Developing a strong commercial presence in East Africa
These range from pure exploration to full exploration and production (E&P) development ventures. Projects in the area tend to be large in terms of volume, timescale and revenue, and therefore represent big opportunities for their suppliers. Erwan Le Gouadec, Vallourec’s Managing Director Oil and Gas Uganda Ltd and East Africa Area Manager, explains how Vallourec has tailored its operations in the region to anticipate and meet customers’ needs.
In 2016, Vallourec established a presence in Nairobi, Kenya, to be closer to the Eastern and Southern African markets and better prepare for the projects to come in these regions. The team are especially focused on the area around the Great Rift Valley and the African Great Lakes, and off the western coast of the Indian Ocean.
In 2017, anticipating the boom of activity in the region, the Group established Vallourec Oil and Gas Uganda Ltd in Kampala, Uganda to manage East African oil and gas projects. From late 2020, activity in the country really started to pick-up. Today, this regional team is digging into the market and acquiring a solid understanding of its unique challenges and opportunities in order to tailor Vallourec’s offers. Already, this strategy has begun to show strong results.
As it has grown, the team’s goal has always been to raise awareness of Vallourec’s products, services and expertise, in a market where traditionally the Group had no presence. By developing existing client relationships and forging new ones, the team has raised the profile of Vallourec’s OCTG pipes and VAM® connections. This hard work has paid dividends recently in the form of two major wins.
In Uganda, Vallourec is to deliver 30,000 metric tons of oil country tubular goods (OCTG) equipment for the drilling and completion phase of TotalEnergies’ Tilenga project. Tilenga encompasses six fields to be developed, with 426 wells to be drilled from 31 well pads in an effort to minimize impact on the environment and biodiversity. VAM TOP® will be the standard connection for this project thanks to its strong track record and versatility in onshore and offshore applications all over the world.
Vallourec’s business development activities built a close, trusting relationship with the teams at TotalEnergies that distinguished the Group from other suppliers. Thanks to regular collaboration and demonstrated expertise, Vallourec has become TotalEnergies’ partner in this project, the largest of its kind in Africa. TotalEnergies is investing more than $10 billion in the Tilenga project, the production capacity of which will reach 190,000 barrels per day at peak.
Vallourec is also working on TotalEnergies’ project in Mozambique that will require 14,000 metric tons of OCTG. Vallourec began tendering when this project was managed by Anadarko, and continued when it was acquired by TotalEnergies in 2019. By maintaining contact and open dialogue, Vallourec proved its commitment and reliability to the project and the region.
This deepwater project will require Vallourec’s tried-and-tested VAM® 21 solution. The client selected Vallourec’s newest and most cutting-edge T&C connection for its demonstrated durability and high performance in a variety of applications.
“For both projects, TotalEnergies has asked us to do full pipe yard management, which speaks to their trust and their view of Vallourec as a valued partner, rather than just a supplier,” Erwan says. “Through our 24/7 field services, we will oversee and direct equipment yards of 55,000 square meters in Uganda and 30,000 square meters in Mozambique.”
To ensure optimal management and overview of the growing number of projects in the area, the regional Vallourec team has had to adapt accordingly. “In the past five years, the team has grown quickly by recruiting from adjacent industries,” Erwan says. “We started from scratch and now we are set to grow to 30 by the summer. In November, when work begins with TotalEnergies, that will double again to 60. By hiring locally, Vallourec is not only contributing to the National Content development program – the Group is also creating employment opportunities and supporting the area’s economy.”
Learning the ins-and-outs of the market in East Africa
“The East African region is a competitive market as there are numerous suppliers all tendering for the same large projects,” Erwan says. “Tendering takes at least a year and a half and is both labor-intensive and time-consuming.”
To ensure successful tender offers, Erwan and his teams are constantly preparing and researching, always in contact with current customers but also potential new customers. “We have to know the ins and outs of the entire supply chain, from remote oil fields to cities,” he says. “For instance, when preparing a proposal for how to transport the client’s VAM® connections, I visited the port and took stock of the available infrastructure. We then built that first-hand knowledge into our tender offer.”
Learning continuously and working in close collaboration with customers will always be key as the team expands its reach and secures even more large contracts in Uganda, Mozambique, and beyond.
