Oil & Gas versus Wind: Found Ocean

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Adapting its service offering to steer a move into the offshore wind industry has paid off for FoundOcean. Jim Bell, Managing Director, tells Offshore WIND that activity went from ‘zero to 60’ in just a year and as renewable energy demand increases, FoundOcean is confident that it can gear up for any future growth. 

Established more than 40 years ago and largely focused on the oil & gas sector, the subsea and offshore grouting specialist was originally involved in the Arklow Bank offshore wind farm in Ireland in 2003 but its real entry to the market came in 2010.

Mr Bell says: “At that time we started to look at offshore wind properly and noticed that the wind industry lacked key service providers and grouting, our speciality, was one of them.”

Although the company had over four decades offshore grouting experience, it knew it needed to adapt its services specifically to the wind industry. “We knew what services our oil & gas customers needed, we knew that offshore wind was going to be a significant market in Europe and it was on our doorstep so we wanted to address this market. 

“However, we also knew it required a substantial investment, serious funds for both equipment and R&D. Therefore, we took a conscious decision to adapt our offering.
“Any right thinking engineering company asks what the market needs and how it can improve things for the customer and that’s what we did.” He adds that there were very few grouting companies in the wind market at the time. “Customers love competition, not just because of the commercial side but also because it encourages business to innovate, which results in better products and services.”

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Once FoundOcean made the necessary investments, activity in the sector immediately took off. “We were expecting a steady entry into the market but we went from zero to 60 straight away. We had expected strong demand for our services and skills but we were still somewhat taken aback.”

Substantial investments in equipment and R&D

FoundOcean has readily adapted to the key differences between the oil & gas and offshore wind markets. As Mr Bell points out when installing in the oil & gas industry, usually one structure is involved or two, three at the most, and you are a week or less offshore. “However, in offshore wind 200 structures can be installed and personnel are offshore for months on a project. We do not expect to see our equipment back in our offshore service facility quickly.”

This has led FoundOcean to work hard on improving the reliability of equipment. “It must be able to work over an extended period of time.” This has also meant changes in the maintenance supply chain and new ways of working. “We now take more spares offshore to ensure 100% backup so as not to cause delays.”

Another key difference is that often oil & gas projects start just a day or two before the job, with FoundOcean teams on standby a week before. “There is often quite some uncertainty in oil & gas regarding the time to be spent away, especially when projects are on the other side of the world.”

Wind is still relatively close to shore, he adds. “With offshore wind there is a chance to create a routine, with crew change scheduling much easier and predictable.” 

Although it is easier from a logistics point of view because wind farms are closer to shore and because individual structures are quite small compared to oil & gas ones, offshore wind is nevertheless very technically challenging because it is necessary to repeat the same exercise multiple times.

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The focus is also very different, says Mr Bell. “To be successful in oil & gas you have to be able to jump when the customer says – at very short notice. Planning in wind gives more forward notice of perhaps a month or more and it is an on-going operation over a long period of time.”

Quality and safety focus

Quality and safety are two areas that have equal focus in both sectors. Consistent quality control is crucial, he stresses, in mixing grout.

FoundOcean has a substantial testing laboratory in Livingston, Scotland where it carries out 1,000 material samples every month. It also has several labs in South East Asia.

There is a strong focus on safety in both industries, he stresses but certainly the risks are different. “In oil & gas we can be working close to an existing live platform and that is of course different to working by a turbine. Oil & gas is mostly subsea, while our involvement in wind is around the splash zone; the risks are different.

“I think the focus on safety is extremely strong in both industries but we have our own safety standards which exceed our customer’s own standards,” explains Mr Bell. FoundOcean is ISO 14000 certified and has its own H&S manager. “And incidents, no matter how small or near misses, I know about it. There is a strong follow up. Safety is non-negotiable.”

Undoubtedly, offshore wind is going through a similar learning process that oil & gas did in the seventies and eighties, he adds. “Wind is still a relatively new industry and a lot of very useful skills and lessons from oil & Gas can be applied to make wind more efficient. Everything is essentially cross-usable in both sectors as expertise transfers.”

“For instance, chartering the cheapest vessel doesn’t mean that the job costs less. An installation vessel can cost twice as much but it does the job in half the time. Wind has gone through that learning curve now.”

Best Practice transferring between sectors

As oil & gas employees move around in the offshore construction industry, skills transfer, he adds. “Engineers and project managers move between oil & gas and wind and they are bringing Best Practice from both industries to the benefit of the wider offshore industry.”

Oil & gas is also benefitting from wind being focused on installation costs and working hard to be as cost efficient as possible, he says. “Optimising offshore performance is an area they can both learn from each other.”

This all helps reduce CAPEX and the cost of offshore wind, he stresses. “We are not all the way to the magic £100 per MW hour figure as yet. But as West of Duddon Sands has shown, we can install a large number of turbine foundations in a short period of time and substantially faster than expected.

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“And with the billions spent on new installation vessels and the industry getting used to working with them, we are moving in the right direction. The £100 figure will probably not be achieved in 2013 or 2014 but maybe at the time of Round 3 in 2015. We are well on the way.”

FoundOcean now has 125 people based in Livingston, Scotland and 3 5 in Marlow, near London Heathrow, as well as stations in Dubai, India and Singapore.

New Houston office opens opportunities in the US

The company has just opened an office in Houston. “We are looking further afield outside of Europe and we have been keeping track of projects in the US. The Houston office will support our entry into the wind market being the home of the offshore industry and it also brings us closer to Brazil and Mexico. “

Overall, Mr Bell believes that it is possible to achieve the 2020 targets but that the supply chain will be tight. He points out that FoundOcean has the ability to scale up if required to fulfil future demand.

“Companies want to work with FoundOcean as we have been in the business for nearly 50 years. They are not exposing themselves to undue risk in their offshore schedules whereas this is not the case with a new entrant.”

“We have shown the ability to scale up in the last few years when we have grown from 50 people in 2010 to around 160 today. We know how to train and recruit, and how to finance and build equipment. If in 2015, 300 to 400 people are needed and 40 grouting systems, we can do that.”

He says FoundOcean has a strong pipeline of projects in 2014 and 2015 and has been given a further boost when an environment equity fund took a 35% stake in the firm. This shows a high level of confidence, he adds.

Fundamentally the world needs a balanced energy supply from renewables, oil & gas, wind, solar, nuclear etc. “We need to lower the world’s carbon footprint and achieve around 25% of this from renewables. Currently, the only reliable one is wind. I think the underlying drivers are good.”

Helen Hill