Pye Singapore – Donald Moffat, Managing Director
Donald Moffat, managing director of Harris Pye in Singapore speaks about his company’s efforts to serve the FPSO market. Commenting on the facilities and capabilities of the wider Singaporean economic hub, he describes Harris Pye’s efforts to engage its clients, as well as the company’s traditional strengths in constructing high pressure boilers.
You have recently returned to Singapore, having spent five years in Australia. What were the tasks you were assigned on return and how do you feel your experience in Australia will help you deliver here?
I have been here since February after the previous managing director retired, my main focus is to try to develop our offshore market in Singapore.
Harris Pye commenced as a small marine and boiler repair company in the mid-1970s, with just ten permanent staff. In the early 1990s, the Group opened an office and workshop in Singapore to service the FPSO market within the region subsequently opening an office and workshop in Dubai. The company wanted to expand, so in the late 1990s they found an investor to take up a 45 percent stake in order to do so. In 2007 the investors share was paid off and the original management were bought out.
Following this buyout, the business started a major push into the oil and gas sector, with a particular emphasis on the offshore market. In Singapore, the focus on this sector up to that point had been relatively limited, and the business sought to expand into the offshore market in a similar way to what had been achieved throughout the rest of the group.
The FPSO market — the mainstay of this office for many years — is actually shrinking. We have relied on two or three conversions annually and have undertaken more conversions than any other company in this market. We have worked on 80% of the world’s FPSOs with much of that work originating in our experience with boilers. Our focus, while expanding into other areas, is also to maintain our core market in which we are world leaders.
What does Singapore, with its historic focus on FPSOs mean for the company and how are you taking advantage of the economic setup here?
The advantage of Singapore is that with the services in place here, it is far easier to mobilise and accommodate clients needs. We have looked at setting up yards in Malaysia and elsewhere in the region but would still have to import specialist equipment from abroad. The ease of access to local expertise is not present anywhere else in the region besides Singapore. That is also one of the reasons why Australian based offshore MODU’s and FPSO’s do not yet undertake large offshore projects on location – it is too expensive to bring in the personnel and equipment required.
In terms of developing client relations, what else are you applying to make your clients aware of Harris Pye and its presence?
There are many cases when a rig does not actually need to come in to dry dock — it can be serviced “in water” which frequently is how we now operate. To give an example, Harris Pye’s first big offshore project was in Brazil, for Diamond Drilling, under a $32 million contract. After Diamond leased a yard Harris Pye took full responsibility for delivery of its project. We used a shipyard in Rio de Janeiro which Diamond leased directly from the navy. The project took about three months and we handed the vessel back to them on time and on budget. We are doing a lot of that type of work now. With the ability to mobilise large squads of men anywhere in the world, Harris Pye are able to assist our clients in fulfilling project schedules.The Ocean Patriot rig has recently been in Keppel FELS for repair and servicing, but had been falling behind schedule. We started off with 12 men on the project however due to having a healthy relationship with Diamond Drilling – a team of 100+ men was later deployed in Keppel over three months. We flew a senior project team into Singapore from our offshore headquarters in Dubai to scope out the remaining work and they are now taking the ship to the North East of England for around 40 days whilst finishing the work before she is deployed in the North Sea.
We also offer custom service and repairs to client specifications. New build rigs are coming out of Korea and Keppel are built to a certain specification. Diamond, Transocean, Maersk etc. need to find clients and their requirements are always different to those of the donor. For this reason, as soon as a rig leaves the construction yard there is already the need to start replacing equipment- even on brand new rigs, this service was pioneered for our company with Maersk rigs in Korea.
You have been pursuing the offshore niche as a strategic focus for the business. You are also operating across services from automation to control engineering and mechanical works. What are your core deliveries at the moment and your main growth sectors?
Offshore is one of our main growth sectors; we are winning more and more jobs there. Regarding our automation division, FPSO conversions typically require a change of fuel from an oil-fired boiler to dual fuel gas and liquid fuels. Traditionally there were only two players supplying this to the market and a lot of clients were getting exasperated by limited options. We were frequently being asked by our customers to manufacture our own combustion systems, as a result we picked up the mantle and have recently completed our first supply and install project in this field. There are currently Harris Pye dual fuel combustion systems being installed on a further two FPSOs undergoing conversion in China.
So your focus on boiler production was the reason you achieved such a prevalence in the FPSO market?
We were eventually asked to undertake more diversified work on FPSOs as well looking at manufacture of our own boilers – as the FPSO market evolved, power requirements became greater. Previously steam ships would convert existing boilers but power requirements continued to grow so designers started mounting larger boilers on deck. We are about two months from ABS approval of our own high pressure boiler powering a steam generation plant and turbine on deck. We set up a design team in Dubai with the task of trying to learn the lessons from every deck boiler failure that we came across in the last decade, in order to provide engineering solutions – we have produced some unique solutions in that regard.
How is innovation helping you provide solutions to the offshore industry?
We invested in our first laser scanner technology recently and consequently realized the benefit and potential this was able to provide and as a result we purchased two more. One interesting project involved scanning a significant amount of pipework in the engine room which had to be replaced on a low budget over a period of time. We scanned the whole engine room, and produced a complete set of piping isometrics for the customer – these can be called off as required and prefabricated before installing them on board. It requires minimum welding on the vessel and involves limited labour because all the parts had been pre-fabricated in our workshop.
You have talked a bit about being ahead of the game. Where do you see Harris Pye in 5-6 years here in Singapore?
With the current FPSO market shrinking, the Group has recognised the requirement for adaption. We have reacted rapidly, and are now ready for the new market paradigm. Singapore has established itself firmly as a centre for our operations with Harris Pye’s ambition to develop a bigger workshop and move into the subsea realm. As an example we have just undertaken induction bending and heat treatment on specialized piping for a blowout preventer (BOP) being refurbished in Singapore. Our goal with the new facility will be to set up everything in-house, meaning if a client requires an induction bending or heat treatment work scope we can provide the solution.
It is often very difficult to start something from scratch with a completely new company. The way forward — which I am a firm believer in, is if one has the capital to obtain a small company that already does specialty work, then it is wise to buy that expertise – later the larger company can provide the resources to fuel growth. This is the principal idea with regard to subsea hydraulic works — identifying a small hydraulic company, taking them over, using their expertise and expanding it.
We have big plans here: Singapore is a big hub for the offshore industry.
Considering the strategic direction that you have brought to the Singapore office, how would you describe your management style? How will you ensure that Harris Pye will respond to the fact that Singapore is the hub for offshore oil and gas?
The goal at the end of the day is to direct concept work to the design and project team management in Dubai and for them to use the rest of the Harris Pye network to fulfil the requirements. Everything for offshore will be run out of Dubai whilst here, we will still complete our own boiler work and marine repairs directly.
The Dubai office will react to wherever the project is, and subsequently will effectively commission Harris Pye Singapore to fulfil the requirements within the geographical footprint. We also see ourselves undertaking a large amount of fabrication work in our shops as opposed to on board vessels. On a global basis, if one arm of the company is experiencing a quiet moment, it can pick up the slack for another part of the group where we have workshop facilities, be it Europe, South East Asia, Middle East, Africa or South America.