New offshore rig services player makes ready for market recovery

A new player in the offshore rig services market has recently emerged in Denmark. The new company, set in the Port of Frederikshavn in the Northern Denmark, was formed by three oil & gas service providers for the oil & gas industry and named OVS Offshore. 

Offshore Energy Today has had an interview with Thoke Flamgaard, Sales & Projects Director at OVS Offshore where we talked about the motivation behind creating a new company, its business plans, as well as current market opportunities.

OET: OVS Offshore was recently formed by three Danish companies. Tell us a little bit about its owners and how the idea to form a new offshore oil rig services company came to be.

Flamgaard: OVS Offshore is equally owned by Orskov Group A/S, VMS Group A/S and Scanel International A/S, and each of the companies have more than a decade, individually as well as in cooperation, been operating and providing services to the offshore rig operators worldwide.

In 2015, the Orskov Group and the Port of Frederikshavn managed to get Maersk Guardian in for conversion from drilling to accommodation rig. The experience gained from here in terms of cooperation with other companies, rig owner and the local community was the kick-starter idea for forming OVS Offshore.

OET: Will OVS function as a separate entity from its owners?

Flamgaard: Yes, the three individual companies will continue to maintain and develop their individual businesses, and OVS Offshore as a separate company will develop its own business strategy.

OET: What type of services does OVS offer?

Flamgaard: As a contractor, we can offer an overall total technical solution and the advantage we have is that all services are gathered in the harbor area.

Secondly, the facilities that support the execution of tasks such as, workshops, warehouses, accommodation, offices, etc. are close too, which is beneficial in terms of planning and logistics.

OET: How are they different from the services offered by its three owning companies? Will there be any overlapping and what kind of approach will you take in sharing the market?

Flamgaard: No, there will be no overlapping as they are complementing each other and the strength is that each of the companies’ competencies and skills are gathered in OVS Offshore. Each of the three companies will continue with their individual core businesses, but now we can provide total solutions where we can assist our customers with planning, logistics, and take a bigger overall responsibility of the projects.

OET: The timing for setting up a new company in these far-from-ideal market conditions for the offshore oil industry is rather interesting. What kind of opportunities are there out there right now?

Flamgaard: The market is down for the time being, but we believe that it will recover again in the near future, and for us it is important to be positioned in the market in due time. Waiting until the market has recovered itself in a very competitive market will be too late.

The demand for energy including oil products is increasing and the oil price is slowly but steady reaching a level where the oil companies again will invest in exploration, which again will require preparation of drilling rigs for operation and we want to be ready when that happens.

OET: Is the new company conceived as a one-stop shop for rig services or as a more specialized entity?

Flamgaard: As a one –stop shop for rig services and I’d like to add that, despite our first priority being to bring the rigs to Frederikshavn, we will also provide similar services inside and outside Denmark in cooperation with partners.

OET: What about its staff? Will OVS be hiring new people or will it be sharing its owners’ employees for the upcoming projects?

Flamgaard: In the first place, we will utilize our owners’ employees, but in addition OVS Offshore has close cooperation with external partners, who depending on the type of works and skills can provide additional staff as required.

OET: What sets OVS apart from other players in the region that offer similar services?

Flamgaard: In addition to our technical services, we also offer unique port facilities, warehousing, logistics, offices, accommodation. Workshops and staffing is permanent, and it can be started quickly and run projects efficiently with low startup costs. Time is money and we know how important value for money is in this industry.

OET: What is your current business plan to advance the development of the company? How do you plan to position yourself in a market that is already crowded and suffering financially since the oil prices dropped over two years ago?

Flamgaard: We are very aware of the competition, but looking at number of competitors we believe that with our overall facilities and our physical position close to the North Sea we will be attractive and competitive within both the services and the cost. Frederikshavn is close to the oil and gas fields in the North Sea and that also will minimize transit time, which also is an important factor. Value for money.

OET: Since the Port of Frederikshavn is currently undergoing expansion that will enable it to receive bigger ships and offshore installations, will there be new opportunities opening up for OVS due to this expansion? Are there plans for OVS to tap into the North Sea decommissioning market?

Flamgaard: The expansion of port facilities certainly opens up new business opportunities. Among the many options are well advanced with plans for the establishment of facilities for the environmentally-sound dismantling of both fixed and mobile offshore units, and in this context we see opportunities to participate in the decommisioning work to prepare and ready the units to be shipped to recycling.

OET: Do you already have any projects in the pipeline or rigs in the yard?

Flamgaard: Yes, we are working on new projects, but it is at an early stage.

OET: What is your work scope on this project and who is the client?

Flamgaard: It is related to a so-called SPS (Special Periodic Survey), but the name of the client we will keep to ourselves for the time being.

Offshore Energy Today Staff

Interview conducted by Offshore Energy Today’s Nermina Kulović.