Green Monsters storms oil, gas rental market

Oil and gas producers’ reluctance to buy expensive equipment is providing a lucrative niche for a Perth-based engineer, which hopes its new initiative will be even more successful than its original business.

During its 10 years in operation, AME Offshore Solutions has become an established provider of engineering, procurement and construction work to some of the industry’s biggest players – Chevron, Woodside and BHP Billiton to name a few.

It has grown from two employees to 25 and is bringing in annual turnover of $15 million, which co-founding director Saul Wende expects to continue to grow by between 20 and 25 per cent year on year.

But it’s an offshoot of the original business, Green Monsters Offshore, which is showing promise of bringing in even higher rewards. Green Monsters runs the equipment rental service that previously sat within AME.

Co-founder Gus Costas said the business discovered that renting out the equipment, such as cranes, compressors, rigging and winches could be more fruitful than encouraging companies to buy.

“We couldn’t understand why companies would go and spend more on renting from Singapore or Aberdeen when we were offering them high quality, or even superior, equipment for less money,” he told WA Business News.

“When we delved a little bit further we discovered that they were concerned about buying a piece of equipment and the associated costs of then having to maintain it.”

Soon after entering the rental market, Mr Wende said it became obvious they needed to clearly define the two businesses.

 “We found that our story to the market was getting confused so we wanted to clean that up. We opted to set up a second business and we split out all of those rental functions.”

Green Monsters has only been in existence for two years and in “on-the-ground” operation for 12 months, but turnover is already about $2 million a year.

Growth projections are significant; Green Monsters’ turnover is expected to surpass AME’s current turnover within three to five years. 

The engineer has invested in a new $3 million facility at the Australian Marine Complex in Henderson, which state minister for small business Simon O’Brien formally opened last week.

Mr Wende said the facility enabled the company to further establish itself in the market and retain business which could have gone offshore because they could now assemble fabricated components in a “staging ground”.

Mr Costas said AME and Green Monsters complemented each other in that oil and gas companies could have a piece of equipment tailor-made by AME, and yet not be expected to buy it outright.

He said there were very few companies competing in the oil and gas equipment rental market. The field was made even smaller by the fact only a few had the engineering capacity, which the relationship with AME afforded.