AHMAD EL TANNIR

Abu Dhabi 2021 | SERVICES | VIP INTERVIEW

TBY talks to Ahmad El Tannir, General Manager of Al Masaood Oil & Gas, on the effects of this year's pandemic, reducing expenses, and mitigating risks in the rest of the year.

How has the pandemic affected Al Masaood Oil & Gas company?

The first effect is the human factor, or the fear of getting the virus. Al Masaood Oil & Gas cares deeply about its employees and their health and safety. First and foremost, we are a service company, and our people are our most important asset. We set the tone for our employees, and this optimistic outlook is facilitated by the government's guidelines. In addition to government precautions, our clients, including ADNOC and its subsidiaries and other IOCs, implement extra safety measures that we need to consider. This was a top priority for us, even if it means we have to work at lower capacity. We came up with an agreement with ADNOC that involved keeping employees onsite and moving them only according to the service orders we got on rigs. That was successful in terms of mitigating the risk of movement and transferring contagions to other sites. The government has been consistent in supporting the private sector and family businesses through its initiatives, particularly those that reduce the cost of doing business. Banks also supported us for our employees, especially in terms of postponing payments for those with loans. A lot of credit goes to this country, which I consider the best in the world. We live in a haven—both business- and people-wise. We have adapted in many ways and maintained a positive outlook.

How has the pandemic pushed you to optimize costs?

Cost optimization does not come from sacrificing the human factor. I think about giving my people a push to adapt to change by reducing expenses, monitor costs, business and market diversification, bring more sales, bring more services, and increase the profitability of the company. Some international and national oil companies have requested a discount in these times of uncertainty, and we provided discounts but not at the cost of deducting salaries or the quality of services we perform. I proposed a salary retention plan to the board members and immediately received approval. Reducing salaries would demotivate employees and spread negativity, ruining the work environment and culture that we have been building for the past five years. Instead, we followed a salary retention plan against our targets and budget for 2020. I advised everyone to control their expenses and consumer bills, in addition to spare parts and whatever else we utilize during these three months to keep costs at a minimum, increase sales and revenue, and in the end retain the same budget numbers with discounts for clients. So far, that has been going smoothly. Our expenses over the second quarter 2020 have been reduced by 35% without cutting any salaries. For instance, many employees are working from home, so we were able to remove some allowances where applicable. We had a lot of savings on fuel consumption, transportation, and accommodation. What's more, worker productivity has gone up now that we have switched to working from home. Large facility management companies and landlords here have given discounts of their own volition. Other measures my team and I have taken in terms of cash flow and financial strengths, as well as negotiations with banks for discount rates and extra facilities that would help us in the new market trends where traders are in need to increase their cash flow, this have helped as well. Altogether, have put us in great shape, and we believe we can sustain our business for a better future.

How has your company leveraged and accelerated the integration of technology in this new business environment?

I have always believed in technology and its positive impact on business. Al Masaood Oil & Gas started an internal initiative four years ago to transfer all of our in-house transactions to digital technology. We started at the beginning with the sales, finance, PR, HR, marketing, legal and compliance, and ethics departments. Then we moved into the service division. It makes us well prepared for any type of business uncertainty or failure in business. We can track it, investigate, work on the, proper solution, and rectify the issue. We have been successful in doing that for the last two years once we completed the ERP process. This technology and the video conferences made us very connected during this period so that we could stay up to date on what is happening. Today, large contracts are being signed via video conferences. Students are graduating via video conferences. Many government agreements are being made in video conferences. Large UN meetings are happening over video conference. It is legitimate now, and people are changing their mindset around technology.

What is your immediate mid-term plan to mitigate the risk of the effects we'll see in 4Q2020?

To mitigate the risk of the effect of this wave of the pandemic, we have to consider business practices before the pandemic and after as completely different. You cannot plan, design budgets, and set up targets the same way we did before. We are in a market of adapting to change. Most of our sales—from mechanical, electrical, and chemical supplies and so on—have been affected due to shipping and the closure of ports and airports. Companies have had two approaches: wait for things to go back to the way they were before or adapt and shape the future. From day one, we were selling products and solutions that could prevent and detect COVID-19 or protect people. That was very successful. There were incentives, and they got paid through those. Everyone was motivated, and we paid Q1 and Q2 2020 sales incentives even during the challenging time. They will be paid for Q3 and Q4 2020 on time as well, as long as they meet their targets and budgeted revenues. The business practices overall are different than they were before, and that will affect us negatively or positively, depending on the leadership of every company. I am capturing the innovation, the power of being optimistic, and taking these initiatives with the support and blessings of our board members, who are all always positive and strongly believe in the UAE government vision and the economy along with ADNOC's vision.