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Interview

with Eric Jas, Managing Director, Atteris

28.06.2010 / Energyboardroom

A little over 10 years old Atteris has established itself as a reliable partner for some of the major offshore oil and gas projects in this industry. What has been its strategy for branding such a positive reputation?

As a design engineering company for subsea pipelines we have made a good start six years ago. In terms of personnel I would classify us as a medium sized company, currently employing a little over 30 engineers. Even though the company started ten years ago we only really started growing over the past five to six years. During our first four years I was pretty much on my own operating as a consultant. In 2004, because of the increase in workload in this part of the world, I had an opportunity to take on people. It was just a matter of demand.

Before that, looking at Western Australia (WA) and Australia as a whole, we were not really living in a boom. During the period 2000-2004 there were only a few projects in the execute phase and most projects in the planning phase lacked momentum. We only started to experience a boom from about 2004/2005 onwards. We, in WA, are still more or less living in that boom. Despite the global financial crisis the oil and gas industry here in WA has not really felt a major downturn. Atteris took advantage of the boom to recruit people which began a “chicken and egg” cycle from then on. With the demand to recruit people we engaged the right staff, which allowed our team to grow, which meant that we could bid for more work, and the snowball effect kicked in. The strategy from that point onward has been to make sure that we recruited the right people with the right attitude in order to get the good work.

Why was Pluto a higher priority than other projects?

At the time I sensed it was going to happen. There were a whole range of projects in the planning phase in 2005 for design engineering companies. We could have selected a project that is still in the planning phases now, five years later. Oil fields are typically developed immediately. If you discover oil in the right quantity and of the right quality and can develop it, you will find a market to deliver oil as an operator. But LNG projects are different. LNG is a higher risk business for a hydrocarbon company. You need to find a market first, and in most cases the fields are developed in a joint venture of two or more energy companies. Joint venture partners may have different priorities regarding the development timeline and/or the development concept. Pluto not being a joint venture at the time (amongst many other factors) was, in my view, one of those projects that had all the pieces to turn it into something that was going to be designed and built without delays.

With reputation being a big component for success in this industry helping you win one project after the next, what have been the innovative footprints and value-added roles for Atteris since riding the boom wave in 2004?

We are different from other design engineering companies for subsea pipelines. I believe we are much more pragmatic and innovative in our designs. Whatever we design we continuously look ahead and ask ourselves if it can be built; if it is the most cost-effective or safest design; or if we should be looking at other options. We have all of that expertise in-house. We have many people in our organization with significant construction expertise from their previous employers, but also with design engineering expertise. On a number of fronts we can deliver work at a very high standard and in a timely, cost-effective, and safe manner. Having done that several times on very challenging projects puts us in a certain mind frame with our clients. If there is a project of a certain nature a client will know to go to Atteris because we have done it several times before. We have won several prizes in engineering excellence and have a very positive industry reputation. Even though we are medium-sized, we are up there with the big boys when it comes to delivering a design engineering scope on major project.

While each project is unique in its own right how has Atteris been able to build off synergies from its previous projects to contribute to success on subsequent projects?

I think that comes down to our staff and their ability to put themselves in a different environment, and look at the problems of particular projects on their own accounts. Although you take learnings from one project to the next, you have to have a fresh look every time you come onto a new project. It is a delicate but important balance between new out-of-the-box thinking and applying the same processes and/or principles in selecting certain solutions.

The sustained resources boom in WA has and will continue to bring competition for Atteris. How will Atteris respond to rising competition in a boom time and maintain its unique edge?

It is a reality that Australia is growing and that there are more people coming to Australia, specifically to WA. The success of WA as a state is attracting companies from overseas. You just have to deal with it.

We are not really focusing too much on our competition. We are not ignoring them, by that matter either. But our focus is dedicated primarily to our clients and what we can do better for them. With the World Cup upon us we could apply an analogy to a soccer game. The first lesson that you learn in soccer is to look at the ball, not the player, if you want to avoid being out-played. That is the same as what we need to do as a company: we focus on delivering the work. As long as we deliver good work, clients will automatically come back to us. We need to maintain that momentum in quality of work and on-time delivery and ensure that the client is happy with what we do. Competition will always be there.

How does Atteris determine which project it can and will undertake? Are there projects that are too big?

Very large projects are rarely designed by one company. Developers always engage a number of companies for the design engineering of the various components. On the Pluto LNG Project for instance we designed the entire shore approach, including pipeline route definition, secondary stabilization design, pipeline protection design, shore crossing design, a shipping channel crossing design; whilst another subsea pipeline company was engaged for the remainder, further offshore sections, of the pipelines. As long as the interfaces are clearly defined, and there is not too much overlap between the scopes, this works fine.

Our strategy is definitely to keep focusing on the offshore hydrocarbon industry. We can diversify into other industries, which we sometimes do. But our main focus is offshore hydrocarbons because we are good at that. It is a market that suites us. It is a natural fit with our clients and our people are compatible in that market with our clients.

It is a fascinating industry from a lot of aspects. I always feel that we are breaking new grounds and setting new standards. What certainly helps is that there are sufficient funds available in this industry to allow us to do our job properly from an engineering point of view. The research centers, such as the University of Western Australia (UWA), are tuned into the market here in Perth. I believe it to be one of the best industries in the world where health & safety and care for the environment is taken very seriously with a high degree of quality assurance and control. We will continue working in this industry and attempt to deliver the highest possible quality. As long as we do that, then the rest will come automatically. We have young people attracted to this company and we integrate with our clients. We almost become part of our clients when working alongside them.

What is your view of the industry technology in Australia? Is it of the highest quality and recognized as such by the industry?

In a way it is known to be and industry players do recognize it as such. During the last decade Australia has made a tremendous development in technology research. Just one example is the O-tube lab testing facility that is currently being built at UWA. It is currently in its commissioning stage and will be a world class laboratory to better understand pipeline seabed interaction under hydrodynamic loading. I think it is going to be a ground breaking facility and already has received a lot of interest from overseas. We work very closely with UWA, and they have a fantastic group of people; academic and pragmatic at the same time.

In that sense WA is becoming more and more a knowledge centre.

In our meeting with the Australian Pipeline Industry Association, Chief Executive Cheryl Cartwright said that the resources boom will be a good opportunity for the pipeline industry to prove that it does not need much forward planning to meet the infrastructure demands of all the upcoming projects in Australia. Essentially, once the producer, user, or exporter decides to move gas from one point to another, by the time the necessary facilities are constructed, the transmission infrastructure will be built. Are subsea pipelines as immune to this type of forward planning as perhaps onshore pipelines are?

It doesn’t seem to me that offshore pipelines between a field and an onshore treatment facility are at the top of a developer’s list. A lot of the focus from an engineering and developing point of view is at the field itself – wells, and platform or other offshore gathering facility. There is a lot of focus going there, and to the onshore treatment plant and the marine facilities to export LNG. The pipeline is often seen as the detail that connects the two. It is not underestimated infrastructure, but normally where we put the pipeline on the seabed and across the shoreline depends on where the plant will be built in many cases. There appears to be a perception that pipelines can be built anywhere. And this is not always the case unfortunately.

Forward planning for pipelines depends on the gas plants or field layouts. Sometimes an operator will make a decision to not build a pipeline to shore and do offshore LNG instead. Pipelines can be quite easily eliminated from a field of development. The Sunrise Field recently announced that it will be developed with a floating LNG facility with no pipeline to either East Timor or the Northern Territory of Australia. That is how easily a pipeline can be eliminated on paper. There are a few other large projects currently in the planning phase with planned dates for pipeline design, order, construction, and project start-up (first gas). Those whole views could easily change next year or even in six months time.

Is the subsea and offshore terrain of Australia particularly difficult to work in?

Yes and no. In a lot of cases people overemphasize the difficulties of the geological aspects of a site, whilst underestimating the seastate conditions. In other instances it is the other way around. Or both are underestimated.

Yes, Australia has unique conditions to work in, but with proper engineering these can be overcome. Sometimes, though, this requires rethinking a pipeline route. (I have seen this many times). Sometimes there is a misperception on what the difficulties are.

For Atteris, are the biggest challenges ahead more so on the engineering side of the business or human resources?

The problem is not with human resources. We have always been able to find good, motivated, qualified, and experienced people without a problem. The engineering challenges are definitely there. But for every challenge engineers have always been able to find a solution, as long as you engage the right people (with the right experience) and follow the right (proven) processes. I think the key is to enable that expertise and engage it at the right time on a project. I have seen it many times that a certain expertise was engaged on a project either too late or in the wrong way. You can turn around a project or concept only when you are involved at the right point in time. It is the classic case of the “project cost vs. level of influence” graph. I would argue that you shouldn’t engage certain expertise at a time when costs are high and you have little time left. You should engage them earlier so you can influence the outcome.

Has Atteris worked on projects at the end of the “project cost vs. level of influence” spectrum when costs were high and level of influence low and has had to optimize the best possible result?

On the projects we have been involved in, we have always been involved since Day 1. Luckily we have been blessed with the fact that we could influence our scope in a way that we can reach optimum cost at the end and have a safe construction period and result.

What is the optimal growth trajectory for Atteris? Do you want to remain a medium sized company in order to have close, responsive relationships with customers or continuously grow?

It is difficult to set a limit to our growth. We obviously need to grow, that is the principle of an enterprise. In principal the strategy we have for the long term is opportunistic. If we see opportunities that arise that allow us to grow, then we will do it, as long as it is in the subsea design engineering market. There is a necessity to grow to ensure we survive as a company in this market. But we always take caution with our growth, not wanting to grow too quickly. Growing in a sustainable way that allows us to keep our systems up to date with the growth of the company is what we wish to pursue.

With a sixth sense for the business where do you see Atteris being positioned in 5-10 years time as the industry continues to mature?

To be honest, I do not have a clue. I think the best thing that can happen to this company is to not have any pressure on its growth. I am definitely not going to lose sleep over it. I am pretty relaxed on how we are going to perform and I have always been like that. I am a strong believer in striking the right balance in life and believe that not having too much pressure will continue our success. Other companies seem to have a tremendous amount of pressure on them to grow. I believe in good clients, good work, good projects, good people, having a good team atmosphere in and out of the office, and keeping cool heads as being key elements for success. We can easily become greedy and think that trees grow to heaven. But they do not. There is an end to everything. We work in a cyclical industry with influences from outside the country which we cannot control. The current boom will end and we will not continue on like this. It could end in one, five or ten years, no one knows. No one really predicted the global financial crisis to the extent that it occurred, for instance, and we can have a similar downturn in our industry. If that happens, then we have to be prepared.

Are there any final messages you would like to convey about Atteris to our readers?

We live in a very delicate environment and I am a big proponent of making sure that the environment we live in is taken seriously. If we look after our environment, the environment will look after us. If we want to design a pipeline across a sensitive area and do not respect that environment, the environment will take care of the pipeline in a negative way. I love the ocean and I love nature. We should be a bit more cautious as an industry of how we treat it. There have been a few recent examples both in Australia and overseas of environmental incidents that could have easily been avoided. It is so sad to see and hear how people can have such a compromised attitude towards the environment. The same applies to health and safety.

Given this conviction, when assessing a project does your priority naturally gravitate towards environmental stewardship over other factors?

Yes, certainly towards environmental sustainability. You can build pipelines anywhere through environmentally sensitive areas. Sometimes you try to avoid the situation or select another route. But there are always ways to do simple things to minimize the impact on the environment. For sure we could have avoided some of the recent environmental disasters in the industry. We have to be more cautious with the decisions that we make. That applies to everyone. People often point to construction contractors since they are the last ones on the job and they handle the physical elements of the project rather than just the paperwork. But there is a whole trail of decisions to where it really started which includes operators, regulators, design engineers, and contractors, all of whom need to be cautious with the environment.

I would like to thank Focus Reports and Oil & Gas Financial Journal for the opportunity to present Atteris Pty Ltd.

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