Tailoring your vessel specifications to clients’ needs has become a very important aspect and element when being considered for a contract.

Maged NADIM Chief Commercial Officer MARIDIVE GROUP

The market offshore

June 6, 2019

TOGY talks to Maged Nadim, chief commercial officer of Maridive Group, about market trends in Egypt’s offshore marine and oil support services and how the company is preparing for growth in the local oil and gas industry. Maridive Group is a provider of offshore marine and oil support services.

What market trends are driving Egypt’s offshore marine and oil support services sector?
Egypt and many other markets have begun to realise that it isn’t just a matter of price sensitivity when choosing a service provider, i.e. renting cheaper units. What really saves money is having a complex player that understands your field, understands the scope of your requirements within that field and can give you a versatile unit that can do more than one job at the same time. Tailoring your vessel specifications to clients’ needs has become a very important aspect and element when being considered for a contract.
The importance of QHSE and safety on board is also very important because overlooking that can cost time and money. This is key to ensuring the health and safety of your staff, as well as that of the environment. Pollution can result in very large lawsuits nowadays.
The region is also becoming a gas hub with the discovery in Egypt of the Zohr field and other ongoing exploration activities. This has driven demand for technology and, as these are subsea wells, they require offshore units with more capacity and capability than the conventional wells that we saw in the past.

How is Maridive Group preparing for the future and aligning itself with this expected growth in Egypt’s oil and gas industry?
We are fortunate to be positioned in the middle of a shift in the whole region’s outlook towards oil and gas. Egypt is taking the lead in that role by building the infrastructure here for gasification and also having the lion’s share of fields.
Being an Egypt-based company has given us the opportunity to be one of the first players to support the development of the infrastructure required to get these projects up and running.
We are welcoming the changes to the upcoming bid rounds, which we feel will encourage IOCs to come in and invest in the country. The demand for offshore support will increase dramatically, and this means that we have to be prepared.
We are based in Egypt and our opex is lower, so we are already in a good position. To build on that, we have moved many of our units closer to the region. For example, we did not renew our contracts in Brazil in preparation for the upcoming boom here.
We have also shifted our technology on our newbuild programmes towards deeper-sea vessels since all of these fields are in deeper waters, and we have increased our capacity in ROVs, saturation diving and subsea cranes, to name just a few areas.

What other technologies have you invested in to stay on the edge of innovation?
Oil and gas has been an old-school industry for years and it has taken us longer to adopt trends. We believe that technology is the future and have endeavoured to adopt that in our strategy. Our focus has been on technology that impacts technological performance and ability of our units, such as for fuel efficiency.
We have taken best practices and adopted them into our technical provisions and newbuild programmes. The vessels coming into the field have innovative DP reference systems, which is an important element in OSVs [offshore support vessels], as well as crane compensation mechanisms. We are actively looking at ways to optimise our performance through technology and we will continue to do that.

What is your current fleet size and age?
Our fleet size is around 75 units, which makes us one of the leading OSV players in the region. The average age is 6.5 years, quite young compared to our peers. We have a diversified fleet that covers what the region requires; we have PSVs [platform supply vessels] and AHTS [anchor-handling tug supply], multipurpose vessels.
The two main advantages that add value to our group are that we built our fleet in series, so our units have three or four sisters. This allows us to provide our clients with a replacement or substitute when required; we provide them with sister units that operate in similar ways. Clients like specifications to remain the same and this is something we can offer.
This has been an economy of scale for us too, because we can buy spare parts for four or five vessels at a better price than if we were buying for one.
Maridive has been able to tailor our vessels to our clients’ requirements. We have built vessels specifically for clients’ needs, so that when a vessel is partnered with a client, it is difficult for that client to replace it because there aren’t many vessels in the world that are that specific to the field or the needs.


How are you taking advantage of your vertical integration?
Over the past four years the industry has gone through tough times with the oil price drop. As a group, the vision was to develop more value, and the direction has been to restructure internally and utilise our different segments, since we are quite diversified and cover the whole value chain.
We started to take these segments and package them according to the prospective clients, be that IOCs or governments, and present turnkey solutions. These would optimise the offshore services we provide to operations in the field.
We have offered this to clients in Egypt and further afield and developed a strong track record that has developed trust between our clients and us. This has enabled us to sit down with our clients, examine their needs and think outside of the box when developing solutions that save them time and money and allow them to deal with one entity rather than many. We can tender on an individual basis, but we also cluster together and offer turnkey deals to clients depending on their needs.

Despite the tough times, the company had a 24% year-on-year rise in net consolidated profit for the first nine months of 2018. What was behind that growth?
The last four years have been tough, and Maridive Group did a good job of weathering the storm. We worked very hard to reduce our costs as much as possible and that played a big role in affecting our bottom line, but without affecting the quality of our service and operations.
We were able to think outside of the box and demonstrate to our clients that we are not just another OSV player, but one with an edge. Providing vessels with the diving teams on board, the construction crews and so on allowed us to improve our numbers.

Can you tell us more about your work outside of Egypt?
The beauty of our industry is that because our units are mobile we can change locations whenever contracts end. Our geographical spread changes on a yearly basis. In total, we have worked in 29 countries around the world, and are currently in eight or nine different countries that hold a lot of potential.
We have a long-standing relationship with Aramco in Saudi Arabia, and have just been awarded two big projects by them in 2018. With Aramco we are tendering on the construction side as an EPC contractor and also as an OSV operator, and are expecting our collaboration to increase through 2019.
In the UAE, there is huge potential and we already have some vessels working there with our clients. There is a lot of development in the UAE with many IOCs coming into the market. They are also looking at building 11 new islands, which will require vessels for construction. In Bahrain, Eni recently signed an MoU and we are expecting to work on that too.
We have just established a base in Lebanon, where Total has created a consortium that will start working on two gasfields. Lebanon is a virgin state when it comes to oil and gas services, specifically offshore.
As aforementioned, we are quite diversified. We can see there is a boom in the region and are ready to take advantage of it. We have also worked in South America in the past and still have a strong presence there; we expect to be part of that region’s growth.

How are you fostering local content and investing in Egyptian skills?
Maridive is a 40-year-old company. It started in Egypt and we are quite patriotic. Today we have 2,400 employees, including around 500 short-term contractors, and 95% of them are Egyptian. We have turned Maridive into a school in which we take on graduates, train them and then deploy them around the world. Maridive has become a conduit, enabling Egyptians to work abroad.
One of our main strengths is that we are dependent on and proud of our Egyptian base. Local content regulation here needs work, and there is still limited differentiation between service providers like us and a foreign service provider. However, we believe the government will be reforming that soon.

What is your vision for the company in 2019?
2019 is going to be much better than 2018 for the industry. We already see E&P spending increasing on an international level. The region is starting many projects this year that will require our services. Our aim is to continue to grow.

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