Now you are going to offer warehousing and equipment rental services, can you tell us more about this?
We provide specialised equipment to service companies and international operators. The equipment varies and could be anything from specialised compressors to valves etc. we supply different equipment depending on the demand. In warehousing as I mentioned before, we have our own piece of land that is more than 2 million square metres. We would like to develop over the next 6 months to be able to support all the activities in the warehousing and yard sector. There is a huge demand, there is a location that has been set up for the past 4 or 5 years and that location cannot contain the boom. We believe that it will be a good business opportunity for us and that we will have the opportunity to build a world class yard and provide world class warehousing services. Along with that we also want to support different logistics services. If we are supplying OCTG for example, the same companies who are buying that piping and casing could purchase storage services from us also. There are a lot of different opportunities that we can develop.
Do you have any plans for the future to go from offering oil field services to actually drilling oil?
We are actually working on it, at the moment we don’t have the capability to be an independent drilling company but we want to team up with companies that do have that capacity. We are looking at a couple of international players. The basic model is that we want to team up with experienced companies and companies that have the technology to be able to learn from them and then maybe 4 or 5 years down the line we will be able to provide the same services that they do.
Could you tell us a bit more about the equipment rental?
Right now we have several contracts with different international companies and we provide them with rental equipment of items anywhere from specialised compressors to light towers or incinerators. Whatever they might need, we can supply it.
What is your strategy to become the market leader?
In terms of the rentals, we are willing to invest. We are searching the market and I think that right now we are the only company supplying this type of equipment. We understand that in the future we may have more competition but we are investing more and more in our inventory to be able to keep the inventory on the ground so that whenever a company needs something we can supply it quickly. A problem in Kurdistan is that everything comes from outside, from Turkey or the UAE, so to cut down on the time it takes to import we would like to invest more and more in order to increase and diversify our inventory and increase our revenue.
As the market matures from exploration into development and production, we will see all services growing and expanding. This is not limited to equipment, but will also include the expertise within the workforce. As a Kurdistan-based service provider, we see the development of the local talent an essential part of our development.
In terms of warehousing, the biggest advantage that we have is the huge piece of land that we own which means we don’t have to rent from anyone. That land can serve different companies for the next 15 to 20 years. Companies can expand there. Most of the time when companies rent warehousing or yard space, the warehousing companies have limited space available. Therefore if you are a company looking for space, you won’t get less than 5,000m2 but if you want to expand you might not be able to do so in the same location because the warehouse company doesn’t have enough space and you end up with two or three locations for you material. We on the other hand want to integrate everything into one location and offer the choice of expanding in the same location for many years to come. Also, our warehouse is outside of the city limits. Logistically it makes sense not to have all these big trucks in the city limits. It makes more sense to bypass the city, so that if you are coming from Turkey or from different borders you can just come straight to Kurdistan, take the 120m road and go to our yard without wasting hours stuck in traffic. The most important thing is the possibility of expanding. We have world class, experienced staff and we want to build quality warehouses and provide services that are as good as those that any international company might provide.
Why do you feel confident that you can deliver this?
It is a combination of everything. We have trained staff; our warehousing manager has worked in Kurdistan specifically, for almost 6 or 7 years. We are confident in our staff and the resources that we have. The fact that we are a local company makes it easy for us to move around in Kurdistan and locate the best land and construction companies. We do have many advantages; not only that we are a local company but that we have resources.
Are you going to look for international partners in warehousing?
We are open to team up with any international company that has good experience and a good track record. On the warehousing side we feel that we do have the in house capability because it doesn´t require huge amounts of technology. For other services such as drilling or other specialised services we will need partners. Part of the agreement would be technology and knowledge transfer and training for our staff, so that in five years from now we should be able to operate on our own. The main focus for our Chairman and our group right now is to be able to do the job as a local company but providing the same standards as any international company. That is the goal that we are working towards.
Can you talk about the road map and the different milestones that you are going to achieve in the next 2 years?
One of the first things that we achieved was our registration with the MNR, the Ministry of Natural Resources. It is not easy to register with them unless you have contracts or experience working in the oil and gas sector. That was the first thing which enabled us to bid for different tenders. The second step for us is to build this yard and warehouse. This is crucial for us, as we believe these are the kind of services that we need right now. The third step as I said, is that we are looking to start joint ventures with different companies. These companies could be companies supplying casing and piping to the rigs or companies supplying valves and pumps etc. That should be achieved in the next 6 months.
Do you have any plans to participate in the construction of the pipelines?
There are no plans for that because the construction of the pipeline is almost finished. Maybe if there is a second pipeline built then we might participate.
How do you feel about working in Falcon Group?
I am delighted to work here. I am very happy, it is like a small family. We are small enough to make quick decisions but at the same time we have enough resources and enough support for our management to close the deal and achieve our targets. I am very happy to work in Kurdistan and with Falcon Group.
There are many other Kurdish companies or Iraqi companies that offer oil and gas services, what sets you apart from the other competitors?
The range of services that we offer. Most of the other companies focus on just one or two services. As a whole group we have Falcon Construction, so we can offer construction, we have Falcon Security, one of the best security companies in Iraq, so we can provide security services, we can also provide offices and housing, catering services etc. So within oil and gas there are several services that we can offer. As I said, what sets us apart is that we have this support from all the other companies within our group, which maybe our competitors don’t have.
So basically you want to be a one stop shop for oil services?
Yes. A one stop shop in the oil and gas service industry. As a group, which is where our real strengths come from, we provide 8 or 9 services to these companies. So within the oil and gas sector we offer 8 or 9 more services than other companies offer. As a group we support each other. For example if we need to supply services to any site in Kurdistan, as a local company we have easier and better access than somebody who doesn’t know Kurdistan that well or someone who is not from here. We have a security service to provide security. We have camp services who can provide camp and logistics services. The whole group working together is what sets us apart from the other companies. We think that we have better support and resources to get a bigger share in our market.
Will your oil services only be provided in Kurdistan?
No, we don’t want to limit ourselves to Kurdistan, this is just the beginning. We already have different operations for construction and security in the south of Iraq, in Bagdad and in Basra. We will definitely expand into the rest of Iraq and perhaps internationally.
When are you expecting to enter the Iraqi market?
We have so much to do here in Kurdistan and so we need to spend our resources here first. We could go into the south of Iraq in the next 2 or 3 years perhaps. However, there is a lot that we can do here in Kurdistan right now