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Interview

with Alan Gray and Dave McKechnie, Global Integrity Manager ; Eastern Hemisphere Manager – Deepwater Technical Solutions, Oceaneering International

22.10.2008 / Energyboardroom

You were initially part of a smaller company acquired by Oceaneering. To begin, would you please give us a brief history of Oceaneering and the company’s evolution to the present day?

Oceaneering is an eclectic mix of companies, including the following: deepwater technology, which is the tooling division that looks after subsea products; inspection, which looks after integrity management; life of field, which ensures no hydrocarbon releases; ROV, as the largest fleet in the world; space systems for NASA, looking after space suits in addition to training astronauts in neutral buoyancy labs; Multiflex, which is the umbilical division based in three location around the world; ADTECH, which maintains some the nuclear submarines for the American Navy amongst other things ; going right down to entertainment systems which produces rides like Jaws. It’s an extremely diverse company, and we represent two small parts of the organization, that are both trying to grow businesses organically in the North Sea and through global expansion.
The inspection group is the amalgamation of companies merged together four and a half years ago, and since then we’ve experienced considerable growth year over year in that group. Over that time, Oceaneering has increased its footprint in the areas it wants to be, and brought professionalism and contractual maturity, to the inspection group.
Deepwater Technical Solutions group, a division of OIE (Oceaneering Intervention Engineering) group, was put together in 1985. To give it focus and future revenue development, the group was taken to one side as a separate entity and allowed to expand and grow. I represent the Eastern Hemisphere for DTS, which is accounted by the West of Shetlands, all of Europe, South Africa, and stops near India where the Singapore operation takes over.
Overall, Oceaneering has certainly grown arms and legs. The previous CEO John Huff was quoted as saying that if the company hadn’t made the very conscious decision 10 or 12 years ago to change the business, we wouldn’t be in business right now. The initial thought process went as follows: Oceaneering is a diving company, so what can we do now? The answers were ROVs, add tooling, and take every opportunity to expand the service. Oceaneering then took steps to either acquire the necessary businesses to fulfil this plan, which we are very good at doing, or grow organically in areas of high competition. Compared to the Oceaneering of a decade ago, there are hardly any original groups left. Oceaneering continues to dive, but as such a relatively small part of the company. Oceaneering is constantly evolving, a fun place to be, but also challenging, in that we’re constantly pushing the envelope of what we actually deliver. That’s in Aberdeen, and also in global terms.

What role do the Aberdeen operations play in the overall Oceaneering portfolio?

For inspection, Aberdeen is a centre of excellence in integrity management, with just over 200 personnel covering structures, subsea, pressure systems, corrosion and pipeline engineering, and all the lifecycle, cradle-to-grave maintenance. Inspection is all about keeping equipment serviceable with controlled deterioration, and extending its useful life in the safest and most cost-effective manner possible.
From the centre of excellence in Aberdeen a very conscious vision is to grow integrity management across a global footprint. Although Aberdeen represents the centre, there are other hubs, such as Lafayette serving the Gulf of Mexico in addition to South American opportunities, and others in the Middle and Far East.
It’s an exciting time, but there’s a lot of work to do. In a way, the North Sea has nurtured hubs around the world, with the direction and funding needed to grow, and then it’s up to the hubs to seek out opportunities. As managers in the company, our job is to sell the full range of Oceaneering solutions. It’s crucial; when one of us appears, regardless of division, the client conversation may begin on the intended subject, but very quickly opens up to equipment, integration, ROVs, rope access, and it quickly expands from, for example, the need for a torque tool into corrosion awareness. There’s always an awareness of the bigger picture, and while there may be a standard client presentation, many clients may not be aware of the breadth of the offering.
Oceaneering is working closer now than ever and there is a reciprocal relationship between groups, so that even seemingly disparate interests can work in concert in a synergistic manner. An individual may be a small part of the whole system, but also be wired and connected into the right person for a particular meeting and particular question. It’s a lovely place to be, when a customer or client calls with a problem, and the company puts all the relevant parts together and returns with a solution. Oceaneering can get the boat, ROV, do NDT on the seabed, come up with a solution, and the client says “wow, you can do all that?” It may be a matter of all divisions collaborating to solve a problem, but that’s the mechanism you can call on in Oceaneering.

Is there a particular case study you’d point to that illustrates this approach?

There were significant problems with two pipelines in the North Sea, Inspection developed a workable solution utilising an ROV, DTS made the radiographic clamping arrangement, and Inspection/NDT performed radiography on the seabed. It was a world first, and has been called upon again this year. This project took all the Oceaneering groups to come together, and they came collectively to service the problem quickly. Oceaneering didn’t have to rely on any outside help, and the solution was 100% internally generated of the solution.
Decommissioning is another huge opportunity in this regard. Normally, such projects involve four or five companies working in concert, but now Oceaneering has combined the competencies into a one-stop shop, and recognized the strength of each division. Before, each division grew in an individual silo, but now there is a realization of bigger gains with cross-fertilization.
Collaboration is everything, it isn’t all about who gets the revenue, we will go ahead and help each other to the benefit of the company. For example, the Aberdeen office is pursuing opportunities in Egypt, Azerbaijan, Kazakhstan, Trinidad, and much of South America, even so 90% of the revenues from these initiatives will not come back to the Aberdeen office, but to the local supporting hub.

How would you describe the investment in training and Oceaneering’s commitment to its people?

ROVs represent the pinnacle of training costs, and Oceaneering has the largest ROV fleet in the world; bar none .It’s a simple matter of supply and demand, and in a resource-constrained industry, there are just not enough high-quality people; sometimes, you’ve just got to make your own. “Hire for ability, train for skill” is one of Oceaneering’s mantras. If a recruit comes across well, although he might not be qualified, we’ll train him.
A critical driver going forward is the training of nationals in the countries Oceaneering works. Training expatriates is fine, but nationals are the future who will still be there in 20 or 30 years’ time and should be able to run and operate the systems independently. Their capabilities can really surprise, despite some difficult situations. For example, Angola experienced 30 years of war which put quite a strain on education and the type of people to step forward, but Oceaneering is getting some great people who are progressing well through the ranks, taking control and moving forward. Nigeria is somewhat easier, without such an extreme background of war, so there are individuals coming in at a very high educational standard, with English as a common language.
There’s always tension in a budget, but the two areas never questioned are training and safety; Oceaneering believe in investing in these areas.
Oceaneering spends a considerable amount on training not only in practical skills-based development, but also in leading high-performance teams. The company realized not all teams were working well, and in some case there could’ve been a better, quicker, or more profitable result. Three and a half years ago, Oceaneering embarked on teaching senior management advanced personnel skills – not on the technical or operational side, but relationships, conflict, how people are managed, and leading teams effectively – in other words, getting to the root of what causes a team to be successful. Since kickoff, this program has now trained over 1,200 people in leading high performance teams.

You mentioned considerable year on year growth. What are your projections in terms of growth over the next five to 10 year time horizon?

Before the credit crunch there may have been a different answer, but at Oceaneering every quarter has been a record quarter for the past four years, with annual revenues growing from $500 million to $1.7 billion in four years. This growth represents a lot of opportunity in the coming years, but if the marketplace is not there and the dollar collapses, it’ll only be the strong companies that will survive, and Oceaneering has positioned itself as one of them. The company is very financially astute, and still acquiring companies if the fit is right. There is still room for growth, and Oceaneering will still grow this year, and based on where the marketplace is right now.

What is your final message to OGFJ readers?

Oceaneering is a one-stop shop for clients’ needs, and there are elements of the company that can be brought in to address basically any problem. I’d like to think that one day, as a brand, Oceaneering will be the first point of contact every time there’s a problem. We might not have a solution already, but we can get one or engineer one. Oceaneering wants to establish the reputation that if there’s a problem, we will be there help every time, which makes a huge difference. Most of Oceaneering’s blue chip clients wouldn’t have a problem picking up the phone and calling us, and 99% of the time we can help, and that’s where we want to be. Oceaneering is such a diverse company with an unbelievable number of product streams. If I haven’t got the answer, it’s often just a matter of contacting other locations, since many problems may have already been solved elsewhere. There’s no need to go and reinvent the wheel – just rely on the Oceaneering network to get the job done right.

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