A Burning Hot Market
Exporting to the Middle East presents great challenges, but as one Alberta company has discovered, it also presents great opportunities
by Gordon Cope
Spending a day at the Global Petroleum Show 2004 can be an overwhelming experience. Billed as the largest event of its kind in the world, the exhibition is held every second year, with 1,500 exhibitors spread out over 500,000 square feet of indoor and outdoor space at the Calgary Stampede grounds.
Dr. Jaber Al-Marri moves like an old hand through the show, quietly examining the pumps, pipes and paraphernalia that fill endless rows of stalls. As former vice-chairman and managing director of Qatar Petroleum and chairman of Qatar Gas and Ras Gas LNG companies, he presided over $15 billion US worth of petroleum investments in his home country of Qatar, located on the west shore of the Persian Gulf. “Canadian companies should have a presence in the Middle East,” he admonishes. “There are a lot of huge projects in upstream, downstream, LNG and petrochemical underway where Canadian companies could play a big role.” Al-Marri stops at the Safety Boss display to meet with the staff. The Calgary-based company has an international reputation for its expertise in well blowout control and Al-Marri is working to help promote the company’s preventative services in the Middle East.
Mike Miller, chairman and CEO, greets Al-Marri warmly. At 59, Miller has a jovial face fringed by white hair and a bushy mustache. His company, which employs between 100 to 350 staff and has annual sales in the range of $15 million, plans to expand its international sales dramatically. “In 2005, we hope to see a 50-50 split between international and domestic sales,” says Miller. “We’re looking to do mostly international in the future, ideally moving to 80-20 split.”
Safety Boss is one of a score of Alberta companies that are exploiting opportunities to tap into the needs of the Middle East. According to Alberta Economic Development’s International Trade Review, the province exported $287 million worth of goods to the region in 2003, and exports are on target to surge 40%, to $400 million this year. The list of exports includes everything from tires and telephone lines to trailers and voltage transformers, but most of the exports fall into two main headings: grains (wheat, barley and canola) and oil and gas equipment and services. “The story is about the tremendous opportunities for Canadians in the whole Middle East,” says Miller.
After the hoopla of the Global Petroleum Show has ended, Miller is glad to be back in the relative calm of his office, a converted bicycle shop in Calgary’s inner city community of Inglewood. The ancient, two-storey brick building is crammed with antiques and souvenirs from over 40 countries around the world. Large Persian carpets cover the hardwood floors. An immense Vietnamese porcelain urn stands beside a bronze tableau of three roughnecks extinguishing a Kuwaiti well blowout.
Miller’s father ‘Smokey’ formed Safety Boss in 1956. Mike had his first job in the business at the age of 12, cleaning up the shop in Drayton Valley. By 14, he was helping put out oil well blowouts. After finishing high school, he took an apprenticeship as a power engineer and entered the drilling profession.
During the 1970s, Miller left Canada to work internationally. “I spent five years in Libya with Mobil Oil as a drilling foreman,” he recalls. “It gave me a familiarity with how you do business overseas, as well as contacts.”
In 1979, Smokey retired, and Mike took over the family business. Safety Boss has two main areas of focus – emergency services and preventative services. Emergency services include the control of well blowouts, pipeline fires and plant conflagrations. Preventative services include standby protection for oilPerpatch operations with a high potential for fire or hydrogen sulphide leakage. The company handled about 12 blowouts a year, accounting for about 30% of its revenue, while preventative services accounted for the rest.
In 1980, however, the imposition of the National Energy Program caused work on drilling rigs in Canada to drop drastically, punching a deep hole in their bottom line. “It was devastating to us. We had to go international or go under.”
Their first big break came in 1984 when an offshore well in southern Iran blew out of control. Since the revolution in 1979, American firms had been restricted from operating in the country. Except for Safety Boss, all of the blowout control specialists were located in the U.S. Officials in Iran contacted Miller and asked if Safety Boss could bring the well under control. Miller and a crew of four flew over to the Persian nation and discovered a tall column of gas and condensate spewing high above the jack-up rig. Fortunately, it had not caught fire. Over the course of 13 days, the crew moved the draw works out of the way, lowered a 30-ton blowout preventer over the open hole, then bolted it in place and shut off the flow.
Their success led to more international assignments, but it wasn’t until Iraq invaded Kuwait that they became a household name in the Middle East. When American-led forces liberated the tiny country in 1991, the retreating Iraqi army set fire to the oil fields. The Kuwaiti government called upon Safety Boss to help. They immediately mobilized over 180 staff and their custom-designed equipment to battle the blazes.
When Miller and his crews arrived, they discovered a charred, smoking wasteland. Explosives had been detonated at the master valves, reducing 732 wells to little more than ragged pipes spewing oil and smoking debris hundreds of feet into the air.
The first step was to snuff out the fire using a special dry chemical pumper. The crew then dug a “bell hole” around the well stump to expose the undamaged steel. An ultra-high pressure water jet was clamped to the pipe in order to cut a smooth edge. A blowout preventer was then lowered over the new cut and welded into place. “We did 180 wells in 200 days,” says Miller. “We built a good reputation, particularly in that region.”
But a good reputation didn’t earn them a return invitation after the second Gulf War in 2003, when the American-led coalition ousted Saddam Hussein from Iraq. “There was some anticipation before the war started that we would be needed,” says Miller. “The wells were wired, but not detonated.” The U.S. government took a dim view of those countries that did not participate in the invasion, however, cutting out many qualified European and Canadian firms from reconstruction. “After the war, we found ourselves shut out by the U.S. government.”
Safety Boss was not deterred. To paraphrase the old saying, if you can’t join ‘em, beat ‘em. “Having always stood outside the American aura, we’ve had the philosophy of going where they’re less welcome,” says Miller. “We go to countries where the Americans are kept out, such as Libya and Iran.” In late 2003, Miller and his company began to plan a series of business trips to the Middle East in order to drum up contracts in preventative services.Pages: 1 2 3