45,000-STRONG

Abu Dhabi 2020 | ENERGY | VIP INTERVIEW

TBY talks to Phil Cherrie, Regional Sales & Marketing Director of Oil & Gas in EMEA Sandvik, on innovation, new offices, and digital adoption in the oil & gas industry.

What new products has Sandvik added to its portfolio and how do your services create benefits for energy companies?

Sandvik is one of the most innovative companies in the world in regards to material development. Our focus is to tackle corrosion challenges. Since several gas fields in the region are sour, there is demand for materials that can withstand the well and formation conditions. Our product portfolio is geared toward this environment and as a result, we work with most of the end-users in this region. We understand the major developments in the fields and across the industry, in particular those that might drive material development. Our products enable the development of many fields as many products could not begin because the gas is severely corrosive. At the 2018 Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), we launched a new product called onsite coil tubing, one of our productive innovation solutions. It essentially adds end stage production on the customer's site. It is combined with a digitization offering that allows us to remotely monitor the supply chain for the end-user and manage the operation. Implementing end stage production on site helps reduce wastage and is therefore more sustainable. This product is generating significant interest.

Would you elaborate on some of the projects Sandvik is engaged in both in Abu Dhabi and regionally?

Sandvik is active in upstream, midstream, and downstream. In refining, we provide materials for heat exchangers and seawater cooling applications. Furthermore, we are engaged with operations in wells that are being drilled offshore upstream. In Abu Dhabi, Sandvik works directly with the NOC as an end user because our products are often integrated into other products. Overall, the company enjoys healthy relationships across all areas of the supply chain.

With lower oil prices in recent years, have you seen some operators and clients striving for greater cost effectiveness and how can Sandvik's solutions help with this?

Material development is an interesting topic with regards to creating better cost effectiveness. Some of our materials have high alloy content, for example, and by conducting material research and testing for an environment, we can propose alternative materials for that application that could support cost savings for the end-user. Consequently, we are also looking five and ten years ahead to future field developments and performing material testing for those potential projects.

Have the changes and restructuring at Abu Dhabi National Oil Company (ADNOC) had any major impact for Sandvik?

It obviously has an impact at a practical level with regards to making things more streamlined when engaging with the end user. It is important to be close to the end-user to understand how their set up is going to change, what the organization is going to look like, and who the key decision makers are going to be in the new environment. Having seen a reduction in the number of operating companies allows us to be more focused on ADNOC's specifications and respond to their needs. In terms of adding in-country value (ICV), our ambition in the countries we operate in is always to work with various partners to generate that value. Our approach has not necessarily changed, but you always have to evaluate your route to market across different regions, considering the countries' current ICV programs.

What does the growing demand for gas in the UAE mean, and how will gas feature in the energy market in the years to come?

In general terms, gas development is significant for us, because the regional sour gas environments drive the need for our materials. In the UAE, there is a clear-stated ambition to be self-sufficient in gas and to reduce imports. Sandvik's portfolio is aligned with the UAE's direction. As a company, we are constantly evaluating the portfolio and engaging with stakeholders to ensure that our portfolio will reflect the market long term. We try to operate across the full energy mix and have developed our portfolio for the renewables market over the years in different market segments.

Does your operating strategy differ markedly in the UAE from the rest of the Middle East and other regions?

As a group, Sandvik always tries to be close to its customers, for example, we have opened an office in Lagos, Nigeria. Sandvik is a diversified group so some segments of our business are operational in many countries, with the office now in Nigeria this is a new enterprise for us as a materials business. If you look at the Asia region, we opened a new manufacturing facility in Kuala Lumpur in 2018, we have invested during the oil and gas downturn to position our business strategically for the upturn. It is a constant process, as it is for any business, and our approach has been consistent, so we are now in an excellent position to explore these opportunities.

What role do you think digitization and technologies such as AI, analytics, and blockchain will play in your industry and for Sandvik?

Sandvik is approaching this from multiple angles. From an internal point of view, we analyze how to improve productivity and efficiency in our manufacturing footprint. That is driving our internal digitization strategy and our efforts to take advantage of new technologies. In 2018 we have invested in increasing our metal powder footprint, for activities like the 3D printing industry, and advanced and additive manufacturing. Externally, we look at industrial productivity for our customers and how we can potentially become more integrated and aligned. Products like the one we launched at ADIPEC is an industry first as we are moving the final step of the manufacturing process to the customer's site. With this, we should be able to reduce wastage and stoppages on projects. This is productive industrialization and digitization, which is a focus for Sandvik. As a company of 45,000 people, we are working in many segments and looking for trends, and we are well aligned.

What is your assessment of the level of digital adoption in the oil & gas industry compared to other industries?

From our business perspective, we are seeing a purpose-driven digitization. This is positive as potential customers can see how new products bring technological innovation that can be beneficial. This is not digitization for the sake of it, it is to improve processes and productivity, and to improve sustainability and reduce waste. It is easier to create an awareness of the benefits to a customer when you are closely aligned with their business. Sandvik has a rich industrial heritage, with over 150 years in the business and tremendous knowledge of materials, and this development and application gives us an insight into how the likes of digitization can benefit the industry. We recently launched SentusysTM intelligent tube system, that allow us to monitor industrial and chemical processes in real time in a customer's application and provide real time data across the many different parameters.