Marine – Rory Deans, CEO – UK
The CEO of Sentinel Marine discusses the challenges of entering the ERRV market in the North Sea, and the prevalence of North Sea skills around the world today.
Could you explain your founding vision for Sentinel Marine and why Sentinel Marine will be attractive to prospective clients?
The first step in establishing Sentinel Marine was the creation of an office in Singapore. The business speculatively ordered some new anchor handling tug supply vessels in China in 2011 with the idea of building up and operating a fleet in Asia. However, as we were building them, some interested parties approached Sentinel seeking to purchase the vessels due to their immediate need. With the attractive premium involved, Sentinel sold the first three vessels it had ordered prior to delivery and moved to place orders for further ships. Sentinel has now built and resold prior to delivery 11 vessels in this manner. This is a model we retain today- some of our vessels on order we will sell, namely some of the AHTS and PSVs; others we will retain for the company’s own use including the ERRVs as these are not for sale.
Currently the company has 19 vessels on order, eight of which are committed to come to the North Sea. These are emergency response and rescue vessels (ERRVs) which were historically known as standby vessels. These are exceedingly high specification fuel efficient and environmentally friendly units.
To give some further history on the evolution of the fleet, it had been in late 2012 that the decision to enter the North Sea from Singapore was taken. The market in the North Sea was buoyant and in particular the ERRV fleet at that time consisted of a significantly high proportion of older vessels. The vessels are built to high environmental standards and have the latest technology. They are agile in their function and can also carry cargo- this adds more value to the client. The design of these vessels is robust; we consider them to be the perfect vessel for the North Sea.
To enter the ERRV market requires significant fiscal hurdles to be overcome. It is not possible to enter with one, or two vessels as it is essential in order to provide a 365 day per year service to clients to have one vessel not on charter which can rotate, allowing the other vessels to return to port to crew up and replenish on-board supplies. To facilitate this, one needs a critical number of vessels; around eight before one can afford the ‘downtime’ for the vessel on standby which is why there are fewer competitors. A great deal of experience is required and given I had around 25 years’ involvement in the industry I was able to input this into the company strategy.
The eight vessels on order to come to the North Sea will come in two tranches, the second group of four being slightly larger and of enhanced design. The first vessel will be delivered in October of this year and will work for Gaz de France for five years at the Cygnus platform. The vessel will be named Cygnus Sentinel.
You spoke about technical capability and excellence in the vessels you are delivering. Can you expand on the necessity for high end design in the ERRV market?
The basic requirements for an ERRV in the North Sea are actually quite high. The UKCS has the highest requirements and standards of all the North Sea sectors. A standard vessel must be able to rescue and accommodate up to 300 people. Sentinel’s vessels will be built to accommodate more than 300 persons and house advanced medical facilities, a dormitory for twenty beds, seated areas, toilets and showers.
The ships also carry fast rescue craft and daughter craft. Sentinel has worked closely with Palfinger to create our own designs of this type. These vessels will be unveiled June the 10th in Southampton.
Our vessels have further capacities as well; they can perform emergency towing for one and they have dynamic positioning systems, which are very novel.
How do you find your companies association with the North Sea’s record of excellence with regard to health and safety will assist you market your company further afield?
Traditionally, the North Sea has been the benchmark which other basins seek to aspire to. In my previous position, with Nomis Shipping, the business operated around the world including in Southeast Asia and they were readily accepted and in high demand in Thailand in particular.
The prevalence of North Sea skills globally is incredible. There is frequently someone from Aberdeen working for a logistics company, or drilling company regardless of where that company is operating globally. They are used to the high standards in the North Sea and they are often eager to bring these quality operating practices around the world. ERRVs tend to be unique to the North Sea but Sentinel is confident that this manner of working could have a wider role out of the North Sea. This represents a significant cost to potential clients, but we are finding them receptive due to the value this service delivers.
How is your company positioning itself to deliver growth?
As stated, we are building further vessels. We know the market and the age profile of our competitors’ vessels very comprehensively. There are around 125 ERRVs in the North Sea operating at the moment- 60 percent of these are 40 years old or more.
There is a big opportunity to introduce new vessels into this market as older vessels are retired. Most operators have age stipulations with regard to the AHTS and PSV vessels they hire – the same is now happening with ERRVs.
Fuel consumption and emissions are lower on our vessels, which puts Sentinel at an advantage over its competitors. The new design of our vessels is responsible for our vessels having a greater degree of reliability too. Reliability is of particular importance because if an ERRV breaks down, its associated platform may have to cease production. Given that a drilling rig, may create costs of 500,000 USD or more for a day’s downtime, the reasoning for this call for reliability is self-evident.
What are the strategic roles of your Singapore and Aberdeen offices respectively?
Our Singapore office is responsible for all our new builds. Sentinel has a team in place there who are accountable for overseeing construction at three yards in China. At each of those yards, we have three new build superintendents who are employed by our Singapore company. This company is tasked with ordering the vessels, supervision during construction and sale and purchase of vessels as seen fit.
The Aberdeen office is in place to primarily look after the ERRV business in the North Sea.
Sentinel Marine has key objectives with regard to expanding the size of its staff. How does your business attract staff in the competitive human resources market here in Aberdeen?
It is a huge challenge. Recently, the company took on three vessels, now operating out of Aberdeen within the space of a six-seven week period. We needed more than 70 new persons in that time, a target the company attained.
Sentinel Marine seeks to be the employer of choice, and looks to offer better conditions, pay and benefits to employees. That being said, one of the key reasons staff are eager to work for us is the new ERRVs that we operate. They offer, unlike some of the older ships, single cabins, single bathrooms,satellite TV,and internet for example.
Looking to the next five years, what key objectives does the business have?
Here in the UK, we have eight vessels on order, to be delivered between now and 2016. We will be seeking long term contracts for all of these vessels.
The business has recently looked to build more ERRVs, and has sought new designs for this purpose. The objective there would be to see the fleet consist of twenty vessels in five years’ time.
Lastly, we will also look at acquiring PSVs to differentiate our service offering.