Paolo Ghirelli is the Chairman and CEO of Bonatti S.p.A. and the main player in Bonatti Group’s impressive growth. Having worked at energy giants ENI and SNAM, Ghirelli has been numbered among the pioneers in the Italian plant-engineering sector since 1975. We interviewed him.
In the early seventies he attended the Scuola Mattei, becoming an expert in technology and specialized projects. The company, originally founded by Engineer Saul Bonatti and currently the workplace of 6000 people, has developed over time, gradually conquering different stages of plant construction and management to become one of the largest upstream operators in the Oil & Gas industry on the international level.
Bonatti’s successful worldwide growth continues in Oil & Gas sector: the company enters strongly in Mexico with pipeline works and achieves its market penetration in Iraq. New contracts for a total value of 400 million, that confirm Bonatti’s roleand know-how in plant and pipelines sector. The EPC Pipeline El Oro – Mazatlàn continues Bonatti’s experience in Mexico: the gaspipeline will connect with the El Encino to Topolobampo Pipeline and end near Mazatlànin Sinaloa state. The acquisition regards the new pipeline, 24 inches dia. and 420 km long, that will be executed for Trans Canada: the project is scheduled to be completed within 2016.
This contract represents an important milestone for Bonatti, that has started its activities in Mexico with the construction of “Gasoducto Morelos” for the Spanish Client Enagas.
The second contract thas been awarded in Iraq: Bonatti will provide Operation & Maintenance, Commissioning and Start-up Assistance services for Lukoil on one of the most important utilities of West Qurna 1 project, the 252 MW Power Generation Plant.
The contractual duration is of three years with an additional option for a fourth one. Good opportunities may also be valuated in Algeria, with EPC Plant projects in Alrar area, next to the border with Libya, and in Saudi Arabia in pipelines sector.
Bonatti is an affirmation of what Made in Italy stands for in advanced technologies.
I will tell you our story. Currently we have 6000 employees and their nationality changes according to the locality in which we are operating, from the Andes to Reno. We have created and experimented with some policies related to local content and we have extensive and longstanding organizational experience. 18% of our employees are Italian. The engineering, strategies, and equipment expertise all originate in Italy.
What course has your company, Bonatti, taken in Arabia?
We know Saudi Arabia quite well. We have built multiple plants there. Amongst these [projects] we engineered and built the oil production facilities in Mubarraz Area south of Al Khobar for Aramco, the largest oil company in the KSA (Kingdom of Saudi Arabia). Then, we were the contractors for the automated metro system that Ansaldo made for the Princess Nourabint Abdur Rahman University for women in Riyadh as well as for a desalinization plant in Khafji. We have been working with the KSA since the 1990s, from the viewpoint of a medium-sized Italian company, a company that [since then] has reached 800 million euro in total revenue. This year our revenue will be 700 million as we had to absorb the costs of the Libyan crisis during which we endured the interruption of all local activities; initially slowed down by the war [these activities] have fortunately resumed their course.
From our perspective, the point of view of a general contractor offering multidisciplinary services to the Oil and Gas industry worldwide, Saudi Arabia is evidently a country where small or mid-sized contracts are rare, this is because all of the oil deposits are ‘giant’ and the investments are at the level of billions of dollars. This is the leading characteristic of Saudi Arabia that we found over time. It is significantly different from North Africa where we first developed our experience and our growth, especially in Libya and Algeria.
How are you confronting a country’s risk factors inplanning your strategies?
We are adopting a model rooted in the country: it is a necessity for EPC (engineering, procurement and construction) contractors specifically those working Upstream. When it comes to refinery design, which is a multi-million dollar project, contractors can move independently ofgeographical location. In our case, we are taking on 100/200 million europrojects and so we need to calibrate the risk and aim towards stabilizing astrong presence in the country. We have an advantage, as happened with our roots in North Africa, because we have a strategy that allows for our work tobe linked from one compressor station to the next with the related transport work such as pipelines. The best strategy is to have multi-sector projects in a given country: flowlines, pipelines and their maintenance. In this way, yearly, we acquire a business volume that allows us to maintain a presence in the country. This is what happened in Libya where we’ve maintained a constant presence since 1979.
What are your expectations for the near future?
One new opportunity is a shale gas plant incollaboration with the Spanish firm, Enagas. This huge shale gas phenomenon has created a new market on the other side of the Atlantic. However, we will continue to follow our traditional market and we are competing in Iraq and Kuwait and in Saudi Arabia where we are building pipelines. At the moment we’re following two major projects for the import of gas from central Asia to Europe: one is Russia’s famous Southstream, meant to by pass Ukraine, and the other a BPproject that will involve gas found in Azerbaijan passing through Georgia and Turkey. We have been qualified for the first stage by the references we acquired in Germany.
How have you approached the Shale Gas frontier?
Our strategy is to focus on the country. At one stage we were able to understand, through our principal client in Spain, Enagas – with whom we had long term contracts – that Mexico was undergoing a transformation in the energy industry throughout the country, focused on natural gas, which is a gas produced like shale gas in the U.S., at 2.5 dollars per million BTUs compared with 12 dollars [for the same] in Europe. As a result we found ourselves competing for around 4000 km of gas pipelines in Mexico, which has no local contractors and where they don’t have the problem of the Chinese and the Indians.
Currently we are vying for the large transporters of American gas for some competitions in Mexico. For us, shale gas means the engineering and construction of thousands of wells that must then be drilled and followed through the various stages. We are also discovering [new] opportunities in Canada.
Interview by Alberto Cavicchiolo