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Interview

Andrew Mahaffy – Managing Director; David King – Technical Director, Cube Offshore, Australia

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Cube Offshore offers innovative engineering design, analytical capability and project management based on extensive experience of onshore fabrication, offshore construction and operations. GM and Founder, Andrew Mahaffy (AM), and Technical Director, David King (DK), highlight the company’s particular connection to Australia, and how its expertise is uniquely integrated within the major projects in the country.

Cube Offshore was founded as an independent venture in 2008. What led to the creation of the company, and what have been some of the company’s leading milestones?

We are keen to promote the fact that we have worked in various conditions around the world, in several segments of the industry, and thanks to this, we have much knowledge and expertise to offer our clients.

AM: At the time of the inception of Cube Offshore, there was certainly a need for local, quality design that focused on practical offshore drivers. We recognized the presence of large construction companies, and we set out to establish and maintain a stable engineering A-team to assist these large companies with their offshore projects, as well as troubleshooting local issues that could not be readily sent overseas. Our initial work revolved around small projects of high value and we provided engineering services right across the strata of industry sectors from Projects to Drilling & Completions to Operations.

As an example of a small project with high value in the Drilling and Completion side of our capabilities, we would design and develop bespoke equipment to increase safety standards and accelerate operations. If we were able to curtail six to twelve hours per well on a 20 well campaign, we were able to provide significant cost saving potential by reducing vessel time for our clients. In this capacity, we found ourselves working alongside other major service providers in the industry.

At the same time, we also have a strong background in subsea structure design. One of our first clients in this regard was a company that had much experience in subsea pipelines, but less experience in designing and installing subsea structures. This expanded our third branch to be a specialization in the subsea field. While we did not take on large scale subsea contracts ourselves, we would find associated pipeline consultants we could partner with. Together Cube Offshore would develop subsea structures, as our partners would address the pipeline design.

In what regard have you contributed to the LNG projects currently underway in Australia?

DK: Beginning in 2008, there were great business opportunities that were presenting themselves regionally in the LNG market. That was the time that all of these major projects started, and many of them are massive undertakings, transforming Perth as we know it forever. With the start-up of such massive projects, many companies began to service needs at the top of the supply chain. What this created was a space where small and medium sized firms, such as ourselves, were able to integrate ourselves in the remaining niche.

One of the negative consequences of the rapid increase of companies establishing themselves around Perth was the reality that human resources began to become spread very thinly. This resulted in a notable drop in quality throughout the local industry. The market has been dominated by reimbursable contracts which does not encourage quality, and this can be seen as one of the negative aspects of the region’s rapid growth.

AM: At Cube Offshore, we like to believe that we provide better quality and as a smaller company are able to focus on better results. This perhaps allows for a more up close and personal perspective on project development, rather than the detached perspectives of a large, bureaucratic organization. There is a little bit of oil production in the region, but the industry has predominantly focused on LNG. We can probably surmise that 90 percent of our projects have been directly affiliated with large-scale LNG initiatives, including design, fabrication and offshore construction as well as lifting governance and third party verification work.

Now that many LNG projects in Australia are reaching completion, what do you see as the next development step in development and strategic positioning for your company?

DK: The projects that have been undertaken here are big on a world scale, not just in terms of Australia. It must be acknowledged that the budgets for some of these projects are comparable to the GDPs of some small countries. Once projects become so massive, one issue that frequently arises is that they become difficult to manage. Whereas many projects are nearing the end of their design and installation, there is still so much work that needs to be done. In this sense, it is going to be a gradual change from installation through commissioning into operational services in the market.

AM: We are aware of the direction the market is headed, and we are actively preparing our company for more initiatives related to the operational phase. The important note is that this is a transition, rather than a cliff in regards to progress in the industry.

Cube Offshore provides customers with expertise in well operations, offshore construction, subsea infrastructure and production facilities. What part of your portfolio is currently your main growth driver?

AM: Our company maintains a certain expertise in offshore lifting as one prominent example. We utilize these capabilities often during the initial construction phase but we are also able to dedicate these skills towards the operational phase. Seeing as our capacity for lifting governance has received high demand over time, we anticipate that this segment will remain strong as we transition into the operational phase.

DK: In principle, however, our core competencies did not need to change to meet the needs of these large projects, and we do not foresee them needing to change as the market transitions into the operational phase either. Engineering is about doing things that are going to work, and in our office we are proud to maintain a team that upholds a high degree of knowledge.

DK: Unfortunately in a market such as this one with such rapid development, and where resources have been spread so thin, we believe that such teams are hard to come by, which is a point of pride for our company. In this regard, we have not needed to tender for much work, but rather many clients come to us, because with our positive reputation, they know they will receive quality results.

Looking forward, what will be your key areas of focus in terms of development to generate growth?

AM: We will still direct a sizable amount of our capabilities to drilling and completion campaigns as projects of this type will not be slowing down in the same way as construction. That said, we have also established a relationship with certain companies on the production side, whereby we are developing, designing, manufacturing, and even at times installing pieces of retrofit equipment onto aging facilities. As we already have traction in this market segment, rather than anticipating a dramatic change in our company, we anticipate a gradual evolution to reflect the market.

DK: We may find a decrease in customers in the construction sector, and may find a greater influx of customers in the drilling and completion space, followed by a growing number in the operations segment. This will be a form of migration, but Cube is taking the same skillset and merely adapting it to meet the unique needs of these different areas. We may see a slight change in who our clients are, but we will be conducting essentially similar work.

What aspects of your company differentiate you from competitors?

AM: In terms of consultancy, we are very project driven and pay close attention to how we grow in order to uphold our consistent levels of quality. Looking at our company culture in particular, our team members have worked for major consultancies and contractors around the world, as well as major oil companies. As a result we bring a very holistic view of the industry to Cube Offshore.

DK: Thanks to our deep understanding of the oil patch, when designing equipment to accomplish a particular task, we are able to offer applicable insight regarding equipment materials, as well as consultation regarding installation of equipment. We also are able to provide appropriate foresight of the challenges that may arise in these facilities on the seabed in a few decade’s time, and how to ensure quality and longevity.

AM: As a company, the main product that we are selling is knowledge. With the enormous influx of people into Perth over the past decade and the rapid establishment of new departments, there has been an equally quick promotion of people into positions of influence. This may have resulted in a market with a lack of experience where quality may be compromised along the way. Considering this, at Cube Offshore, we are keen to promote the fact that we have worked in various conditions around the world, in several segments of the industry, and thanks to this, we have much knowledge and expertise to offer our clients. We sell knowledge, competency and expertise that results in quality outcomes and this is the added value that our company is proud to guarantee. This is just as applicable to operators conducting work in the operation phase as much as it applies to constructors in the construction phase.

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