Amer Al-Awadi, general manager of Mechanical Engineering & Contracting Co, speaks to Pipeline Magazine’s Nadia Saleem about Kuwait business plans and EPC contracting in the country
What is the scope of MECC’s business in Kuwait?
MECC is one of the EPC contractors concentrating in the upstream sector of oil business in the state of Kuwait serving various companies under the KPC umbrella, with more than US$750 million worth of projects under various stages of execution.
Also we focus on building strategic alliances with major technology providers and suppliers in the world in supporting our business growth. We are in major pipeline projects, civil works, major equipment, plant installation, operation and maintenance projects.
What opportunities do you see for oil and gas engineering in Kuwait and GCC?
We see a busy year ahead of us, with increased investment flowing towards the oil and gas sector and OPEC announcements on increasing the supply output. Kuwait is redesigning its investment and growth strategies with important projects coming on-stream in the near future to ensure sustainable crude oil production.
This will be achieved by building crude production capacity of 4 million barrels per day by 2020, refining capacity up to 1.4 million as part of Kuwait Petroleum Company’s 2030 strategic plan. We have aligned our business interest in supporting this important strategy and would be one of the top contributors to achieving this successfully.
How are the fluctuating (now high) oil prices affecting your business?
Oil prices have taken a toll on the global oil and gas industry. Fluctuating oil prices present positives and negatives for our business. With increasing oil price, we are optimistic in government spending towards the oil sectors (upstream and downstream) leading the development of various oil fields in Kuwait with more flowlines and pipeline projects coming up.
The recent award of 86 new wells development by Kuwait Oil Company portrays a very bright future for MECC’s business in the short to medium term.
What is the biggest industry trend that you have to take into consideration?
With more stringent norms coming into place for safeguarding the environment and depleting oil resources, high sulphur content in the oil has led to introducing new technology in the oil and gas sector in Kuwait. We, as a leading EPC contractor, have been prominent in winning the strategically important water knock out projects from KOC, while providing us enough space to be a preferred contractor by KPC companies.
What is your company’s growth plan for this year?
We are focusing on increasing our capabilities to be awarded projects in developing heavy oil fields and offshore fields as part of our future growth plan. Also we are planning to diversify our emphasis from upstream to downstream sectors to become a more comprehensive services provider.
Our company’s growth target for this year is 22 per cent, but I foresee we will be able to achieve a growth of 30 per cent this year. We are also focusing on expenditure reduction and increasing our operational excellences by adopting and implementing new project execution strategies.
What is your business outlook in the short-medium term?
We are very positive on our short to medium term business opportunities with major projects lined up by the KPC companies. While the focus for many is naturally on the short-term, we need to remember that the short-medium and long-terms are all interlinked. Stability today is crucial for stability tomorrow given that the oil industry remains very much a growth business, with oil continuing to be a fuel of choice for the foreseeable future.
A subsidiary of Ali Alghanim & Sons Group General Trading & Contracting Co, MEEC was established in 1976 by a group of experimental engineers, who brought together their skills and experience to develop the company to serve the oil and gas Industry in Kuwait. MECC started as a small organisation with around 35 employees and limited investment that supported the company to securing projects worth of $50,000 - $150,000.
Over the years, and some successful small projects, MECC has been able to recruit experienced staff in oil and gas sector and expanded its heavy equipment division that supported the company’s growth to up to $320 million. Today, MECC employees exceed 1,250 and its fixed asset are worth over $160 million. It has the capability to arrange projects worth up to $800 million. MECC believes that with aggressive strategic planning, quality products, and services, it can add value to the oil and gas industry.