John Pearson, Group President Europe, AMEC, UK
“The UKCS market is very busy. The Norwegian continental shelf is undergoing a coincident spending peak in their history. There’s work in conventional power and nuclear new build. The outlook for the international capital projects market is also strong,” John Pearson, Group President Europe of AMEC says of the UKCS market.
Prior to 2013, AMEC was managed through three divisions: Natural Resources, Power & Process and Environment & Infrastructure. Nowadays, reporting is on a geographic rather than sectoral basis. What was the rationale behind this organizational restructuring?
The ultimate aim of the reorganisation was to drive increased levels of growth. We have multiple geographies and four main cross-connecting markets. We wanted to devise a structure that would enhance our internal collaboration. Having very strong horizontal market organisations encourages us to take the best expertise and individuals within the company and place them into the best projects, wherever those projects may be in the world, at a single point in time.
When you were appointed head of European operations in October 2012 what were the priorities you set?
The first priority was to form a single team out of our oil and gas, environment & infrastructure, and clean energy components. Secondly, it was important to elaborate a clear strategy that was strictly growth orientated. The strategic imperatives we resolved upon were to be sales-led and place greater focus on our customers. We have actually put a huge amount of energy into understanding the business from our customer’s perspective and have harnessed that understanding to drive the company forward.
What factors do you believe led to AMEC recently winning contracts with the oil and gas majors here in the UKCS?
At AMEC, we pride ourselves on understanding what we do best and then specifically targeting those kinds of projects. We have won lots of contracts because we are excellent at what we do. In brownfield projects, for example, there is no one out there better than us. I would be happy to take comparisons with any other company on how we execute brownfield projects. When you couple that level of technical competence with a genuine belief in forging relationships with your customers, there will always be extra opportunities to grow.
Establishing dialogue with customers is crucial in terms of the feedback it brings. What feedback is AMEC currently receiving from its oil and gas customers in the UKCS?
It helps to distinguish between feedback from individuals and feedback from customers as a whole. The most useful feedback doesn’t really come from Apache Corporation. It comes from a Mr ‘X’ or a Mrs ‘Y’ within Apache Corporation who has been working with us on a specific assignment.
In general terms, I think we are regarded as being technically excellent, as possessing very good personnel and as focused on relationships. This means we are less argumentative, less commercial and more in tune with what the customer actually wants. We also have a reputation for providing solutions that actually work in the long term.
You can buy many things in life cheaply, but the cost of owning those things only surfaces later on. With oil and gas platforms, one percent of uptime is worth a vast amount of original capital cost. We understand this and know that when a contractor doesn’t deliver on his promises, the costs for the client are very high. The sorts of projects that we undertake are either technically complex or complicated by issues such as supply chain or geography. It is therefore even more important from the customer’s perspective that the solutions that we provide work and are able to do so over a sustained period of time. It is because we understand this that we have been able to establish ourselves as a market leader for really difficult brownfield projects.
Where do you see most of the demand coming from on the UKCS?
Brownfield projects represent a huge market for us and one that is rapidly growing. This year we see record high investments on the UKCS and we forecast that this level of spending will continue over the next few years. Today, we operate at much greater capacity than what was considered normal a decade ago. When we install projects, we then have to operate and maintain them so the asset support market will be very strong going forward too. We are currently exploring innovative ways to support our customers with their ongoing operations.
The UKCS market is very busy. The Norwegian continental shelf is undergoing a coincident spending peak in their history. There’s work in conventional power and nuclear new build. The outlook for the international capital projects market is also strong. We service projects round the globe out of both our Houston and London operations.
What is AMEC’s strategy to attract new workers? What makes AMEC the employer of choice?
I have heard many stories about the industry having recruitment problems, but that’s absolutely not my experience. We have never hired as many graduates and trainees as right now, and we could hire several times more than we actually do. Who wouldn’t want to be in oil and gas, clean energy and environment sectors right now?
AMEC has hired thousands of people. We treat resourcing as a core part of the business and therefore have a really sophisticated model for predicting what resources we need and for delivering those resources to the business. This is partly about graduate and trainee hiring, but also about dealing with the peaks and troughs of normal business. We are simultaneously making strategic hires. Currently there are certain parts of Europe where the economy has not been performing. In those places, there are some very talented and technically competent people who have the sort of experience that plays directly to our industry. Often, these people are very keen to relocate and eager for opportunities that they cannot find domestically. We have been very active in hiring those types of people and this is a key part of growing our business and moving forward.
AMEC is working on some really great projects and that makes it easy to hire new people. Engineers want to work on exciting cutting edge projects, so if you have those projects as part of your portfolio, you will attract the best workers. Then, if you have the best workers, your customers award you the most exciting contracts. It fast becomes a positive spiral.
Skilled workers have many job offers in the oil and gas sector. To attract the best workers you have to sell them a vision. At AMEC, we have a clear strategic vision, have grown well, and have exciting projects coming in as well as a customer base that is very satisfied. This all helps to make us an attractive place to work. People like the fact we have invested so much in our processes and systems. If you are ambitious and want to learn about brownfield projects or greenfield projects then AMEC is surely one of the best places to come.
What are the latest technologies implemented by AMEC?
We are keen to bring technology to market faster and have been collaborating with Malcolm Webb of Oil and Gas UK to explore ways to do this. At some point in the future, when production levels eventually decline, the UK oil and gas business will predominantly become the supply chain. It is therefore strategically critical to start developing the UK’s technology competence. In 50 years’ time the UK won’t be exporting commodities, but technologies. At the moment, many people regard the UK as one of the leaders, if not the absolute leader, in subsea. The UK really needs to find other such domains where it can really excel.
People tend to think of technology in terms of a shiny metal object. At AMEC we have a much broader conception of technology as the ability and intelligence to complete a technical task. It can be about having the knowledge and skills to safely deliver a project that’s never been done before in a part of the world that doesn’t have a track record. It can be about having the know-how to successfully execute and sustain an incredibly complex project. Technology lies at the heart of what we do. Along with talented personnel and well-managed customer relationships, technology is fundamental to our success.
Over the last five years, AMEC has reinvested millions in a program called ‘operational excellence’. The program entailed analysing all aspects of our business and operations with a view to identifying improvements to how we function. Because we have invested heavily in systems, control and processes, we are able to demonstrate to our customers that we operate in an integrated and joined up fashion and can reassure them that we will be able to deliver successful solutions that will be sustained long-term.
When we come back in three to four years, where will we find AMEC?
We will have grown both domestically and also internationally through greater partnership with different parts of AMEC around the world. When you are really good at a specific area such as the UK subsea industry, you need to export it to address the world markets as opposed to just the market that you can see out of the window. I’m really optimistic that more and more of the skills and talents we are building here in the UK will ultimately be deployed around the world. We are, of course, doing much on this front right now, but we’ll be doing even more in the years to come.