Small country, big offshore

The Dutch offshore industry is an international frontrunner and the Dutch are to be found anywhere in the world with their innovative and creative solutions for the offshore industry. How come such a small country is so big in this field? And where do the opportunities lie for the Dutch to continue to be one of the leading countries?

Its maritime history, the continuous struggle against the sea, the fact that the Netherlands is the home base of Shell and a mayor gas producer surely play a role in the successes of the Dutch offshore industry. The strategic location of the Netherlands towards the North Sea is important as well. Den Helder in the peak of the north of the country is one of the harbours that forms a key link in the logistic chain for the offshore oil and gas industry. Over the years more and more oil companies, offshore suppliers and offshore-related shipping companies have concentrated their logistical activities here, as drilling rigs and production platforms in the North Sea can easily be serviced from this port. It also is an excellent location for carrying out inspection, repair and maintenance works and the offshore industry can make use of the facilities offered by Den Helder Airport. To give the offshore industry more space and to be able to service the industry even better, one of the quays was elongated, the start of the so-called multipurpose quay. On 21 June 2013 the renewed quay was taken into use.

Next to the offshore oil and gas industry, Den Helder aims to play a key role as the base for operations regarding the offshore wind industry in the future. Also the Port of IJmuiden, conveniently located at the mouth of the North Sea Canal to Amsterdam, has experience in facilitating and accommodating the construction of wind farms in the North Sea and in various offshore related projects. The North Sea wind farm off the coast of Egmond aan Zee and the Prinses Amalia wind farm off the coast of IJmuiden were both constructed from this port.

Excellent reputation

A Dutch exploration and production operating company active in the North Sea – mainly the Netherlands and the United Kingdom – is Oranje-Nassau Energie (ONE). Originating from the mining industry, today ONE is the largest privately owned Dutch exploration and production operating company. Up until 2011, the company only focused on non-operated assets in the North Sea, other parts of Europe and Africa, but following the acquisition of Dutch operator Cirrus, the company now is also an active operator in the North Sea. ONE also has non-operated production from Gabon, West-Africa. Being a customer of offshore suppliers, ONE can relate to the Dutch offshore supply industry having an excellent reputation regarding offshore and gas technology, but also excelling in the field of geophysics, logistics and maintenance: ”We are currently developing production facilities at the Maasvlakte south of Rotterdam, for the Q16-Maas field which we discovered in 2011, and recently held a tendering process”, Ron Hagen, executive vice-president business development of ONE explains. ”The Dutch bidding parties were very competitive, as their price-quality ratio was really good, and as a result, many contracts went to Dutch suppliers. Not only nationally, but also internationally the Dutch have an excellent reputation.”

Sander Vergroesen, managing director of IRO, the Association of Dutch Suppliers in the Oil and Gas Industry, agrees: ”The Dutch offshore industry has a top 5 position worldwide, next to the United Kingdom, the United States of America, Norway and France, and specifically in offshore contracting, the Dutch are leading. Because of our vast maritime history, we have a lot of knowhow, experience and expertise. Dutch research and educational institutes, companies and the government join forces which leads to many innovative products and makes us a frontrunner in that field, offering high-quality technological solutions for the winning of oil and gas. Winning oil and gas becomes more and more difficult because the focus is shifting towards deeper waters and more challenging circumstances. The Dutch are used to operate worldwide, we have two important logistical hubs, Rotterdam Mainport and Schiphol Airport. Our country’s historic strength in trading is important too, as is the ability to adapt to different cultures. The Dutch are acknowledged as a reliable partner, who defines necessary agreements and who is not bound to politics. The Netherlands overall is a stable democracy and has a positive image, is strong in technology and offers good education, all facts that make the Dutch offshore industry a worldwide leader.”

Dutch companies working in the offshore industry are to be found everywhere in the world where oil and gas has been discovered. New places where oil and gas are found are often far away from the Netherlands, in deep seas with difficult infrastructure. Vergroesen: ”Mexico offers a lot of opportunities, but because of the political situation, it was difficult for the Dutch to be able to be active there. However, this is about to change, so it seems. The local regulations are about to change to enable foreign parties to participate in the exploration and exploitation. Mexico has a lot of oil reserves, but they lack money and technology to exploit the fields. They import oil and gas now, but are in need of their own reserves and that need will only increase the coming 25 years. We have been to Mexico with a trade mission and national oil company Pemex is open to foreign companies. After the change of the energy and fiscal bill future developments will be very interesting for Dutch suppliers. Australia is booming as well, the Dutch are very active there and we think that Indonesia will start to emerge soon, the Arctic is interesting, operating in this area needs to be responsible and clean and oil companies realise and work on that. There are already operations on-going in the Arctic, but only on a small scale. Angola and Nigeria are traditional oil countries and Ghana and Ivory Coast are emerging. So are other African countries at the east coast, for example Mozambique, Tanzania and Kenya, where new discoveries have been made. It is important for the countries themselves that these areas are being explored and exploited, as they will benefit from it.”

Emerging East-Africa

To be able to seize the interesting business opportunities East-Africa offers to the Dutch offshore industry, the Netherlands-African Business Council (NABC) gathered a group of relevant Dutch companies like Boskalis, Dockwise, Heerema, Damen Shipyards Group, Mammoet, Van Oord and Shell to form the Dutch Round Table Oil and Gas East-Africa. Founded in 1946, NABC is the leading platform organisation for the Dutch private sector active or with ambitions to be active in Africa with their extensive experience in the field of doing business in this region. Next to the partnership focussing on East-Africa, NABC also established the Port Development Partnership – consisting of mainly companies in the maritime sector – focused on West-Africa. Elisabeth van Loon, senior programme manager at NABC, comments: “East-Africa offers a wealth of opportunities for the Dutch offshore and maritime industry, gas reserves have been found in Tanzania, Mozambique and Kenya. Especially Mozambique and Tanzania are becoming world players in the field of gas production and although it will take several years before the gas production will be fully operational, countries who want to be involved, have to act now. There is a need for infrastructure, ports and logistics to be able to convert the gas and export it to Asia and Europe, and the Netherlands is perfectly capable playing a role in making the country more accessible, as the Dutch can offer better innovative and sustainable solutions than the traditional solutions other countries have on offer. The big question however is: how can we make sure that the Dutch Excellence is positioned in the right way in East-Africa?”

”As a collective we stand stronger than as individual companies”, Van Loon continues. ”The competition is fierce and we need our government to open doors and show East-Africa what we have to offer as a combination of industry, knowledge institutes and government, the golden triangle, which is the ‘way forward’. Jointly we want to position the Netherlands in East-Africa, commercially every company will go its own way. The Netherlands has an excellent reputation, but East-Africa has to know that we are there. Our most important strategy is sharing our knowledge and expertise and offering training and education, as there is a need for local content and East-Africa hardly has any good training and skills at its disposal. The first steps since the start of the consortium in 2012 have been taken: a trade mission to Mozambique was organised, a joint cooperation between the Dutch government and NABC, with 25 companies to get in contact with the key stakeholders and after that Mozambique’s Minister of Mineral Resources, Esperança Bias, visited the Netherlands together with representatives of the Mozambican national oil company and we set up an extensive programme for the delegates to show what the Dutch can do and how they work. A visit to Maasvlakte 2, an impressive welcome at Mammoet’s head office combined with a tour on Heerema’s Aegir and an interesting visit and presentation at Damen Shiprepair Rotterdam left a lasting impression of the Dutch excellence and what we are capable of to the minister and the national oil company, and exactly these memorable kind of impressions make a difference. The next step is to set up a master class/training programme for the local key stakeholders in Mozambique. We built a reputation and now we have to make sure to hold on to that, showing that we are a reliable partner with sustainable expertise.”

During Offshore Energy 2013, a conference session will be held about opportunities in East-Africa for the offshore industry, organised in cooperation with the NABC. This session will discuss East-Africa’s potential, business opportunities as well as lessons learned by first movers. Van Loon: ”We want to explain how to approach this region, show the opportunities that arise from the resource chain. It surely will be an interesting story.”

For ONE, East-Africa might be interesting as well, but not the first region the company looks at to expand. Hagen comments: ”We are a niche player that tries to operate in fields that other companies think are not interesting or find difficult, preferably in shallow waters. We concentrate on expanding in the North Sea, our backyard, and West-Africa, where we already are active, but if any interesting opportunities in other regions arise, for example in East-Africa, we surely will consider becoming active there as well. Outside of the Netherlands we want to grow by acquisitions, in the Netherlands we are growing both through acquisition as well as organically by drilling and development activities. Earlier this year, we acquired Noble Energy Europe’s stake in the F2a Hanze oil and gas fields on the Netherlands Continental Shelf and agreed with the German utility company EWE Vertrieb GmbH to acquire all of EWE’s upstream oil and gas assets in the Netherlands.”

Creative solutions

Not only newly discovered fields worldwide offer attractive business openings for the Dutch offshore industry, according to Hagen: ”Finding new creative solutions that make it easier to explore smaller fields in te North Sea also belong to the opportunities for the Dutch, for example innovative small or unmanned platforms. I am sure that the Dutch offshore industry can benefit from these innovations and for our company, such creative solutions mean more possibilities. Another interesting subject is the decommissioning business. This becomes more and more important and I am sure the Dutch offshore industry can earn big money if they seize this opportunity wisely and efficiently.” Tidal and wave energy also might be of interest to the Dutch, says Ruud Liem, IRO’s business development manager: ”Tidal energy is a niche market in the offshore industry that starts to emerge. As soon as tidal industry becomes an interesting issue, we hope that our members will use their experience in the offshore oil and gas industry to play a role in the installation and maintenance of offshore tidal energy.”

For now, the current trend in the offshore industry is drilling in ever deeper waters. Vergroesen: ”We see an enormous boost of oil and gas field discoveries, mainly because of new technologies that allow to search in deeper waters. The oil price is quite high, which means the investments in new technologies to drill deeper are earned back and therefore companies are more willing to invest in these technologies. Shell just ordered the largest floating object in the world, a FLNG of almost 500 metres length. SBM Offshore and other Dutch suppliers are involved in this kind of developments. In January the semi-submersible heavy lift vessel Dockwise Vanguard was taken into service, which can carry cargoes up to 110,000 tons, so oil companies are not being hold back to build bigger platforms anymore. Other examples of innovative Dutch offshore companies are Huisman, market leader in the design and manufacturing of cranes and other heavy construction equipment, Allseas, who is one of the two companies worldwide that own a pipelay vessel able to lay pipes up to 3,000 metres water depth. Also Dutch dredging companies are worldwide involved in offshore oil and gas operations, by for example dredging pipeline trenches or burying pipelines with sand or rock. The strength of the Dutch lies in the invention, development, design, production and installation of high-quality technologies. This creates work and because of this, the companies can continue to invest in research and development, which enables the Dutch to stay a frontrunner in the offshore industry.”

Gail van den Hanenberg