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Gulf Region customers welcome efficiencies, scalability of Tenaris’s Rig Direct®

Markets in the Gulf Region are easing back into activity with the pandemic ebbing, and this includes the in-person return of ADIPEC 2021, hosted by the Abu Dhabi National Oil Company (ADNOC).  Tenaris, a long-standing partner of ADNOC, has been participating in the region’s signature oil and gas exhibition since 2010.

Ahead of the show’s opening, November 15-18, Renwar Berzinji, Tenaris Commercial Vice President for the Middle East, North Africa, and India, shares insights on Tenaris’s growing presence in the region, traction of its direct service model and customer alignment on climate change.

How is the situation today in the Gulf region with the pandemic subsiding?

I believe in the GCC region, and in particular UAE, have taken proper actions to ensure the safety of its citizens, having moved with very strong safety guidelines and vaccination campaigns. That's one of the reasons why we’re seeing a more rapid reopening of the economy versus other parts of the world. With regards to our industry, despite the slowdown during COVID, National Oil Companies (NOCs) did see a slight reduction in activity but continued with clear drilling and production targets going forward. They have been guided by an outlook that demand for oil and gas was going to be steady and robust once we have gotten past this difficult period.

What are customers looking for in their business partnerships?

I think the NOCs are much more honed in on looking for reliability and efficiency. They're looking at the well economics, midstream efficiencies, and downstream expansions. In the process, they're seeking reliable partners to help them extract maximum efficiency and reduce total cost. We see a paradigm shift from that point of view. And I think that fits well in what Tenaris can offer its customers.

Where can Tenaris make its biggest contribution for greater positioning in the region?

We have a proven model. More than 50% of our clients globally have opted for what they call VMI (Vendor Managed Inventory), which is a branch of our Rig Direct® spectrum of services. In RigDirect®, instead of only managing inventory, we look at the entire process from A to Z and identify all the areas where efficiencies can be generated, from the technical design stage and all the way up to the delivery to and pipe installation in the well. We provide a full review of their operations and identify areas where they would benefit from our expertise and in ways that we could reduce working capital, prevent surplus, improve cash flow from net working capital while adhering to the highest standard of quality and reliability. This is an area where Tenaris has a lot of expertise. We've invested early on in fit-for-purpose technology and applications, such as our fully integrated mill to well pipe identification digital solution PipeTracer® and RigDirect® Portals.

Employees are driving differentiation and we see a lot of countries prioritizing local talent. How is Tenaris supporting in this area?

I believe this is 100% in progress, for example, in Saudi Arabia for the last 10 years and similarly pursued over the past three years in UAE. We see it also being pursued in different models in Kuwait and Qatar. Our track record is strong, taking a very holistic approach, in the various communities where we operate around the world. We have the support of TenarisUniversity and work with local universities to hire, train and retain young professionals. We have a real organic local content program and it’s what differentiates us because in the end, our local employees are very much attuned and connected to the requirements of our customers.

High on the agenda for the sector is the energy transition. How are our governments and energy companies in the Gulf reacting to the call for climate change action?

Personally, I think it's very encouraging. We see the NOCs taking a proactive position on this, pushing for positive climate and decarbonization initiatives. ADNOC has publicly said they're looking to lower greenhouse emissions intensity by 25% over the next 10 years.  In Saudi Arabia, they're looking at the capture and storage of carbon. Similarly, in Qatar, they're deploying carbon capture facilities with the aim of capturing almost seven million tons per annum of CO2. Kuwait has also pledged to reduce emissions and environmental pollutants.

How is Tenaris supporting customers in this regard?

If you consider Rig Direct®, it is all about generating efficiency; you have a much leaner structure when it comes to managing your tangibles. With a leaner more efficient structure, you consume less water and electricity, reduce preventive maintenance and transportation too. On the technology side, we are working closely for example with clients in GCC on Dopeless® technology and have observed an increased interest and appreciation. We see environmental benefits by eliminating the use of thread compounds. It reduces hazard waste management, workers exposure and contact to the compound, and seepage into the reservoir or offshore waters. In addition, Tenaris is taking the overall initiative seriously where it has pledged this year to cut Co2 emissions by 30% by 2030.

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