Netherlands – Gilbert van den Brink, Managing Director
The MD of Wintershall Nederland discusses the trends that will shape the North Sea sector and how effective the Netherlands has been at incentivizing production. He also discusses the challenges involved in moving from solely gas to oil and gas production.
What have been some of the principal changes and key successes since our last interview with you in 2009?
One of our key successes is that we have continued our exploration program, despite the oil price dip around 2009. Although Wintershall Noordzee, the operator of our Southern Northsea assets has been a gas-focused company for several years, they are now also focusing on the proposition of oil aftyer their discoveries in the in Denmark and the Netherlands. Wintershall Noordzee continues to be successful on the gas front as well, a tight offshore reservoir was drilled and developped which was afirst for offshore Netherlands and is now under production. Furthermore the Wingate field, a carboniferous development in the UK has been very rewarding thusfar. Of course, the majority of the operations in the Southern basin of the Northsea are mature, but having these finds definitely provides a solid basis future for Wintershall in the Southern part of the NorthSea in the Netherlands, Denmark and the UK.
What have been some of the implications and ramifications for the company after the F17A find?
Wintershall’s activities in the Southern Northsea have been mainly gas driven. Now having struck oil in the Netherlands and Denmark means that “Oil Skills” are required. This has had an impact on the whole structure of the company. Moving to an oil process means identifying if we have the inhouse expertises to appraise and develop these finds. Wintershall has of course oil experience in other areas and will try to tap as much as possible from these best practices but it also appears that recruiting new people is required and we have been doing so for the last two years actively, next to our continued successes in gas developments.
What are the challenges behind seeking tight gas, and what are your strategies?
Developping tight gas offshore is not the most obviouos thing to do of course, but we carefully looked at our options, work closely with expert consultants to complement our in-house knowledge from well stimulation to hardware subsea well design. To be totally honest, the development of the field which is taken as a phased approach has thusfar exceeded our expectations. It’s now a matter of producing the wells and understanding the behavior of the tight reservoir and from there plot our next well appraisal and in-fill drilling wells. This plan is working well so far.
What have been some of the recruitment challenges for the company, and how do you ensure you attract the best talent?
As the market currently continues to be squeezed, it is very challenging to recruit experienced people, not just in the Netherlands but around the entire Northsea in general. The only way you can really attract people, which I have seen with other companies as well, is by being consistently successful. For example, our sister OPCO in Norway has been is very successful recently and it gets noticed and they managed to attract the right people. For the Dutch part, once Wintershall Noordzee announced the F17A Chalk discovery, it became obvious this had caught people’s attention and this also was noticed in the quantity of responses to our published vacancies. This was good but of course having larger number of people knocking on your door brings a new set of problems and that is making the right selection for quality and appropriate experience. It also has led to a huge diversification, the Wintershall Nederland Group companes now emply some 27 different nationalities. Obviously, the more successes we have, the more options we have, and the more work we have to do in finding the best talent.
What is the strategic importance of the Netherlands to Wintershall globally, and how do the activities here fit into the global image?
The strategic importance of the Netherlands is that it has always been a very stable producer and reliable entity to the group. Furthermore, we provide shallow water expertise and through our fully fletched operator Noordzee provide a training grounds that covers the full value chain in E&P from acquisition, exploration, development and production right to even abandonment including finance, construction engineering, to production, drilling and even challenging Legal and commercial issues. Being a mid size player, we don’t simply recuit large numbers of new trainees on board; they have to fit in organisations, be able perform a job which is also attractive to the individual of course and hence actively contributing to our projects. Learning on the job style.
What’s your current opinion on how successful the changes in E&P regulation have been in the Netherlands since we last interviewed you?
In 2009 the Dutch E&P environment new initiatives to boost the industry, and some steps were taken in this regard. I had the pleasure as Chairman of Nogepa to sign the Marginal Field Incentive Covenant with the Minsiter of Economic Affairs (Maria van der Hoeve) on behalf of the Oil and Gas producers. This new government initiative had taken several years in consulatation between the ministery and the industry that by the time of implementation I already had a strong suspiscion that more was needed as some suggested steps were already taken over by events and more and other types of incentioves to stimulate offshore activities even further.were needed. However, after signature came the economic downturn which led to governments all over the world tightening their belts. Today, the mature Northsea industry is clearly in need of new incentives. This is also a topic currently in the UK and Denmark as well as in the Netherlands. What of course does matter for our Dutch operations in general is that our parent company Wintershall Holding allocate its resources according to the best opportunities and sees the best strategic fit and the Northsea needs to stay an attractive area to invest in that portfolio.
Which other trends are driving change in the North Sea today?
Safety is and has, ever since Piper Alpha, always been a strong driver in the North Sea activities and rightfully so. The Macondo incident in the Gulf of Mexico of course could not go unnoticed and has resulted in Europe to a new EU Offshore Safety Directives which will lead to new legislation soon to be implemented in the Nortsh Sea surrounding countries. It is always good to learn from incidents but this new legislative change will also lead to more administrative work to support the operations. I can imagine that larger companies will have more resources to cope with changes besides the fact that very likely most new requirements are alaready one way or the other handled by the more experienced operators. For operators with smaller operations here, it could become quite a burden to absorb the extra workload and recruiting experienced people to deal with it a s mentioned earlier is a substantial and time consuming challenge.
What are your ambitions and key objectives for growth in the near future?
The E&P environment in the Netherlands is good, predictable and stable. The authorities are reliable partner(s) to work with hence, despite the maturity I can see operations in the Southern Northsea develop further and not just in the Netherlands. For Wintershall, the Dutch operations will continue to provide a training ground and a pool of offshore expertise which our worldwide operations can tap from. Also as part of the Wintershall Nederland organization we have a dedicated Global Support Group. A group of professionals based in our Rijswijk whom are providing services and are actively participating in worldwide projects of other WIntershall OPCO’s. Because of the strategic location of our Rijswijk offices, we have access to a good pool of available E&P people in Randstad area in the Netherlands, next to good infrastructure access for train and airport facilities and International schooling should our people need so for families. I can forsee that this global support group could grow in the years to come.
The Netherlands is a mature area, nevertheless from the Netherlands through Wintershall Noordzee we are also developing projects in Denmark and the UK. It’s an enviable position to be in, to be in this mature base with an incredible amount of expertise, while still being able to produce a healthy profit margin. The recent oil finds will take us into the future hence I still see a bright Norsthsea future ahead of us.
On a more personal note, what is it that motivates you every day?
The whole E&P business is very energetic and full of surprises; this is what I find challenging and gets me out of bed each day ! It doesn’t always go according to plan and you need to be vigilant ; but give me a problem and we’ll solve it as a team. It is an exciting industry to be in.