Licensed to drill
Gulf Drilling International (GDI) was formed in 2004, as a joint venture between Qatar Petroleum (QP), the national oil company of Qatar, and Japan Drilling Company, a Japanese offshore drilling company with over 40 years of experience to serve the oil and gas drilling sector of Qatar.
The company began with an initial investment of $103.2 million with two offshore rigs and one land rig. In six years of operation GDI has grown considerably. It currently operates five offshore and four land rigs with a local market share of 28 per cent and 100 per cent respectively. In 2008 GDI was put under a QP holding company and floated on the local stock exchange.
Qatar has just one onshore oil field called Dukhan, currently being served by three drilling rigs and a work over rig, all belonging to GDI. The company is looking to expand its operations despite geographic limitations, on the premise, as its marketing manager Mian Imtiazuddin explains: “GDI expects huge development potential because well spacing in Dukhan is still pretty wide, compared to global standards, so scope for higher density bore holes is good and we therefore expect there will be many more wells to drill to increase production. The results of a study have just come out and they are now working on the way forward in the development phase.”
Offshore oil drilling has far brighter prospects for GDI. Already owning five rigs and over a quarter of the market share, the company is looking to add further rigs to its operations and targeting a 50 per cent share of industry in the region within the next three to five years. GDI’s interest lays primarily with investing in furtheroffshore activity, as Mian illustrates: “We are looking for something in deeper water fields. We have identified the equipment that would work for our clients and it’s just a matter of getting some assurance on signing a contract. Once that happens, we will go for it.”
The company is in a good position to achieve these aims. Over its six year history GDI has had steady year-on-year growth with 2009 being the company’s best year yet. It improved on 2008 in the categories of revenue, net income and profitability with net income increasing 30 per cent to $116.39 million. The company attributes the increase to a combination of full utilisation of its rigs, decreased rig downtime and a constantly improving safety performance. Mian sees this as an example of a company with increasing experience: “We’ve had some tough times but we have survived those and we are getting more mature, more stable and more efficient. Our down time record has improved tremendously and our safety record is better than the IADC regional average (International Association of Drilling Contractors).”
However, with the oil and gas drilling industry currently going through a low cycle, the company has begun considering alternative avenues that it could diversify into. Mian explains: “Drilling activity has softened, but we see a market for post-drilling services and are focusing on jack-up barges, and self-elevating, self-propelled platforms. Such vessels have used for maintenance, shutdowns and light workovers, in addition to well intervention and well testing. We’re looking at that market quite seriously.”
Mian highlights how GDI has already begun this expansion with the recent pursuit of a maintenance contract: “We are waiting to see the results of a major contract to refurbish offshore platforms. If that happens we will need three jack-up barges for this long term project.” He goes on to add how this road into the barge market will affect the future shape of the company: “We are hoping that in the next two or three years it would form maybe 20 to 30 per cent of our product range and stabilise profitability as well. We would have protected ourselves from the cyclical affects of a traditional drilling contractor’s business”
GDI attributes its success to the skill and experience of its employees. Despite a personnel and skill shortage for the industry in Qatar, the company does not see this as an obstacle and Mian considers teambuilding as being at the root of the company’s success: “We’ve started more team building workshops internally. We think that individuals can be available but you still need to build a team. We’ve seen the benefits are much bigger than the cost.”
A commitment to its employees runs alongside to the company’s commitment to local investment. GDI aims to contribute to Qatar’s social sector through providing excellent job opportunities for fresh Qatari graduates to enter its workforce. Mian sees local investment as core to the company’s near future: “This is a cyclic industry and we are going through a low period. As it starts rising, we expect to grow with it. There might be a downturn in ten to 15 years down the road, perhaps we can explore prospects of deploying our rigs in areas of more active drilling. But right now our primary focus is to serve Qatar.”
Although the company has had rapid growth over the last few years, Mian remains clear on the present and hopeful for the future: “We’re progressing, but that is not to say we are where we want to be. We want to be compared with the top companies globally. The vision is there, the interests are there, the support is there, we just need time to get there. We have all the ingredients, we are young and we have to grow, there are no alternatives.”
Gulf Drilling International
Services: Oil and gas drilling