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René Kofod-Olsen, Chief Executive Officer at Topaz Energy and Marine discusses leading industry topics with the Seatrade Maritime Middle East team:
- Top offshore energy trends in the maritime industry for 2018
- The most important opportunities and challenges for digitalisation
- What is attractive about doing business in the GCC
- What should the maritime industry be most optimistic about
Read the full interview
1. What are the top offshore energy trends in the maritime industry for 2018?
Less of a trend and more of an assertion, oil and gas will continue to be the cornerstone of global energy consumption for many years to come, as global demand continues to grow, particularly from emerging markets. According to OPEC estimates, by 2040 more than half of the world’s energy needs will still be met through oil and gas, with renewables accounting for less than a quarter of the primary energy mix, even though they are expected to record the fastest growth rate. As a result of this, we expect investment levels from the major oil companies to increase in 2018, which will have a positive impact on the OSV sector, probably mainly from 2019.
Marine logistics. Operators will be required to perform more complex tasks than before in order to remain competitive and relevant. This will require working more closely with our clients to better understand, anticipate and fulfil their ever-developing requirements.
Cost optimisation. Despite steady demand, there is still pressure to keep costs down for offshore vessel operators and to align ourselves with the cost transformation agenda of our clients. To do this, we must demonstrate more discipline in the way that we operate, and focus on long-term sustainability over short-term gains.
Data-driven decision-making. Although our industry is in the infancy of digital transformation, we can see that operators are working towards harnessing available data and processing it to develop efficiencies in fuel consumption, vessel maintenance which will ultimately lead to cost optimisation.
2. What do you feel are the most important opportunities and challenges for digitalisation?
Having real-time data, gives us better decision-making power. Therefore, ultimately the biggest opportunity is having the tools and information needed, at our disposal, to improve operational efficiency, safety and to save costs - both for company and clients. Since 2014, Topaz has reduced costs by US$68m, much of which has been a result of going digital; automating key tasks and standardising processes. As we mature in our approach, learning from other industries along the way, we’ll be able to become more proactive than reactive, offering greater revenue and cost visibility.
I believe the greatest challenge for digitalisation is the management of change and adopting the right mind-set. Going digital is as much about people as it is processes and hardware. Embedding the right culture within an organisation takes time, and it is often the reason many digital transformation projects fail or take longer to implement, particularly in a traditional industry like the OSV sector.
3. What is attractive about doing business in the GCC?
The GCC is a trade hub due to its location and business friendly regulation and is of course a key oil and gas region. For this reason, we manage our MENA and subsea operations from Dubai where our headquarters are also located, optimising overheads and synergies. Although the Caspian is our key revenue generator, the Middle East offers great potential for growth, as NOCs develop their offshore activities. Despite challenging market conditions, we are seeing an encouraging level of business enquiries in the region.
4. What are you most optimistic about and conversely, what are you least optimistic about?
We're emerging from the downturn now, which of course should bring us some optimism. I'm optimistic about the future of the oil and gas industry, and subsequently the demand for offshore support services. Although as I've said before, as operators, we must be able to perform more complex tasks than before if we are to remain competitive and relevant. I'm optimistic that Topaz is well-positioned to do just that, as a leading provider of marine logistics to the global offshore industry, rather than a vessel supplier.
However, as an industry we must remain cautiously optimistic and I strongly believe that the industry needs to be discouraged from engaging in speculative new-build programmes or mass re-activations from layup as the downturn picks up, or the scales of equilibrium will again rock to oversupply, causing low day rates and a return to the instability we’re beginning to come out of.
5. What are you looking forward to most at Seatrade Maritime Middle East?
Industry survival will require that we continue to make strategic cultural and operational changes. I believe it’s important to meet with peers to discuss best practices, engaging in dialogue which will help us to navigate the new market norms that we’ve been faced with.