MEED: Shoaibi Group’s core business is oilfield technology. How is that sector performing in Saudi Arabia in 2010?

Khalid al-Shoaibi: The oil and gas industry is facing incredible challenges. In 2000, global demand for oil was approximately 75 million barrels a day (b/d).

Despite a major global recession the demand for oil has increased by an additional 10 million b/d. These production increases have come from oilfields that are older, in more remote locations and in more complex geologies. It would have been impossible to achieve this growth without major advances in drilling and production technologies.

Our ability to build local businesses … [and maintain] international standards is attractive

Khalid al-Shoaibi

Saudi Arabia has been blessed with prolific oil and gas reservoirs that have, until recently, been mostly immune to many of the challenges that have impacted other regions of the world. But, this is no longer the case – Saudi Arabian fields are ageing rapidly and require the application of new technology to maintain and increase production. 

Much of our business is related to the identification and development of this technology. This year and beyond promises to be a very lucrative domain for the industry and Saudi Arabia in particular.

You are the in-kingdom partner for many international companies. What reasons would you give as to whyso many companies from around the world want to team up with you? 

Our ability to build local businesses with our strong market expertise, while maintaining international standards is attractive. Our multinational team consists of quality people who are experts in their respective fields.

I think our innovative approach to the business and the reputation we have built over the past four decades is based on trust, integrity, professionalism and loyalty to our partners. 

Has Shoaibi Group had any offers regarding a take-over or is it considering an initial public offering?

The core family holding company of the Shoaibi Group is expected to remain a wholly owned family business for at least the medium term – 15 to 20 years.

In the last three years, the group has divested, after a period of successful development its interests in Saudi Bea [fastener business], Expro Saudi Arabia [well testing] and FloTech [downhole equipment]. We actively manage our portfolio, much in the way a private equity firm does, ensuring we are consistently and actively pursuing value.

Is Shoaibi Group planning any major acquisitions?

Because we are looking at expanding our operations into the GCC and Middle East, our approach would be to acquire or merge with a local business that already has a stronghold in the market we wish to penetrate.

There are plans to merge some of our operations to achieve greater scale and access to capital for growth, but this will be announced in due course.

What are Shoaibi Group’s expansion plans for the region?

In the first instance, we have recently established a local presence in Bahrain, where the country has ambitious upstream development plans for its reservoirs and, in time, the further expansion of its downstream activities. These developments closely match the range of products and services the group offers with its partners.

The group has been in regular dialogue with its partners, regarding expansion into the southern oil fields of Iraq, and we are considering carefully our potential steps in this important regional oil and gas market.