Company – CEO, Spie Oil & Gas Services – France
The CEO of Spie Oil & Gas, a global service provider to the oil and gas industry, describes his company’s wide range of services and assesses the challenges facing EPC contractors at the moment.
Spie Oil & Gas Services offers quite a wide range of different services. Could you please describe to our audience your key activities and businesses?
Subsidiary of Spie Group, the European independent leader in multi-technical services in the areas of energy and communications, Spie Oil & Gas Services provides solutions across the full spectrum of services on the oil and gas supply chain. We present different services, which are composed of different streams. In regards to well services for instance, we are licensed and accredited by tubulars manufactories. We are qualified to cut premium threads. We boast an operation that supplies expertise for drilling supervision while being able to staff a full rig whether offshore or onshore. Moreover, our engineering office in Pau provides geoscience services. We are equally capable of producing seismic interpretations and vectorization of logs in addition to data management. We also have an asset support activity, which includes maintenance engineering, maintenance operations and commissioning. Our third service line consists in solutions related to competence development: selection, assessment and training of personnel. Finally, the EPC projects we undertake in relation to electricity, telecom SCADA, and security systems are fully dedicated to the oil and gas industry. This particular service line is deployed through business units that emanate from the former Spie automation engineering offices.
How would you define the core business of the company?
Asset support definitely constitutes our main strength. 80% of our activity relates to supporting and extending the life of production facilities. In 2013, the upstream sector represented 95 percent of our activity, while our downstream activity was only responsible for 5 percent of our activity. Our involvement in the downstream sector is characterized by our services in refining and petrochemicals. We recognized that developing our downstream activities was essential to our growth strategy. By 2014, our downstream activity represented 15 percent of our business, thanks to operations commissioning refineries in Saudi Arabia. We are expecting to further balance our downstream activities in relation to our upstream activities.
You managed to sustain high growth levels for years now. Can you compare and contrast your organic and external growth strategies?
The Spie Group completed 90 acquisitions since 2006, which is considerable, and Spie Oil and Gas Services acquired two important companies: Gemco international in 2007, a fairly small sized company, and Plexal in 2013.
Gemco International was a very strategic acquisition, as it further complements our expertise in maintenance, while Plexal’s activity is similar to our EPC services. The strategic decision stemmed from our desire to penetrate the Australian market. Overall, organic growth utterly contributes to our high growth levels, which on average reach an annual compounded growth rate of 12.5%. In upcoming years, we will increasingly rely on external growth to accelerate our international expansion. The current mergers and acquisitions market is very fertile in the oil and gas sector and within that context, the Spie Group has allocated funds to erect a very active M&A department
Could you give us insight into your R&D activity and innovation policy?
We have a central department that was recently renamed “Development & Solutions.” It carries two main missions. The first one consists in collecting and disseminating all the expertise we gather in various domains. The second mission is to train our engineers, instill our values and skills before we dispatch them to projects abroad. This department works on development regarding commissioning tools, mapping competencies of our professionals and identifying any mismatch between their skills and our expectations and requirements. We sometimes decentralize research development. For instance our expertise center for maintenance engineering is showcased in Malaysia. We outsource some of these activities to produce expertise at more attracting cost as part of a process to enhance our competitiveness.
Could you please describe your international activity?
It is a difficult question, because we need to differentiate between countries where we have registered legal entities, and countries where we provide our services during temporary missions. Overall we established subsidiaries in 31 countries. I must admit that in light of geopolitical tensions, corruption and unstable economic situations; we retracted our activities from certain countries such as Libya. On the bright side we have been opening new offices in several countries and in Korea in particular. In Iraq, since Daesh invaded the country we had to prioritize safety and postpone some activities. We have promising prospects in Kurdistan despite its proximity to combat zones.
In regards to human resources, how do you appeal to engineers and what do you seek from candidates?
My answer is very simple. In essence, Spie’s achievements in the oil and gas sector are more than outstanding considering our less than ten years history. It took us very little time to demonstrate our capacity to set up businesses abroad and become a benchmark for the sector. When we recruit, we tell candidates that they are not entering a corporation where they will be told what to do; instead we will listen to them carefully, and leave them room to undertake initiatives because we are unreservedly interested in their creativity and entrepreneurship. Our professionals understand from the very beginning that they are not just accepting a job but rather a way of life. Successful applicants must be mobile, speak English and ready to explore and understand different business cultures.
Do you take pride in your commitment towards healthy human resources?
I have been promoting healthy interactions between our professionals since the beginning. We do not sell any products but rather solutions and services, which render our employees our most valuable asset. Diversity is extremely important; we integrate women at the highest level of decision-making. I am also very proud to highlight that our 4,000 employees comprise more than 75 different nationalities. One of the most essential values we try to advocate is proximity. When we set up businesses abroad, we insist on producing as much local content as possible to become more competitive, and establish permanent ties with domestic communities as well as fostering lasting partnerships. To illustrate this philosophy, we have sustained a permanent activity in Gabon for over 30 years.
How do you explain your success and what are your prospects for the years to come?
First of all, we were not affected by the 2008-2009 financial crisis thanks to our asset support services. The explanation for our sustained growth is that although our clients chose to put the creation of new platforms on hold, they still seek services for maintenance purposes. In order to be successful in the future, we need to change our mindsets. For example, we should from now on dispatch teams of carefully selected engineers to thoroughly examine the situation on the field before we decide to set up new business.