Interview with Karim Kadry, Head of Commercial Department of Egyptian Drilling Company (EDC)

What is your evaluation of the current business environment in Egypt?

I would say that the current business environment is showing a positive climate. We can say that there is a positive climate ahead of us. We can see it in the reports, in the numbers, though we cannot see it physically yet, but there are sure signs that imply it. So, all in all, it’s a positive business environment right now.

Let’s move on to the oil and gas and drilling in particular. How has this sector been affected by the recent turmoil of the past years, especially the oil drilling in Egypt?

In the recent years, more importantly the last three years, I think the oil and gas sector has been heavily affected by a lot of challenges. There was a financial challenge, because of the economic status of Egypt. There was a threat to security, especially in the remote areas. There was reluctance among the foreign investors to come and invest in new concessions in Egypt. Those were the challenges that we faced in the last three years. That has brought about a slowdown in the market and has affected the stability. Work was stable, but it had slowed down a bit. There was the fear of some foreign companies leaving Egypt. I think this has changed now. As I was saying there were many positive signs. The current government is trying to deal with all the challenges. Financial troubles have reduced. There have been new deals for new operators to invest in new concessions in Egypt. I also think steps have been taken to deal with security challenges. That’s why things are in motion now. I think things will move forward, because there is an increasing need for energy in Egypt. It has to move. But I think we are handling things in a smarter way.

How has the EDC been affected by the aforementioned? What has been your experience? What has been your approach in handling security issues?

EDC has mainly faced security challenges, especially in some remote areas such as Sinai, far-off areas in the Western Desert. It was a challenge to provide protection to our employees so that they could continue their work. Because of the financial situation in Egypt, there was no liquidity in the market. So, we had big delays in getting finance. This has been a liability as far as the security is concerned, because we are a service company. There was also a challenge from the personnel. There was an increasing demand for labor force in Egypt. There was an increase in demands and due to this we had to increase the wages and this has changed our outlook in dealing with our employees. One other challenge has also been owing to the reluctance of new foreign companies to invest in Egypt, there was a slowdown in the market. So, we cannot predict what we will do in the coming years. 

EDC was formed in 1976 as a joint venture between the Egyptian General Petroleum Corporation and the A.P.Moller - Maersk Group from Denmark. Please tell us the story of EDC.

Yes, Egyptian Drilling Company is a joint stock company formed in 1976 as a corporation between the Egyptian General Petroleum Corporation (EGPC) and the A.P.Moller Maersk with a 50-50 partnership. We started operations with one onshore drilling rig and we have expanded since then and today, we have 70 rigs. These 70 rigs comprise drilling work in onshore and offshore markets. We are not only in Egypt; we also have operations in Saudi Arabia and in Gabon. Historically, we have been in Qatar and Syria. We have stopped operations in Libya. We are trying to expand operations in the Middle East. Our goal is to have more presence in Egypt and in the Middle East, in the MENA region.

Who are your clients? How would you classify them?

We are dealing with the top, the very best in the oil and gas sector. In some cases we also have joint ventures. For example, we are dealing with Saudi Arabia’s Aramco. We are dealing with Shell subsidiaries. Similar to the joint ventures in Egypt; we had that in Libya and Syria before with Shell. We had German Shell. We are mainly dealing with strong foreign companies, first class companies in the oil and gas sector.

Please elaborate on your position within the market. You have already mentioned that you are the leading company.

In Egypt, we are the number one company in the drilling onshore market, with nearly 50% of the market share. We are number one in the work over business in Egypt, with nearly 48% of the market share. In the offshore market, we represent about 20% of the market share in Egypt. We have foreign representation, not necessarily by market position, but more with respect to performance.  We have a good performing company in Saudi Arabia, which deals with Aramco. So, this is our market position.

You have operations in Saudi Arabia and in Gabon and, at the same time, you are looking into further regional expansion. Which countries in particular are you looking at?

Right now, because of the slowdown in the market, and the market stability, we are looking into our own internal development. We are focusing on how to perform better, more efficiently. Let’s say we are renewing our fleet by live extension project of our fleet. So, we are not adding new equipment right now. Expansions mainly come with new equipments, new rigs.  Right now, we are focusing on ourselves, to straighten our things, to ensure that our vision for the future is to expand. If we are looking to expand, it will be mainly in the Gulf countries like Oman and Kuwait. If things are stable, we are looking at Kurdistan, North Africa for sure and Libya also. Right now, things are not that good, but it should be promising in the future. When exactly, we can’t say, but we want to make sure that we are expanding. But not now for sure. In the near future, we are not expanding.

You touched upon your vision. What is your strategy? Where would you like to see the EDC in 2 to 3 years from now?

We are mainly focusing on how to provide excellence in drilling services, in providing drilling service. This is how we are looking into it. This is our strategy. Actually, this is the mission of the company. Whether we are expanding or not, we are always concentrating on providing excellence in drilling services to our clients. We intend to achieve this by having all the cost-effective measures, having optimal operations for our clients. We are creating value for our customers. This is our strategy.

Please elaborate on your CSR activities.

Egyptian Drilling Company is taking CSR seriously. We are trying to be more and more involved with the local communities. We have invested in modernizing school for girls in Minya, which is in Upper Egypt. We are trying to always have a blood drive campaign. We make donations to orphanages. We are looking forward to expanding and turning it into a joint effort with other companies. We are working in Egypt to have a unified effort for doing something more for the local communities.

Is there anything else you would like to mention about your current initiatives?

The situation right now looks promising. We are trying to cope with that, because just because it looks promising, doesn’t necessarily mean that it is. We are trying to cope with the changes that are happening right now. We are trying to cope with our changing workforce. The new generation that is coming up is promising in a way that they are energetic, but they are challenging in a way, because their needs are high. So we are trying to cope with our personnel. We are trying to cope with the future. This is our mission right now.

What differentiates you from your competitors?

I think it is providing excellence. What EDC brings into the market is performance and quality. We are trying to provide quality, good performance and to create value for our customers.

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