Amjad Bseisu, Chief Executive Officer, Enquest, and Chairman of the Board, Enviromena Power Systems
Who or what inspired you to work in the oil and gas industry? What entrepreneurial qualities played an important role in your success?
Actually, I did not pick the oil and gas industry as an industry of choice. It is more that the industry picked me. I completed a mechanical engineering degree and then I did a doctorate in aeronautical engineering, as I love planes. As General Motors sponsored my research, I joined them working on control systems optimization for the dynamics of spark ignition engines.
Later I wanted to link back to my roots in the Middle East where the oil and gas business is the biggest industry in terms of value.
Growing up in Bahrain, I had seen the wells, rigs, and infrastructure on a day-to-day basis, although the only connection I had then to the oil and gas industry was my cousin who worked for Qatar Petroleum. When older, I had a summer training internship in construction engineering with Caltex in Bahrain, at the BAPCO [Bahrain Petroleum Company, a national oil company] refinery, which was my first serious full-time job.
When linking back to my roots, I was interviewed specifically for oil and gas companies and picked Atlantic Richfield Company (ARCO) where I worked for 14 years.
I was always commercially minded. Even when I was young, I created a special currency just for my family and friends. I had a small business when I was 10 years old, buying and selling books. My Palestinian father was a banker. He was conservative and always looking to minimize and mitigate risk. My entrepreneurial spirit probably comes from my mother, who is Lebanese. She is extremely entrepreneurial in approach and she felt frustrated because she could not pursue her own career as we lived in a society where she was not really free to work.
What are the models of entrepreneurship in oil and gas? Who is a business leader?
First of all, you have to have an unequivocal passion for what you do to be successful. If you absolutely love your work, you will do very well. I loved what I did and I continued to work around the business from the commercial, operations, and drilling sides.
Having a wider skillset is also extremely important in the business. I am a scientist by background, so I started in research and then went to technical services, operations, production, and finally to commercial.
I think the key is ensuring that you have a huge competitive advantage, whether it is a type of role that brings depth or one that integrates several disciplines.
In addition, the ability to manage people well, to understand people and to motivate them—these social skills matter greatly for a business leader. This is something you do not acquire easily or quickly; this is something developed over time. I think leadership is more about EQ (emotional quotient) than IQ (intelligence quotient).
Can you identify a tipping point in your career when you made a decision and suddenly realized you were an entrepreneur?
A tipping point is probably when I got married. The realization that I could not live on my salary and keep my wife happy in the long term accelerated my career!
Joking aside, even when I was young I said I wanted my own business. That is why when I was at ARCO, I realized I needed to have a broad range of experience. I was not going to really advance in the oil business or oil investment business without understanding a diverse range of competencies. I made a conscious decision at the age of 20 to understand reservoir engineering, geology, geophysics, and drilling operations.
It is very beneficial for those who would like to move from technical to managerial careers to get a wide breadth of experience. I also think it is much more difficult to be entrepreneurial in the upstream oil and gas environment. It is much easier in the oil services environment.
At the same time, if you have a significant depth of knowledge in particular services or in scientific niche areas, then it is much easier to become a successful entrepreneur.
One of your favorite books is The Prize, by Daniel Yergin. What is the most valuable information or idea you can pass on to our readers from this book and from your quest for oil?
A great thing about this book is its succinct link between oil and politics—something close to my heart. The importance of the energy industry in the geopolitical environment is strikingly clear from this book.
Now more than ever, it is clear that writing about the oil industry also means writing about history. When we look at the oil deals in the Middle East, northwest Europe, and North America, these are trailblazing and historically significant.
History can be written through the analysis of the oil and gas industry. It may be unfortunate, but a lot of politics in many parts of the world are related to oil, gas, and minerals. In 20 to 30 years’ time, we will read how current decisions relating to oil and gas will come to have shaped the history of countries.
EnQuest is the largest independent oil producer in the UK. What makes it different from other companies operating in the UK Continental Shelf (UKCS)?
You always have to have a strategic competitive advantage. In the UKCS, there is an open space where the major companies find that assets are sub-material for them, in terms of reserves and production. The assets they leave behind or do not want to pursue become attractive to companies of our size. We look at taking the assets that are left behind, aiming to develop them and move them into production. We are extending the lives of assets by trying to introduce secondary and tertiary oil recovery, infill drilling, waterflooding, gas lift, electrical submersible pumps, and new technological developments that can be used in these fields. The UK fits very well for development companies such as EnQuest.
We are also looking outside the UK, specifically in North Africa (Tunisia) and in Malaysia. Both regions also have late-life assets and near-field opportunities which are sub-material for major companies or other independents. Our ability to develop these assets—to take them from the discovery phase to the development phase—adds the most value.
For us, production on the order of 5,000 to 10,000 BOPD is material and significant. We started with production of 0 and now we are in the mid-20,000-BOPD range, hoping to get to 50,000 BOPD by around 2017.
North Sea oil production is declining at a time when EnQuest’s is increasing. Are reports on the North Sea’s imminent death premature?
Although the wells are producing a lot more water than oil, they are still economic. When we took over Thistle, for example, it was producing 2,000 B/D; last year, it produced over 8,000 B/D. The types of fields we take on are those where there is potential for us to increase the recovery factor. At Thistle, the recovery factor is now around 47% and we are planning to take it well over 50%.
Another example would be Heather, which has one of the lowest recovery factors in the North Sea at around 27% in this 500-million-bbl STOIIP [stock tank oil initially in place] field. The reservoir in Heather is difficult, compartmentalized, heterogeneous, and quite fractured, but that gives us opportunities. With new drilling and new technology, we are taking it to a higher recovery rate. We can operate with water cuts of more than 90%; Thistle is at 95% plus and still economic.
We are looking for more development opportunities in the North Sea and beyond. These fields are by definition challenging and they do not have large booked reserves, so the geology needs to be well understood.
We have also taken over Ardmore, the first producing oil discovery in the North Sea. It was abandoned at 70% water cut, but we are planning to take the water cut up to 90%. We also have a heavy-oil development with Kraken, which has 137 million bbl of recoverable reserves from 450 million bbl STOIIP.
What major changes have taken place in the UK oil and gas industry since you moved there in 1997? How have the changes to the small field allowance encouraged field development?
The biggest change was in 2011, when the UK government increased tax rates from 50% to 62%. The industry was not consulted prior to that increase, but since then, both as an industry and as a company, we have worked closely with the government.
I think they have largely reversed any negative effects for new developments and for brownfield investments by giving allowances that have enabled companies to continue investing.
As a matter of fact, the industry invested in approximately USD 25 billion of projects in 2013, the largest investment ever in North Sea oil and gas. This is partially because costs have gone up, but also because the government reacted and was able to give incentives for investment.
Incentives came in 2012 for small fields and heavy oil, and they have since added brownfield allowances in 2013, so it has all happened over the last 2 years. These allowances helped us to make these investment decisions. The biggest investment decision we are making is related to the Kraken field (heavy oil) and we are looking to sanction that project soon.
Prior to 2013, EnQuest had invested USD 1.3 billion in the North Sea. In 2013, depending on sanctioning of this project, we will have spent more than USD 1 billion, with more substantial investment in 2014 and beyond.
As we understand, you personally believe in “peak oil.” Why?
Globally, it is getting more and more difficult to find reserves that are economic. The complexity of the reservoirs, the availability of new technologies, and the cost associated with development now have increased markedly. It is generally more difficult to find new oil, which is more expensive to produce. I think the shale revolution in the US and Canada is real, but with an overall industry decline rate of 3 to 5% a year, that will not be enough because we are losing 3 to 4 million B/D due to natural decline.
I also see the Middle East as becoming more unstable and it will become much more difficult to invest in those countries in the next decade or so—this will also constrain the supply side.
In the US, there are a large number of wells; 45,000 wells are drilled every year, but the decline rate is quite significant. The other problem is the clays in the shale oil plays. I definitely think it is a revolution that is contributing several million B/D, but I see it in the single-digit range, not in the double-digit range. For me, that is great in the long term because it helps to alleviate some of the supply shortages in the Middle East.
So I am a peak theorist, but not necessarily a huge oil price bull theorist because I do not think oil prices can go up significantly in real terms. There is always a supply/demand connection. There is always elasticity which destroys demand.
You have assumed various roles throughout your career in the energy industry. What roles have you enjoyed the most and why?
I love what I do and I love the business. As I mentioned, you really need to be passionate about what you do to succeed. I am very happy with what I am doing and I think it’s a great business and industry to be in.
You need to plan your career in a structured manner. You actually have to consider what your strengths are and what your weaknesses are, and to take on roles where you can increase your capabilities. I have had roles that I did not completely enjoy in the past, but if I look at them overall, I am still grateful for them because they gave me the tools I needed to achieve my goals. Not every job is going to be the best job in the world, but if you look at it as the next step in a long journey, I think it becomes much more enjoyable. You can’t just have a dream without a path towards that dream think crystallizing the path, however long it is, gives you an ability to move forward.
What percentage of EnQuest’s workforce consists of young professionals (YPs)? What kind of YP is EnQuest looking for and why? How would you describe the working culture at EnQuest?
We are a very young company; half of our people are under the age of 40. We do try to hire younger professionals and ensure we get a lot of young talent involved in the industry. For example, we hired five graduates in 2013. We look for hunger in YPs. Do you want to be successful? Do you want to make a mark? I think it is important to be passionate. In fact, passion is one of our core values. You have to have a dream and you have to chart out your dream to realize it. You have to think about how the dream will be achievable.
At EnQuest, you will always feel like you are part of a family; we know everybody and everybody knows what they are doing. We are extremely focused and collaborative; everybody understands our goals very quickly. We give responsibility to people from the start.
Have you been an active SPE member? What are the advantages you see of active participation in SPE?
Yes, I was an SPE member most of my career. In 1984, I became one of the youngest Journal of Petroleum Technology editors, reviewing research papers.
SPE papers are hugely useful. The ability to access others’ experience in specific situations has been very useful for me and is also very useful for the industry in general. The ability to pass that knowledge on is what moves us forward as an industry.
Amjad Bseisu holds an honors BSc degree in mechanical engineering from Duke University, and MSc and DEng degrees in aeronautical engineering from Stanford University. From 1984 to 1998, he worked for the Atlantic Richfield Company (ARCO), starting his career as senior engineer in the drilling and production division and moving to the position of vice president, ARCO Petroleum Ventures, with responsibility for operations and commercial activities in the Middle East and North Africa. In 1996, he became general manager of international marketing, negotiations, and business development, and president of ARCO Petroleum Ventures and ARCO Crude Trading Inc. In 1998, he founded the operations and investment business for Petrofac Limited and was the chief executive officer (CEO) of Petrofac Energy Developments International Limited. In 2010 Bseisu co-formed EnQuest PLC and was appointed CEO. Previously Bseisu was a co-founding nonexecutive director of Serica Energy PLC (2004–2005) and Stratic Energy Corporation (2003–2006). In 2010 Bseisu was also appointed nonexecutive chairman of Enviromena Power Systems, a private company and prominent developer of solar services in the Middle East and North Africa.
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22 July 2019
29 July 2019