One of Scotland’s proudest companies, founded by brothers George and James in 1871, Weir is known around the world for its pumps, and everything that stems from pump and high pressure flow technology, like valves and safety systems in a wide range of industrial applications. Its oil and gas division designs and manufactures pumps and ancillary equipment for global upstream and downstream oil and gas markets, and is a very strong business in the Middle East, which depends so heavily on hydrocarbons for its revenues.
The Middle East business, together with Europe, North Africa and the CIS countries has been headed up since 2009 by Managing Director Vikas Handa, who has held senior positions with the group since 1999. “Basically, my territory is the eastern hemisphere,” he says, “though I am based in the UAE and the main focus of my attention is the offices we have in Dubai, Abu Dhabi, Oman, Aberdeen, Azerbaijan, Kazakhstan, Saudi Arabia and Iraq.”
The O&G division deals with two main product lines manufactured by the company, he explains, high pressure pumping (where Weir is the global leader supplying equipment to extract shale gas and tight oil) and wellhead equipment. The wellhead is a critical point of any well, both from a production and a safety point of view. Weir has traditionally led the market in valves and other components, such as blowout preventers (BOPs), however 2012 saw the company make a step change when it acquired the American wellhead manufacturer Seaboard for $675 million.
The acquisition was a strategic one, designed to capture the growing fracking market in the States, however this equipment gave Weir, in any case the largest provider of O&G equipment in the Middle East, with significant new capacity. To meet the demand in the local market, it was decided to build a new manufacturing facility at its heart, so Weir has built a 250,000 square foot plant in Dubai to manufacture Seaboard wellheads and also Weir’s SPM branded valves and high pressure flow control equipment, delivering them to customers in the region at a competitive cost.
The new plant employs more than 300 people, and is staffed by professionals from more than 20 different nations. “It is right at the heart of the marketplace, close to the customer, catering for their needs and meeting their demand for tighter lead times while ensuring the highest quality standards in a trusted product. It is the first such plant in the UAE,” says Handa with apparent pride. Dubai, he adds, is a place which will always attract the best talent.
There’s no denying the industry is in a tighter spot than it has ever been, nevertheless this is the best time to make the investment. “We are a new entrant in this market. Seaboard was the fourth largest wellhead manufacturer in North America but had little share in the ME. We are starting from scratch in this market place at a time when everybody is looking for ways to save money, and we can help them do that. The customer focus is on two fronts: who can supply them a quality product in the most cost effective way and who can deliver in the shortest time and give the fastest service? We are already well known for the quality of our service, and that is how we have been growing our business. We have built this plant locally so that we are closer to our customers, can respond in the fastest time, and by manufacturing in the region we can make sure our costs are minimal so we will be cost effective.”
It’s Weir’s OEM pedigree that differentiates it and has established it locally. Much more than simply a supplier of product, from its fully equipped local workshops it runs complete maintenance operations and takes on maintenance management projects all the way from the wellhead to the processing plant and power stations for companies like Lukoil, BP, Shell and Adnoc. “Since I joined 16 years ago, our businesses here have grown substantially. Now we are moving into the wellhead pressure market and marketing it strongly in the region. We are making big investments in manufacturing plants and growing our capabilities in the region.”
Weir has landed major maintenance contracts with all the key players, notably Saudi Aramco, Saudi electric company and the mining concern Maaden in Saudi Arabia and Adnoc, Adco and Adma in the UAE. In Iraq it has long standing maintenance management contracts with Russia’s Lukoil. Last year Weir acquired the Weatherford OCTG threading/machine shop and inspection business in Basra. The move to the Weatherford purpose-built facility will provide the infrastructure and space it needs to expand these services. “By investing and acquiring the former Weatherford machine shop business and growing our presence in Iraq, we have demonstrated our commitment to the country,” says Handa.
It was also in 2014 that the company signed a contract with Lukoil to provide general maintenance services for the West Qurna-2 oilfield in Southern Iraq, one of the largest undeveloped oilfields in the world. The two year agreement, worth a total of $98 million, covers delivery of mechanical, electrical, maintenance and pipeline services for the related production facilities, including the Mishrif Central Processing Plant. Weir invested more than $8 million in establishing its service centre in Basra, Iraq and it is the first in-country location to offer fully comprehensive maintenance services for all kinds of rotating equipment, valves and wellheads. The facility was also the first in Iraq to obtain API and ISO licences, he adds.
In Iraq 50 percent of the highly committed workforce is local and Weir is investing in improving the country’s engineering skills base. It runs a state of the art training and apprenticeship programme for its own employees and makes it available to its partners. Petroleum Development Oman (PDO) is a case in point: Weir has a contract with PDO to give Omani nationals mechanical and professional training as well as workshop management. “We train them on the job, and that contract went so well that PDO has extended it for the next six years and added 40 people to that training programme. It has been accredited by the ECITB, so we certify those national engineers with a proper vocational engineering qualification.”
Capital may be tight, but production needs to be maintained when oil and gas are the main sources of prosperity. “Our strategy is simple,” says Vikas Handa. “We are in this business for the long term. I have seen many downturns in my career though this one is probably the most challenging so far. But we will see it through and there are always opportunities. That’s why we are investing in new products and new facilities, ensuring we can grow market share by being even closer to customers delivering engineering solutions they need, when they need them.