Businesses founded on the North Sea oil and gas industry are looking to replicate that success here.
Businesses founded on the North Sea oil and gas industry are looking to replicate that success here.
WESTERN Australia’s growing oil and gas industry is continuing to lure established European companies to Perth, with a range of service providers setting up camp.
The Australian Oil and Gas Exhibition and Conference held in the city last week has provided further proof the $110 billion of investment in committed projects is enticing more global players to the local market.
For Aberdeen-founded engineering consultancy Xodus Group, opening a Perth office eight months ago marked a second attempt at tapping into the market.
Perth operations manager Andy Jones told WA Business News the company made an initial foray into WA five years ago in a joint venture arrangement but later sold its stake in the company, which became S2V Consulting.
“The message from us is we’re here to stay this time,” Mr Jones said.
Xodus opened a Perth office with two people in April last year and now employs 27.
Mr Jones said the expansion of its services to include subsea engineering and production assurance would help the company grow to about 60 people by the end of 2013.
Xodus services global clients such as Shell, BP, Total and Marathon and Mr Jones said he hoped the experience gained by, primarily Scottish, companies through work in the North Sea would be taken advantage of locally.
“Obviously, there’s a mature industry in Scotland, which has an awful lot of experience to offer WA. So, hopefully, people are happy about embracing that experience,” he said.
Xodus had received a positive reception from local operators - Mr Jones said they welcomed foreign companies’ helping create a competitive market.
“Most of the guys welcome a new player because it brings more competition and they’re not constrained by a monopoly player,” he said.
“I understand that some folk will be a bit opposed to that ... but it’s a positive thing because it’s boosting the economy here.”
Fellow Aberdeen-based company Viking SeaTech has also entered the WA market hoping to gain work through engineering contracts.
It has expanded its team from four to 29 over four years and has positioned its Perth base as the company’s engineering hub - a decision group chief executive Bill Bayliss said was prompted by Australia’s innovative culture.
“There’s a lot of youth and vibrancy here, our engineering team is very ‘go-get’ if you want to call it that,” Mr Bayliss said.
“They’re highly educated and professional and I think that behaviour and attitude is quite appealing to clients if they’re looking for solutions rather than a ‘we’ve always done it this way’ type of activity.
“The UK and the North Sea areas are very traditional and they’ve always done things a certain way; whereas Australia opens a number of different avenues to bring innovation through.”
Global Energy Group is another Scottish business expanding into WA.
Early this month it announced its third WA acquisition in the space of 18 months, buying fabrication business Oil & Gas Engineering for an undisclosed sum.
Global Energy Group CEO Iain MacGregor said the strategy was to replicate in Australia the services the business offered in Europe.
Its aim was to be an execution partner for local engineering companies, offering staffing solutions, quality control and integrity inspection services and, now, fabrication workshop services.
Its next step would be on-site construction capacity.
Mr MacGregor said the Australian market contributed about $80 million of turnover and he expected to triple that in the next few years.
Estimates on potential investment in the WA oil and gas industry sit at around $90 billion, on top of the $110 billion already committed. That, as well as the potential for ongoing servicing once projects are up and running, has given companies the confidence to establish a local presence.
Oil and gas-specific online training specialist Atlas - also founded in Aberdeen - is intending to employ its first WA employee in April.
Head of learning research and development Ken Jones said the person would focus on developing business relationships.
“Initially you’ve got to look at business development and see that you can build up a local rapport with the company - that’s irrespective of whether or not it’s an international oil company because you still have to build up a local rapport with them,” Mr Jones said.
Atlas was established in Aberdeen 17 years ago and has since expanded to open offices in Houston, Abu Dhabi and Kuala Lumpur.
“The next step in that natural progression was WA,” Mr Jones said.
“We’re doing work with big international companies and they’re saying to us ‘why aren’t you actually there’?”
Norwegian project management company Dovre Group has also been lured to WA, given investment in oil and gas and limited labour needed to lead the projects.
The company is using its position as an experienced operator in the North Sea as a drawcard for companies, which may be lacking project management skills and experience.
The company is anticipating Perth becoming its Asia-Pacific hub as it looks to expand into the emerging coal seam gas industry on the east coast.
Meanwhile, Swedish IT services company IFS is targeting junior oil and gas companies operating in WA.
The company’s Australia and New Zealand managing director, Rob Stummer, said the industry’s growth was forcing juniors to mature and implement more sophisticated systems and software.
The company has just signed a contract with Perth-based mining contractor Brierty, which Mr Stummer said had been a door opener for the company.
“WA is a market where everyone knows everyone and that makes it extremely difficult for a newcomer to break in but once we won our first customer, it became a lot easier to attract new business,” Mr Stummer said.
