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40 - EXECUTIVE INTERVIEW

Joe RaineyPresident (EH organisation)

Headquarters in Texas and Dubai

65,000 + employeesUS$33 billion turnover in 2014

Laser focusHalliburton is on a mission to show the world that it is a company that will always deliver. IMAGES COURTESY OF HALLIBURTON

One of the world’s largest oilfield companies, Halliburton had revenue of nearly US$33 billion in 2014. Its current mission is to build on its successful business strategy to be ready for action when the global downturn turns up.

Halliburton provides services to help oil and gas operators maximise their assets throughout the life cycle of the well. The company has dual headquarters in Houston, Texas, and Dubai, UAE, with operations in more than 80 countries, and it employs more than 65,000 people. The company has two divisions: Drilling and Evaluation, and Completion and Production. The Drilling and Evaluation Division, which comprises six product service lines (PSLs), provides field and reservoir modelling, drilling, evaluation, and precise wellbore placement solutions that enable customers to optimise well construction activities.

“Our US manufacturing plants are quite viable for us, but now we have a significant footprint in the Eastern Hemisphere, too. That gives us more diversity of supply and wider access to talent.”- Joe Rainey

EXECUTIVE INTERVIEW - 41 40 - EXECUTIVE INTERVIEW

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The Completion and Production Division also has six PSLs, which deliver cementing, stimulation, well intervention, pressure control, pipeline and process, and completion services.

Erle P Halliburton started the company in Oklahoma in 1919. Just seven years later, he began to expand its business internationally, selling five cementing units to an English company in Burma. The sale was the start of Halliburton’s Eastern Hemisphere (EH) operations. Erle sent his brothers to Alberta, Canada, to open business there, and to Venezuela to establish the company’s first international offices in 1940. The company took its innovative technology into Colombia, Ecuador, Peru, and the Middle East, where it provided services for the Arabian-American Oil Company, the forerunner of Saudi Aramco.

In the following decades, Halliburton expanded to Europe and, in 1986, became the first American company to provide oilfield services in mainland China. Today, Halliburton continues to grow its business in the EH.

Joe Rainey is president of Halliburton’s EH organisation. He has spent his entire 37-year career at Halliburton, with 33 of those years in EH locations—West Africa, Asia–Pacific, North Africa, and the Middle East. He has worked in a wide variety of management and operational roles in many areas of the company, giving him an exceptional understanding of his organisation. When he became president of the EH, it was a natural move.

Joe recently spoke to The CEO Magazine about the company’s expansion into new

markets, its focus for the future, and why suppliers are such an essential factor in business success.

“When I took over the EH president role, we focused on the opportunities that presented themselves,” Joe says. “Fortunately, at that time, the market was on the rise. Our key challenges were determining where to invest our capital and our people, and how to capitalise as much as possible on those investments.”

Joe first set out to assemble an outstanding leadership team at the vice-president level, and also built up the country-level management and leadership teams, moving the right people into the right jobs—a process he sees as ongoing, and crucial to the company’s success. With his extensive contacts throughout the company, he has

put in place a strong team, with four regional vice presidents who report to him directly.

“They’re smart, talented people,” Joe says. “They are some of the best business strategists and most capable leaders anywhere in the world.”

Joe and his leadership team place the highest priority on safety. They have put considerable time and effort into strengthening the organisation’s safety engagement, resulting in gradual but significant improvement in its safety performance. The company-wide

“Xtreme has a very successful relationship with Halliburton. It is a great organisation with a vision to bring the highest quality products and service lines to each integrated energy project they manage. We are extremely proud to be a part of that team.” - Tom Wood, CEO, Xtreme Drilling and Coil Services Corp

“Our key challenges were determining where to invest our capital and our people.” - Joe Rainey

EFFICIENTADVANCEDADVANCEDTECHNOLOGYSERVICE

ZHONGYUAN PETROLEUM ENGINEERING LTD

ZP ARABIA DRILLING COMPANY LTDZP Arabia Drilling Company Ltd. is one of the overseas subsidiaries of ZPEB International. It was established in the Kingdom of Saudi Arabia in 2000 and has been providing onshore drilling and workover services in Saudi Arabia for 15 years, and working as a preferred drilling contractor with Halliburton since 2010. A total of 30 rigs are now in operation in KSA.

Tel: 00966-13-8955985 (Ext. 102) Fax: 00966-13-8955986Email: saudi@zpebint.comAddress: P.O. Box 4389, Abu Al Fawares Street, Al Khobar 31592, Saudi Arabia

EFFICIENTADVANCEDEFFICIENTSERVICE

ZHONGYUAN PETROLEUM ENGINEERING LTDZhongyuan Petroleum Engineering Ltd. (also called ZPEB International) is a large state-owned enterprise mainly engaging in drilling, workover, cementing, mud-logging, wire-line-logging and tubular tools service, with subsidiaries located in 14 countries including Saudi Arabia and Kuwait

Tel: 0086393-4894376Fax: 0086393-4491879Email: marketing@zpebint.comAddress: 7 Xingye Road, Puyang 457001, China

EXECUTIVE INTERVIEW - 47 46 - EXECUTIVE INTERVIEW

safety strategy, ‘Journey to ZERO,’ emphasises that all Halliburton employees share the responsibility of working safely and addressing hazards in the working environment.

Tools such as journey management, hazard observation cards and management of change give employees the means to assess and prepare for risks, identify unsafe conditions and bring them to the attention of management, and halt a job altogether if any unsafe situation or behaviour is observed. As the title of the safety initiative suggests, every business unit and every individual employee is given the goal of zero safety incidents, zero environmental incidents, and zero nonproductive time.

“In today’s market, being nonproductive time (NPT) free, or being the lowest-NPT company, is a big competitive advantage,” Joe says. “An important aspect of that is the competency of our people. To stay safe, avoid NPT and complete every job efficiently, it is absolutely crucial to make sure our people are competent on their jobs, and that they know and follow our defined processes.”

Each PSL and support function in the company has developed detailed processes for managing its business. Carefully simplified and structured around basic control points for every job, the processes have proven successful in enabling teams to complete jobs without any NPT. Joe sees adherence to processes as

indispensable in cost control and superior service quality.

Another aspect of the business that contributes to efficiency and cost reduction is supply-chain management. Joe wants to focus on supplier relationships, especially in Asia.

“We have two ways we manage our suppliers,” he comments. “First, we have around 20 categories of suppliers, each with a category manager who is responsible for building a relationship with the supplier and trying to drive processing and costs down.

“Second, we use a strategic sourcing methodology,” he notes. “We look at not only the immediate cost of a product, but

how we can get a longer return benefit, how can we gain better logistics from having a local supplier, or how we can innovate or develop products with a certain supplier.”

About eight years ago, the company built out a significant footprint in Malaysia, and in recent years it has moved a significant part of its manufacturing to the EH.

“We evaluated around 30 different locations around the world, finally selecting Malaysia, and it has been a great success for us,” Joe notes. About four years ago, the company built additional capacity in Singapore, where it had had a small manufacturing operation for more than 20 years. One of the company’s

largest real estate investments, the expansion was mainly for the completions business. But the move also brought the company closer to many of its raw material suppliers in Asia—and diversified the Halliburton footprint.

“Our US manufacturing plants are quite viable for us, but now we have a significant footprint in the Eastern Hemisphere, too,” Joe notes. “That gives us more diversity of supply and wider access to talent.”

Although the plants provide manufacturing support globally, the company benefits from having them in the EH. The diversity of suppliers in Singapore and Malaysia has included lower-cost suppliers, and the EH

location has led to improved delivery times, which is critical to both Halliburton and its clients.

Joe says Halliburton stays competitive by providing consistently excellent service and remaining intensely committed to outstanding delivery.

“We will continue to grow into the future,” he asserts. “What I believe sets us apart—and we hear this from clients on a regular basis—is that if we commit to something, we deliver it. Let’s just say, not every company in our industry can promise that. We are honest about our business, we are direct with our clients, and we do what we say we will do.”

Joe notes that, with the current market conditions, the next 12 to 18 months are going to be especially challenging for Halliburton. However, its strong reputation will continue to be a sustaining strength. The company’s commitment to its well-established strategy will be another source of stability.

For the medium to long term, Halliburton is focused on the three

“What I believe sets us apart is that if we commit to something, we deliver it.” - Joe Rainey

EXECUTIVE INTERVIEW - 49 48 - EXECUTIVE INTERVIEW

strategic areas that drive the company’s business: mature fields, unconventional assets, and deep water.

Mature fields account for more than 70 per cent of the world’s oil and gas production. The average recovery factor for gas is 70 per cent and for oil only 35 per cent. Given the vastness of the reserves remaining in these fields, every 1 per cent increase in recovery could generate a two-year global supply of hydrocarbons. Halliburton helps customers realise increased recovery in their mature fields through immediate-impact interventions, optimised reservoir management, and new pay zones—all while leveraging existing infrastructure.

Joe says there is huge opportunity in unconventionals around the world and, increasingly, in the EH, especially China and Australia. Halliburton is the recognised leader in unconventionals in North America, and brings its broad knowledge, extensive experience, and innovative technology to projects in emerging unconventional markets worldwide. Joe describes the Halliburton approach as highly collaborative.

“We work closely with our customers to create value and help them lower their costs per barrel of oil equivalent, every step of the way,” he states, and then goes on to identify three distinguishing advantages Halliburton brings to its customers’ unconventional assets. Firstly, subsurface insight accelerates reservoir understanding and recovery, making it possible to locate untapped oil and gas reserves more precisely. Secondly,

customised chemistry is key—premium fracturing f luids combined with innovative technologies can boost production and significantly increase estimated ultimate recovery rates. And lastly, surface efficiency is a major asset—deploying the industry’s most reliable delivery platform while leveraging global procurement, materials, and logistics network. This can lower costs and lessen environmental footprint.

The company’s third key strategic market is deep water exploration and developments. Today, deep water is the toughest market. It is the highest-cost operation, hit hard by the downturn.

“Nevertheless, we continue to use our technologies to focus on being f lexible, and on gaining every possible efficiency,” Joe says. “We believe some of our customers’ deep water projects can still work, and we will be there to provide the

technologies and expertise to make them successful.”

Overall, Joe sees Halliburton in a solid position when the market rebounds.

“We’re laser-focused on running the projects that fit our strategy and our plans,” he says. “We’re the safety leaders. We’re the ones with a global supply chain, with procurement, materials, and logistics functions in more than 100 countries. We aim to provide best-in-class service. When we say we’re going to do something, we do whatever it takes to get the job done and done right.

“In other words,” he says, “we’re the company that delivers.”

“We’re deeply proud of the relationship we’ve built together by safely delivering the chemistries, services, and real-time solutions that support Halliburton’s mission to create sustainable value and to deliver affordable energy sources to power our world.” - Chris Oversby, President, Univar Global Oil, Gas and Mining

“We’re laser-focused on running the projects that fit our strategy and our plans.” - Joe Rainey

With nearly a century in the chemical industry, Univar Oil & Gas has helped oil and gas companies accelerate their business. Partnering with Univar gives you an advantage. We o� er a suite of services across the oil and gas spectrum and provide our customers with a one-stop, dedicated global resource. Custom blending, direct-to-wellsite delivery, managed inventory, on-site testing, start-up support, and much more – Univar Oil & Gas is where you need us, when you need us.

At Univar Oil & Gas, we’re creating customers for life

© 2015. Univar USA Inc. All rights reserved. AD-1045-1115

• Comprehensive chemical portfolio• Safety and regulatory compliance• Proven technical and logistics expertise• Inventory management• Custom blending by Magnablend• Dedicated, 24/7/365 customer service• Direct-to-wellsite delivery• Mobile asset and on-site chemical management• Full service support for the oil and gas industry• Waste management services

Chemistry DeliveredSM | +1 855 888 8648 | univar.com/Business/Industries/Oil-Gas

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