TOGY talks to
Industry EvolutionSeptember 20, 2017
Blair Ferguson, Kenson Group CEO, talks to TOGY about upcoming opportunities in Trinidad and Tobago’s hydrocarbons market and regional expansion. Kenson Group began operations in Trinidad and Tobago in 1994.
Kenson operates as a services contractor in the oil and gas industry. The company’s core business is the provision of operations and maintenance services for both offshore and onshore facilities. Kenson Group has made it a priority to provide training services in Trinidad and Tobago and the greater region. The company is committed to nation building and evolving in the face of the global economic down.
• ON SUSTAINABLE ENERGY: “Renewables is an area we know the Caribbean will be looking at closely moving forward. As pioneers in the field of operations maintenance, we are looking at those areas for partnerships. Kenson is open to a relationship with anyone that shares our philosophy, to any company or person that shares our vision of becoming a company that uses investment in new technology to develop its capabilities.”
• ON GUYANA: “For Kenson, with regards to growth in Guyana, there have been many discussions about how the country is going to expand, specifically about oil and gas operations, maintenance, training and small engineering. There are numerous expectations to manage when it comes to Guyana. I do not see a lot of opportunities in the oil and gas industry. I see more from the Guyanese government, whatever their strategy is, in terms of expansion. I see great opportunities for Trinidadian companies to partner with Guyanese companies.”
Ferguson also discusses the possibility of partnering with other companies in the CARICOM region and the advent of renewables. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Blair Ferguson below.
What have been Kenson’s main achievements over the past year?
Given the challenges faced by operators in the industry, we have had small gains that were significant for us. This year, we have focused on operational efficiency, optimising our business processes and making changes to our business model where operational efficiency is key, but always with the customer in mind.
We have worked to have better communication within the company and with our clients. We have developed an informational database platform and included several more databases that have allowed us to become more effective. We evaluate many businesses and have closed some deals this year. Although not the number or magnitude we would have liked, it was still a good year.
What challenges and opportunities do you foresee for the industry in the near future?
The industry is shrinking and particularly the industry as we know it is changing. However, we are not short of competition. In Trinidad, we find ourselves competing with companies that have never invested in the country before. They do not have the relationships and they have made no significant contributions to the country. However, they are competitive because they have past working relationships in other locations with the multinationals. They do not understand that we at Kenson are also about nation-building.
Kenson, for example, has invested for twenty years in our training institute. We have developed capabilities in Trinidad and Tobago that are outside the capability of the state training enterprises. Our training school is a feeder for our clients. In 2005, we saw the need to start generating our own revenue for the school to try and assist our parent company. We sought international accreditation with several accreditation bodies such as the Energy Institute of UK in addition to our current recognition by the City & Guilds Institute and of course the Accreditation Institute of T&T. We realised one way of achieving our goal of becoming financially strong was to develop internationally. We were asked by a number of countries to assist in training their technicians. With that, we saw an opportunity where we could reduce our overhead and simultaneously add capacity to Trinidad.
Trinidad and Tobago is seen as a place to poach technicians. As fast as we turn individuals out, we lose them. That stopped other companies from looking to develop their own capabilities, and we found that companies were taking it from our brand. That is why we decided to expand. Having a training institute is good for us. It has allowed us to build capabilities at a very rapid rate.
Local companies do not have many strengths compared to international companies. As such, being local does not give us an advantage; in some instances that may be a disadvantage. This clearly speaks to where we see the economy going. Every strategy and client conversation is about low cost even with requests to cut costs on existing contracts. We know that we at Kenson can provide and achieve this demand. However, as we speak, in Trinidad and Tobago, companies are coming in with zero overhead from overseas and are being awarded contracts. It is difficult for us to operate in this present environment of cost-effectiveness, competing with outside companies with no local investment in infrastructure and assets. We do not agree with this unequal playing field which does not exist in other countries where many of the multinational have operations.
Do you see room for local companies to obtain maintenance work on the new platforms such as Juniper and other ongoing and upcoming projects?
Yes, in this environment, companies now have to look more into Trinidad. The capability is there. I know for a fact, when it comes to subsea operations, it is something we in Trinidad and Tobago should be moving very quickly on developing. The opportunity however is definitely here for maintenance.
Also, within the sphere of production and maintenance, the expansion of some of our clients’ assets will keep us busy. There are some contracts being rolled over while some are being put up for tender this year. We have to focus on rethinking some of these contracts and on being aware there is more competition. We will continuously look to improve our capabilities and offerings which would be more along the lines of the expansion of our present contracts.
Are you looking into any new partnerships?
We are always looking for opportunities to expand and for partnerships. Renewables is an area we know the Caribbean will be looking at closely moving forward. As pioneers in the field of operations maintenance, we are looking at those areas for partnerships. Kenson is open to a relationship with anyone that shares our philosophy, to any company or person that shares our vision of becoming a company that uses investment in new technology to develop its capabilities.
We are not averse to new countries or regions. We have shown that we are willing to work anywhere. There are challenges with the travel bans now. But when it comes to the region, I want Kenson to be known as one of those companies that can assist and help build the capacity of our fellow island states.
When I took over as CEO in April, I changed the strategy of the company. Kenson was always seen as a training institute. I was managing the school at the time. It was in the best interest of the school in terms of optics. Then, I realised that nobody knew that. Kenson is more than a school. It is a services provider. We also have strong engineering capabilities. If you look at our website, we offer operations and maintenance management, engineering and training. We looked at diversifying outside of the energy sector, and have invested a paper conversion company in East Trinidad.
What sort of growth opportunities do you see in Guyana and Suriname for yourself and for other companies?
In Guyana, there have been institutions and companies interested in training and development, as well as, lines of operations, maintenance and engineering. For Kenson, with regards to growth in Guyana, there have been many discussions about how the country is going to expand, specifically about oil and gas operations, maintenance, training and small engineering.
There are numerous expectations to manage when it comes to Guyana. I do not see a lot of opportunities in the oil and gas industry. I see more from the Guyanese government, whatever their strategy is, in terms of expansion. I see great opportunities for Trinidadian companies to partner with Guyanese companies.
As to operations and maintenance regarding the FPSOs, it all depends on the philosophy of the company that is operating. We still do not know what their strategy is. They are saying local content. However, if you are discussing local content and you are dealing with CARICOM [Caribbean Community] and free movement, then Trinidad should be a player. I do not know if that is going to be adopted. They have a local content policy that is specific. It seems it is strictly about local Guyanese. I do not know how they are going to make that transition. I do not know to what extent the company is going to involve Trinidad and Tobago companies with capability in their Guyanese operations.
Within the operations maintenance arena of oil and gas, I do not see many opportunities in Guyana, based on the fact there are a lot of expectations to manage. However, in training and development, I see a lot of opportunities. I do not know if it is being taken that seriously by the Guyanese decision-makers at this point in time. We have a lot of very interested individuals but interest is as far as it goes right now. Kenson is looking at the wider Caribbean.
Could you please expand on the regional challenges and opportunities?
Regionally, I am very optimistic because of the fact that Caribbean countries such as Jamaica and Barbados, for the first time, are looking to expand into the oil and gas industry. They have been before, but they are really looking to make a strong stance. Regionally, we have excellent opportunities. With regards to challenges, I do not know if we have a clear strategy. You will see pockets. I know our prime minister, Keith Rowley, was in Jamaica at one point in time, but I do not know of a clear strategy for Trinidad and Tobago in terms of regional development in oil and gas.
Most private sector companies hope that governments would give us an opportunity. I do not see that. Once again, I see Kenson on its own looking for some of these opportunities. Now may be the time to recognise and accept some private sector local companies such as Kenson.
It may appear that Kenson lacks a clear regional strategy for the private sector, possibly because of the government’s reaction to other Caribbean islands affecting our private sector. Depending on how other countries see Trinidad and Tobago, the private sector can be affected.
There is a lot of skepticism. If Trinidad and Tobago is so known for its know-how, why is Jamaica moving forward with LNG and regasification without Trinidad? Why is Trinidad not part of that? Why is Barbados purchasing LNG from an international buyer, while Trinidad is not playing a part in their development? There are things other than selling gas that Trinidad has to offer. Trinidad has capabilities. We have done some private work in Barbados as a company, training, however, we have felt some hesitation. Governments of Trinidad are responsible for relationships which we have not done well with in terms of our Caribbean neighbours.
How is your base in Tanzania doing? Do you have any plans for expansion there?
Tanzania has been very slow to develop and expand. There are a lot of challenges there, the least of which is geography. Uganda has been better to us. However, over the past year things have also slowed-down in Uganda. We are prepared for some students to come to Trinidad, but I think it all depends on financing on their side. Companies know about us. There is an interest in Ghana. There is a good relationship between Trinidad and Ghana. I do not know if the environment is right at this time for us. It is a very expensive investment as the cost of start-up is very high. From the private sector, Trinidad does not have a philosophy working together within the private sector nor a co-ordinated approach under the GORTT [Government of the Republic of Trinidad and Tobago] umbrella.
We were in Ghana in 2010. We invested heavily there. The government decided not to go ahead with the Ghanaian project. Being part of the private sector, all of that was immediately shut to us. You could understand my skepticism regarding the government and the private sector. I have not seen a strategy to take the private sector with the government. I have not seen any clear indication that the government is going to allow any level of partnership.
One of the challenges we have is operating externally, is we are all on our own. It is up to the company’s board of directors to drive these types of expansions. At this point in time, it is very difficult. There are a lot of factors. How the Trinidadian government responds to Ghana affects the private sector and it affects the country’s brand. How our government responded in 2010 affected the Trinidadian brand to the point that it also affected our private company. We have to be very careful when we invest in these countries. Because of the size of investment, we have decided to focus not only in Trinidad but regionally for the time being.
For more information on Kenson Group in Trinidad and Tobago, including the company’s regional training efforts and expansion, see our business intelligence platform, TOGYiN.
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