NDCO (Public Relations) - We have conducted an interview with Mr. Hedayatollah Khademi, the managing director of the North Drilling Company regarding the activities and capabilities of the company in the year of Economic Jihad.

- Would you please explain how you managed to earn the significant 770 billion Rial profit in 2010?

First of all, I should emphasize that this amount of profit becomes significant considering the company’s 2.6 trillion Rial capital and assets. The news was placed atop news of the oil industry and we provided the media with all the related documents in order to clarify the issue. It should be mentioned that the profit was gained through offering specialized drilling services to domestic and foreign employers.

To increase productivity in 2009, a thorough and comprehensive study was conducted considering details and succeeded in reducing costs and increasing profits. For instance, we decreased drilling rig waiting time, which is four to five percent on the average worldwide, to one percent and we are planning to reduce the figure to zero. Considering that each onshore drilling rig earns 40,000 dollars per month.

This shows the company’s high productivity and the high quality of its services which is made possible with the tireless efforts of the company’s committed and experienced personnel.

- Which domestic and foreign companies are you cooperating with and what kinds of services do you provide them with?

The North Drilling Company is cooperating with a number of domestic and foreign companies benefiting from its existing equipment and facilities as well as skilled staff. In the onshore sector, the Iranian Central Oilfields Company is the main employer and the North Drilling Company’s rigs are operating for the Iranian Central Oilfields Company. Another drilling rig is operating for the Iranian Offshore Oil Company. We have concluded five-year and ten-year contracts with this company. Our other rigs are operating in Hendijan, Shiraz, Kangan, Khorasan and Dehloran. Pars Oil and Gas Company is among the companies which are requesting our specialized services. Managing and relocating offshore rigs, mud logging, borehole logging, drilling logistics, pressure testing, complementary testing, cementing and acidizing, directional drilling, and port management are among other services we provide to our employers.

In the offshore sector, we have concluded a contract with Turkmenistan’s Dragon Oil Company in 2006 with an offshore drilling unit. We have drilled 27 wells up to now which are in the phase of production. Turkmenistan is exporting the oil produced from these wells. The North Drilling Company is the only Iranian company which offers technical and operational services to foreign contractors and gains huge incomes from these services. For example, a single offshore drilling unit makes 143,000 dollars per day.

- What equipments does the North Drilling Company own?

The company owns 9 semi-heavy onshore drilling rigs and the Iran Khazar offshore drilling unit, which is deployed in Turkmenistan’s waters. We offer exploration, production and exploitation operations as well as related services inside and outside the country relying on 2,000 experienced and committed experts. Utilizing the Iran Amirkabir semisubmersible advanced drilling unit, owned by the National Iranian Oil Company, new oil and gas reserves will be discovered and put into production in the Caspian Sea. The North Drilling Company operates five vessels named Iran Behshahr, Iran Kasma, Caspian 1, 2 and a 500-ton barge. Another vessel named Caspian 3 will be added to the fleet in the near future. The company also owns an ROV system weighing 38 tons which is used in deep water drilling operations and can be operated in depths of 1,000 meters.

- Operating the Iran Amirkabir semisubmersible drilling unit requires advanced technical knowledge. Is this job carried out by Iranian engineers or foreign experts?

We are honored that the Iran Amirkabir drilling unit is operated by capable Iranian engineers and the North Drilling Company holds the exclusive knowledge to operate the rig. Some 86 to 100 persons, including the rig supervisor, head of operations, boring master, mechanics supervisor, electrical engineer, electrician, and the employer’s representative, work on the rig daily. It should be mentioned that the Iran Amirkabir drilling unit is equipped with an advanced BOP system, enabling it to quickly curb any eruptions at seabed. The system is second to none in terms of weight and technology in the Middle East. Only a few large companies operating in deep waters hold similar systems. The system weighs 220 tons and is installed at the seabed after drilling the well’s third borehole and running 20 inch casing to remotely prevent any probable blowouts.

- How far from the shore is the Iran Amirkabir drilling unit and how are the personnel transported to that location?

The Iran Amirkabir drilling unit is located 250 kilometers from the shore and the personnel who are working on the rig work on the two-week-work two-week-rest basis. They arrive at the rig after 14 hours of sailing, which can be very difficult in during hot, humid, and stormy weather. Two of their resting days are spent in their trip back and forth to and from the rig. We are planning to use helicopters for their transportation. It should be noted that two doctors offer medical services to the staff, which of course, is not enough. If an accident occurs on the Iran Amirkabir drilling units, we do not have the facilities to quickly transport the staff to a medical center. We hope to solve this problem by using helicopters soon.

- What are the Iran Amirkabir drilling unit’s features?

This 14,000-ton platform is curbed using eight anchors, each weighing 180 tons. So, unlike other platforms which are fixed in their places, Iran Amirkabir experiences tangible fluctuations which create difficult working conditions. In order to prevent probable risks, the platform should be detached from the BOPs. A reentry system is used to do so. A reentry system separates the platform from the BOPs until there is a normal and stable condition. Using data received from satellite and the reentry system, the BOP position is precisely determined and is installed again at the previous location and the operations continue.

- What measures have been taken for training the personnel?

Given that the operational and administrative activities in the North Drilling Company require keeping the personnel’s specialties up to date, training them is always a top priority and we try provide them with the necessary training. For example, we have planned an 18-month training course, which includes 2 months of theoretical training and 2 months of practical training on the rigs. We have already sent some 87 personnel to the south oil regions to work and go through the necessary trainings on the North Drilling Company’s rigs. Some 82 contractor personnel holding bachelor and M.S. degrees have already participated as trainees in the company’s training. We are the first company to employ and train contractor personnel as trainees. These personnel have made a committment to work for 10 years in our company.

- What measures have been taken in terms of research? Has there been any invention or innovation? Do you have scientific and technical cooperation with the universities?

Our activities are also up to date in terms of research and we enjoy the newest achievements for implementing our plans. One of our requirements is to provide parts for the machineries. We provide domestic manufacturers with the technical knowledge and the part to be manufactured. The sample is tested and if approved it is then mass produced. The groundwork is also laid for innovation and inventions. There have been several inventions in this company. For example, a Drill Watch has been invented by Eng. Mostafa Koraie which has superior compared to the European models and it is installed on most of the drilling rigs. This device provides drilling information and data to the user wirelessly. This information and data include the amount of mud, weight on the drill bit, and etc. The previous devices were connected by a cable and we faced problems during rig moving. But this problem is now resolved and it has speeded up repair time. We have also some fruitful relations with the universities. Students, who use our facilities for compiling their thesis and conduct research on our required fields, are cooperated with and they are provided with the proper facilities.

- How is the 5-year executive plan of the North Drilling Company prepared? What are your future plans?

Benefitting from our colleagues in the Integrated Planning Management of the North Drilling Company, we have conducted some precise planning which rely on investigating all aspects and all factors effective on our activities such as what is our status in the regional market? What percentage of that market belongs to us? What is the plan of the National Iranian Oil Company for the next 5 years? How many drilling machines are required? How many wells and where should they be drilled? After gathering this information, we analyzed the operational capabilities and facilities as well as the market shares of domestic and foreign companies and finally we specified the National Iranian Oil Company’s needs for drilling rigs. As a result of these investigations, we found what sources we will need if we want to increase the number of our drilling rigs to 13 from 9. Thus the 5-year executive plans were approved by the North Drilling Company’s board of directors and are being carried out completely. We make every effort to develop the company’s activities especially in the region during the 5-year plan and increase our annual income through offering specialized services with high quality, integrated services and encouraging innovations.

- Manpower is the main asset of each company and organization. What is your opinion in this matter and what kind of management do you believe in?

After many years of experimenting with trial and error and bearing many costs and loses, today the management knowledge offers this achievement to the directors that a successful management is based on human resources. It was necessary that many years passed to change the management from a human-tool to the human-based one, because the human enjoys many potentialities and amazing capabilities. Even though our human-based management has some commonalities with the western human-based management, it is different in nature. They only think about making profit based on capitalism, but in our human-based management, human enjoys a lofty status because he has been created by God. On the other hand, experience has shown that if the manpower is not satisfied with his working conditions, it will not have the expected outcome. The manager in each company should manage his manpower first. If a manager seeks the success of its company, he should consider that his only asset is the manpower. We have shown that we managed to make profits beyond anyone’s expectations by this approach with a limited number of manpower. As mentioned before, the North Drilling Company’s net profit has been over 770 billion Rials in 2010.

Manpower is very important for us. A manager should treat his personnel like they are his family members and the personnel consider him as their father or brother. In this case a manager will be successful no matter where he is working.

- As you know, this year has been named as the Year of Economic Jihad by the Supreme Leader. How will this affect the national economy and how does the North Drilling Company feel towards this responsibility?

We have considered the Supreme Leader’s statement since the beginning of this year and we have determined to boost the company’s efficiency through more efforts and innovation as well as providing more facilities and equipments. The results of these attempts have been reflected over the past 3 months. Economic Jihad is based on an active and comprehensive thought and will lead to very fruitful results. Economic Jihad prevents unnecessary costs and promotes more investments, as a result many job opportunities are created and unemployment rate is reduced. We will have a rich country through Economic Jihad and the proper opportunities will be laid forth for the financial and spiritual promotion of our hardworking and committed people.

Following this issue, we should move towards taking the best advantage of our available resources and have the most efficiency. We have fortunately fulfilled our responsibility in this matter. Considering the net profit (770 billion Rials) we brought to the country last year, we have made more efforts over the past 3 months and have employed more professional forces. Follow this statement, along with proper human-based management we can reach the anticipated income. We should believe that by meeting both the financial and spiritual needs of the manpower, in addition to fulfilling our responsibility we will be successful in reaching our lofty objectives more than anticipated.