Weatherford International launched a facility in Cairo that is expected to result in cost savings worth US$1.5 million as all of the company's Egypt operations are consolidated.
Mark McCollum, CEO of Weatherford, one of the leading oil and gas services company, officiated the new facility in the presence of Mohamed Mounes, First Undersecretary of Gas Affairs at the Egyptian Ministry of Petroleum and Mineral Resources, Abed Ezz El Regal, CEO of Egyptian General Petroleum Corporation (EGPC) and Osama El Bakly, CEO of Egyptian Natural Gas Holding Company (EGAS).
The facility, located in the south of Cairo’s Khatemeya area, spans an area of 75,000 square metres, housing several different buildings along with being the company’s Egypt headquarters.
While consolidating administration offices, Weatherford’s facility includes a workshop, which is one of the largest of its kind in Egypt, training rooms and a warehouse.
This operational consolidation in Egypt, which combines five facilities into one, is part of Weatherford’s global transition plan to boost earnings and lower cost.
Weatherford is expecting to spend between $200 million to $250 million in 2019 with a focus on new technologies being delivered to customers.
“The transformation program that we’re going through is a huge effort to triple our earnings through cost savings, technology sales and other things to get our revenues back to where they were prior to the downturn several years ago,” McCollum said. “This transformation is worth over a $1 billion for us. There is not one thing that will solve this. It’s a thousand million dollar decisions that will solve this. So this is essentially a million dollar decision.”
“It’s $1.5 million of initial savings just in lower lease cost and support cost - that’s just the start. As we collaborate, we’re going to do a better job of servicing our customers, give more work, revenues go up so the implications will be huge,” he added.
McCollum said the company will go through a consolidation in 90 countries and Egypt is the second country to have done this after Saudi Arabia.
Egypt and the wider Mediterranean region is seen as a breakout market after the recent downturn in the oil industry.
"We’re still at least a year or two away from the deep-water offshore market really breaking out and coming back to where it was prior to 2015.
We have to be ready organisationally and from a technology standpoint to service that market and to get ourselves positioned,” McCollum said. “This facility is getting us ready to serve that.”
Meanwhile, the company has new facilities coming up in other parts of the world as part of the global strategy.
“In a few months we will open a new base in the Permian Basin, a new one in Oklahoma City and Kuwait. We’re also working now in Argentina on a new facility. This is a part of en effort all around the world,” McCollum said.