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Swire sees buoyant global outlook for offshore boxes

Swire sees buoyant global outlook for offshore boxes
Swire Oilfield Services has set the objective of growing its annual turnover from £125million to £250million over the four years to 2014.

Swire Oilfield Services has set the objective of growing its annual turnover from £125million to £250million over the four years to 2014.

However, most growth will be global rather than in the North Sea, where the accent will largely be on high-grading its huge fleet of specialist containers deployed in the offshore oil & gas industry.

According to SOS director and commercial manager Roy Burrell, the UK-Norway markets account for about 80% of the current annual figure and, between them, around 300 jobs. The firm commands a 60-70% North Sea market share.

“We reckon there are 4-4.5million tonnes of goods that go across North Sea quaysides annually, and the vast majority of that has to be packaged into containers,” Burrell told Energy.

“For me it’s the criticality of what they (client companies) see as being simply a steel box or basket. But if they don’t have those then the whole industry grinds to a halt.

“In some ways we’re the bottom of the food chain, but we’re a very critical part of that food chain. It’s not just provision of a steel box but a service to support offshore activity.”

SOS came to the North Sea more than 30 years ago, starting out with about 3,000 containers.

“We now have almost 20,000 units operating from the UK, the majority of which are out of Aberdeen. Worldwide and its 45,000 units, again the majority serves the North Sea,” said Burrell. “Effectively, two thirds of that container fleet serves Northwest Europe.

“Growth of the North Sea workforce is in part contingent on a successful debut in the renewables market. During the last oil price dip we didn’t lay anyone off and that put is in a good position to resume growth generally.

“We also see growth linked with decommissioning. Depending on what you read there is over £30billion of decommissioning activity to take place over the next 30 years. We already have experience of that in Norway.

“And we see growth through adding value to the steel box through investment in tracking technology such as GPRS and other radio frequency ID tagging to make management of the fleet more efficient.

“A further opportunity is higher value products such as modular workshops … what Schlumberger refers to as cabins … boxes to house pumpsets, winches and a whole range of equipment and products for which there is a growing demand for.”

While that market share is set to decline as other target areas worldwide gain traction, nonetheless, Burrell still sees expansion opportunities, including the untapped maritime renewables market, which is currently embryonic.

Growth is going to come through acquisitions, including recently, US company Gator Tanks of Louisiana and organic expansion. The company is looking to set up further manufacturing plants, such as in Brazil and India.

In such markets the emphasis will be on local content and local plant, though it may be necessary to import the grade of steel required to fabricate the specialist containers.

With global expansion in mind, SOS announced in December that is was setting up an area office in Singapore and in January that it was setting up a subsidiary in India.

India is both ripe for the picking and a huge challenge. Offshore industry attitudes and practices there do not match those of the North Sea.

Burrell: “They’re still shipping a lot of goods offshore on pallets, or banded in drums and crates, without any recognition of the dangers and risks that presents from a lifting and transfer point of view.

“The experience of the North Sea means that standards have been developed to a much higher and safer level.

“The containers that we supply are designed to take all the lifting and dynamic forces that they are likely to encounter in service.

“Their robustness means that goods will almost invariable reach their destination offshore safely, dry and in good condition.

“It’s a very efficient and effective way to transfer goods with negligible loss of integrity or value.

“In the North Sea the standard is specialist supply vessels with wide, clear decks.

“They’re designed for taking cargo in containers into situations where it can be a very rough, aggressive environment where you can have a vessel heaving and rolling in close proximity to a static platform, its cargo being successfully handled by the platform’s cranes.

“However, if you have an oil and gas installation in a benign area and in shallow water, like India, they might get away with a much smaller, perhaps adapted vessel that wasn’t specifically developed for the offshore industry.

“They may not have the space or craneage available to handle containers, so instead they use pallets, wooden boxes and other things.

“They’re not even beginning to think about steel boxes because they don’t have sophisticated supply chain infrastructure as does the North Sea.

“As a result, you can end up with loss of cargo, damage to cargo and significantly less safe handling practice.

“What we’re trying to do is bridge the gap in a phased way between where countries like India are now and where we expect them to be in the future.

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