Bristow Helicopters has been around forever in the North Sea. Indeed, the group’s Europe division is by far the largest of five geographic units. With a turnover of about $800million, it accounts for 70% of group revenues and more than 70% of profits.
“Europe is the stronghold of the company and generates good profits, though the primary driver is return on capital,” divisional MD Richard Burman told Energy.
“We operate 38 helicopters out of five bases … Den Helder – Netherlands; Norwich, Humberside, Aberdeen and Scatsta in the UK.
“However, we have had an affiliate, Norsk Helikopters, in Norway for some years and very recently acquired the remaining 51% of the shares in that, so we now own Norsk in total. We’ve had that relationship for about 15 years in partnership with the Ugland family.”
So why buy now, especially given the instability of global financial markets?
“I think the time was right for us and the partners. Norsk had a subsidiary called Lufttransport, which is an aero-medical business and largely fixed-wing. We decided that the Uglands would take that portion of the business and we would take the oil&gas side. That keeps us in our core sectors of oil&gas and search and rescue.
“We needed to inject a bit of capital into both businesses anyway. It was mutually very agreeable and a good time to do it. That further strengthens the European position as Norsk becomes added into the revenue stream … another $120milion of turnover a year.”
However, while Bristow’s main focus will remain North Sea for some years yet, Burman is clear that international expansion is now very important – countries such as Ghana, Libya, Malaysia and Kazakhstan.
The company, which was recently subject to an investigation by the US Securities Exchange Commission forbribery and under-payment of taxes, has had a sizeable global footprint for several years. For example, the Australian business has shot from five to 24 helicopters in the space of three-and-a-half years.
Nigeria is significant, too, with more than 40 aircraft currently deployed there. Moreover, Burman reckons this part of the business is making headway, though it is a tough place to work.
However, the company has not managed to establish in Angola despite its growing importance as a producer.
“We should have been there six or seven years ago, but missed the opportunity. It would have been a good place,” said Burman.
On the new targets, he said: “Ghana may develop, but I think it’s a bit like Equatorial Guinea … the coastline is relatively small, though there’s a lot of hope for the Jubilee oil discovery.
“We have flown our first contract down there in the last six months, so we have a presence and see that as part of the future; Libya, too, where we have contracts.
“We have been waiting for Kazakhstan to develop and, with the change of operatorship of the Kashagan development – Agip has given up in favour of ExxonMobil and Shell – there’s scope for a new relationship and we would like to be part of that, even though working there is very difficult.”
But what about the Arctic, especially the Barents Sea, where Gazprom is pushing on with the huge Shtokman gas development?
Burman: “We’re not sure how that’s going to play out. Obviously, Gazprom holds sway there and it has an aviation company called Gaspromavia; and they are buying new technology aircraft … the EC225 … we think. If it operates from Norway, I think we could be well placed for that work. At the moment, Gazprom’s saying they’re going to operate it from Russia … very long-haul with extra tanks and all the rest of it. It will be the longest missions flown and I think only the EC225 will be able to do it … maybe the S92, too, though the EC225 is favourite.”
Might Gazprom license it?
“Possibly, if they’re smart. Because Gazpromavia has no offshore track record, they’ll possibly acknowledge there is existing expertise that they really do need.”
Adding to Bristow’s credentials in this regard is the fact that the company has operated in Sakhalin for a number of years.
“Shtokman is exciting; it would be very prestigious to get that contract because of the nature of the operation.
“Meanwhile, we’re in Sakhalin for another year, possibly two. There are moves by the Russians to take over the operation, so there’s no long-term future for us there.”
However, beyond Norway, Shtokman and Sakhalin, Burman admitted to being unconvinced about the talking up of the Arctic resource.
“It’s almost like deepwater West Africa, which took a long time to get going. Yes, there’s stuff possibly coming through in the Beaufort Sea. That’s not part of my division, but Bristow Group is interested in that, obviously.”
So where is the big opportunity for Bristow Eastern Division?
Where does Burman expect to be in five years in terms the company’s balance of international trade?
“One of our business units is called Other International. It looks after places like Sakhalin, India, Egypt, Kazakhstan, Turkmenistan, Mauritania, Libya, Ghana – the emerging markets.
“That generates only $50million a year of turnover. I see that growing significantly over the next five years, and we’re bidding on two major contracts at the moment. If we get them, it will more than double the size of that business overnight. These are long-term contracts that will give us core business in two critical markets … one in the Caspian, the other in the Far East.
“In the case of the Caspian, if we do, we’ll be able to create a Caspian hub around Azerbaijan, Turkmenistan and Kazakhstan.
“That’s very important to us and we would open an office in Baku to look after that sector of the business. We would link in Sakhalin, too.
“In the Far East, we have a large tender for Chevron in Thailand. If we got that, we would set up a south-east Asia hub in Bangkok which would support Malaysia as well as Thailand.
“Over the last three-plus years, we’ve thought about China. We were there and have withdrawn; we’re thinking about India, but can’t get our minds around how to do that model; prices are very low and we’re interested in making a profit.”