During its first quarter seminar on economic activity analysis on April 7, SSC once again turned its eyes to the Saudi Arabia and Kuwait markets. Paid-in contract value increased by 29.7% year-by-year in Saudi Arabia which is expected to become the first one-billion-dollar market for SSC; in Kuwait, business turnover skyrocketed by 102.1% year-on-year and profits in the first quarter reached $US8.06 million.
In recent visits to these two Middle East countries, Sinopec Group leaders also heard a lot of praises from project owners about SSC.
In recent years, with its technological expertise and service capacity, SSC has established firm presence and won good reputation in Saudi Arabia and Kuwait, two markets with rigorous standards and fierce competition. SSC has become the largest onshore drilling engineering contractor of Saudi Aramco and Kuwait National Petroleum Corporation (KNPC). The contract of ongoing projects in Saudi Arabia and Kuwait totals value $US6.639 billion (4.63 billion for Saudi Arabia and 2.009 billion for Kuwait respectively).
It is a hard-won achievement amid a declining oilfield service industry. Due to plummeting oil price, sluggish global demand, forced slowdown of the oil and gas industry and declining investment, the oilfield service industry is confronted with the duo challenge of declining workload and service price. Having adapted itself to the new normal and low oil price, SSC has further improved its market structure, timely adjusted its market strategy, exited from markets with low returns and gloomy prospects, and consolidated key overseas markets such as Saudi Arabia.
In its overseas market development and service, SSC is committed to uniform banner, uniform brand, uniform standard and uniform management. With Sinopec Service as the platform to coordinate overseas business, SSC has integrated resources of regional and specialized service subsidiaries, played out their advantages as a whole, made good preparation for bidding and large project implementation to maximize the overall returns.
Since its entry into Kuwait, SSC has innovated its management system and operation mechanism by integrating personnel, technologies, equipment and other resources of five regional subsidiaries under SSC in Kuwait on the platform of the Sinopec Service Kuwait and built four uniform management platforms—market development, technological support, production management and public affairs management—in Sinopec Service Kuwait. SSC keeps making breakthroughs in market expansion through coordinated market research and joint bidding. So far, SSC has signed contracts on 42 drilling and workover rigs with total contract value of US$2.009 billion and advanced award letter on eight drilling rigs. Once the agreement is signed on these eight drilling rigs, the total sale of drilling and workover rigs will reach 50 with contract value of US$2.34 billion. From 2009 to 2014, SSC’s market and workload shares in Kuwait increased to 37% and 41%. It has become the largest drilling service provider of KNPC and made profits in different sectors.
To meet the high technical and working standards, high equipment and qualification requirements, and tough regulation, SSC has established a responsive and market-oriented management system with tough standards in light of its human resources. After comparing notes with management systems and standards of Saudi Aramco, SSC has revised its systems, standards and processes to provide basis for its operation, regulations to follow and accountability to hold. This has ensured smooth project implementation and maximization of overall interests.
SSC has built a uniform technological support platform and, according to uniform matching and operation standards, fully played out its overall technological advantages in petroleum engineering to save spud-in time for drilling rigs. The SSC drilling crews move and drill faster than any other ones in Kuwait. They keep enhancing its moving speed in the past five consecutive years. Now, they only need 2.5 days on average, much shorter than other drilling service providers. In drilling projects of Saudi Aramco, the spudding time of 11 drilling rigs as a whole came into operation 35 days ahead of the agreed schedule, which has become an example of large-scale and fast movement of drilling rigs in the Saudi market.
Focusing on high-end and high-return business, SSC is exploring a high-end operational model in Saudi Arabia and Kuwait. It will strive to occupy high-end market, stabilize profitable market and exit from risky market. With this principle, SSC will keep improving and consolidating the key Middle East markets, especially Saudi Arabia and Kuwait, and focus its resources on making major breakthroughs in wellbore projects in the Middle East.
Thanks to its market-oriented and international strategies, SSC is becoming more competitive. Sinopec Zhongyuan Petroleum Engineering Corp. ranked 137th and Sinopec Shengli Petroleum Engineering Corp. ranked 207th in the top 250 International Contractors of Engineering News Record (ENR).