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Interview

with Kevin Mahoney, Managing Director, Yardbury Group

05.08.2008 / Energyboardroom

What was your vision behind the creation of Yardbury in 1992, and how has it grown to become the diversified group of companies it is today?

I was working for Santa Fe in 1992 as a subsea superintendent, when I decided to leave and set up something on my own. I felt that there were not many companies around in the same line of work. Over the years I built Yardbury up from very small beginnings, steadily developing the diverse range of services that are offered today.

One of our means of growing the business was through strategic acquisitions. Glenmac was the first acquisition, carried out in 1999, as there was a need for hydraulic services in the market. Later on in 2002, Yardbury bought Dee Bridge Electrical Engineers to give us even more capabilities, though we decided to maintain its name as it has been around since 1947 and is well recognised.

Internationally, Yardbury took its first major steps in 2003 when we entered into a co-operation agreement with a Libyan drilling contractor to re-certify equipment in that market. It was a challenge, but today, Yardbury has its own state of the art workshop in Libya similar to the one in Aberdeen, smaller in scale but with Yardbury management systems.

Which of Yardbury’s capabilities would you define as a core competency of the company?

Yardbury has specific capabilities in the area of hydraulic units, in which we offer the full range of products and services. Over the years, we have worked on several large projects with different clients in the UK. The single biggest project involved developing a riser tensioning system for an exploration company. It consisted of four separate tensioners, which were to go on the tension deck of a jack-up rig, each capable of up to 860 kipsor 860 000 pounds. The state of the art equipment was powered by a hydraulic power unit and controlled by a PLC.

Yardbury is capable of taking on the whole range of project work, from control and repair to testing and recertification. We also have proven capabilities to design and build BOP stacks.

The UKCS has seen the arrival of many small and independent oil companies over the last few years. To what extent do these players represent an opportunity for Yardbury to further grow its business?

We are very active in identifying and approaching the smaller independent companies which could become our clients. It is quite refreshing to deal with companies like Apache, Talisman and other independents which are very dynamic and easy to deal with. Of course, we highly value our business with the bigger oil companies as well, though they tend to request mainly original equipment manufacturers (OEM) and require us to go through their drilling contractor.

Yardbury has just concluded a deal to supply two BOP stacks to Apache via their drilling contractor, Seawell. We are looking forward to further growing our business with Apache, which has established itself as one of the key players in the UKCS after taking over BP’s Forties field and has been very successful in increasing production.

In what ways is Yardbury Group’s size a handicap or an advantage when facing the competition on the market?

Yardbury is an SME, a rather small company when compared to our main competitors. However, we have grown considerably over the last three years on the back of booming demand for energy and record high oil prices. There are many clients in different parts of the world who appreciate the way we do business. As a non-OEM player, Yardbury is independent, which gives us a commercial advantage.

We can provide what our competitors have, only quicker, as was the case for the Apache BOP which we were able to deliver in a third of the time compared to the OEM’s quotes. Yardbury is also a considerably more economical option for clients in terms of repair costs. So as a company we have beaten the competition on delivery, price and can also outdo them on quality. We are a small service company, but that gives us the benefit of speed and the ability to react quickly.

How important is Yardbury’s international business vis-à-vis the UK operations?

Yardbury is doing a mix of domestic business and work abroad. In addition to Libya, Yardbury has supplied other overseas markets such as the USA and Norway. We recently supplied a drilling contractor in Singapore, and are looking with great interest to develop business in the Saudi market.

Yardbury is also focusing on capturing a slice of the business from new drilling players coming into the North Sea like Northern Offshore. We are keen on seizing new international opportunities, but first of all we need to grow our size here. Yardbury is very capable of taking on important projects, but in some cases clients may consider that we are simply not big enough for certain jobs that demand scale.

What makes Yardbury rise up above the competition with regards to engineering services for the oil and gas sector?

Yardbury’s strongest point is its expertise, meaning the management team which has many decades of combined experience in the oil and gas industry, particularly in drilling. One of the key characteristics of Yardbury is the fact that at the management level we have the same people today who helped me set up the business almost 17 years ago. They have been through the ups and downs and seen the company survive, so they know they can count on job security. This is very significant since one of the most difficult things right now is to find people with the right set of skills and experience out in the market.

What do you think Yardbury’s name stands for today in the oil and gas industry?

Yardbury has made a good name for itself over the years. At the end of the day, we always deliver a quality product which is what the customer needs. Our commitment to quality has been long-standing, being one of the first companies in our field to get ISO 9001 certification.

Although companies sometimes tend to look at the bigger players, we are confident they can also recognize what an independent company like Yardbury can offer them.

What are your expectations for the growth of your business in the UKCS over the coming years?

We are fairly positive about the prospects in the UK, as there are many interesting new clients investing in the area. We have already built up a good rapport with Apache, through the drilling contractor initially, but now we are dealing more directly with them. This closer relationship with the operator is the type of business we seek to develop more in the coming years, and this is possible thanks to the new types of oil companies working in the North Sea.

What experience does Yardbury have in terms of working with National Oil Companies (NOCs)?

We have experience working with Libya’s NOC and are confident to continue developing that relationship. Additionally, we have contact with Iran’s National Drilling Dcompany, so we are very open to opportunities with NOCs and do not hesitate to go into markets which other companies may avoid.

What is your perspective on Aberdeen’s ability to remain as a global centre of excellence for oil and gas towards the future?

I believe that there is always room for improvement and further development, but Aberdeen will maintain its position as oil capital of Europe. And of course, Yardbury will also remain as a key player in the city, for business in the UK and around the world.

As founder and managing director of Yardbury Group, what is the most motivating thing about your job today?

I am very proud of having moved up through the ranks, coming from working on the floor on the rigs together with some of my current management team. What also motivates me towards the future is to continue growing Yardbury, and have fun in the process because life is short.

What is your final message to the readers of Oil & Gas Financial Journal on behalf of Yardbury Group?

Yardbury is ready to provide hydraulic, electrical and mechanical services to the oil and gas industry, all in-house and controlled under the same roof.

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