A Legacy of Success
Beginning as a small trading company in Bahrain in the 1920s, the Zamil Group of companies has spawned a series of successful entities such as Zamil Offshore, the leading marine services company in the Middle East and number five in the world.
Zamil Offshore Services is the largest offshore support vessel operator in the Middle East and fifth largest in the world. In 1977 the twelve Al Zamil brothers founded the company, originally called Zamil Marine Services, and bought its first vessel, M/V Zamil Supplier, chartering it to what was then known as Aramco, the Arabian American Oil Company.
Zamil Offshore is an affiliate of Zamil Group Holding Company, one of the largest global investment enterprises with diversified interests and capabilities in more than 52 business sectors, a range of industrial, commercial, services and consumer solutions with a vast network of manufacturing facilities, which comprises companies in steel, air conditioning, plastics, chemicals, petrochemicals and energy.
The Zamil Group was founded by Sufyan Al Zamil’s grandfather, Sheikh Abdullah Al Hamad Al Zamil (1897-1961), in the 1920s as a trading company in food, textiles and real estate in neighboring Bahrain. As Saudi Arabia became a significant producer of oil, the Zamil Group invested in founding a wide range of industries paralleling the development of the Saudi oil industry.
Creating Opportunities
Sufyan Al Zamil has been recognized as one of the rising young executives under forty years of age in family businesses worldwide. Although he is a Zamil family member with a degree in Systems & Industrial Engineering and a Master’s in Business Administration, he had to begin his career with the company on the plant floor working alongside other employees. He also made it clear that there were no guarantees for advancement in the family businesses and that a rigid policy requires enrollment in a number of management training programs before being considered for promotion up the ladder within the organization.
Diversification has always been an ongoing business practice at the company. Founded as Zamil Marine Services, it was renamed Zamil Marine & Catering Services in 1980 to better identify its catering business for employees at terminals, vessels and offshore/onshore oil and gas facilities. In 1985 it again changed its name to Zamil Operations & Maintenance to encompass its growing involvement with government work.
Building a Legacy
Zamil Al Zamil (founder of Zamil Offshore) earned his degree in Petroleum Engineering in the U.S. He returned to Saudi Arabia to join the Ministry of Petroleum and was employed by Aramco, which provided him the opportunity to work in the offshore marine sector. During the 1970s the Saudi government began acquiring shares in Aramco as oil production doubled and the company took its place at the forefront of world oil and gas production.
During the mid-1970s the Ras Tanura Sea-Island Terminal and the Ju’aymah Offshore Terminal were opened as Saudi production, for the first time, exceeded three billion barrels of crude annually. Aramco was growing rapidly, and the Saudi government bought 100 percent control in 1980 and in 1988 renamed the company Saudi Aramco.
The 1990s put Middle East oil production and Saudi Aramco at the forefront of investment and production. It was a time of conflict as Iraq invaded Kuwait and the U.S. and West European countries sent their armies to stabilize the region. Then Gulf War Two caused repeated dramatic swings in oil prices, and Zamil Offshore continued cultivating existing and new contracts with Saudi Aramco while investing in additional vessels, facilities and highly qualified personnel.
The new millennium saw a shift to increased offshore production in the Arabian Gulf and Red Sea, so Zamil Offshore diversified into shipbuilding, ship & rig repairs and the offshore hook-up business as well as construction and engineering services. In 2003 Zamil Offshore was awarded a seven-year hook-up contract with Saudi Aramco for maintenance, upgrade, modification and commissioning support for 30 percent of Aramco’s rigs and platforms in the Arabian Gulf. At the end of 2011 Zamil Offshore was awarded yet another seven-year hook-up contract for a larger share approaching 75 percent.
The Saudi Aramco rig fleet today numbers approximately 170, and Zamil Offshore’s Engineering & Construction division remains the top service provider. It provides modification, upgrading and support services for Saudi Aramco’s onshore and offshore rigs, including both oil and gas facilities. Saudi Arabia’s offshore oilfields hold about 76.1 billion barrels of reserves with a combined capacity of 3.4 million barrels per day. These offshore fields represent roughly 30 percent of total Saudi reserves and four percent of global demand.
Strategically Positioning the Modern Company
Today, Zamil Offshore has a fleet of 77 offshore support vessels and is the largest operator in the region with some 3,400 employees. Seven more vessels of various sizes and activities are currently being built; they will join the fleet this year. Zamil Offshore’s fleet represents more than 40 percent of Saudi Aramco’s total chartered fleet.
In 1999 the company was awarded a lease contract to manage and operate Dammam’s King Abdul Aziz Sea Port Marine facilities, including navigation and pilotage. Zamil Offshore immediately began operating the port marine yard and ship repair business and in 2002 ventured into shipbuilding. In 2003 the company built and delivered the first vessel constructed in the Kingdom of Saudi Arabia. In 2004 it built the first diesel-electric anchor-handling tug/supply/safety vessel in the world.
Today, after almost 11 years in the shipbuilding business, the total number of ships built at Zamil’s yard stands at 41 vessels, of which 24 are specialized offshore vessels, including two DP-2 multi-purpose anchor-handling tug/dive support vessels, the largest ever built in the Kingdom. Zamil Offshore’s shipyard has also built three vessels for the Saudi Royal Navy and 14 vessels for various Saudi Sea ports. It recently received a six-vessel contract from a Gulf State country.
As the premier and only shipbuilder and top ship repairer in Saudi Arabia, Zamil Offshore invested almost $250 million in building an advanced shipyard next to its current Port Marine Yard in Dammam. The new yard was opened in February. Its facilities include a Rolls Royce 7,000-ton Synchrolift serving nine dry berths. The new shipyard will double the company’s new construction and repair capabilities and absorb the repair and maintenance business of the entire Zamil Offshore fleet in addition to many of the offshore vessels serving in the Arabian Gulf.
In June 2013 the company won a ten-year lease to operate the Jeddah Ship Repair Yard on the Red Sea. The Jeddah yard’s two floating docks and other facilities are currently undergoing major upgrades. Approximately 25,000 vessels sail through the Red Sea each year, and about 6,000 of them call at the Jeddah port. This represents good demand for ship repair, and Zamil Offshore intends to add new ship repair facilities in Yanbu, north of Jeddah on the Red Sea, to service merchant and naval vessels of all sizes.
As to its marine operations expansion, in 2012 the company entered into a joint venture with Mermaid Maritime, a leading provider of subsea and dive services based in Thailand and traded on the Singapore Stock Exchange. Mermaid’s Qatar-based subsidiary, Subtech Qatar Diving and Marine Services, is teaming up with Zamil Offshore in subsea inspections, repairs and maintenance, and light infrastructure construction services for the offshore oil and gas industry in the Arabian Gulf.
A Bright Future
Sufyan Al Zamil said he is excited about marine services because of the recently witnessed innovations and fast development in the offshore oil and gas industry, which directly affect the Saudi economy. The company he heads will continue to expand its fleet of advanced vessels and upgrade its shipyards on the Arabian Gulf and Red Sea to meet the growing demands of the offshore and merchant marine industry in Saudi Arabia and the Middle East. At the same time, the company has opened an office in Singapore to be closer to the offshore oil and gas dynamics in Southeast Asia and especially in Malaysia and Indonesia.
Sufyan Al Zamil is keenly aware of the responsibilities of running a successful business, which were ingrained in him by his father and his uncles. Diversity has been the key to the company’s growth and success. He acknowledges that the three main divisions within Zamil Offshore are being positioned for spin-off due to their financial strengths and the ability of each to operate on its own.
While the company relies heavily on Saudi Aramco for its core business, it is also recognized by the major oil and gas companies and other industries as the leader in marine services throughout the Middle East. It is a recognition that has been earned through two generations of Zamil leadership, and its future looks very bright indeed.
Tony Munoz is Publisher and Editor-in-Chief of The Maritime Executive.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.