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Interview

with Rolf Olavesen, Managing Director, CAN AS

06.10.2009 / Energyboardroom

As an introduction to our readers, could you give us the same presentation speech that you received when entering CAN a few weeks ago?

CAN was created in 1993, and today has a staff of nearly 80 people. CAN is based in Stavanger, focused in the NCS and plans extensive growth in the near future. Geographically that would mean expand our headquarters building or moving to a new building elsewhere in Stavanger. On the broader picture, this means taking the company north, whether in Bergen, Stjordal, or even further but this hasn’t been decided yet.
The nature of CAN’s business is to use rope access, instead of scaffoldings which can be time consuming and costly. Clients reduce the time on platforms by 300% to 400% by using our methods instead of spending two weeks building a complex of scaffolding structures. Our business is focused on the long term, (modification and maintenance,) and is therefore not significantly affected by ups and downs in the market.
CAN has two types of clients: The first are oil companies or operators like StatoilHydro, BP, Talisman with whom we have frame agreements. The second type of client is formed by the main contractors such as Aker Solutions, Aibel, Fabricom etc… CAN is not at the top of the food chain in the industry, so to speak, but is seen as a specialist company.

You mentioned that you are saving your clients a lot of time by using ropes; what is CAN’s core competence and what kind of projects is CAN working on?

At CAN, we have mechanics, welders, pipe fitters, and engineers with a “double“ background. They all have certificates for the disciplines in which they are working and in addition to this they have courses and certifications in climbing and rope access methods. Our employees are carefully selected and trained. CAN has very stringent safety procedures and certifications for employees.

But in this business, isn’t safety more a necessary condition than an added value?

Of course. But CAN’s added value is that the company considers safety in a cost effective way. CAN interacts with its clients prior to working with them in order to prove to them that rope access is as safe as other methods. Clients trust CAN not only because CAN’s methods are safe, but also because these methods enable them to dramatically reduce their costs.
At CAN, we are focused on our employees’ safety. We have training facilities in house, and make sure every employee has gone through training, certification, personality testing etc. to make sure that they are ready to work.

You said that a CAN employee has a specific personality. In terms of recruitment strategy Norway has a very low unemployment rate, so in that environment how does CAN attract and retain these highly motivated personnel?

Since the beginning of its activities in 1993, CAN has gained experience in recognizing the type of person who should work for the company, and the type who should not. The company has a very thorough interviewing process in house and uses the help of a recruitment company to find and select the most capable candidates. Of course CAN receives applications from people only looking for an adrenalin rush, but this is not the kind of employee we are looking for. Nevertheless highly qualified people don’t grow on trees. We have to find them, get them, train them, and then we have to make them stay. CAN gives its employees challenging jobs step by step. CAN has a low employee turnover since our employees find it attractive to work with the company. CAN has excellent safety statistics, track records of 0 accidents, and will continue doing so. The ultimate goal is to have our employee safely back home with his family after every time he goes out on an assignment.

What exactly is Can’s offer to its customers?

We base our projects on the EPCI philosophy. Some jobs require more engineering, planning, selecting the right equipment etc. rather than just the person hanging from the platform – as some people describe us. One job can be done by 2-3 people in three days, but requires two weeks of engineering & planning beforehand. CAN is a small EPCI company – construction being here also demolition – and does everything in a complete package. CAN’s clients want us to do planning, engineering and the physical performance rather than having numerous contacts with several different companies.

We talked about the frame agreements that CAN has with major operators such as StatoilHydro, Talisman, BP. But what is your strategy towards all the others from ConocoPhillips and Total to smaller independents, and the so called mosquitoes?

CAN’s strategy is to do offensive marketing, go see them and tell them what we can do with our safe methods. It is not only a question of cost efficient working methods, but also in terms of bed capacity on the platform, transport etc. Instead of having to accommodate 10 people for 3 weeks, if the client only needs 3 people during 4 days it is another way to save costs.
CAN’s clients are oil companies, even those having no operations, but who are partners. Smaller players have some weight on the decisions taken during licensing meetings. That is why CAN wants to be used for preliminary studies, reports & calculations to bring with these smaller players in the licensing meetings to discuss. But of course CAN’s main clients are the operating companies and major contractors. Even though the company has plans for growth, having nearly 80 employees is a limit on how large the jobs taken can be. Obviously CAN could get people from sub-contractors, but there is a limit on how many the company would like to handle and it is a challenge to get the right people to do the job safely and according to CAN’s high standards.

When we met with Viking Life Saving equipment in Bergen, Benny Carlsen said that Norway is recognized as leader in HSE worldwide, and that it will be hard for any country to get to the same level; how does the nationality of CAN help in its recognition by clients?

Safety is two things: it means procedures, equipment, systems, extensive training etc. But safety is also a culture; one has to think safety 24/7. One has to be safety oriented, and Norway is like that and has been for years. We do not only see safety in terms of morals, or ethics, but also in terms of money. It is not to undermine other countries, but it’s a culture. Some countries in other parts of the world see things differently than we do in Norway.

When we interview Mr. Bakken in Scandpower he was explaining that even though risk management is expensive, accident are even more, and that all in all their company had not been impacted by the price of oil. You said earlier that CAN is focused on the long term, so how has the price of oil affected CAN’s business and how will the next contracts be affected?

If the price of oil is too low for a long period, it will affect us. But what is low? Is $70 per barrel low? Obviously compared to what we had last year, it’s half of the price, but compared to what we had a few months ago, it is quite good. A lot new projects that are coming up could be put on hold by operators because of uncertain profits. It would be mainly affecting new builds, yards and companies doing new platforms and slightly affect us. But there are a lot of platforms – for example Troll with horizon 2050, Heimdal with horizon 2048 – that need regular maintenance to produce. If the oil price goes down to a “scary level” it will create opportunities for CAN since companies will look for cheaper and more efficient solutions.

We are dependent on oil companies, but CAN is not directly impacted by changes in the price of oil since our core business is the maintenance and modifications. We have seen some projects put on hold at this time, but we believe they will most likely go forward in the future. Despite changes in the oil price, CAN’s expertise is always needed.

What is your vision for CAN is the next 3 to 5 years?

We have the ambition to be the leading contractor for working in heights. To a certain extent we have already achieved this today. We would like to grow, while keeping intact our core business, specialties and what makes us different. This is our competitive edge. Even if we double or triple in size, we want to keep up our working methods in order maintain our competitiveness. The figures are quite ambitious, and end of 2009 we will reach a turnover of NOK 80-85m and plan to have continuous growth until the end of 2013, and that’s just the start. The company’s assets are human resources and development is linked to growth in the workforce and training programs. CAN is not able to double its turnover and size without increasing the number of employees, and this means there will be increased needs to follow with training. CAN will also expand geographically, but before that the company has to define where its new market should be. It will depend on where our clients have their offices, on logistics i.e. how many people of the area of the country are from there, how many people live there etc.

CAN is focused on the NCS, and plans to expand in Norway, but you have been to Houston to promote the company? How do you see CAN on the international scene?

We have an agreement with our sister company in the UK to concentrate on the NCS. There is a huge potential for growth within Norway and the company doesn’t have to go to the Gulf of Mexico, or any other region to reach its goals in terms of expansion.

What would be your dream contract to reach these goals?

A long term contract with StatoilHydro would be perfect for CAN. StatoilHydro already started the prequalification process for its new portfolio of MMO frame agreements. Such a contract would mean for the chosen company that a permanent staff would be working there with 6-8 years contracts. We want to be their preferred partner so that they think immediately of CAN when planning projects in our area of expertise. We are flexible and will respond to most demands, but we need a long term client base and do not want to have all our business coming from these hectic situations and Friday evening urgent calls. StatoilHydro will complete its prequalification process this autumn, the bidding process is planned for Q1-Q2 next year and they will award contracts during the summer 2010. CAN would like to become a long term partner with them.

What is your final message to Oil & Gas Financial Journal readers?

The company has skilled personnel in most disciplines that are especially trained and certified to undertake work in difficult accessible areas. We are ISO-certified, DnV approved and registered in Achilles.

Over the years, CAN AS has developed methods and equipment suited for these special tasks – some of which have been patented. This is a constant process closely linked to our training and certification program. Carefully selected suppliers are used for critical equipment. Control, checking, testing and recertification of equipment are very important starting point for our next job.

Yes, we CAN.

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