Alasdair Cowie, MD, Cortez Subsea, Aberdeen, UK
Alasdair Cowie discusses current developments for Cortez Subsea including the company’s ambitions and strategy for growth, its Zap-lok technology and modular pipelay systems. All this is discussed in the wider context of the ageing assets in the North Sea giving a clear indication as to Cortez Subsea’s abilities to deliver for his clients. Mr Cowie also details how his love of the sport of rugby assists him to motivate his staff and encourage teamwork.
Cortez Subsea was created in 2010 and enjoyed a fruitful period of investment in 2013, culminating in a new office due to the doubling of its workforce. What opportunity in the market led you to create the company?
Many subsea contractor companies who entered the market in the mid-2000s to 2010 didn’t have the full spectrum of services required to be truly successful on their own. I saw a gap in the market where a new, service-oriented company could support contractors using technology focused on pipelines and inspections to reduce subsea costs.
We created Cortez Subsea four years ago and have been building the business ever since. In that time, we have built a solid reputation for advancing technology and maximising value.
In terms of your inspection, pipeline and ROV products, what are your principle generators of revenue? What are your growth drivers?
Pipelines will be the key growth area for us, especially with the continued development of our modular pipelay system (MPS) using Zap-lok technology and suite of subsea inspection software. We are also advocates of fostering cooperation. For example, through our partnerships with two companies that grant us access to their substantial fleet of ROVs we are able to provide the industry with a tailor-made solution to its inspection needs.
Have there been any contracts which you felt were seminal to creating a foundation for Cortez’s reputation?
We have had a number of important contracts both in the Mediterranean and West Africa since 2012. We are also starting to see the fruits of our investment in the MPS and Zap-lok technology, and we see this technology as important for the future of the oil and gas industry in terms of providing safe, efficient and cost effective installation of subsea pipelines.
What are the advantages and capacities of the Zap-lok technology over welded pipe?
Quite simply, Zap-lok is quicker and cheaper. Our Modular Pipelay System (MPS) technology is more cost effective than the conventional method as it reduces the number of staff required offshore and allows pipe to be deployed from any readily available DP2 vessel.
Three of the major international operators have approved the use of Zap-lok for global subsea operations in the past two years. Operators need to make tiebacks and completions cheaper in the North Sea and using Zap-lok allows them to do so.
You are currently offering services to both start up and decommissioning projects. A leading industry figure told us that he felt high oil prices were creating a ‘bow wave’ pushing back decommissioning. To what extent do you agree with this assessment, and what is the current balance with regard to new, existing and closing projects in your portfolio?
The government in the UK has made clear that the objective is to extract as much oil as possible, but CNR, for example, has now stopped production on Murchison, one of the biggest ever offshore platforms in the world.
It is a myth that decommissioning is something new. I was on the Board of Decom North Sea for two years when it was inaugurated and I can assure you that decommissioning has been going on for the past fifteen to twenty years in the North Sea. People tend to think of decommissioning as simply taking apart platforms, but well heads, pipeline umbilicals and small platforms all need to be taken out. Forms of decommissioning like subsea well abandonment have been done for years and millions are spent annually on these operations. For companies in the North Sea, decommissioning is a reality, to a varying extent depending on how a business is set up.
Is Cortez Subsea engaging in these decommissioning opportunities?
Decommissioning is not a big focus for us but if the task at hand for our pipeline, products, and inspection involves decommissioning, then we will do decommissioning work. We are not primarily set up as a decommissioning company however. There are already too many such companies in the market.
Cortez Subsea has secured its first contract win in Ghana for pipeline inspection work – what further prospects does Cortez consider are available for international expansion?
We are looking at West Africa, the Mediterranean, the Caribbean, especially Trinidad and Venezuela, the Middle East, and the Far East. A lot of operators are looking at Zap-lok for areas that are not necessarily deep water around the world.
In 2013, you stressed the need for collaboration as an engine for innovation in the North Sea. Can you tell us how your partnerships are helping you forward your business aims? How, for example, do you use collaborations as a gateway to foreign markets, and what do you look for in an ideal partner?
The partnerships we have are through people I have worked with in different guises for the last twenty years and these types of relationships are an integral part of bringing technologies to new markets.
For example, we are currently completing work and have work scheduled with OTSL in Trinidad, while we are also bidding for other work in the region in Venezuela and Colombia. Having a sound relationship with OTSL has definitely been beneficial. We also have a partnership for MCS data management on the software side in Egypt.
What is your assessment of the companies and skills present in the North East of Scotland?
Aberdeen is now and has always been very good in the subsea area but you could argue that it is pricing itself too high. This may work against the city in the next five years, as people will come here to learn the skills and disperse elsewhere.
Where do you feel that new technologies could reduce costs?
The inspection software we use allows us to reduce the number of people needed on board for pipeline and structure inspections, to stream data in live time for onshore data processing for a fraction of the cost. The Zap-lok pipeline also saves companies money.
The challenge in the North Sea is that there exists at times an unwillingness to move away from conventional practices. Although the management may understand the benefits and operators seem to be coming around, the lower level management are still hesitant.
Some companies have told us that the managers in large operators are not eager to give contracts to smaller companies. How are you competing as a small company, and how will you get this message through to these managers?
We will get the message across through perseverance and by demonstrating how our work has been successful in the past. Sometimes big companies do not like giving work to small companies, but small companies provide a much better and more focused delivery. You have to challenge the conservative nature of the operator to fully change this trend, while procurement rules and regulations also have to be more flexible.
As a rugby enthusiast, what parallels do you see between motivating a team on the pitch and generating a healthy working environment here in the company?
In my business, as in rugby, all members of the team play an important part. There are no prima donnas, and it is essential to work for each other to deliver, whether it is onshore, offshore, management team, staff, or contractors. Cortez Subsea also has a clear game strategy and executes it. If we properly execute the strategy, we will score the points. It is harder as you grow to maintain this ethos, but we are trying to maintain these values as we develop as a business.
Do you have an advice for young entrepreneurs in the oil and gas industry?
I would tell young people to enter the oil and gas industry as it provides the avenue into a wide variety of other sectors in the future. If you are not scared of hard work you will go far.
To succeed in the industry, I would recommend apprenticeships. People need to be trained technically, as these skills are lacking in the market. Technicians, in both electrical, mechanical and hydraulic areas now come from overseas as there is not enough supply in the UK. The industry offers life-changing opportunities to many technicians, especially for employees that work offshore.