Paradigm good growth in Africa
Feature Articles, Nov  09  2009 (Digital Energy Journal)

- Richard Jefferies, Paradigm executive VP for Europe, Africa and the CIS, says that the company is seeing good growth in its African business this year, with more business in the first half of 2009 than in the whole of 2008, a factor he attributes to the company’s focus, the match between geology and technology, and its client’s technology leadership.

“We see Africa as somewhat of a jewel in our crown right now. We will continue to make steady investment in this vast, challenging, yet rewarding continent. I fully expect to see African organisations appearing in our top 10 customers in the not too distant future,” he says. “The key will be not to get impatient and overstep the investment curve.”

“In early 2008, Paradigm put together a strategy specific to Africa. It created a dedicated Africa sales team, re-balanced its Nigeria operations to focus on our major clients, and initiated a program for Angola which brought on board our first Angola-based employee in 2008. “With over 50 countries and 2000 languages, you can't treat Africa as one market.

“For example, Nigeria and Angola are major OPEC producers, focusing on the highly prospective and productive Gulf of Guinea, Niger Delta and West-Central Coast. Nigeria and Angola are very different, with their own unique characteristics; both countries are at the core of our African business, but in very different ways.

“Moving away from West Africa, we are focusing our business development activities on Algeria, dominated by the national oil company (NOC), Sonatrach, and then in the discrete opportunistic markets of Southern Africa, Madagascar and the Rift Valley,” he says. “We have a plan of development and execution for each segment of our African territory.

“Local content is extremely important. Our team in Nigeria is 100 percent Nigerian, and our business development manager in Angola is Angolan. Not only does this make sense from a language and cultural point of view, it also demonstrates commitment to the local economy.”

Geology and technology

There is a good match between Paradigm’s technology and the geological diversity of the region, Mr Jeffries says.

“In looking at a cross-section through the Gulf of Guinea, moving towards the offshore, the geology transitions through four principal zones, dominated by shale diapirs, compressive folding, thrusting and anticlinal deformation.

“All four geological settings are prospective and require different interpretive approaches from a broadly disciplined team of explorationists,” he says.

Moving east from the heartland of Africa’s oil economies, the East African Rift Valley is “becoming more and more prospective; it is hard to think of a more structurally complex, and indeed tectonically active, setting for exploration,” he says.

“The need for accurate, fault-sealed models is paramount to understanding the geological reservoir uncertainties and to the creation of development plans that have fully incorporated all aspects of potential risk.”

Paradigm’s Rock and Fluid Canvas software is designed to work well with these kinds of complex and diverse rock structures, covering the whole exploration and development life cycle, and to create better images of previously hard-to-image prospects.

Client technology leadership

Paradigm tends to be most successful when working with clients who are themselves technology leaders, Mr Jeffries says.

An obvious example is Statoil, which has had technology leadership as an important element of its long term strategy since being established in 1972.

“We see all around the world that Paradigm tends to be most successful where the subsurface technical challenges are addressed by innovative clients who are technology leaders. ““Paradigm has had a long and successful relationship with StatoilHydro, going back many years, such that they are today one of our most strategically important clients,” he says.

Along similar lines, Angola’s Sonangol and Somoil are “making every effort to embed high science and best-in-class technology in their DNA,” he says. “Today Sonangol and Somoil are investing in Paradigm leading edge innovations, such that we see a long and mutually rewarding future in Angola.”

Business climate

There are many big investments going on in Africa despite the world’s current economic issues.

“Many of our African clients do seem to be less impacted by the financial crisis than our European ones,” he says. ““There appears to be a different dynamic in finance and access to credit in Africa, versus the more traditional European markets.”

“It is difficult to pinpoint exactly what that is attributable to, but some factors are likely to be home generation of capital and the gradually maturing political and banking infrastructures in countries like Nigeria.

“Several Nigerian banks have visibly gone global in recent years, with the Financial Times reporting many of them showing exponential growth.

“Gas is featuring as an increasingly strategic natural resource in the West African offshore, and money from China, India and Russia is still being pumped into Africa, fuelling the need for constant investment in the best technology.”

“Multi-billion dollar deep and ultra-deep water projects under sanction, with their attendant thirst for efficiencies and greater ROI, are going ahead,” he says.

Even smaller indigenous oil companies are slowly taking a more global view of available technology, he says. That trend,coupled with a drive to educate the local workforce and to repatriate as much of the value-adding “knowledge” work as possible, feeds the demand for new technology.

Working hand in hand with the knowledge workers and equipping them with the ability to learn and succeed drives an increased demand for robust, easy-to-use applications on a common desk top infrastructure or “canvas,” he says.

Paradigm has historically been seen as a smaller competitor to organisations such as the major oilfield service companies, but Mr Jefferies believes this is changing. “We are no longer considered small. We are competing extremely successfully. We are not encumbered with a massive, capital intensive services giant over us, so we can be more nimble. We are that ‘breath of fresh air.’ Our value is fewer wells, not more.”

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