An in-depth development strategy conceived for SBM Offshore
Saskia Kunst, Group Strategy Director at the Dutch company, tells how she can handle successfully such demanding role in the challenging oil & gas field
In January 2008 it took only 48 hours in her new capacity to be asked by her brand new employer to conduct meetings in Australia in order to discuss, on the company’s behalf, an important new FPSO contract.
Probably the faith in the manager’s capacity was more than thanks only to the fact that Saskia Kunst is a compatriot to SBM Offshore NV, albeit she works in the Dutch group’s headquarters in the Principality of Monaco. In fact she was ‘trained’ as an international manager along 12 years spent in the ports and terminals industry in Asia and Europe at multinationals such as Hutchison Port Holdings (1995-2000) and PSA International (2000-2007).
The following years in the offshore field have proven that the employer’s trust was not groundless: six years after joining SBM, Kunst is currently Group Strategy Director, responsible also for Mergers and Acquisitions and Member of the Executive Committee.
In this capacity she recently did an interview with the specialised offshore magazine Rigzone which is partly reproduced hereinafter.
Most of the new reservoirs being discovered are in ever-deeper waters in more remote areas, which go hand in hand with more complex projects with higher pressures and temperatures.
“In fact our core products, the Floating, Production, Storage and Offloading units (FPSOs) that SBM is currently providing, have increased in complexity due to requirements from our clients that are producing oil from these reservoirs” Kunst states. “Since late 2011 we’ve adopted a completely refocused strategy around FPSOs and related systems. We are concentrating our invested capital and are much focused on an appropriate risk-reward balance. We would like to work in a way that creates profitable, sustainable solutions for our customers and other stakeholders and properly reward us for the risk we take along the full product lifecycle.
It’s been a very deliberate choice to focus our capital, talent, management and marketing efforts on our core
business as in these areas we have seen consistently good results. The market outlook shows that
there will be plenty of opportunities in the coming years, so we will be able to stay focused on that core offering.”
Kunst’s role, in conjunction with the Board, is to find what is meaningful in all information around the broader state of the markets, commodities pricing and investing, and apply it to the company’s strategy. “We assess the macro trends as well as the big global shift in areas of supply and demand for oil and gas, capital and talent”
Another element to consider is that there is also a longer timeline between initial discovery and final investment decision to consider while planning. “We live in an environment where geopolitical elements influence the wider energy mix, supply and demand, and commodity prices. All of these elements can clearly have an impact on contractors such as SBM Offshore”.
The Dutch manager notes that the whole industry is dealing with an age gap that will need to be covered with the right people somehow. “Of course, we want to attract and retain talent for our own company but as an industry we are all facing significant challenges to getting all of the required talent in place. It’s a great
industry for commercial, finance and business administration roles. As an industry, we definitely need to build the pipeline of new leaders. The oil and gas business is a very strategic sector; for decades to come, it will be developed according to trends in the overall macro environment. It’s also a very international environment; this creates a dynamic that is also attractive. We work in a business where technology, finance and commercial considerations all come together. This can also be appealing to individuals”.
Kunst’s role as group strategy director at SBM Offshore differs from previous ports and terminals roles in Asia and Europe.
“In my last experience in Italy at VTE I also had to manage many operational issues. It was challenging to deal with the very unionized workforce in Italy and very demanding shareholders in Asia. In SBM, I worked in a group function, reporting to our company’s CEO. I worked jointly with our Management Board on the strategic transformation of the company and positioning ourselves for the future; this includes the development of a long term, 10-year vision. We’re also looking at strategies where technology plays a key part in keeping our competitive advantage”.
Kunst believes, at the heart of being successful, there is hard work and the need to invest a lot of oneself. One also have to be ready physically to possibly travel and work long hours whilst maintaining a healthy work-life balance.
“Professional life is not a series of continued successes: we all will face setbacks. But if you can look back and say that you performed your work in a diligent, scrupulous, responsible way, you should continue to believe in yourself and your team and be determined to overcome the challenging times. The resulting reward is in the teamwork that often takes place during these periods. It also makes you more mature and ready for the challenges ahead and increased responsibilities”.
Malaysia, Brazil, Italy among recipient countries of SBM alleged big bribery?
Oil and gas shipping firm MISC was named in a legal document allegedly leaked by a disgruntled SBM employee as one of the bribe recipients in a global scandal involving Dutch maritime engineering group SBM Offshore, according to media reports and to a Wikipedia entry pasted anonymously in October 2013 and has since been removed but can still be accessed online.
MISC, a unit of state-owned oil giant Petronas, was said to have received 10 million dollars in transactions related to the Kikeh FPSO development off the Sabah coast that is owned by two joint-venture firms formed by MISC and SBM (Malaysia Deepwater Floating Terminal Ltd and Malaysia Deepwater Production Contractors Sdn Bhd) and operated by Murphy Sabah Oil Company, on behalf of its partner Petronas Carigali Sdn Bhd.
Actually the Dutch maritime engineering group seems to be involved in one of the biggest worldwide corporate bribery and corruption scandals in history; allegedly SBM paid in bribes between 2005 and 2011 more than 250 million dollars (185 million euros) in many countries, among which might be Equatorial Guinea, Angola, Brazil, Italy, Kazakhstan and Iraq.
Another potential recipient, further to MISC, of the alleged bribery is Petrobras of Brazil.
The state-run oil company has just started an internal investigation - due to last 30 days – on the assumption that the Dutch ship leaser paid bribes worth 139 million USD to win contracts for floating oil platforms.
SBM in Brazil has 8 FPSOs, that produce about 1 million barrels of oil a day for clients in Brazil, Canada, the United States and West Africa, and 3 onshore bases and a shipyard.
SBM already announced that an investigation into the alleged payments made between 2007 and 2011 concerning potential corrupt payments in three countries has been continuing for two years.
SBM later disclosed it might have violated anti-corruption laws and could be subject to criminal investigation for alleged payments of bribes to officials in two countries in Africa and in one other country, but said it was not possible to give more information or an estimate of potential outcome.
However, SBM told it was only aware of the leaked document in late January this year and argued the information was secured illegally by an angry former employee who tried to blackmail SBM.
SBM has been hit by a steady stream of bad news over the past two years, including heavy losses and a management shake-up.
The company has been forced to take 1.4 billion dollars in charges and costs related to the failed project Yme in Norway leading to hefty losses and a shake-up of management. In November 2013 the company dismissed COO Jean-Philippe Laures without giving a reason.
SBM disclosed the possibility of criminal investigations, in case leading to reduce its revenue and profit, result in monetary penalties, criminal and civil sanctions, in a 205-page prospectus for its rights issue intended to finance costs related to a dispute over its abandoned Norwegian gas platform Yme.
As a straight effect of these latest harsh rumours in a single day its shares dropped by 16% at the Stock Exchange; SBM is a listed company on the Euronext Amsterdam stock exchange and has been a member of the AEX index since 2003.
Over half century deep experience
Although the current name SBM Single Buoy Moorings did not exist in 1959 – indeed it was established in Switzerland in 1969 as IHC Caland N.V., a name maintained prior to July 2005 - the company made installation of the first example of a new type of mooring for oil tankers that would open up a whole new range of possibilities for loading, at last setting such operations free of the need to be carried out in a harbour.
That first single point mooring, for Shell off Miri in Malaysia, was built by IhC at the Gusto Shipyard in the Netherlands; it was so successful that the operator ordered two more such buoys SBM subsequently became a pioneer in single point mooring (SPM) systems.
The company was the first to offer an integrated oil and gas production service through the investment in a Floating Production Storage and Offloading (FPSO); it leases and operates FPSOs vessels and is involved in the design and engineering, construction, installation, operation and life extension of solutions for the offshore oils and gas industry.
The most recent addition to the product line is midscale LNG FPSOs for a capacity in the range of 1 and 2 million ton per annum with Nitrogen expansion liquefaction technology, developed in collaboration with The Linde Group.
Another milestone was in August 2009 when SBM Offshore announced the signing of a framework agreement with Shell for the supply of turret mooring systems for Shell's FLNG, expected to be the largest in terms of diameter with capability to handle mooring loads in excess of current systems. The deal covers the supply of turret mooring systems for 15 years. The 3.5-million ton per annum FLNG facility will produce LNG offshore and will be moored with an internal and permanently connected freely weather-vanning turret mooring system.
The group (over 9,900 individuals worldwide) operates from four main execution centers - global headquarters in Schiedam, Monaco, Kuala Lumpur, and Houston – and has six companies: LMC Holding Inc. S.A, Single Buoy Moorings Inc. Monaco, LMC Atlantia Inc. Houston, SBM Schiedam B.V., SBM Malaysia Sdn. Bhd., Kuala Lumpur, SBM Production Contractors Inc. Monaco.
In November 2012 SBM sold offshore design company GustoMSC B.V. to investment firm Parcom Capital, subsidiary of ING Group Capital.
At the moment SBM has 10 FPSOs in operation and 5 in construction; 3 FSOs, 1 Semi-submersible and 1 MOPU in operation and has also been involved in almost one hundred FPSo projects, ranging from supply of the mooring turret through to complete turnkey provision of whole newbuildings and converted FPSos.
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