Arnoult Gauthier – President, SeaOwl – France
As a French-based leading provider of specialized asset management and manpower services, SeaOwl’s president shares his belief that the African continent – with the advent of ambitious national players with insatiable demands for technical assistance – will constitute his main market of interest. He also shares his will to find a partner in Asia to set foot in the region.
What encouraged you to take over V-Ships and create SeaOwl in 2008?
V-ships was actually a very successful company. We believed that we should concentrate on the oil & gas industry and services in particular. Together with former partners at V-ships, we therefore founded SeaOwl back in 2008. SeaOwl is service-driven and its business segments comprise power, industry and oil and gas. We are convinced that the state, defense and oil and gas industry need to reduce costs and therefore need to outsource certain aspects of their businesses. We have been successful in helping the French navy reduce its budgets and become more cost-effective. The oil and gas industry must follow the same trend and outsource half of its activity in order to introduce more flexibility. Encompassing every competency internally is obsolete and inefficient.
In 2013, we acquired Fortiori, which is specialized in providing highly qualified personnel to the oil and gas industry, a competency we were missing. SeaOwl has grown by more than 20 percent per year since its creation, and I would say that our common feature together with Fortiori is quality.
You managed to engineer a capital raise quite recently. Why was it necessary and what were the challenges in doing so? Since your management buyout, how is your capital structured today?
The capital structure of SeaOwl is owned by former V-Ships managers and is now supported by an important private equity fund. Once again, the fund endorsed our business model, which consists in enabling oil and gas companies to provide quality at the global level without enduring unbearable costs. Most technical assistance companies are family owned and therefore lack the financial solidity to fulfill their ambitions in terms of growth and international development. V ships, contrary to many other competitors, immediately chose a diversified and global portfolio. We immediately recognized the importance of investing significant resources to build proximity with our clients. Many competitors feared the financial implications in regards to working capital and cash flow and therefore refused to build proximity until they won contracts.
You rebranded the company in 2014, which usually implies considerable communications efforts. How did you ensure a smooth and visible transition?
In order to successfully complete the re-branding of a company, one needs to have built an outstanding reputation prior. When we rebranded, we didn’t have to deploy considerable marketing campaigns, because our clients came to us and wondered what had happened to V-ships. The same thing applies for Fortiori, which is recognized as a leading provider of drilling engineers.
In the field of marine services, players from the North Sea usually dominate the market. How does SeaOwl distinguish itself?
We are simply not competing with North Sea players. On the marine side, we operate in a very niche sector. With respect to asset management, we are present in countries such as Nigeria and Libya. We are also convinced that the African continent will constitute our main market of interest according to its forecasted growth levels. A few majors used to dominate Africa. Nowadays, the advent of ambitious national players, with insatiable demands for technical assistance has opened a considerable window of opportunity for suppliers of expertise and manpower such as us. We are also qualified to provide training, which will be increasingly sought after on the African continent.
Furthermore, in many countries, the state used to undertake the responsibility of training in marine and offshore services. Today, governments have disengaged from this endeavor in favor of the private sector. As oil companies seek qualified local content, it has become our responsibility to match their expectations. Oil and gas companies can no longer rely on the state to fulfill this objective. Successful trainers will be those who immediately address considerations related to logistics. Moreover we have had to adjust to the advent of safety as an undisputed priority and value across the oil and gas value chain, by applying proper sourcing methods, thinking long term, selecting qualified people and training talents.
As you mentioned, the SeaOwl Group completed the acquisition of Fortiori in July 2013. How have you built on the synergies between both entities to enhance your offer in the oil and gas industry? How challenging was the integration process?
Fortiori had built an excellent reputation as a provider of highly qualified drillers. SeaOwl was already supplying seafarers and asset management capabilities. Both SeaOwl and Fortiori’s services carried a positive image in our industry. Our objective consisted in diversifying our offer while maintaining quality. Fortiori’s new business model is straightforward: integrate our services within SeaOwl’s portfolio as rapidly and efficiently as possible to yield immediate results. A former freelance superintendent with outstanding credentials and references set up Fortiori in 1999. Since the acquisition, we have incorporated new complementary services such as the supply of project managers.
How do you seize opportunities from the current drive toward cost-reduction and what is the role of technical assistance in introducing flexibility in a rather conservative sector?
The industry requests global solutions and global outsourcing. Oil and gas companies seek partners instead of simple manpower suppliers. For instance, in asset management, we provide integrated services that cover the marine side of FSOs. Our role is to assess from a global perspective which people will be needed in which positions, where the risks lie in terms of safety and quality. If we don’t become partners, we will be unable to anticipate our clients’ concerns and predicaments. In this regard it was essential to gain outstanding references in a niche market.
Our competitive advantage compared to our counterparts is our experience managing all types of vessels. We have a thorough understanding of procedures and expectations. We do not find it difficult to understand the requirements of the industry in terms of safety. Safety implies respect of procedure, training and anticipation.
Two years ago, you inaugurated an office in Singapore. Is it too late to penetrate the Asian market and where would you say that SeaOwl is well positioned internationally?
We have developed our activity at a robust pace in Africa and in the Middle East. We need to strengthen our positions in Singapore and Asia generally speaking. The penetration of the Asian market will most likely suppose expansion by external growth. We need to foster a genuine partnership with an Asian player to raise awareness and build credibility. In this regard, the private equity fund, which supports our company, will contribute in fulfilling this objective. I admit that many European companies have been focused on Africa and therefore disregarded or underestimated the potential of Asia. Many companies in our field were already experiencing difficulties in Africa where they allocated considerable resources and therefore didn’t have the means to expand.
Local content is a game changer in our industry. How do you assess the impact of recent and future trends on your activity?
Local content has undeniably prevailed as a prerequisite to any business activity conducted in Africa. A company has to be present in a country to provide, source and train the right professionals. We therefore have to be fully present in oil and gas producing countries and possess a framework to control training. Local content is a trend that will determine the fate of European companies operating in Africa.
Again, anticipation and partnerships are essential in succeeding in producing qualified local content. One of the majors contacted us two years ago for a project in Nigeria. Their project requirements stipulated 80% of local content minimum. Established producers such as Nigeria and Angola, or countries holding much potential like Mozambique, will grow tremendously in the near future. We therefore need to deploy significant efforts and dispatch the appropriate teams to match their ambitions. We currently have agents, subsidiaries or local presence in 15 African countries. As a French company we have obviously followed Total in a majority of their African projects. At this stage, our activity is increasing in every business line including global management. The problematic is always the same: finding the right people and ensuring that they deliver accordingly. We have for example provided 12 positions for Engie in Algeria recently.
You recently won a project in Brest on behalf of the Navy, which was considered a historical win for SeaOwl who was awarded the project at the expense of Bourbon. What does that tell us about SeaOwl and your ambitions for the future?
The attribution of this project illustrates our ability to capitalize on our fields of expertise to develop and provide excellent services beyond our core business. We won this contract at the expense of Bourbon because we supplied the same service, employing a better ship at a cheaper price. In the offshore and defense sectors, trends toward cost-reduction are aligned with the current trends in the oil and gas sector. We will thrive in the upcoming years because oil and gas companies are accepting the entry of new players – if they are more competitive and provide pertinent references, which we do!
I am confident that in 10 years’ time, the majority of our clients will be local players. Before 2013, we used to be in communication with headquarters before pursuing a project. Nowadays we often interact with the local offices, which now have more sovereignty and commercial autonomy. Subsidiaries and national companies will now oversee local implementation.
What would be your final message to our audience?
Managing professionals constitutes a true expertise. Technical assistance has implications related to talent management, insurance, customs and safety. Employees dispatched abroad are no longer simple expatriates. Local considerations can no longer be disregarded. We understand the industry’s requirements in regards to safety and quality, and are prepared to accompany the international expansion of any given player. We are devoting considerable efforts to build a corporate and financial structure, which corresponds to our objectives. In this regard we have completed the acquisition of companies offering complementary services, to become a global player and solution provider.