Bourdon – Executive Vice President, Dietswell – France
The executive vice president of Dietswell, a company specialized in the provision of integrated drilling and engineering services to the oil and gas industry, outlines his company’s excellent performance between 2010 and 2014.
Dietswell represents an interesting example of a medium-sized internationally focused company. Can you tell us how the story started?
I founded the company with Dietsmann as a partner but the whole business model has been created by me. I am originally a drilling engineer and have spent most of my career within the French oil contracting business. At the end of the 1990s, I realized that there was no more future for me in that segment of international drilling expertise, and even though the UK for example was very present in the game, I thought we had a role to play in areas like the Middle East or Western Africa. I could not, of course, create such a company on my own and decided to look for a partner. This is how Dietsmann that was already present in Africa entered the game. Two years later, Dietsmann decided to disinvest and I bought their shares. Hence for almost three years, I was the only shareholder of the company. At that time, I was approached by Truffle Venture that offered me some fresh money. From then on, things went pretty well to such an extent that we decided to stock the company on the Alternext, the exchange dedicated to SMEs. We were really looking for expansion in the specific segment of rigs adapted to drill in very tiny constrained places, in the context of exploration of shale oil & gas. Unfortunately, our company was badly hurt by the 2008 crisis. Some of our projects never came out. We then had to adopt a new strategy and focussed on high added value technology which was, by the way, our initial plan. We then created our technical assistance division, we launched an inspection and auditing business segment, and also, an engineering department to focus on high engineering turned towards offshore. In 2005 we purchased Dolfines Sofindel which proposed rig design, engineering and technicians, and that’s how we started designing our own rigs. When the crisis hit us, we decided to speed up the development of this engineering activity.
Would you say that the key of your success lies in this ability to cover the full spectrum of your fields of activity?
Indeed. In four years’ time, we were able to recover from a very dramatic situation and depreciation of assets. My plan has always been to focus on intelligence, “brain juice” as I call it. From 2010 to 2014, Dietswell experienced constant growth and since then we have run a profitable business. For 2015, we will maintain our budget even though we lack visibility for the rest of the year. Of course, everyone in the loop is looking at costs reduction and there is an evident shrink in the volume of activity, since as always, the first budgets hit are those of exploration.
Today, 8% of our global activity is directly linked to exploration, which implies that the rest of our businesses are still ongoing for the time being. Middle Eastern countries are however continuing to explore and therefore need our services. But the truth is that every actor of the chain is currently discussing the prices. We are not a direct oil producer but our customers are obviously affected by the decrease of the prices and we have to cope with this new deal. What I can say is that Dietswell is now a well-recognized and credible player, even though it might be a bit complex to explain who we are precisely and the complete range of our activities.
Can you tell us more about your different business divisions?
Dietswell is organized in four different business lines. First of all, we have Dietswell services, which is providing technical assistance. But unlike what you may find in the UK, we believe our business model is going far beyond the body shopping. Of course, we are renting people but not only. We are also present in terms of supporting people, providing a local content to our customers (fiscal policy, visas…), and our added value transcends body shopping. Our second business line is Dietswell Solutions. It is our engineering department that designs and calculates the structure of equipment. Our third business unit is called Dietswell contracting. Let’s make it clear. We haven’t given up drilling. We are just no longer a drilling contractor. In other words, we still know the activity but we have turned into projects engineers who put the rigs at the adequate level requested. We sometimes get demands but we also try to be as proactive as possible. We now have a business manager looking for customers. Our chance is that we are now recognized in the business. We currently have several projects going on. One of them is in Spain with Enagas that has very specific requests. Our customer wishes to recomplete its well in the Gulf of Gascogne in order to keep its production and storage capacities. We then had two solutions: either to remove completely the rig which would have been very expansive or put the rig back to working conditions and make the process approved by an inspection company. This is the kind of projects we are currently leading.
Can you tell us about the fourth business unit, Factorig. What does it consist in?
This was conceived from scratch here in France. We are exactly on the same line as Moduspec, the current leader in this activity, which has been, by the way, swallowed by Lloyd’s. We are very quickly expanding this business in the African zone and North Africa. In 2009, we also decided to set up a presence in the Middle East, and we succeeded doing so. We now have constant activity in Abu Dhabi for the commissioning of land rigs coming either from the USA or China for their numerous launchings of offshore platforms. From then, we have spread to the neighbouring countries like Yemen, Oman, Qatar and Iraq.
What about your recent contract with South Korea?
I am coming from the French contracting business so I have offshore experience. But at Dietswell, we have long been too small to run offshore business on our own. Things are however changing now. Most of the world drill ships are designed according to international standards. None of the Korean drill ships fit the exact needs of the customers, and Dietswell is aiming at reducing this gap between the construction yards and the needs of the customers. We are working on this promising niche market that requires high tech drilling skills and an ability to solve several issues. We provide our customer, with advices and support to bring the rigs to their needs and required specifications It is a very interesting move for us. We have many new projects in Algeria too.
I am very proud to say that today, Dietswell is profitable in its four business lines and this was a very important step to reach.
Is this success of Dietswell due to the structure of the company and the fact there is one man on board making the big decisions?
I guess both. Definitely, there is a great team of highly experienced and motivated people at Dietswell. Most of our experts have both the adequate academic background and the operational expertise. The team deserve the present success but we still have to maintain our efforts. We need cash to sustain our projects. But what I believe is that all the big players in the market have left some room for niche companies like ours. We have to be flexible, highly qualified and have a proactive approach. We should soon hopefully get for three of our business lines, the API Q2 certification that is linked to added value in service companies. We have a very good knowledge of rigs and have very good feedback from our customers.
We are very interested in learning more about the two contracts you signed in Iraq. Dietswell showed at this occasion a great sense of boldness and adventure. How did this happen?
I personally went to Iraq three years ago within the frame of a very organized trip. Even though the country was chaotic and unsafe, I found it had potential. As it was difficult to organize the operations from France, we decided to run them from our Abu Dhabi office. We found out that the best way for us to enter the country was through inspection and technical assistance services. We then made a prequalification approach, received the call for tender and won two of them; one with Russian Lukoil, the other one which is the biggest, with BP Iraq. We have permanent teams on the round, and this is a big adventure we can build on.
The world is dangerous by nature and our industry is present in countries that can never be safe forever. In our business, we always arrive before or after a revolution. We have to be aware of that without putting ourselves in danger. It is a difficult balance to find. Dietswell is in that regard not different from the others even though I was personally accustomed to work before in Iraq or in places like Libya during the Khadafi times or Kuwait. We need to be highly mobile but we are not crazy! In Iraq, we currently send our people to Bassorah, and we pay safety teams to protect our people. We do everything to treat them as if there were local ones. But adventure is in Dietswell’s DNA!