Corso Balboni – President, GE Oil & Gas Le Creusot – France
The President of GE Oil & Gas Le Creusot discusses the site’s status as center of excellence and future prospects for their lead product: the Integrated Compressor Line (ICL).
How has the Thermodyn Unit in Le Creusot become a center of excellence for GE Oil & Gas?
The site of le Creusot has been focused on specific applications in low pressure and medium to small sized compressors for over a century, an historical expertise which is highly competitive. The engineering team here has always focused on being at the edge of technology and delivering integrated and advanced solutions, including the use of active magnetic bearings. There are very few players in the world capable of producing similar compressors. When GE was prospecting in the area, the company was extremely impressed with the expertise available in Le Creusot and decided as a result to coordinate an acquisition.
GE Oil & Gas Le Creusot has therefore developed over time a very advanced modeling tool to predict the performances and design the compressors in order to maximize efficiency levels for every application. The global group currently employs this model to perform compression selection and optimization. GE Oil & Gas has invested considerable funds to enable our site to erect its own product line. In 2008, we unveiled an integrated compressor om magnetic bearings, otherwise known as Integrated Compressor Line (ICL), which remains today the most advanced product on the market at the moment.
Being a global center of excellence certainly comes with the responsibility to constantly innovate. How would you describe the innovation and R&D agenda of GE Oil & Gas Le Creusot?
The most important program is related to the integrated compressor. We introduced this program in 2004, before finally launching the most advanced compressor in the world. We have addressed compression for gas transportation and storage and treatment of strictly clean gas designed for the mid-stream industry. The product we have developed responds to the needs and requirements of the European market. We have in this regard sold 30 ICL products since 2008.
Today the overall idea is to develop the integrated processors into a product line capable of addressing all services comprised in the oil and gas industry: mid-stream, upstream, treatment of acid or sour gas in the Middle-East, offshore installations and so forth. It has become essential for us to differentiate our offering and extend the applicability of our ICL product.
Steam turbines constitute our other product line, which stems from our impulse technology coming from the licenses we hold. These steam turbines serve different markets particularly in the oil and gas field, but also for biomass, solar applications and the navy industry. Our site was actually the historical supplier of steam turbines to the French Navy. GE Oil & Gas Le Creusot is also allocating considerable investment funds to enhance the efficiency and quality of these turbines.
How did the company perform in 2014?
GE Oil & Gas Le Creusot comprises manufacturing and repair activities, which responds to order intakes from the broader oil and gas industry. The site is completely integrated with the other GE Turbomachinery site that is located in Florence, Italy. GE Le Creusot’s growth in the last three years has been stable. 60% of our turnover comes from new unit sales while services account for 40%. Services are incrementally representing a greater portion of our sales.
In 2013, GE Oil & Gas expressed its wish to progressively introduce a restructuring plan in various French entities. Did this reflect the growing trend in the energy sector to reduce costs in light of the current slowdown and increasing competition? Have you been affected by these waves of layoffs?
In 2012 we performed a restructuring plan to increase the productivity of the site and reduce variable costs by reducing labor hours. This restructuring was finally executed towards the end of 2013 and was a mere representation of the trends for cost-reduction that are affecting the entire sector.
How economically viable is it to maintain a manufacturing unit in France?
GE Oil & Gas Le Creusot is a producer in an application space where every unit is customized and every project carries different duties to execute. The expertise developed by this site in compression services symbolizes France’s technology-oriented nature. Centrifugal compressors, high speed motors and magnetic bearings, the key components of the ICL product, are all produced in France. In France, we have an easier access to technology, which constitutes a significant asset. Every field has a different gas composition, which must be addressed. These parameters have very technical implications, and our site in Le Creusot is best suited to incorporate them. For instance, delivering for a customer operating on a North Sea platform differs from executing a project for a pipeline transporter in China. Today, more than 80% of our revenues are drawn from our worldwide customers.
Your international presence is very robust. You export your products to Africa, the Middle East, Europe obviously and the United States. Which regions are today preferred export markets and where do you see growth or sustained demand coming from in the future, in light of the current changing energy market dynamics?
Le Creusot’s expertise has developed strong ties with North Sea customers. We have also been involved in important projects in China regarding gas transportation. China represents a great opportunity because their pipeline infrastructure needs to expand. We are also planning on enhancing our position in the offshore sector, especially in Brazil where we have been handling projects for Petrobras and important EPC’s like SBM Offshore. It must be however noted that in recent months, the drop of the oil price has hindered opportunities for projects in the offshore sector.
We have also recently won a project in Ghana for ENI. In Africa we capitalize on France’s deep-rooted ties on the continent to win projects in Algeria for example on behalf of Sonatrach. The broad scope of our international projects illustrates the robustness of our products and services.
You were appointed CEO of GE Oil & Gas Le Creusot with a mandate to consolidate the plant as a Center of excellence while ensuring adequate project execution and determining the strategy for coming years. How would you define your vision for the short to medium term?
Our objective in the future is to further extend our portfolio. We have for example introduced a product line, the DH compressors, which was formerly only available in the US. This bold move has led to multiple sales here in France. I aspire to make Le Creusot a world market leader in integrated compressors by transforming the ICL into a genuine product line. My second objective is to unveil new products to increase our flexibility from downstream to upstream.