True to style

The 2014-15 oil price collapse has unquestionably severely dented confidence in the global offshore oil and gas industry, with job losses above 150,000 and tendering largely on hold.

Sander Vergroesen, managing director, the Association of Dutch Suppliers in the Oil & Gas Industry (IRO)

But, true to style, the Dutch are not panicking. While many are having to make adjustments to their businesses, as operators cut or delay spending amid US$60/bbl prices, backlogs are still being worked through and there are still opportunities.

When markets change, the characteristically innovative and adaptable Dutch are able to respond accordingly, says Sander Vergroesen, managing director, the Association of Dutch Suppliers in the Oil & Gas Industry (IRO), be it offering new cost saving solutions or looking to new markets, such as renewables, decommissioning or emerging economies across the globe. They also have a trump card – the willingness to work together.

“Our business is one of boom and bust,” Vergroesen says. “This is the third drop since 1996, so we have seen this cycle before and most of the companies, they have seen this coming, more or less. Yes, it was sudden, but there had to come a time for the industry to slow down a bit.”

Many companies are still busy, fulfilling existing orders, but the next year and a half will be a challenge, because order in-take is at a minimum level, Vergroesen says. “The operators are waiting to see what is happening with the oil price, so all the decisions are being postponed.” But, there are opportunities, he says. “If you come up with solutions, which can reduce costs, that’s what everyone is looking for. There are opportunities in other parts of the industry, too. Companies that can use their knowledge and equipment for decommissioning oil and gas fields, for example, could find that they will be using it on decommissioning sooner than they thought, because decisions to shut down fields could be taken earlier than originally expected.”

Wagenborg’s Kroonborg multi-purpose vessel. Photo from Wagenborg.

Vergroesen says the Dutch also see opportunities in countries where, despite the oil price, there is still a growing demand for energy and the local governments wish to draw on their own reserves instead of importing oil and gas. “That’s an opportunity in the future and they often need help doing this,” Vergroesen says. “They need the knowledge and that’s what we have.”

IRO recently ran a trade mission to Mexico, a country that has decided to focus on unlocking its own reserves, the result of which has been major market reform enabling the entry of internationals in the country after a long state monopoly. “We see more of these areas coming up,” Vergroesen says. “Of course it takes a while, but there are opportunities. Abu Dhabi has allocated $25 billion for offshore developments, this is another example.”

As a once major maritime nation, with considerable engineering skills developed over the years at home and overseas, the Dutch seem to have maritime engineering in their blood. But, they also have another skill, which has meant they’ve been able to leverage each individual company’s strengths – the willingness to collaborate.

An example of how the industry collaborates to create new solutions is the Kroonborg, a walk-to-work vessel designed by Wagenborg working with Dutch operator NAM and supermajor Shell and built at Dutch yard Royal Niestern Sander Shipyard. It uses walk to work technology from Dutch firms Ampelmann and Barge Master (see page DO-23).

“That is the kind of solution operators are looking for,” Vergroesen says. “Instead of flying crew to a facility with a helicopter, which is sometimes grounded by the weather, or boats, which only work in a certain wave height, they can use this and stay on board, going from one installation to another with ease. You can also use a crane on this vessel with these waves because of the Barge Master system. This kind of solution, where operators, suppliers, work together is a Dutch solution,” Vergroesen says.