Jan Willem van der Graaf – CEO, Seaway Heavy Lifting – Netherlands
The CEO of Seaway Heavy Lifting discusses the company’s dual focus on the oil and gas and renewables industrys, how this has helped the company build a sustainable business, and talks about the passion that drives his company today.
What was the reasoning behind your appointment as CEO of Seaway Heavy Lifting in 2013?
My position at Subsea 7 at that the time I came on board at Seaway Heavy Lifting (SHL) in 2013 was senior VP for renewable energy. Subsea 7 was looking at a couple of big renewable developments, including Beatrice in the UK, which is still very much in the company’s focus, and realized that clients in this industry were looking for more than just transport and installation (T&I) services: they wanted engineering, procurement and construction services as well. Subsea 7 already owned 50 percent of SHL at that time, which was making a very good name for itself in the renewables industry, in comparison to many civil contractors that had come into the business but were struggling. The company already had a number of great projects under its belt, including Gwynt y Môr for RWE and Sheringham Shoal for Statoil (this project enabled us to negotiate for Statoil’s Dudgeon project, which is booked for 2016). Subsea 7 decided to strengthen SHL’s offshore credentials by moving into EPCI (Engineering, Procurement, Construction and Installation)– I was chosen to lead this new stage of the company because of my knowledge of the subsea business and EPCI contracting.
How did you make the first steps towards bringing these new capabilities into the company?
I was a board member of SHL for two years before becoming CEO, which meant I knew a lot of the people, which was a big help. It was key to preserve the existing strengths of the company, before building on its excellent performance: the first year that I joined, 70 percent of our business came from renewables, but we made sure to maintain our focus on oil and gas, and indeed, this year, the oil and gas share of our business will be much larger again. This company was built on conventional oil and gas projects, like platform installation for companies as GDF Suez, deepwater projects, like a module installation on a FPSO for SBM Offshore in Brazil. , . Today, we concentrate on three business areas: conventional oil and gas, renewables in both T&I and EPCI and decommissioning. The only part of the business we have expanded is the EPCI capability, but our focus has remained the same.
How much investment did these changes involve?
Fortunately, we didn’t need to make large investments in assets: our two existing vessels, the Stanislav Yudin and the Oleg Strashnov, which have a revolving lift capacity of 2,500 Mt and 5,000 Mt respectively, have allowed us to move into this new space comfortably. We did need to bring on some more people, but we also got a lot of these straight from Subsea 7: when I came on board, I brought with me around 20 people, including Bob Dunsmore, now the company’s VP for renewable energy.
Traditionally, how much of your business has been based on the Dutch continental shelf?
The Dutch offshore industry is where our company has it roots. When we started the business with our first vessel, the Stanislav Yudin, , at the beginning of the 1990s, the company would spend the summer period working on projects in the North Sea (on both the Dutch and UK shelf). We were involved in most of the platform removals over the last 20 years, and did many of the installations in the North Sea. In the winter periods we would send the vessels to either the Middle East, or India
In the oil and gas industry we install several platforms in the North Sea every year. In 2013, for example, we installed four platforms on the Dutch shelf of the North Sea.What will happen now, with the oil price, we will have to see. This is where having projects in the renewables industry really helps to reduce risks for us as a company, especially considering that renewables projects have a much longer duration than most oil and gasprojects.
In the future, where will you be focused in order to find the most interesting projects in the oil and gas sector?
We see business for ourselves in the North Sea, the Gulf of Mexico, all over the world on FPSO projects, in which we are very competitive thanks to our vessels, of which one is equipped with a DP3 system and very high reach, essential for FPSO work. We are also expecting business to come from the Mediterranean and the Middle East, which are our two other focus areas. The Far East is less interesting for us, because the lifts are generally not that heavy, which means we are not as competitive.
Does having a foot in both renewables and oil and gas affects the perception of the company in both industries?
I don’t think it bothers our clients at all. By being active in different lines of business, you can generate more work, and this means you can spread your costs over more days. What I see is that clients want performance, some want you to take the risk away from the operators and transfer it to the contractors, particularly in the renewables industry ,and safety is very important, but at the end of the day, performance and costs are key. By being in both industries, we can keep our costs low and our performance high, and this is what matters.
The Dutch have several large companies that are very well known, including the three that are owned by various Heerema brothers; there is definitely a serious streak of entrepreneurial spirit running through many Dutch people, and to back this up are some very good oil and gas universities. There is also a nautical tradition that attracts people towards working at sea: I don’t know if this is more prevalent than in other countries, but somehow it has an impact here. When we are looking to hire new staff, our photos of our vessels and projects always tell half the story for us, and attract a lot of people. The Netherlands is a great place to be based, and then go off and work all over the world. Trying to recruit people in the Netherlands today is challenging: we are fishing in the same pond for the best people. However, this might be impacted by the low oil price, but we will have to see.
Do your vessels have permanent crews?
Absolutely: for quality and safety performance, it’s vital to have your own crew. Although we regularly have busy periods, but in the quiet times, many companies send their crews home, but we at SHL don’t believe in that. The Stanislav Yudin, built originally in Finland for a Russian operator, has had a Russian crew since day one: it has gone through a few generations now, with some original crew retiring and new ones arriving, but it is very much one crew. We have done the same with our second vessel, which has a combination of several nationalities including Dutch and Malaysian aboard, but still operates as a single, continuous, permanent crew.
Will you be looking at technological acquisitions in the future?
We are definitely looking, and that is all I will say. Our company’s assets are steel—its material assets, the vessels and the technology on them—and our people. Our development strategy works by first assembling a team of people that understand where the business is going, how to execute efficiently and think creatively, and then build our material assets around the ideas they have. We don’t have to buy assets either: we are very happy to rent if it makes more sense, and this is a lesson that many companies in our segment have not learned, and may struggle in the future as a result.
I really like the passion in the company. SHL has a heritage of being a small team, starting with one ship and then building the second one from this office, together. The people that designed it are still here, doing their daily work with something that was conceived in their minds. Working here is all about passion: it’s a very motivated group of people that can work well, efficiently, and safely l, and working with them is a real pleasure.
And what are your long-term ambitions for SHL, looking further down the road?
It is extremely important to make our strategy, which is based on the three lines I mentioned earlier, work. We need to fill our order books with great work. Just a modest amount of growth would mean a lot more capabilities here, which is fantastic. My ambition is not to grow for the sake of growth, but to keep the company healthy, balanced, performing well and performing safely. With this in mind, the growth will come by itself.