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Interview

with Wally Georgie, Principal Consultant and Director, Maxoil Solutions

02.04.2009 / Energyboardroom

Would you please give us an overview of the company’s history and its evolution over the years?

After gaining extensive knowledge through individual careers in the industry Wally Georgie and Mel Dow founded Maxoil Solutions in 2004. Our vision was based on the clear need in the North Sea and Global oil industry to bring together like experienced consultants with hands-on and practical operational experience. The Maxoil Group then expanded in 2005 through setting up the Maxoil Asset Management division which, further enhanced and diversified our overall capabilities and strengths.
Aberdeen and the North Sea is home to many engineering houses that perform consultancy services but, the general focus deals primarily in individual design aspects and general engineering. Maxoil Solutions and Maxoil Asset Management perceive things from a different angle by approaching the operational side of the business through integrating both production process and asset operating support.
Starting with Wally Georgie originally as PRIMAS in 1999, Maxoil now comprises 18 full-time individuals in addition to several contract based associates available on an ad hoc basis. Overall, Maxoil represents an assembly of recognized industry leaders as a multi-disciplinary team of process engineering, fluids separation, flow assurance, production operations and chemistry specialists who are greatly experienced in tackling issues from an operational perspective at the root cause level to optimize process performance efficiency, production uptime and overall asset value.
Shortly after founding Maxoil, we realized our expertise here in the North Sea was needed in other areas. For example, many of the tried and tested design principles based on developments in the North Sea were being incorporated and applied in the Gulf of Mexico. Consequently, with a knowledge base of problems and solutions for such installations and processes Maxoil decided to launch our company in US based in Houston.
Because we’re a small outfit, Maxoil does not focus especially on large studies and capex budget modifications. Our goal is to go in and assess problems, provide optimal and workable solutions without going for high cost changes or upgrades. Often this is achieved by making realistic operational changes whether through personnel training or, changing the parameters under which the processes are being run resulting in fantastic gains to efficiency and uptime. Maxoil is a solutions driven totally independent entity. With no affiliations with any manufacturer, this objectivity means our company is not restricted by allegiances or confined to promoting certain types of either chemicals or equipment solutions. Therefore, we can offer the client a completely unbiased service.
Although most of our company is built on the Aberdeen foundation, we are fully able to respond to the global market. Many significant projects involve sending out our consultants to assess problems onsite in production areas worldwide but, whether the project is located in Houston, Gulf of Mexico, Alaska, Australia, Far East or West Africa the key project deliverables will draw on our core of resources available in Aberdeen.

Can you explain the advantage of this operational perspective Maxoil takes?

Often it’s a simple matter of recognizing the root causes of any given problem. The requisite solution is then frequently achieved and delivered by utilizing the existing equipment in situ and applying the corrective measures through minor changes to the incumbent process configuration and operating practices. Since other consultancies may not have this breadth of practical experience or integrated approach, they may simply rely on one specialty area and end up recommending additional and ultimately unnecessary costly new equipment.
Maxoil’s depth of knowledge provides the benefits of alternative solutions that can be found with the existing equipment by modifying their configurations and apply best practice principle. Whereas, the big engineering design houses may approach the problem by resorting to process equipment upgrades and relying on vendors to improve vessel or unit performance.
Traditionally, oil companies invested as a matter of course in the long-term development and training of employees to gain comprehensive field operational experience. They also had corporate research facilities and teams of specialists dedicated to technical advancements in the areas of exploration and production. Industry downturns and increased operating costs combined with profit driven constraints forced major operators in the oil and gas industry to restructure their organizations by concentrating on maintaining core functionality. As a result, they divested much of their technical and specialized in-house expertise in favor of relying on outsourcing these capabilities. One of the fundamental issues though for any operator when contracting out operational and technical support services is that it is difficult to retain the learning and expertise in one place. Over the ensuing years though, the availability of these key skills combined with the effects of industry demographics has generated an imbalance of knowledge. Although the major operators have recognized this problem and are now responding by creating internal focal points and groups for technical expertise, these can be limited with availability of personnel and resources. The problem is that oil companies can still end up embarking on high cost modifications or upgrades that may not have been necessary had alternatives been available for consideration.
Maxoil today represents a wealth of diverse expertise gained from years of hands-on frontline experience which, is a privilege not currently shared by many. For example; a client commissioned a study through an engineering company which, based on their area of expertise recommended an upgrade to the existing produced water handling facilities that involved a capital expenditure outlay costing over $75 million. In addition, the substantial loss of production revenue during the necessary construction period has to be taken in to account as well as the increased risks involving safety and the environment. Maxoil was brought in to provide an independent assessment of the study and to look at the facility. Our extensive review determined conclusively that an alternative option would in fact provide the required improvements to the process operations through modifications to the existing infrastructure rather than replacement. The benefit to the operator was that not only did they achieve their project targets but, at significantly reduced costs and downtime.
The point is that Maxoil has both the ability and flexibility to take different perspectives that provide effective and value based choices. When operators are under tremendous pressure to fast track critical projects to completion it is essential to think laterally and deliver these efficiently and cost effectively.

What is the most common client response when faced with the potential of delivering such significant cost savings?

Of course they’re happy but, sometimes there can be mixed responses given that the decision making process involving large capex can be arduous. When a client is almost committed to the spend and Maxoil’s offer challenges this cost outlay then, of course we have to be able to substantiate our recommendations to ensure they achieve the same gains. We deliver options based on a diverse operating knowledge, diagnostic abilities and intimate understanding of particular process systems. Sometimes though, convincing the project teams of the merits of our proposals supported by hard proof can be as challenging as finding the solutions.
It’s easy to be skeptical when a project study has already been completed and advocates spending considerable amounts of the client’s money. The answers are not always straightforward and given the ramifications certainly some people will demand testing them for credibility. Once our proposals are proven and the project teams convinced in the end clients are receptive to the changes.
Of course, this reinforces our reliability and impartiality and promotes our continued involvement with our clients. The oil and gas is a close community and many operators take part in forums and information exchanges so, it’s great to be involved in their successes.
The first thing Maxoil does in troubleshooting work is to gather information from all sides and aspects of the operations. Right from the onsite production operations people involved with the assets on a day to day basis through to process management and engineering personnel. Only then can you really get true cross sectional picture. Maxoil has adopted a holistic approach of assembling all this data, having a mix of in-house disciplines that complement and integrate with each other. What we find out are the dynamics and mechanics of what is really causing the problem.
Merely treating the symptoms though is only a temporary fix and ends up chasing the problem around as the process operations varies. The root cause may be something considered totally unrelated but, in fact crucial when step changes are made in an operating system. Maxoil looks holistically at all the potential interactions from a macroscopic viewpoint. We identify the critical cause and effects of why problems are happening as opposed to treating only what the problem presents.
The business is about producing oil and gas at optimum conditions and most cost effective means but, this involves tremendous systematic and environmental and safety challenges to achieve all the targets. When an operator is not reaching proper oil, water or gas specifications Maxoil always looks at the entire field as well as the asset operations. Very often the cause of a problem starts earlier in the process than originally thought and this involves understanding several key things; operational practices, how the hardware is configured and the equipment being operated, the nature of the produced fluid and gas streams, their dynamics and any compatibility issues. Maxoil is then able to figure out and develop effective and practical solutions.

You mention your people require experience in other companies before coming to Maxoil; where do you find them?

They’re proving very difficult to find. Many of our existing employees were acquired via networking after having been in the industry for a number of years and establishing good contacts. Unlike other companies in Aberdeen who can more readily acquire people from different industries, Maxoil requires certain in-depth oil and gas process knowledge. Although we are trying to address the skills gap by taking on graduate engineers thereby creating a young wave that are benefiting from older consultants and specialists. In Houston for example, Maxoil’s plans in the medium term are to recruit people locally and bring them to Aberdeen for familiarization. They will then return as local Maxoil staff. Aberdeen is Maxoil’s training base and though there is good knowledge in all the spheres of the world, it absolutely essential to have grounding in the fundamentals of the Maxoil philosophy and applying all the skills we’ve learned throughout our many years of offshore and onshore operating experience.
Just recently, Maxoil has sought out technically orientated people to help with business development because at the end of the day, we need to build on our resources. There’s an important balance in having both technical understanding and capabilities for business development rather than solely depending on personnel recruitment and development because this is an important fit for Maxoil’s plans.

After opening a Houston office in 2005, and a Norway office planned for 2009, what are the company’s international growth plans at present?

As our founding market, Maxoil realizes there is still a great potential in Aberdeen and the North Sea. When comparing the worldwide oil production volumes though to that of the UK sector production it’s clear that to build our business portfolio we need to strategically grow.
On the troubleshooting side of the business, expansion in to deepwater developments in the Gulf of Mexico has occurred over the last 10 years building up on the many similar problems to the North Sea during the 1990s. Another market Maxoil has gained access to is West Africa, although the company doesn’t market itself there directly through our Houston link we have very close relationships with many of the USA operators and therefore are increasing the amount of involvement with that region. Maxoil is also working in the Australian market which, despite having difficult fields to produce has grown much bigger in the last five years.
As fields mature operating costs begin to seriously impact on production viability. In the North Sea sector there is an increasing trend of smaller international oil companies entering and acquiring longstanding assets. Maxoil Asset Management specializes in operational support services, i.e. not only with just troubleshooting but, on the day to day operation. Maxoil is not competing with the large engineering companies but, it’s a very specific market to help the smaller operating companies and duty holder companies manage their assets.

With such a variety of service offerings and geographies, what is at the top of your current agenda in terms of priorities?

For Maxoil, the USA is our #1 priority after the UK and Norwegian sectors. The company’s US business began in the Gulf of Mexico but, now Alaska is just as big. These facilities in the North Slope are getting over 20 years old and operators have plans to produce oil for another 20 years which, they need to do effectively in an environmentally sensitive area.
Maxoil has established frame agreements with major operators inside and outside the USA and use these to continue reaching international markets like Australia, West Africa and countries in the Far East. Although it’s equally important to understand the local business ethos and competitive structures in order to successfully adapt and operate in these markets.

What are your visions for Maxoil in the next five to 10 year time horizon?

It really depends how the industry shapes up. The recent oil price fluctuations would have been unfathomable at one time. Our current strategy involves building structure and consolidating value within Maxoil, securing longer term contracts plus providing consultancy support and design review from an early stage of brown and green field developments. For mature operations we’re building up our asset management activities over ad hoc troubleshooting and expanding with steady growth while maintaining a stable organizational structure.
Maxoil will certainly keep busy prioritizing zones until we bring in more people. Fortunately though, with our global coverage based on the Aberdeen centre of excellence the company can take on project work in other countries and manage these by making trips there.

What is your final message to readers of OGFJ?

Maxoil operates as a multidisciplined consultancy with an uncommon level of specific and relevant expertise. Our expertise is in delivering holistic value driven solutions to process and operational problems. We fit in between the big engineering companies and the individual type of contract consultant.
Although we established our Houston branch in 2005, in the Gulf of Mexico Maxoil has identified only one company that partly competes with us and then only in certain aspects of our services. Some of the operators have begun recognizing that potential in us because in the USA there is a tendency towards using major engineering companies or manufacturers who either give a design solution or, one involving capex and investment in new equipment.
On the other hand, Maxoil builds on our wealth of North Sea experience to bring our integrated in-house skills to get the job done. Many deepwater developments have been built incorporating tried and tested designs taken from other difficult offshore operating arenas such as the North Sea. Many similar problems start to show up as these fields and assets go through their various operational phases. Maxoil are familiar with many of these issues and we can solve problems in a much quicker and efficient way. Also, there are many North Sea experienced international staff now based with oil companies in the Gulf of Mexico and these are familiar with our concepts.
Many of the Oil companies place a lot of faith and rely very much on the equipment and chemical suppliers. Maxoil’s track record of practical operating experience provides a layer of advice between these two groups. It enables us to act as a bridge on behalf of the operator to assist in developing the necessary specifications and liaising with equipment suppliers to provide what the operator actually needs. There’s definitely a benefit in Maxoil being able to input with this operator-supplier interaction for both the majors and smaller independent oil and gas producers. We’re still in the early stages of getting our message out to more people in the Houston and New Orleans areas and in the last 2 years, Maxoil has built up an increasing level of participation in working with smaller companies in the shelf area of the Gulf of Mexico. Our abilities are not limited to deepwater projects and they realize our capabilities just as useful for their smaller fields and operations.

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