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Interview

with Wolfgang Wandl, Managing Director, Viking SeaTech

30.10.2012 / Energyboardroom

What do you see as the strengths of this Anglo-Nordic company in the international maritime industry?

Viking Seatech started in 1986 and throughout this period it was both Scottish and Norwegian, although a couple of years ago we branched out into Australia and Singapore. Our ability to produce solutions for these international markets partly depends on the nature of the Norwegian offshore environment – it does not get tougher in terms of environmental challenges with waves offshore sometimes reaching 30m in height. Some rig moves, which should have lasted 4-5 days, instead lasted (at the worst) 30 days. Norway is also a very long country stretching from Stavanger up to Hammerfest, which represents a 1600km trip. Managing the logistics of this market is a challenge even at the best of times, but in winter we can have closed airports and roads due to snow and wind. Essentially if you can survive the offshore conditions and logistical challenges in Norway then you can survive almost anywhere.

The business also benefits from the innovative nature of Norwegians, which I consider to be culturally driven. For example, there have been cases where we presented ideas to an E&P company in the UK and the UK office asked the Norwegian sister company to test out the product first before it would be used in the UK. Norwegian companies are apparently more willing to try out new ideas and several of our products have been supported by Det Norske, Statoil and other Norwegian players. In addition, the high labour costs in Norway mean that efficiency measures are the only real way to guarantee lower costs. Australia actually faces a similar challenge and like Norway, looks to efficiency measures for cost savings. Norway is a very small country, yet represents the second country in the world for gas exports and fifth for oil exports. This is coming from a population of five million, so they had to be innovative to make the oil and gas industry a success.

Similar challenges are faced on the UK side and Viking Seatech is on both sides of the sectors, but has always belonged to UK owners. The fact that we are spread across Norway and the UK is very useful for our E&P or rig-owner clients as they are also spread across these two locations in the majority of cases.

Many service companies have used the “Norwegian laboratory” for developing their technology. Why do you think this environment is so well suited to this?

Norway is an efficiency driven market. In Norway workers do two weeks on, four weeks off and in the UK they work two weeks on and two weeks off for the same pay. When labour and rigs are under supplied to the market, the only solution to maximize on these limited resources is to be efficient. For example, Viking Seatech has moored a rig on both sides of the UK/Norway border and the amount of rental equipment differs by a factor of five or six. In the UK we work to a smaller amount of equipment and consequently minimum price and it may mean standing off four or five days during the winter. In Norway, they instead say: tell me what you can do to have zero days off. If Norwegians can eliminate inefficiency they will do it, no matter the cost.

Viking Seatech has produced a “fibre in bag” technology which has been tested by Det Norske. What is the potential of this technology to deliver efficiency savings to the market?

The background to this technology lies in the difference in regulations between Norway and other countries. With respect to anchor handling there is a legal freeze on all Norwegian operations at a significant wave height above 3.5m, where as in the UK it is the captain of the vessel who makes the decision as to whether or not he can operate. This means that there are situations, where on the Norwegian side activities stop, and they continue a couple of nautical miles to the West in the UK.

Given these regulations Viking Seatech has tried to see where we can best contribute to improving the efficiency of rig moves, and the only way that we can really contribute to rig move times is in speeding up the mooring process. As a company, our turnover is just over USD 100 million, but we can contribute in a very significant way to companies like BP, Shell etc by making their processes smarter and faster. Viking Seatech has therefore developed technologies for prelaying mooring systems prior to the rig move. However prelaying fibre mooring systems faces one principal challenge: we are not allowed to place the fibre on the seabed in case this fibre gets damaged or it damages life and coral on the seafloor.

Viking Seatech therefore patented a collection of prelay mooring systems known as: fibre in a bag, fibre in a box and protected fibre. These solutions were all designed with the idea of going to a field way in advance of the drilling rig, prelaying the mooring system but at the same time keeping the fibre lines and seabed from coming into contact by having the fibre lines in a container.

To develop our solution, Viking Seatech found a fantastic partner in Det Norske, who agreed to try out our innovation. They are a smaller E&P player and want to show the majors what they can achieve so they were ideal for this partnership.

This experiment was highly successful and we can now lay down the moorings one month in advance which means that the rig only has to arrive and hook up using anchor handling vessels. In real terms this means that instead of three or four days spent mooring a rig, you only need to spend four hours. Anchor handling vessels can now go out when they are cheap to hire and the weather is good and you only need to then hook up the rig when it finally arrives. Five years ago it was the norm to spend three to five days on a rig move, now we can spend a day on average. Det Norske’s drilling manager told us during the ONS that because of our assistance in prelaying, Det Norske will now be able to drill one additional well over the contractual period they have with the Transocean Barents rig.

How have other players received this innovation?

The technology has potential in all geographic areas but we have only just begun to present this to other companies. Viking Seatech has also discovered that there is potential application of this technology for other offshore companies requiring mooring solutions. Currently they will have to spend several (up to 12 hrs) hours spooling of fibers and if – in the case of back-up fibers – these are not required then a further six hours spooling off the fiber. With our fiber in bag solution they can load a fibre alternative onto the vessel in two minutes. Fibre in the box is the next product we develop where we will place an entire drum on the seabed and then you only have to go down with an ROV and roll it out.

How do you see the willingness of other international markets to take on your technology?

On an international level, just behind Norway we have the Australian market which is actually ahead of the UK in terms of size for us. Brazil is also an attractive market but Petrobras are currently working independently with their own mooring solutions which can also be very innovative. We have therefore taken the decision for the moment not to enter the Brazilian market. In terms of leadership we need to define where we go and where we do not want to go. The companies I have encountered who have had operations in Brazil for five to six years have lost considerable amounts of money due to import duties, surprises with regulations and so on.

At the moment Viking Seatech already has strong international operations. We are working in Norway (the North Sea, Norwegian Sea and Barents Sea), the UK, and we are exploring options in Russia. We have equipment stationed in Malta, in Egypt and in Ghana and have done a series of jobs on the Ivory Coast which were mobilized out of Ghana. We also have an office and equipment in Singapore and the office in Perth with our equipment base in Karratha.

There is an interesting Norway – Australia link for Viking Seatech. Would you explain how you view the connection between these two markets – is there a cultural or technological similarity?

Actually many of the individuals that you encounter in Australia are actually expatriates from the UK so it is not down to culture or nationality. A major similarity is the remote distance between the cities and the bases; Karratha and Perth are like Hammerfest and Stavanger in terms of their separation. A second similarity is that Australia is a huge country where very few people live, but when you come to a city or base it is extremely expensive and you cannot get reasonable real estate.

Thirdly and probably most importantly, the speed of development in Australia is very similar to Norway. Looking at the prognosis for the UK you see a declining market every year, whereas for the first time in over a decade in Norway you have rising demand on the back of Johan Sverdrup, Aasta Hansteen and other discoveries. Australia and Norway therefore both share the same rising demand and both need to work smarter whilst facing the same limitations in the number of rigs and personnel. Australia does not have the waves that we have in Norway but they do have cyclones. Viking Seatech has therefore very successfully introduced prelay systems to Australia.

What do you see as the strengths of this Anglo-Nordic company in the international maritime industry?

Viking Seatech started in 1986 and throughout this period it was both Scottish and Norwegian, although a couple of years ago we branched out into Australia and Singapore. Our ability to produce solutions for these international markets partly depends on the nature of the Norwegian offshore environment – it does not get tougher in terms of environmental challenges with waves offshore sometimes reaching 30m in height. Some rig moves, which should have lasted 4-5 days, instead lasted (at the worst) 30 days. Norway is also a very long country stretching from Stavanger up to Hammerfest, which represents a 1600km trip. Managing the logistics of this market is a challenge even at the best of times, but in winter we can have closed airports and roads due to snow and wind. Essentially if you can survive the offshore conditions and logistical challenges in Norway then you can survive almost anywhere.

The business also benefits from the innovative nature of Norwegians, which I consider to be culturally driven. For example, there have been cases where we presented ideas to an E&P company in the UK and the UK office asked the Norwegian sister company to test out the product first before it would be used in the UK. Norwegian companies are apparently more willing to try out new ideas and several of our products have been supported by Det Norske, Statoil and other Norwegian players. In addition, the high labour costs in Norway mean that efficiency measures are the only real way to guarantee lower costs. Australia actually faces a similar challenge and like Norway, looks to efficiency measures for cost savings. Norway is a very small country, yet represents the second country in the world for gas exports and fifth for oil exports. This is coming from a population of five million, so they had to be innovative to make the oil and gas industry a success.

Similar challenges are faced on the UK side and Viking Seatech is on both sides of the sectors, but has always belonged to UK owners. The fact that we are spread across Norway and the UK is very useful for our E&P or rig-owner clients as they are also spread across these two locations in the majority of cases.

Many service companies have used the “Norwegian laboratory” for developing their technology. Why do you think this environment is so well suited to this?

Norway is an efficiency driven market. In Norway workers do two weeks on, four weeks off and in the UK they work two weeks on and two weeks off for the same pay. When labour and rigs are under supplied to the market, the only solution to maximize on these limited resources is to be efficient. For example, Viking Seatech has moored a rig on both sides of the UK/Norway border and the amount of rental equipment differs by a factor of five or six. In the UK we work to a smaller amount of equipment and consequently minimum price and it may mean standing off four or five days during the winter. In Norway, they instead say: tell me what you can do to have zero days off. If Norwegians can eliminate inefficiency they will do it, no matter the cost.

Viking Seatech has produced a “fibre in bag” technology which has been tested by Det Norske. What is the potential of this technology to deliver efficiency savings to the market?

The background to this technology lies in the difference in regulations between Norway and other countries. With respect to anchor handling there is a legal freeze on all Norwegian operations at a significant wave height above 3.5m, where as in the UK it is the captain of the vessel who makes the decision as to whether or not he can operate. This means that there are situations, where on the Norwegian side activities stop, and they continue a couple of nautical miles to the West in the UK.

Given these regulations Viking Seatech has tried to see where we can best contribute to improving the efficiency of rig moves, and the only way that we can really contribute to rig move times is in speeding up the mooring process. As a company, our turnover is just over USD 100 million, but we can contribute in a very significant way to companies like BP, Shell etc by making their processes smarter and faster. Viking Seatech has therefore developed technologies for prelaying mooring systems prior to the rig move. However prelaying fibre mooring systems faces one principal challenge: we are not allowed to place the fibre on the seabed in case this fibre gets damaged or it damages life and coral on the seafloor.

Viking Seatech therefore patented a collection of prelay mooring systems known as: fibre in a bag, fibre in a box and protected fibre. These solutions were all designed with the idea of going to a field way in advance of the drilling rig, prelaying the mooring system but at the same time keeping the fibre lines and seabed from coming into contact by having the fibre lines in a container.

To develop our solution, Viking Seatech found a fantastic partner in Det Norske, who agreed to try out our innovation. They are a smaller E&P player and want to show the majors what they can achieve so they were ideal for this partnership.

This experiment was highly successful and we can now lay down the moorings one month in advance which means that the rig only has to arrive and hook up using anchor handling vessels. In real terms this means that instead of three or four days spent mooring a rig, you only need to spend four hours. Anchor handling vessels can now go out when they are cheap to hire and the weather is good and you only need to then hook up the rig when it finally arrives. Five years ago it was the norm to spend three to five days on a rig move, now we can spend a day on average. Det Norske’s drilling manager told us during the ONS that because of our assistance in prelaying, Det Norske will now be able to drill one additional well over the contractual period they have with the Transocean Barents rig.

How have other players received this innovation?

The technology has potential in all geographic areas but we have only just begun to present this to other companies. Viking Seatech has also discovered that there is potential application of this technology for other offshore companies requiring mooring solutions. Currently they will have to spend several (up to 12 hrs) hours spooling of fibers and if – in the case of back-up fibers – these are not required then a further six hours spooling off the fiber. With our fiber in bag solution they can load a fibre alternative onto the vessel in two minutes. Fibre in the box is the next product we develop where we will place an entire drum on the seabed and then you only have to go down with an ROV and roll it out.

How do you see the willingness of other international markets to take on your technology?

On an international level, just behind Norway we have the Australian market which is actually ahead of the UK in terms of size for us. Brazil is also an attractive market but Petrobras are currently working independently with their own mooring solutions which can also be very innovative. We have therefore taken the decision for the moment not to enter the Brazilian market. In terms of leadership we need to define where we go and where we do not want to go. The companies I have encountered who have had operations in Brazil for five to six years have lost considerable amounts of money due to import duties, surprises with regulations and so on.

At the moment Viking Seatech already has strong international operations. We are working in Norway (the North Sea, Norwegian Sea and Barents Sea), the UK, and we are exploring options in Russia. We have equipment stationed in Malta, in Egypt and in Ghana and have done a series of jobs on the Ivory Coast which were mobilized out of Ghana. We also have an office and equipment in Singapore and the office in Perth with our equipment base in Karratha.

There is an interesting Norway – Australia link for Viking Seatech. Would you explain how you view the connection between these two markets – is there a cultural or technological similarity?

Actually many of the individuals that you encounter in Australia are actually expatriates from the UK so it is not down to culture or nationality. A major similarity is the remote distance between the cities and the bases; Karratha and Perth are like Hammerfest and Stavanger in terms of their separation. A second similarity is that Australia is a huge country where very few people live, but when you come to a city or base it is extremely expensive and you cannot get reasonable real estate.

Thirdly and probably most importantly, the speed of development in Australia is very similar to Norway. Looking at the prognosis for the UK you see a declining market every year, whereas for the first time in over a decade in Norway you have rising demand on the back of Johan Sverdrup, Aasta Hansteen and other discoveries. Australia and Norway therefore both share the same rising demand and both need to work smarter whilst facing the same limitations in the number of rigs and personnel. Australia does not have the waves that we have in Norway but they do have cyclones. Viking Seatech has therefore very successfully introduced prelay systems to Australia.

Do you see potential in other Southeast Asian markets?

We have actually just recently opened our office in Jakarta, which will give us a second base in Southeast Asia alongside Singapore. We are also looking into Kuala Lumpur given that there is a lot of activity there. Our entry strategy will be to team up with local partners in these markets, although in Singapore we have our own registered business.

Most Norwegian companies had to internationalize in the past due to a declining market. Now the Norwegian market is again booming. How do you manage the balance between your Norwegian and international markets?

Viking Seatech is an international company; we were Scottish from 1996 until 2006 when the official registration moved to England. Therefore there is no Norwegian controlling limitation. I predict that activity in Norway will increase nicely over the next three to four years. The financial foundations are in place to swallow the growth that we foresee in Norway and internationally. This is in part thanks to HSBC being the majority owner of the company and adding its financial weight.

At the same time, because of the relative simplicity of what we do, expansion should not be an issue. Viking Seatech essentially mobilizes mooring systems onto rigs, which can be deployed just as easily in Indonesia as in the UK. Therefore our capacity is sufficient and on top of expanding our international markets, Viking Seatech can now also afford to look into new products. I believe that we can do more with our existing client base and they will appreciate this. In fact, the rebranding of the company back in April 2012 from Viking Moorings to Viking Seatech was designed to remove the limitation of only being associated with mooring solutions. Viking Seatech has now started a manpower business and a positioning business. This will provide us with more legs to stand on as we move into new geographic areas.

How do you deal with the shortage of people?

The skills limitation will affect all players in Norway as well as in Australia. When COSL or Songa bring in new rigs into Norway they will typically need several hundred people for each rig and they need to take this manpower from other players in Norway. Fortunately for Viking Seatech, if we mobilize one thousand meters of mooring chain or ten thousand meters of mooring chain we still only need two staff to be present. We can therefore relatively easily take the best practices in Norway to our international markets without suffering from the human resource limitation too much.

There are also fantastic employees in other markets like the UK, Australia and Singapore who do things even smarter than we do them in Norway sometimes. Our offices meet regularly and this planned communication is great for our development. One of the best innovations for us recently came from Aberdeen, where they were invited by Canadian National Resources (CNR) to supply two complete mooring spreads for a job in Africa. One young Viking Seatech engineer from Aberdeen suggested that instead of two mooring spreads, just having one large spread and the rig could then winch itself between them saving the client around USD 70 million. We are a small company of 130 people so to keep our engineers we like them to be challenged and create innovations like this. We provide a good environment: working safely, legally, making money and having fun.

What can we expect from this Viking Seatech “invasion” in the years to come?

As the individual in charge of Norway I do have an eye on Russia and also further into the Barents Sea. I am in fact more optimistic about what can be discovered in the Arctic than most. After all, 2011 taught us how wrong we could be about Norway’s status following the Johan Sverdrup discovery. The previous operators of that prospect had been within a few meters of the discovery for decades, but it was not until 2010/11 that they actually struck the discovery itself. So I see a lot of potential to move with the industry, into new territories of E&P.

On the innovation front, Viking Seatech will be unveiling new and smarter solutions within a very short time period. My vision is that at every ONS Viking Seatech will be unveiling a new technology or product line. Z
We have actually just recently opened our office in Jakarta, which will give us a second base in Southeast Asia alongside Singapore. We are also looking into Kuala Lumpur given that there is a lot of activity there. Our entry strategy will be to team up with local partners in these markets, although in Singapore we have our own registered business.

Most Norwegian companies had to internationalize in the past due to a declining market. Now the Norwegian market is again booming. How do you manage the balance between your Norwegian and international markets?

Viking Seatech is an international company; we were Scottish from 1996 until 2006 when the official registration moved to England. Therefore there is no Norwegian controlling limitation. I predict that activity in Norway will increase nicely over the next three to four years. The financial foundations are in place to swallow the growth that we foresee in Norway and internationally. This is in part thanks to HSBC being the majority owner of the company and adding its financial weight.

At the same time, because of the relative simplicity of what we do, expansion should not be an issue. Viking Seatech essentially mobilizes mooring systems onto rigs, which can be deployed just as easily in Indonesia as in the UK. Therefore our capacity is sufficient and on top of expanding our international markets, Viking Seatech can now also afford to look into new products. I believe that we can do more with our existing client base and they will appreciate this. In fact, the rebranding of the company back in April 2012 from Viking Moorings to Viking Seatech was designed to remove the limitation of only being associated with mooring solutions. Viking Seatech has now started a manpower business and a positioning business. This will provide us with more legs to stand on as we move into new geographic areas.

How do you deal with the shortage of people?

The skills limitation will affect all players in Norway as well as in Australia. When COSL or Songa bring in new rigs into Norway they will typically need several hundred people for each rig and they need to take this manpower from other players in Norway. Fortunately for Viking Seatech, if we mobilize one thousand meters of mooring chain or ten thousand meters of mooring chain we still only need two staff to be present. We can therefore relatively easily take the best practices in Norway to our international markets without suffering from the human resource limitation too much.

There are also fantastic employees in other markets like the UK, Australia and Singapore who do things even smarter than we do them in Norway sometimes. Our offices meet regularly and this planned communication is great for our development. One of the best innovations for us recently came from Aberdeen, where they were invited by Canadian National Resources (CNR) to supply two complete mooring spreads for a job in Africa. One young Viking Seatech engineer from Aberdeen suggested that instead of two mooring spreads, just having one large spread and the rig could then winch itself between them saving the client around USD 70 million. We are a small company of 130 people so to keep our engineers we like them to be challenged and create innovations like this. We provide a good environment: working safely, legally, making money and having fun.

What can we expect from this Viking Seatech “invasion” in the years to come?

As the individual in charge of Norway I do have an eye on Russia and also further into the Barents Sea. I am in fact more optimistic about what can be discovered in the Arctic than most. After all, 2011 taught us how wrong we could be about Norway’s status following the Johan Sverdrup discovery. The previous operators of that prospect had been within a few meters of the discovery for decades, but it was not until 2010/11 that they actually struck the discovery itself. So I see a lot of potential to move with the industry, into new territories of E&P.

On the innovation front, Viking Seatech will be unveiling new and smarter solutions within a very short time period. My vision is that at every ONS Viking Seatech will be unveiling a new technology or product line.

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