Cooperation - the key to success for companies in the offshore industry

So similar are the challenges facing the oil and gas and offshore wind industries over the next few years that it makes little sense to distinguish between them. This is the message from Johannes Kromann Bie, recently appointed director of the Oil & Gas Division of Offshoreenergy.dk.

He is just as eager to talk about offshore wind and techniques for shipping wind turbines as he is about recovery rates and drill samples.

“Oil and gas installations and offshore wind turbines have a lot in common, including the huge challenge of bringing down the cost of operating and maintaining installations. The political pressure to reduce the cost of offshore wind farms is very strong right now, but cost is just as serious an issue for the oil and gas industry,” he says.

Industries sharing sub-suppliers

In his previous position as vice president of Semco Maritime, he worked for a company with operations in both market segments. He explains that when you're in the business of providing welding solutions, it makes no difference whether the job is for a drilling rig or an offshore wind turbine.

“The vast majority of our members are companies providing services for offshore installations. With many of their services, there is no difference which industry they’re supplying, so it's important that I don't emphasise one over the other – we depend on each other,” he explains.

Established last year, Offshoreenergy.dk is a national knowledge and innovation centre and a network hub for companies in the offshore industries. The organisation's chairman is Anders Eldrup, and the management is headed up by CEO Morten Basse, who is in charge of the Renewables Divisions, and Johannes Kromann Bie, director of the Oil & Gas Division.

Jobs at stake

“Both industries stand to lose jobs over time unless we do something. A loss of jobs would mean a loss of tax revenue and also that all the development potential we currently have on our home market would vanish. That would be a disaster, and we can't let it happen,” says Mr Bie.

So the challenge is to find new solutions and, not least, learn from each other.

”What we’re after is something like a man on the moon situation. It's not about finding a one-per cent cost cut here and a two per cent cost cut there: we need to take a big chunk out of our costs over a very short time span,” he says, explaining that costs may have to be cut by 40 or 50 percent over relatively few years if the oil and gas industry is to continue to thrive.

We can see from the charts that production from our current fields will gradually drop over time, eroding our supply security, so it is important that we add new fields. We know where the reservoirs are, and we know what we have to do. The problem is that it's too costly right now to make a good business case, and that's what we have to do something about.”

Closer partnerships with universities

One way to do that is to forge stronger bonds between the universities and the business community to promote innovation and develop new work methods and processes. To that end, Offshoreenergy.dk is working to help these players set up networks and development projects.

“We see a huge opportunity in creating ties between the research environments at the University of Southern Denmark or Aalborg University and some of the businesses that are deeply involved in working with the installations. If we can work together to find a way to do things better, or if we can lift the reservoir recovery rate by just a notch or two, it would expand our market immensely.”

There is also a huge potential in standardising, explains Mr Bie, not only within oil and gas, but across all offshore energy industries.

“The way things are today, one country could have developed its wind platforms in a certain way, whereas other countries could have conceived an entirely different model. It's not cost efficient when you have to invent a new solution every time instead of figuring out what it should look like and then using standard components as much as possible.”

Focusing on the unusual projects

Danish businesses will also have to get better at winning international orders. We may be relatively small players, and Esbjerg may not be Stavanger, but Denmark's oil and gas businesses are certainly strong enough to hold their own in the international market, as Mr Bie stresses.

“One thing we're good at in Denmark is making things happen. We’re good at adapting to new situations and handling project modifications. That means we can really make our mark in complex and unusual projects. We excel in finding solutions, being innovative and getting the job done,” he says.

“If we can add a little more international twist to our approach so we know the standards in Norway, the UK and the Netherlands, then we can build a position there, too. And if we can get the small businesses to join forces and leverage on each other's strong sides, we can take it even further.”

About: Offshoreenergy.dk

• Offshoreenergy.dk is Denmark's official knowledge cluster and innovation network for the Danish offshore industry. Founded a year ago, the organisation has one leg in renewable energy and one in oil and gas.
• One of its special focus areas is to leverage the skills and experiences that reach across the industries. The member base consists of about 270 large and small businesses based in Esbjerg and the rest of the country.

About: Johannes Kromann Bie

• Johannes Kromann Bie was recently appointed director of Offshoreenergy.dk's Oil & Gas division. He joined from a position as vice president of Semco Maritime and has previously served as CEO of Davidsen Partners, vice president of the oil and gas division at Rovsing and vice president of ABB.
• Johannes Kromann Bie trained as an electrical power engineer and holds a degree from IMD Business School.