The National Marine Dredging Company CEO, Yasser Zaghloul, talks about entering its 40th year of operation and the significance of two recent high profile projects in Abu Dhabi and Egypt.
The dredging sector is in the same boat as other industries serving the energy sector that have to come to terms with the new low oil price environment and meet these challeges. NMDC’s CEO feels it is in a prime position to deal with the downturn, not only because of its history of being an Abu Dhabi based company with 40 years of experience, but also because of recent high profile projects for ADNOC in Abu Dhabi and the new important Suez Canal project in Egypt.
“It is tough days for the dredging sector but our order book is still reasonable for this year. We are also looking seriously at projects worldwide. We still see opportunities, and although the global energy market is down we feel optimistic about future projects in Abu Dhabi and the GCC,” Zaghloul said.
2016 is an important milestone for NMDC as it marks its landmark 40th anniversary. The CEO touched on how the firm is looking to take the next step in its evolution.
“I am proud with what we have achieved over 40 years. Going forward we are looking at getting involved with more international projects. We are getting invitations from all over the world for dredging projects and I am very confident that soon we will start participating on global projects,” he explained.
The company has around 3,000 employees and NMDC launched an employee recruitment campaign recently that has already proved successful, with a number of young Emiratis joining the firm.
“We have plans to have one dredger fully crewed by locals and we have succeeded so far on this on the operations side. With training, we aim to fulfil the engineering side in the future.”
The low price environment has impacted on most companies working in the oil and gas sector. It is how a company reacts to the challenge that counts, Zaghloul believes.
“We will survive this challenging period. I believe that true success comes from overcoming such challenges and when you do, it sets the foundation for future development,” the CEO pointed out.
One of the ways NMDC has dealt with the new energy landscape is to become more efficient, which it has done by creating a streamlined company structure and management system.
“These new business processes have had a beneficial impact on our efficiency and we are always looking at ways to be as flexible as possible.”
Over the last five to six years, NMDC has faced increased competition, but Zaghloul sees that as healthy, as it makes for a leaner and more efficient dredging market.
“In the MENA region we feel we have an advantage over our competitors as we are Abu Dhabi based, which gives us great clout around the region, as Abu Dhabi has such a strong reputation,” he said.
NMDC believes in the importance of partnerships and the benefits that brings.
“Our philosophy is to work in partnership. We are rooted in Abu Dhabi and we work with all our clients as if they are partners, and not just clients,” he added.
The ADNOC effect
A game changer for the Abu Dhabi-based dredging company was its work with ADNOC’s Zakum Development Company [ZADCO] on building four big artificial islands in the Upper Zakum field 80 km offshore Abu Dhabi to help increase production by 40 per cent to 750,000 bpd.
The Upper Zakum Project was an EPC contract which included the creation of four new artificial islands complete with port facilities. The artificial Islands are falcon-shaped, with dimensions of 710 meters or 650 meters by 480 meters for the satellite islands and 1,200 meters by 600 meters for the central island.
Zaghloul explained: “The ADNOC project was a huge step forward for NMDC. We competed for the project on the basis of an international tender and won. This is very significant for us. I feel that NMDC was revived by the successful completion of the ADNOC project. It has really expanded our energy dredging capabilities.”
He added: “For the ADNOC project, we invested a lot of time and capital as it was a challenging project to take on but we had to do it, which we did. The job was classified as one of the most difficult dredging jobs in the world,” he said.
The biggest challenge NMDC faced during the project was working on a live, producing oilfield.
“We had to come up with a bespoke traffic management system to get the barges around the working oilfield which consisted of a whole network of pipelines. We defined a special route to get the vessels to the islands without crossing too many pipelines. It was a very understandable risk, as we couldn’t allow disruption to any of Abu Dhabi’s producing fields.”
Another challenge NMDC faced was in the design of the islands, as it needed to demonstrate to ADNOC that the islands were safe and would be able to sustain natural disasters such as earthquakes.
“At the beginning we faced a steep learning curve, but we ended up creating a great working partnership with ADNOC. We were able to show our capabilities and win the confidence of ADNOC over the period of the project.”
He added: “There was probably even more pressure on us, as an established Abu Dhabi company, to do the job well. We could not cut any corners as we knew how important and prestigious this project was for the Abu Dhabi government. So completing it well has helped us build trust with the government who saw that a local company linked to the government itself won and completed a high profile operation.”
New Suez Canal boost
NMDC’s strong performance last year was all about the successful completion of the new Suez Canal project in August 2015.
“The success we had on building ADNOC’s artificial islands and the overall satisfaction helped us in winning our biggest project to date, to build the new Suez Canal channel in a consortium that we led. The award of the project was crucial for us.”
The President of Egypt announced at the start of the operation that the Suez Canal extension would be completed in a year, which was a mammoth undertaking.
“We were to be an international consortium of the biggest dredging companies all working under our leadership. With the global team we had, we were confident that we could meet the tight deadline,” he said.
NMDC executed the biggest dredging project of the century in the project of new Suez Canal by leading an international consortium to dredge 210 million m³ of sand in just 10 months with 26 cutter suction dredgers. The dredging of 40 million m³ of sand per month is a world record.
“We had 57 nationalities working on the project, with around 2,000 employees and US$5-6 billion in assets as we used the latest dredging equipment available. I feel we have set a new standard with the speed and efficiency of what we did on dredging the key extension of the iconic Suez Canal.”
Zaghloul sees a real opportunity for NMDC to grow its dredging portfolio on the energy side. In Abu Dhabi, the company is already working on various other projects for ADNOC.
“Our experience with ADNOC has meant we are pitching for more energy projects and we are utilising our knowledge for future tenders. We are now busy tendering for important energy projects in India and with Saudi Aramco in Saudi Arabia.”