188 SUMMER 2015 4 8 10 15 SUB-SAHARAN CALL DERBY DAY HAPPY BIRTHDAY THE SUN SHINES HUNTING ART PRIZE ON LOUISIANA Hunting’s new facility in Springing from a small Cape Town is now open gathering of racing Celebrating a decade Following the official and preparing for business enthusiasts in the Georgian since the Hunting Art opening of the Louisiana in the world’s fastest era, the Epsom Derby Prize relocated to Texas, ‘Supercenter’, it is now growing oil & gas region. has grown to become the Review revisits recent back to work at Hunting’s a celebrated fixture award-winners and the recently expanded on many international life-changing moment facility in Houma. sporting calendars. for this year’s winner. 18 20 22 24 ROLL OF THE DYCE DIRECTIONAL SIX SIGMA SUCCESS OUR HUNTING DRILLING GROUP COMMUNITY The company’s perforation Continuous improvement capabilities in the North A collective marketing is an ongoing focus for News from our community Sea are enhanced by the initiative between three Hunting worldwide, as around the world. establishment of a new Hunting divisions has recently demonstrated by site in Dyce, Aberdeen. proved popular with both the efficiency initiatives employees and customers. from the Electronics staff in Houston. Hunting Review the external house magazine of Hunting PLC 5 Hanover Square, London W1S 1HQ, UK | [email protected] Edited by Georgia Langdon and Nick Johnstone, CMS Strategic | [email protected] Design: www.plaindesign.co.uk Print: www.healeys-printers.co.uk Cover: Jonkershoek Valley, Western Cape 2 HUNTING REVIEW 188 Background image: A sign of the times - stacked rigs in Odessa, Texas A sign of the times We have recently seen the US become the largest oil producer in the world at 11.2 million barrels per day due to the shale revolution, ahead of Russia at 10.5 million barrels and Saudi Arabia at 10.1 million. Between them these countries provide a third of the world’s crude oil supply, the first two independently while the Saudis are part of OPEC but with whose members and ideals the kingdom appears to be at odds. In the meantime oil prices have found new pricing levels towards the marginal cost of production as the number of active rigs in the US has fallen 60% from their peak of last year. This situation is unsustainable. As the commodity cycle swings and dips, global demand for energy steadily grows and the need for oil and gas for transport and power constantly increases. Investment in our future is the basis on which we build our ambitions and in this issue we visit the opening of strategic facilities in South Africa and the Gulf of Mexico that will help safeguard that future. We consider too how we can act smarter through our Continuous Improvement Programme and more efficiently to reduce cost and add value through marketing synergies. We also celebrate 35 years of the Hunting Art Prize and the 10th anniversary of its relocation to the US. The growing well of creativity displayed at these exhibitions is a fitting commentary to the company’s ability to sustain innovation and position itself for the opportunities to come. Chief Executive Officer 3 Nigeria Uganda Sub-Saharan call Tanzania MOMBASA The opening of Hunting’s new Cape Town Angola Mozambique facility is a step of strategic importance South Africa’s natural resources have oil basins in the Gulf of Guinea have CUSTOMER WANTS South Africa long been a focus of successive brought wealth and trouble. But the Hunting had been closely following the generations from many different nations, region is relatively well known for its trend, when in September 2012 Sam both continental and overseas. For geological extent, in comparison to McClements, long standing Director of centuries the earth’s bounty has held a the continent’s Eastern side which has Hunting Energy, and Dennis Proctor, CEO CAPE TOWN regional attraction for producing not just arguably been under explored. The last of Hunting PLC met to discuss the issue in agricultural and bulk commodities but a decade has seen a shift in that emphasis Boston, USA. First studies had indicated wealth of high grade mineral production as companies and governments have that a physical presence would be needed often associated with the extraction woken up to the magnitude of finds on to establish local connections with a of precious metals and stones such and offshore East Africa, from Sudan to dedicated team on the ground, receiving as gold, platinum and diamonds. South Africa. This makes it the fastest direction and support at a corporate level growing oil & gas region in the world. as appropriate. However, the company was GOLDEN PROSPECTS These newly discovered reserves look also mindful that communication, resourcing To this heady mixture, a new focus is set to benefit from another phase of and the internal supply chain could be being given to the production of other investment in territories emerging on overextended if not planned robustly. high value resources: oil & gas, not the world’s production map, which The first issue to be addressed was where just for export but for consumption in includes Ethiopia, Kenya, Madagascar, the new facility would be best based this power short and power hungry Mozambique, Tanzania and Uganda, with to reflect the needs of the customer region. The developed West African more than 140 operating companies. supported by a strong local technological 4 HUNTING REVIEW 188 Nigeria Uganda Tanzania MOMBASA Angola Mozambique South Africa Providing equipment and service to West, South and CAPE TOWN East African Operations and resource base. After just under a year of substantial market research including extensive travel throughout the Sub-Saharan region, it was decided to incorporate Hunting Energy Services South Africa Pty Ltd in Cape Town. When Jay Leighton joined the small team in mid-2013 as Business Development Manager based at the Portswood office in the downtown Waterfront area of the city, market study moved up a gear and plans moved into fruition. 5 Opening honoured by the presence of overseas guests MARKET POSITIONING It rapidly became apparent that much of what the company was looking for was to be found in the Western Cape. With reasonable access to the West African markets it would be possible to grow the company profile in the region while seeking new opportunities in Well Intervention for working over existing producing wells. The chosen location, which is equidistant from the major eastern hubs of Mombasa, Dar es Salaam and other key ports, meant that it would also be Mr Dennis Proctor and HE Christopher Trott feasible to support these major emerging plays - provided that a satellite service, stocking and repair centre was set Mr Sam McClements and Mr Garth Strachan up. It was deemed that this approach would better suit other Hunting market segments of Well Construction and Completion and a Joint Venture has been set up in Mombasa, which is expected to be operational later this year. In addition, South Africa’s small but established industry is in desperate need of investment, if the local demand for energy is ever to be satisfied from local sources rather than expensive imports. In time it is also predicted that the country’s position atop the sixth largest shale gas reserve in the world could be exploited if and when the political will prevails. The oil and gas industry could easily change the country’s traditional extractive profile. 6 HUNTING REVIEW 188 INVESTMENT IN PEOPLE of the art and ultra modern credentials, overseas visitors who had travelled AND PROPERTY roots it firmly in South Africa. Ironically for the occasion. After an introduction Better still was the prospect of a supportive with energy in mind, a constant power and welcome by Dennis Proctor in the local government administration, back-up is provided to prevent machine presence of Teddy Taylor, the US Consul established infrastructure and a technical setting and software failures in the event General, Garth Strachan from the South education system eager to partner a new of electricity outages. Standards for safety African Department of Trade and Industry, venture that sought to raise employment and the environment have been strategic and His Excellency Christopher Trott, and skills levels. In June 2013 the Board of priorities not just for the building but for the British Consul General, all three took Hunting PLC invested $25m in a 10 acre the future management of the operation. part in the ribbon cutting ceremony. The plot in the Brackengate Business Park Just 18 months after the first meeting latter reminded guests that Hunting’s new to build a 55,000 sq ft facility along with to discuss the viability of the venture, manufacturing business joins a tradition the forward supply base in Kenya. The Hunting’s presence in Africa was officially of the British investment in South Africa company anticipates employing 25 people cemented by the introduction of the new with almost £13.4bn, or half of all Foreign this year in South Africa, 50 in 2016 and workforce. Simultaneously, the regional Direct Investment originating from the UK, 120 when at full capacity in the following headquarters were moved from the creating an estimated 250,000 jobs. few years. From the outset, the company original Waterfront office to Brackenfell. The celebration for the opening of has sought to work closely with both the With the appointments of Ross MacKay the plant marked a major milestone local colleges and universities to nurture as General Manager and Ed Friedrichs as in the company’s development and young talent. It is envisaged that ultimately Engineering Manager, the tasks of hiring confirms Hunting’s regional intent.