THE common perception of the resources sector may be one of hum drum processes such as digging and drilling, but Belmont oil and gas services business Velocious proves that there are plenty of intellectual challenges in this sector for local players who p
THE common perception of the resources sector may be one of hum drum processes such as digging and drilling, but Belmont oil and gas services business Velocious proves that there are plenty of intellectual challenges in this sector for local players who put their minds to it.
Velocious specialises in undersea equipment operated by remote control, manufacturing high-tech devices that would not look out of place in a science fiction setting.
In fact, the company uses a touch of the science fiction approach to explain its strategy in an animated website video.
In the animation, a sledgehammer-wielding crab fails to properly remove a walnut from its shell and is replaced by an octopus using high-tech equipment to solve the problem.
“Then nobody’s nuts get cracked,” the video states, showing that there is also a sense of humour in the leadership of this relatively young company.
Not only is the gear Velocious produces of a specialist nature, often made for rapid response in one-off emergency situations, but the young engineering team behind this business has also sought to make it look good, featuring striking industrial design complete with branding on products that it “mass produces” for the offshore oil and gas sector.
Velocious deliberately coloured its products pink, taking a contrary approach in the typically masculine world of offshore oil and gas – where the gear and the people have to be tough.
Clearly the strategy behind Velocious is working. It has expanded to nearly 40 people since taking on its first outside employee in 2008, and is expecting to turn over more than $11 million this financial year, double the sales of 2009-10.
It is forecast to nearly treble revenue in the coming financial year as it looks at strong organic growth and the possibility of some acquisitions in overseas markets – such as the US and Norway – where it already operates.
It is also expecting more work in relatively new fields such as renewable energy, where it has some experience with wave and tidal power, including work for Perth-based Carnegie.
This buoyant outlook should not obscure the fact that Velocious faces real challenges as a new business, however. The high Australian dollar, for instance, is affecting the competitiveness of its manufacturing and forcing it to consider looking overseas.
The company has also had to look at replacing staff no longer suited to a bigger-company mentality.
Velocious was established in 2006 by its now 29-year-old managing director Brett Silich while he worked full-time for oil and gas subcontractor Subsea 7. The following year three partners joined him, all of whom held down other jobs while they built the business.
Mr Silich said he took his business plan to get into specialist equipment manufacturing for the subsea sector to his then employer but its management was focused elsewhere.
Instead, he established the business by working in his own time – both designing products and getting a skilled labour hire operation up and running. The latter division became a key provider of cash flow to the start-up Velocious and remains part of the group, though it has now become a stand-alone business unit.
Asked if he has always had an entrepreneurial bent, Mr Silich said the drive to create the business came from his interest in physically building things.
“I was always focused on being in engineering and particularly mechanical engineering from an early age,” he said.
“Even though I didn’t do so well at school I found a way in the back door.”
Mr Silich said he did engineering at Tafe before attending Curtin University, where he founded a motor sport team.
“That was where I started getting a taste for building something and having people working around you, working towards a common goal,” he said.
Mr Silich said during his studies he worked for a company that made tools for remote-operated vehicles, which are prevalent in the offshore oil and gas world as deepwater operations often preclude direct human intervention.
After that, his work in the ROV world revealed there was a shortage of high-end manufacturers, with the small number of big players tending to offer existing solutions or tools from their catalogues.
Mr Silich said the company had proved on many occasions that there was value for clients in developing the right tools prior to installation, rather than having to deal with later problems deep below the surface.
Velocious is not a one-man band. The team is relatively young but it has also drawn on experience to provide balance.
The key players in the management team are operations manager Stefan Haliczenko and engineers Tim Blacker and Nick McNaughton.
For those outside the deep sea oil and gas world it is hard to imagine the type of equipment that Velocious designs and builds, using its own resources, manufacturers in Perth and other global specialist equipment makers for inputs such as electronics.
The group does have a line of what it calls ‘mass produced’ products for subsea intervention.
These are specialist pieces of equipment that might be required on multiple occasions – for instance in a series of monitoring stations along a subsea pipeline.
In most cases, it might produce 100-200 units but has been known to manufacture thousands of a particular item.
A recent example of constructing multiple items is a large pipe-bending tool – bigger than a car – which will create deliberate buckles in a pipeline at periodic intervals to reduce issues resulting from the pipe’s seabed expansion. Part of that tool will remain in place for decades.
But Mr Silich said Velocious was also known for developing bespoke tools required for rapid deployment because delays in the oil and gas business could cost millions of dollars per day.
This includes remotely operated machining tools that can cut off damaged parts, or re-bore a special piece of equipment thousands of metres below the surface where there are severe limitations due to pressure and visibility.
In addition, Mr Silich said the tools Velocious developed had to be simple and easy to use because workers using ROVs often lacked experience in this fast-growing field.