Italian expertise offshore QatarJanuary 22, 2019
Alaa Khaled, regional manager for the GCC of Rosetti Marino, talks to TOGY about areas of expansion in the Qatari market and what is needed for local development of technologies and know-how. Rosetti Marino is an Italian provider of engineering, procurement, construction, installation and commissioning (EPCIC).
Established in Italy in 1925, Rosetti Marino opened its Doha branch office on November 16, 2017. In 2017, Qatargas awarded the company a USD 120-million contract for EPCIC works for a newbuild offshore living quarters platform with a capacity of 85 people. The project will mark the first time that a complete platform will be fabricated locally in Qatar (to be done by N-Kom, a joint venture between Nakilat and Keppel). As part of this contract, Rosetti Marino will also work on the revamping of brownfield platforms. About 40% of the total value of the contract is being spent in the local market.
On Qatar: “Qatar is well recognised in the international markets. It’s open and interesting for our group. We have a big commitment as a group to invest our time, know-how and expertise in the Qatari market. The decision to enter the market is very important and was at the right moment. We are addressing the blockade as an opportunity and are not frightened of it.”
On the technology and know-how Qatar lacks: “What’s lacking is up-to-date engineering expertise. Whereas the offshore market in Qatar slowed down in 2014, engineering has been dramatically developed over the past couple of years. We are looking to bring in our engineering software and expertise since we are at the top of the scale for niche engineering expertise. Providing this for the Qatari market will be a very important thing. Another factor lacking on the fabrication side is the expertise in offshore fabrication. Offshore fabrication is complex and risky. There is a clear distinction in welding procedures dealing with offshore projects. Optimised engineering is key to the success of the project.”
Most TOGY interviews are published exclusively on our business intelligence platform, TOGYiN, but you can find the full interview with Alaa Khaled below.
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What can a new foreign entrant like Rosetti Marino add to the Qatari energy market?
Considering the potential developments that Qatar is seeing now, we believe that there is a great opportunity to present the Italian expertise to the country’s offshore market. Due to recent agreements between, for example, Eni and QP for future international developments, there is enough room to contribute to local expertise and bring our know-how to the Middle East.
In 2017, we won an EPCIC contract with Qatargas, and for the first time, a complete platform is going to be fabricated locally in Qatar. We are subcontracting for approximately 40% of the fabrication contract in the local market. This is also where we are bringing added value to the Qatari market.
Which market developments encouraged you to enter the market?
We are a specialised EPCIC contractor in the offshore market, and there are big expansion plans in offshore activities in Qatar. The several upcoming greenfield and brownfield projects will provide residuals for the business as well.
There are offshore developments in the Al Shaheen field and North Field. We’re seeing expansion in the North Field Sustainability Project and Khaliji Development Project and Revamping. This expansion means that the revamps of the programme will be starting in 2023 for the old offshore assets established in the 1970s, ‘80s or ‘90s. So, the revamp project and the brownfield modification requirements will come up.
We are seeing a huge potential in the market. This is what motivated us to come to Qatar, and we’re looking for sustainability and hoping that the situation allows us to continue.
What are the main challenges when executing a project in this market?
In our case, the project [for Qatargas’ offshore platforms] has suffered some bumps due to the boycott that resulted in several route changes for the materials. Most challenges are related to maintaining the equation of cost versus quality. We are fabricating according to high international standards and the standards of Qatargas are quite high, so it requires a lot of proactive work, expertise and preparation of the site. Equally, there have been many changes in rules and regulations over the past year due to the blockade and the economic crisis.
Qatar is well recognised in the international markets. It’s open and interesting for our group. We have a big commitment as a group to invest our time, know-how and expertise in the Qatari market. The decision to enter the market is very important and was at the right moment. We are addressing the blockade as an opportunity and are not frightened of it.
To what extent is now a timely moment for outside investors to penetrate the market?
I don’t think that Qatar requires any sort of foreign direct investment. All they need to invest in is human resources and expertise. Of course, this is the foundation for the future. They should bring external know-how into the technology sector and the gas industry.
Qatar possesses strong infrastructure but still requires more attention to localisation of expertise. For example, the N-Kom and Milaha yards are able to perform jobs related to offshore, which constitutes about 80% of the development in the sector. Now, however, they can’t serve the market. More utilisation of these yards is required and new regulations to localise the components will generate more support for the projects.
What technologies and know-how is the oil and gas market lacking?
What’s lacking is up-to-date engineering expertise. Whereas the offshore market in Qatar slowed down in 2014, engineering has been dramatically developed over the past couple of years. We are looking to bring in our engineering software and expertise since we are at the top of the scale for niche engineering expertise. Providing this for the Qatari market will be a very important thing.
Another factor lacking on the fabrication side is the expertise in offshore fabrication. Offshore fabrication is complex and risky. There is a clear distinction in welding procedures dealing with offshore projects. Optimised engineering is key to the success of the project.
To what extent do internationals have a duty to spur local know-how?
We decided to fabricate everything in Qatar. We see our decision to spend 40% on local content not as a duty, but as an opportunity for a sustainable business model.
We are making a good gesture in recirculating the investment – cash in, cash out. That contributes to the economy of the country beyond the project itself. We are spending every effort to reflect the commitment we have toward our Qatari clients and we hope to be admired at the end of the project, once the project is delivered safely and the team does a good job.
The duty of any international company is to spread know-how and offer a partnership. We’re living in one world and we have to exchange benefits among countries and individuals. We have built up very strong relations in different markets. The exchange of expertise doesn’t mean that the company is losing its assets. It’s expanding the international reach. You are bringing new technology and building a very strong business in a foreign market.
Internationalisation has to be done in this way. Otherwise, it is just an opportunistic way to look at the business – coming in, making money and leaving. This is not the concept.
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