Dutch Offshore Services: In Good Shape despite Oil Price Pain

By Jon Mainwaring

In late March I was invited to Rotterdam to meet a group of companies that supply the oil and gas industry in the Netherlands and beyond. It was a whistle-stop tour of half-a-dozen firms, as well as meetings with trade bodies that represent suppliers, and I met enough people who work within the offshore oilfield services sector to be able to gauge its mood. That mood is best summed up as: “We’re not hurting yet, but 2015 and 2016 could be tough years.”

Many of the oilfield services representatives I met were mindful of the need to innovate in order to stay relevant to the offshore industry. For example, Peter Zoeteman – managing director of trade body Netherlands Maritime Technology – pointed to Huisman Equipment, a Rotterdam-based firm that is investing in developing technology to completely automate drilling processes.

Meanwhile, a manager at Damen Shipyards told me that although the drop in the oil price was likely to have an adverse effect on the company’s business, in the long run he was “optimistic” because vessels always need upgrades.

The family-based nature of the Dutch oilfield services industry provides another reason for optimism for those who work in that sector. A number of the best-known firms in the country are owned and managed by families who have invested much time and effort, sometimes over several generations, in building up those companies into the sizable entities they are today.

For example, tug-boat firm Kotug Group, which gets some of its business from the oil and gas industry, is today run by Ard-Jan Kooren – whose father Ton Kooren established the company in 1987 and whose family have been in the tugboat industry since 1911. Such people have a legacy to protect and build upon. And they are there for the long term, so they do not tend to be influenced by the short-term considerations that are more likely to occupy the minds of CEOs who prefer to play the usual game of boardroom musical chairs.

They also have the kind of vision required to bring about the construction of the Pioneering Spirit, whose breathtaking scale I was delighted to see for myself thanks to a boat trip around the vessel courtesy of the Port of Rotterdam Authority. The world’s largest platform installation and pipelay vessel, the Pioneering Spirit, is the brainchild of Edward Heerema – the president and founder of Allseas Group, who also comes from a family of offshore entrepreneurs.

Since my trip a month ago, the oil price has strengthened somewhat but it seems that the Dutch offshore services industry is in good enough shape to get through any further oil price pain.

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