Register to download the report. Already a member?

Download PDF

Click Here for $250 / 6 months

Click Here for $450 / year


– Stephen Hill, COO – Singapore

26.09.2014 / Energyboardroom

The COO of Britoil describes how his company leverages the international opportunities in the APAC region to ensure it has delivers leading anchor handling tug services to its clients. By designing and constructing their own vessels at their award winning shipyard in Indonesia, Britoil has reached a stage where it is looking to expand its services- both internationally, and in the scope of offering. Most recently, Britoil has moved to construct Ulstein PSVs, and Hill understandably speaks with enthusiasm about the company’s next venture.

Britoil signed a deal in 2012 to deliver two Ulstein designed PSVs, which is on track for completion next year. What was the prelude to securing this agreement, and what particular benefits do you predict this design will return to Britoil?

Traditionally, Britoil has had an anchor handling tug boat fleet. That in itself, restricts the company to certain markets. For example, our main market is the offshore oil and gas sector. By having these particular assets only, Britoil was restricted principally to the construction phase of the offshore development cycle. Over the years we have been expanding rapidly, gaining larger more sophisticated vessels and moving into deeper water. However, the fact still remains that our current fleet is constrained within the construction section of activity offshore. Building the Ulstein PSVs will change this as we will gain the ability to operate in every stage of the offshore life cycle which, in turn, will give us access to the opex spend of clients as well as the capex spend early on.

Before choosing this design, the business did a great deal of market research. As a private company, we have to be very diligent in how the business uses collateral. PSVs are a new undertaking for our business, so we wished to proceed with a tried and tested partner in this venture. In our opinion, the Ulstein PX-121 design represented what we were looking for with regard to its performance and capacity. Overall, its specifications were the best fit for Britoil, and we anticipate solid demand for them from the market. Ulstein vessels are premium product, and add value, which chimes exactly with Britoil’s overriding principles.

You design and construct your own vessels in Batam; what does this achieve for your operations on a day to day basis?

Over the past ten years at least, our overarching strategy has been to bring our entire value chain in house. The main reason for this is to garner more control of all aspects of our operations. Our yard in Batam is a case in point. It is very high tech and is likely one of the most advanced in Southeast Asia. It is fully automated, and designs created on computer software – CAD-CAM- are sent direct to our panel line. The lifting equipment and cranes are sourced from Finland and are recognised as highly advanced in this field.

Predominantly, although not exclusively, we are not in the business of creating designs and selling them to third parties. This is because we wish to retain the competitive advantage our 20 strong design team can deliver to our own operating assets.

Whilst you produce your vessels in Batam, you are headquartered in Singapore and have facilities in the Philippines. What are the advantages to be gained from this multi-country approach?

With regard to a multi-country approach, this was not something that was deliberately conceived. With regard to the shipyard, for example, Britoil conducted a feasibility study on suitable locations for this facility. We wanted somewhere close to our main operations in Singapore which really left us looking at Indonesia, Malaysia and Singapore itself. The comparative availability of land, local legislation, set up costs and projected running costs all were taken into account and it so happened that at that time the industrial development area around Sekupang in Batam was just commencing and provided us with an opportunity that, on balance, provided us with the best comparative advantage.

With regard to our manning agency in the Philippines and in Jakarta, it is natural to have these offices there as the majority of our crews are Filipinos or Indonesians. This allows us a solid intake of crew to man our operations.

Your in-house design and fabrication of vessels is intended to give you a competitive edge; how do clients perceive your services?

By having control of our fabrication process, Britoil produces very high quality vessels and seeks to incorporate the best possible equipment into our new builds. In our opinion, it is a false economy to seek to build as cheap as possible and this approach is not a fit with our strategy of owning and operating high quality and reliable vessels. I consider that this control and high quality approach provides Britoil with an advantage over our competitors.

The equipment we integrate into our machines are top of the range- from Caterpillar engines to Rolls-Royce winches. This gives us confidence that our vessels will be as reliable as possible since these companies also have a strong support network around the world, resulting in that, when we do need replacement or repair, it is readily achievable.

The improved reliability of our vessels, therefore, represent real value to the client. Our ability to operate these vessels, due to the professionalism of both our crews and support staff, provides us with a tangible competitive edge.

You have also received recognition for the, environmentally speaking, more benign nature of your operations within your Batam shipyard. What factors secured this success?

Right from the start, our HSE function has been the cornerstone of our operation- across our fleet and in our shipyard. Britoil strongly believes a clean, tidy, and orderly operation in the shipyard creates a mindset across the business and across staff and contractors working there which is more sensitive to environmental and health and safety issues. A clean, orderly workplace is conducive to being aware of the environmental considerations that have to be made on a daily basis. Developing a culture that proactively deals with these issues is essential.

Britoil’s being awarded the distinction of the most environmentally friendly and efficient shipyard in Batam in 2013 is testament to our company’s attitude towards responsible commercial practices, as are our ISO 14001 and OHSAS 18001 certifications for environmental and occupational health and safety standards respectively. We take these issues very seriously.

How is your business coping with regional regulation?

This is a chief challenge for Britoil and increasingly so. From the point of view of a ship owner, operating in a number of markets, all we can do is comply with local regulation. Most of these rules are set by national governments, so to gain work in a market, we must operate within this framework. Creating in-country companies has seen Britoil also open business units in Australia and the UK to ensure we are compliant with regulatory requirements locally. Partnerships are also a route to ensure compliance- a route we have taken in the Middle East for instance. Local crewing requirements are another example of rules we have to face and comply with.

Your training facilities in the Philippines and Indonesia; what challenges and opportunities do these establishments present?

As we have a fleet of anchor handling tug boats, by their nature the operations our vessels undertake are quite specialized. As a result of this we require skilled crew, with a particular emphasis on having experienced officers and engineers. Due to their specialized nature, they need extensive training, and, increasingly, many years’ experience.

These crew can be quite scarce, and, traditionally acquiring such crew was tough. Britoil’s response was to set up our own manning agency, first in Manila, in the Philippines, and subsequently in Jakarta, Indonesia. This centred on a cadet scheme, which has proven invaluable and which will soon start delivering captains to our company. The scheme sees school leavers receive offshore experience and fiscal support through the accreditation process with Britoil, and the business trains and mentors these individuals. The result is well trained, loyal, and experienced crew- it gives the business a notable advantage.

In conjunction with that, we have training centres, exclusively for our own companies. Crew attend these sites before joining ship to receive pre-familiarisation training, allowing them to become accustomed to the equipment and systems housed on our vessels before embarkation. This emphasis on excellence in our training is representative of the ethos we apply to both machine and man in order to achieve the highest quality standards.

You are a private company, and are seeking to produce top quality assets. How easy is it to secure finance to drive your construction campaigns?

We are a private company, so of course there is a limit as to what we can borrow. However, Britoil has not had any problems to date because the financial management of the company is traditionally quite conservative, with a very low debt to equity ratio. The overall equity that we retain in the business far exceeds the debt that we hold. Due to this, the company is easily able to use that collateral to secure new build projects.

Currently the business is building two PSVs – building more would have been a push with our policy on debt, but following their construction we will be able to again move forward with more projects. Step by step, the business will move forward without overstretching. Prudent progress is our vision of moving forward with expensive projects.

You work in a family business. What are the family values that drive forward the enterprise?

From our perspective, one of the key values our company embraces is appreciation for our workforce since our success is attributable to them. As a private, family business we have the luxury to spend a little longer looking at the well-being and aspirations of our staff. This has resulted in both a very, very low turnover rate and in skills being retained within the business. From a managerial angle, as a private family business our decision making process is far more flexible than some other entities.

What milestones do you want to achieve by 2019? 

The next half decade is very exciting. Armed with our new PSVs, we are entering a new market and diversifying out. The business wants to continue that and enhance and increase the PSV fleet. The expansion of this fleet depends on the ability to raise finance and our own risk analysis, but, generally speaking, on the next five years, the business would hope to add a further four PSVs to its fleet and beyond that to diversify into the AHTS market. In 2019, we would hope to have built at least two AHTS.

Naturally, by entering the PSV market, we will likely expand from a geographical basis too. Our anchor handling tugs have typically worked from the Middle East through to eastern Russia, with occasional contracts in West Africa, South America and the Mediterranean, and we will look for further operations there and in Mexico too for our new PSVs.

The picture is of diversification, expansion, and increasing the range of our core competencies.


To read more articles and interviews from Singapore, and to download the latest free report on the country, click here.



Most Read