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OMAN - Energy & Mining

Salim Al-Harthy

CEO, MB Petroleum Services (MBPS), Oman

Bio

Salim Al Harthy serves as the global CEO of MB Petroleum Services, a wholly-owned subsidiary of MB Holding LLC based in Oman. He holds a degree in Petroleum Engineering from Sultan Qaboos University and an MBA from Hull University, UK. With over 25 years of experience in the oil & gas industry, both domestically and internationally, he oversees all aspects of the business across the MENA and Europe regions, encompassing more than nine countries. His responsibilities range from fostering a strong, positive work culture within the team to strategically positioning the company for a resilient future through intelligent investment decisions. Leveraging his extensive executive management background, he adopts a robust strategy to lead MBPS to be a partner of choice for E&P companies locally and globally by providing high-quality services to its customers that meet their target production in a safe manner.

"MBPS, though rooted locally, has a strong international presence with operations in countries like New Zealand, Australia, Thailand, India, Iraq, Syria, and Indonesia and now in Germany, Romania, Austria, the Netherlands, Saudi Arabia, Bahrain, and Kuwait."
TBY talks to Salim Al-Harthy, CEO of MB Petroleum Services (MBPS), Oman, about the company’s involvement in the sector, changing market dynamics, and goals for the coming year.
Can you share recent highlights of the company’s involvement in Oman’s oil and gas projects?

We have achieved a notable milestone by successfully securing one of our largest projects, namely Petroleum Development Oman (PDO)’s “Wave 2 Rigs.” Leveraging state-of-the-art technology and mechanization, we deployed a total of four rigs to replace aging models, some of which were over two decades old, resulting in a notable reduction in labor requirements by approximately 25%. Furthermore, MBPS has expanded its capabilities through the acquisition of Balance Point Control (BPC), a distinguished Dutch company specializing in advanced services such as hydraulic workover (snubbing) and E-Line operations. Additionally, we have established a joint venture with Christoph Industries to cater to our client OMV Petrom’s needs in Romania. In parallel, MBPS has secured two rigs in Kuwait, further expanding our presence across key regions. With operational rigs now spanning Kuwait, Romania, the Netherlands, and Austria, where three rigs are already operational, these developments signify significant progress for MBPS in its journey of growth and expansion.

Does the company’s expansion address a specific need, or a change in market dynamics?

Our entry into the snubbing and E-Line business further showcases our dedication to advanced technology and specialized services. This strategic shift aligns with sustainability and positions MBPS for a resilient future. MBPS, a company with over 40 years of experience, recognizes changing market dynamics. Competition has increased due to easier market entry. To adapt, our strategy now focuses on high-barrier businesses like the expensive drilling rig venture Wave 2 and the recent acquisition of a Dutch E Line and snubbing services company. Wave 2, involving drilling rigs, represents a high-capital, exclusive venture. Our recent acquisition of the Dutch company aligns with our focus on high-barrier, technology-intensive ventures. Similarly, our entry into this business further showcases our dedication to advanced technology and specialized services. This strategic shift aligns with sustainability and positions MBPS for a resilient future.

What does it take for local companies to compete with international giants, especially when it comes to access to capital and expansion opportunities?

MBPS, though rooted locally, has a strong international presence with operations in countries like New Zealand, Australia, Thailand, India, Iraq, Syria, and Indonesia and now in Germany, Romania, Austria, the Netherlands, Saudi Arabia, Bahrain, and Kuwait. The recent acquisition of BPC reflects our ambition to develop our own R&D capabilities to eventually compete with major players on a global scale. In Oman, MBPS leads the industry. However, we aim to expand this leadership beyond Oman, positioning ourselves as a formidable competitor in the international arena. The MB group focuses on closing the gap with industry leaders through informed decisions and strategic investments. While financially strong, its spending is guided by a measured approach, with funds allocated based on ROI and project presentations. Careful consideration and convincing strategies are key to driving investment decisions, ensuring the most is made of available opportunities.

What significance does Oman hold for MBPS beyond being the operational headquarters?

In Oman, we operate with four divisions: drilling, workover, production services, and mud engineering, including chemicals. Oman is also the group’s flagship and largest operation, contributing significantly to revenue and in overall percentage terms. As the birthplace of MBPS, it remains the core of our operations, generating the bulk of our income.

With renewable energy investments expected to surpass oil production investments this year, what role do you anticipate oil servicing companies like yours playing in the next decade?

The real question is not whether oil will become obsolete soon, as that is unlikely. However, the focus has shifted to reducing CO2 emissions, aligning with the Paris Agreement and Oman Vision 2040. While the global push for alternative energy is debatable, oil remains the cheapest source for now. The real shift will occur when a more economical alternative emerges. MBPS is committed to playing its part in fostering a sustainable and responsible approach to energy. We aim to enhance efficiency by transitioning heavy equipment from traditional engines to battery-powered alternatives, reducing reliance on fuel and minimizing CO2 emissions. Additionally, we are exploring integrating equipment with the electrical grid to decrease environmental impact further. We are proactively incorporating green elements in our proposals. We are also exploring hydrogen opportunities and bidding for projects in this promising field.

What is MBPS’s involvement in geothermal projects?

We have started working on the new technology but have yet to complete related initiatives. The focus is on developing rigs suitable for drilling in European villages without causing disruptions, minimizing noise, and efficiently powering local houses. The demand in Europe emphasizes the need for environmentally friendly drilling solutions. To align with this trend, we are considering turning our European operations into a green company. This shift is crucial as the oil and gas industry in Europe is expected to decline sooner than in our region.

How would you assess the current investment attractiveness of the oil and gas sector in Oman, especially considering the global context and the ongoing shift away from it?

Our recent B+ investment rating reflects the positive impact of higher oil prices. Despite current global events, we are confident in our high potential for attracting investment. Changes aligning with Oman Vision 2040, including policy and procedural adjustments, enhance our appeal. I am optimistic that if Vision 2040 progresses successfully, Oman will undergo a transformative evolution over the next few decades. Beyond oil and gas, Oman has diverse assets: terrain, tourism, welcoming people, and tranquility. With the right push, these elements can be harnessed to shape a progressive and vibrant Oman in the coming years.

What are your priorities and outlook for the next year?

Our focus is on executing tenders and maintaining our current projects. A crucial aspect is learning from past experiences, particularly the challenges posed by the COVID-19 pandemic and oil crashes. With 27 years in the industry, I emphasize the cyclical nature of oil crashes occurring every five years. I am therefore urging my team to develop robust contingency plans and barriers to mitigate the impact of future crashes. This includes ensuring sufficient cash reserves and implementing protective clauses in our policies, procedures, and contracts with staff and clients. Our proactive approach in preparing for such eventualities remains a priority.

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