry. When our customers have a critical objective and they want assurances that their objectives will be met on time and on-budget, they call Halliburton. But we are looking further than that. Especially in today’s environment with low oil prices, we need to understand how the market is developing and how the customer’s business is changing. We have to be aware of evolving geopolitical dynamics and how they affect us. We are constantly trying to understand the future so we can serve our customers better and ultimately drive better performance for our shareholders.”
The current economic environment is also making efficiency more critical than ever. It is no longer enough simply to complete the job—it must be executed as effectively and efficiently as possible.
“For Halliburton, one of the key elements in this is customer collaboration and customer intimacy,” Kenawi says. “This is another area where Halliburton excels, and it’s an important differentiator. We build strong customer business relationships, and we believe in working on a collaborative solution rather than forcing an idea on a customer. Having strong, joint ownership builds credibility, and typically results in more effective solutions.”
Another area for growth is the Halliburton Consulting and Project Management business line, which adds significant value to customers’ workflows, and their well construction and completion objectives. Working with both the Drilling and Evaluation and the Completion and Production divisions, the Consulting and Project Management teams aim to deliver predictable well-construction and intervention projects through collaborative leadership and risk management.
“We had identified the need for a tiered approach to offering our services, to match customers’ needs and enhance value-creation,” Kenawi says. “The Integrated Project Management component has been developed over the last 15 years, and has different levels of integration and considerations.”
Turnkey drilling—the delivery of well stages for a fixed, lump-sum price—is becoming widespread in the Middle East. This requires the contractor to accept more risks with drilling the well, while shielding the operator from most operational risks. While a risk-averse nature in both operator and contractor may promote behaviors that lead to poor drilling performance with a turnkey drilling contract, a collaborative and integrated approach between operator and contractor could lead to improved performance. “Today we operate 70 well construction and 44 integrated well intervention rigs worldwide,” Kenawi says, “and our customers continue to appreciate the value of increased collaboration.”
Halliburton invests massively in research and development. The company’s commitment to the Middle East region is highlighted by the inauguration of the new Unconventional and Reservoir Productivity Technology Center in Saudi Arabia earlier this year, at the King Fahd University of Petroleum and Minerals. The new center enables Halliburton to provide state-of-the-art research and development solutions for conventional and unconventional reservoirs addressing challenges both in the kingdom and across the region. The center provides a base for developing strong relationships with local universities such as KFUPM in developing technology—relationships that are expected to lead to employment and training opportunities for Saudi technicians and university graduates. In addition, Kenawi says, the center is expected to provide technology and solutions to existing and future partners around the globe, contributing to the development of local workforces and national economies.