with John Sørensen, Managing Director, Ramboll Oil & Gas
Ramboll Oil & Gas is one of the key success stories emerging from the Danish oil & gas industry. Having worked for Ramboll for almost 3 decades and having been managing director of Ramboll Oil & Gas for four, what do you believe has been the key to this impressive international success?
We have been taught the business in the Danish market and grew up in it. Although Denmark is Europe’s third biggest oil & gas producer and the only net exporter of oil & gas on the continent, Denmark is of course a small oil country on a global scale.
The fact that Denmark is a modest oil & gas producer and not that well known internationally means that we have operated in a difficult market with marginal fields. In such an environment Ramboll had to develop a cost-effective and innovative way of thinking.
For a company to grow up in Denmark is fundamentally different from operating in bigger markets such as the Norwegian one, where massive projects are being developed all the time. The Danish industry and way of thinking has developed around making small projects feasible and squeezing every potential out to actually make it feasible.
This is one of Ramboll’s key strengths: we have trained ourselves to be very cost-efficient and very innovative engineering partners to the industry.
These conditions have formed the identity of the Danish oil & gas industry. Still, what made Ramboll succeed and become a major international player, where other Danish competitors did not?
First of all our company values stick out. Ramboll tries to be a true partner to our clients. The ownership of the group is different from many stock-owned service companies, which undoubtedly has influenced our approach. Establishing long-term relationships with our clients is a crucial part of our base. We want to create a lasting relationship rather than work on a hit-and-run basis.
The other factor, also partly due to our ownership, is that we have been able to invest in ourselves and also to be a little daring in our decision making and set the bar of our ambitions high.
The fact that we are a Danish company and grew up in a small market made it a major challenge to take the operations abroad. We had to be a bit brave to get out there and begin the fight with the big boys. Still, I am glad we did!
The early success of Ramboll Oil & Gas seemed to often go hand in hand with the success of Maersk Oil. How fundamental is your relationship with Maersk Oil today and how important has it been to diversify your client portfolio?
Maersk Oil has always been a big client for Ramboll Oil & Gas, and they still are.
Ramboll’s decision to go to Qatar in 1995 was largely based on Maersk Oil’s move into Qatar, but actually it took us eight years before we started to receive any jobs from Maersk Oil. In this long transition period we had to proof ourselves and show that we could survive in a new market with other clients. The jobs did not just come through by knowing some people at Maersk Oil.
Today we have a great relationship with Maersk Oil in Qatar and we are one of their major engineering suppliers. Ramboll’s Qatar office has grown substantially and we actually became the biggest engineering company in Qatar, with nearly all active players on our client list. Furthermore we recently moved into Abu Dhabi from Qatar, with other clients – Maersk Oil has no operations in Abu Dhabi, and on an international scale, a company like Statoil is today one of our biggest customers.
Diversifying our client portfolio was a specific strategic decision that we took a couple of years ago. Part of the rationale was that we wanted to decrease our dependency to lower the risk factor. We also felt we needed to diversify to make it more interesting for our employees to work in an international environment and actually offer them new and other possibilities – also from an engineering project perspective.
Furthermore it was beneficial to Maersk and to all our clients for Ramboll to gain experience with other approaches and other views on projects. Looking at Ramboll Oil & Gas today, this proved a wise strategy.
Ramboll has been showing incredible growth over the past years, but so has the market and some of your competitors. For the coming years, are you looking mostly at organic growth or, as the market is going through a phase of consolidation, also at more acquisitions?
In 2010 we published a strategy for oil & gas, and we set the bar high. In 2010, Ramboll Oil & Gas employed 500 staff. That number is 1000 today, and we want to reach 4000 staff by 2020. These targets led to some shocked faces when I presented them. Looking however on a year-to-year basis, it becomes feasible. And three years down the line we are still on track, which is all the more remarkable if we take into account that these targets were based on an organic growth path and acquisitions: we have acquired just one smaller Danish player with 20 employees.
Ramboll Oil & Gas did not acquire any major companies, and that was not because we did not want to. Finding a partner with a strategic match, also in company values and ethical standards, is a challenge. We do not acquire just for the sake of good growth.
Of course the commercial match also needs to be there, and in the past years oil and gas companies have been extremely expensive, so we had a bigger focus on organic growth. We closed 2012 with an all-time high of 35 percent organic growth.
Could you outline your vision for the company beyond the numbers? Ramboll Oil & Gas has grown massively under your leadership; when will you be happy?
Happiness does not exist in this regard – whenever Ramboll reaches a milestone, I am already looking at the next! Also, it is not a matter of me being happy. It is a matter of us at Ramboll wanting to develop what we started. We want to retain our employees and be able to offer them interesting projects, and interesting projects go hand-in-hand with attracting the right people.
That is how engineers are born: we of course want a fair salary, but most of all we want to work on the interesting, fun and challenging projects. The bigger the engineering firm, the easier it is to pull in such projects. And once you finally reach the size to pull in such projects, you see that there are even more challenging and bigger projects on the horizon, which again provides motivation to grow. We are always looking for the next opportunity and the next frontier.
Where exactly the story will end we do not know, but we have always said that we want to reach the top layers of the international engineering sector. It is a serious challenge to get into the top three of global oil & gas engineering companies, because these companies have a turnover that exceeds the total turnover of the Ramboll group.
This would be perhaps even too ambitious and non-achievable for us, also because we are not an ECP-contractor but an engineering company. We might go for a few ECP contracts if we have a good relationship with the client and see a possibility, but the key focus is to be an engineering company and that sets a limit to the size that we can reach.
To summarize: there is a limit, but that limit is far beyond what we have reached today, there are lots of frontiers to go for and milestones to reach. We have set the next focus areas and are confident that we will reach those.