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Interview

David J. Mackay Executive Chairman, PD&MS Energy, UK

“While we grow as a company we have acknowledged that one size does not fit all—there is a huge recognition of that fact. The companies we are working for are making significant investments in order to upgrade infrastructure in the UKCS, and we are ready to support them with our broad range of services,” states David Mackay of PD&MS Energy.

 

In 2013, PD&MS opened an office in Baku, Azerbaijan to support the company’s international growth. How has your internationalization strategy reflected on your order revenue stream?

The first steps were taken to enter the Brazilian market, and, in early 2011, we began to work on our first contract. It takes four to five years to establish oneself as a recognized player on the Brazilian market, which is exactly what we have achieved.

The opportunity arose to open an office in Baku, Azerbaijan, and this undertaking was easier to set up. PD&MS secured a major engineering contract with an oil major, which will see the Aberdeen-based business provide platform engineering services and upgrades to support platform based drilling package projects in the Azerbaijan-Georgia-Turkey region (AGT).  We will create 25 jobs locally with an additional 35 to 50 positions being created in Aberdeen to support the Azerbaijan based project delivery team. The contract initially covers support to numerous offshore facilities in the Caspian Sea with the further potential for support to onshore facilities, and will be the company’s largest overseas contract to date. This contract is a major step forward in our internationalization strategy, and we expect a phenomenal amount of work and revenue coming our way in the AGT region.

What have been the lessons learned from operating in a challenging market such as Brazil?

First and foremost, do not be in a hurry.

All the preliminary work has been completed: banking, finances, an agent has been set up and we have offices if we need them. It has been a huge learning curve for me as an individual, as I was solely responsible for our operations in Brazil. It is a challenging market but it has lots of opportunities.

As PD&MS becomes an even more global player over the coming years, how important will its Aberdonian roots and identity remain?

Our Aberdonian roots and identity are absolutely fundamental to our success. Aberdeen is recognized as a centre of excellence for the oil and gas industry. In fact, we are looking at relocating to a new office in Aberdeen. Currently, we have around 210 people working for PD&MS from its various offices in the centre of Aberdeen, with a further 130 trades personnel offshore at any one time, but we are looking to secure Aberdeen office space to house up to 400 personnel as part of our continued growth plans. Whatever the future may hold, PD&MS will most definitely remain a part of the landscape in Aberdeen for many years to come.

What were, according to you, other key developments of 2013?

A main milestone of last year has been a long-term contract with an oil major operating in the Norwegian sector. This contract will see PD&MS deliver engineering, procurement, and offshore construction services for predominately drilling upgrades associated with the oil major’s platform based drilling packages.

The contract award has provided us with a steep learning curve, and we have taken this model to support the oil major in the Caspian region as well. However, the centre of excellence will remain in Aberdeen, and all technical design engineering will be done from here, which is more cost effective for the client.

PD&MS’ single most important differentiating factor is simply the speed at which it reacts. You mentioned earlier: “In big companies, enquiries have to go through long and cumbersome processes”. Now that you have grown substantially and opened offices abroad, is this still true?

While we grow as a company we have acknowledged that one size does not fit all—there is a huge recognition of that fact. The companies we are working for are making significant investments in order to upgrade infrastructure in the UKCS, and we are ready to support them with our broad range of services.

At PD&MS, we are trying to retain the positive aspects of working with a small company, such as the one-to-one service, the speed at which we react, fit for purpose solutions and getting things done; all whilst delivering the big-company benefits our clients demand.

Encouraging more collaboration between companies is one element that could help the industry forward according to Sir Ian Wood’s review. Would you agree?

Absolutely. We might not be involved with a production sharing type of collaboration but from a project level we are committed to collaborating with the client. With some clients, we collaborate to such an extent that we help to work up their own budgets, scopes of work, and make office space available for them to fully integrate with our design and project delivery teams—we become so deeply ingrained that we collaborate at all levels.

Among the supply chain we also see increased collaboration. At PD&MS, we have undertaken to create a “lessons-learned database”. People in the industry are making similar mistakes and if this information would be shared more effectively, this would bring the industry as a whole forward.

How important do you see decommissioning becoming for the PD&MS, and how well are you placed to grab those opportunities?

We have an established relationship with one of the major players in decommissioning that has a first rate facility in one of the yards in Norway. This client has approached us to assist them with the engineering element of the decommissioning. As a result, we will jointly tender for various decommissioning projects.

One of the UK‘s earliest and largest oil and gas development projects, Brent, is currently in the progress of being decommissioned, and I expect to see several other decommissioning projects completed before the end of this decade. Decommissioning is definitely gathering momentum.

At a time of skill shortage affecting the entire industry, what does PD&MS offer in order to attract and retain talent?

PD&MS runs a very lean structure from a management point of view. There is no room for elitism in the company. Management is very approachable and work is done side by side. The company has created an informal, open, and flexible working environment, which is highly appreciated. In addition, our engineers get exposure to loads of different types of projects. As a result, many of our employees have been with us for a long time.

In 2013 the PD&MS Energy businesses demerged from the Wilton Group. What was the rationale behind the demerger?

The company’s growth in 2006 and 2007 was a huge turning point for PD&MS, which eventually led to the acquisition by Wilton Engineering Services Limited, a company based in Teesside and mostly focused on fabrication and vessel mobilizations.

However, as a synergized group of companies, this turned out to be less successful than expected in 2008. Therefore, it was decided that Wilton Group would continue to focus on its core business, while PD&MS is back doing what it does best, providing design and engineering services to the oil and gas, drilling, production and marine industries.

Last year PD&MS celebrated its 10th year anniversary. On a personal note, what would you like to have achieved by the company’s 15th anniversary?

Our aspirations are to grow the business in a sustainable way based on our reputation of quality delivery. At PD&MS, we sell ideas and expertise and have a new office full of ambitious people supporting primarily the UK sector and various parts of the world.

Our objective is to conclude more contracts with blue chip clients for engineering services to the oil and gas, drilling, production, and marine industries. Currently, we are reactivating our facility in Dundee, and we are expanding our services to mobile drilling rig upgrades.

In conclusion, our vision is to have between 400 and 500 people working for PD&MS with lots of contracts on the shelf. Our company should be the first name on our clients tongue.

 

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