INTERVIEW: Ocean Installer ‘Casts Wider Net’ to Tackle The Downturn
- Business & Finance
Ocean Installer, a young Norwegian subsea services player, holds strong EPCI expertise within the SURF (subsea structures, umbilicals, risers, flowlines) segment.
The company was established in 2011, in response to changing structures and increasing demand in the subsea construction industry.
In an e-mail interview, Subsea World News spoke with Steinar Riise, a CEO of Ocean Installer, with 19 years experience in the subsea sector.
Prior to the position as CEO of Ocean Installer, Riise spent 14 years in Subsea 7. He holds a Master’s degree in engineering with a speciality in offshore construction from the University of Stavanger, Norway.
We asked about recent contract win with Statoil, company’s market focus and future plans, and how Ocean Installer is adjusting to current downturn in the oil & gas industry.
Ocean Installer is a relatively young subsea player, with little less than 5 years under its belt, can you tell us how it all started and how are you satisfied with the company’s development and performance so far?
Ocean Installer was established in 2011 as a response to, what was then, a need for additional players in the subsea/SURF market. Our business model was to develop a lean and flexible contributor with highly experienced people and efficient vessels as the company’s prime assets. We got off to a very good start and secured important contracts with key clients such as Shell, Statoil and ExxonMobil within our first two years of existence, and the company expanded rapidly. Although we have naturally also been affected by the slowdown in the market, I have to say that I am very satisfied with the company’s overall performance and development over the last five years.
As a result of the slowdown we experienced in the North Sea specifically, we included new regions in our bidding efforts, participating in all potential new bids within our focus market segment. Followed by this initiative we have had a high success rate in winning new work, also as the market has tightened. Hence, over the last five years we have developed a solid track record with key clients, and in addition to continuously expanding our client portfolio, we experience a high level of reoccurring business as well as new, additional work being added to existing contracts. What I am particularly happy about, is that we so far have been able to build our backlog with projects that are matching the competence and capabilities of our people and vessels, and thereby continue to develop our core expertise, also in more challenging times.
In sum, we are succeeding at what is at the very heart of our business: winning and delivering on projects. We have proven our business model successful – being lean and flexible is contributing to getting us through the current downturn – without having to make such drastic measures that we are not fit to follow when the market at some point starts picking up again.
Contracts secured in the Gulf of Mexico and West Africa tell us that you’re not solely fixed on the Norwegian Continental Shelf, what region(s) will you be focused on and where do you see the most potential for your company right now?
From the very offset we’ve had an ambition of becoming a global player. We started this process quite early on, but with the last years’ market developments this work has somewhat accelerated as the need to cast a wider net have become apparent. The North Sea will always be an important region for us, as this is where we have the biggest pool of resources to plan and execute projects. However, we will also continue to focus on GoM and Africa. Looking a few years ahead, we also see considerable opportunities in the Asia-Pacific region. Our vessels are global assets and we need access to the global market to ensure satisfying utilisation of our fleet. However, compared to our main competitors, we are a small and lean company, which only require a limited number of projects to keep the organisation and fleet busy over the next few years.
The recently awarded contract hat trick with Statoil has you booked for work in the second half of 2017, how are the project preparations going?
The three projects from Statoil was for us a very important win, as it confirms the relationship between Statoil and Ocean Installer in a market where the whole business is challenging its players. The preparations are now moving ahead according to plan and we are well on track. As we have done quite a bit of work for Statoil over the last few years, our organisation gets more and more familiar with the Statoil “way of doing things”, and this facilitate a smooth project start-up and execution.
We’ve witnessed Normand Vision’s first renewables contract at the end of last year. Many subsea players have, due to the highly competitive market, shifted their focus to that sector. Is the renewables market going to be direction for Ocean Installer in the prolonged oil & gas slowdown?
In today’s market, our strategy is to cast a wider net, which includes renewables as well as other offshore operations that fit our expertise and assets. However, although our current main focus remains on oil & gas, subsea know-how is and will be needed in a broader set of industries, including renewables, decommissioning and other segments of the subsea business, and we are keeping an eye on the developments across segments. In particular, I believe that the development of a submarine European smartgrid for the exchange of power between Norway, the UK and mainland Europe will offer exciting opportunities when the time comes.
What’s next for Ocean Installer, what are your plans for this year and how is the company positioned for the future?
Our organisation is well set up for the activity level we expect for 2016 and 2017, and this allows us to focus on our core business, namely delivering in existing projects and securing future work. Our main ambition is to strengthen our footprint in the regions we are currently present, and increase market share in a way where we continuously build the company and prepare Ocean Installer for the market to pick up, as we all expect it to do at some point. This means that we will always seek partnership and/or consolidations to improve the cost base and support the Operators to develop their portfolio at a cost level that is sustainable for the business.
Although I leave to others to offer predictions on how the market will develop, the way I see it, we are well positioned for the future, whether the downturn continues or the market improves. It is important to me that we do not become a passive victim of business cycles – we are not set up only to deliver when the market is good, but also in more challenging times, and we are fighting our way through this current downturn with intelligent solutions, hard work and a long-term perspective on what we do.
Subsea World News Staff