Robin Watson has stepped into his new role as Wood Group’s first chief operating officer. He recently sat down with our three new chief operating executives; Dave Stewart heading up Wood Group PSN, Bob MacDonald leading Wood Group Kenny and Michele McNichol at the fore of Wood Group Mustang.
This was a great opportunity to ask them some key questions.
Q1: Robin – what is your vision for the future of Wood Group?
Robin Watson: My vision for Wood Group is to be the best service provider to work with and the best service provider to work for, with a focus on continuous improvement. We’ll achieve this through building on our diverse range of services, varied client portfolio, strong market reputation, and proven ability to manage our risk well.
The secret to unlocking our further potential will be celebrating the different skills and capabilities we have across the business and bringing together our combined strength in an appropriate and deliberate manner to enhance value.
Q2. That’s interesting, can you elaborate?
RW: Wood Group is made up of three businesses - Wood Group PSN, Wood Group Kenny and Wood Group Mustang. Across these businesses we provide cradle to grave solutions for the oil & gas and power generation industries worldwide, from design, engineering and production support, to operational and maintenance management services through to decommissioning.
To each of our stakeholders – our investors, customers, employees, suppliers and the communities in which work - we offer a proposition that is discreet, unique and different from our competitors and this is something we are proud of.
Quite often our customers have engaged with one distinct part of Wood Group. Our focus and challenge going forward is to appreciate the offering that comes from each individual part of the business and celebrate our differences, while looking for opportunities to offer our ‘togetherness’ as a benefit to clients. A future focus for Wood Group is proactively seeking more market opportunities where we can collaborate across our three businesses and offer something quite compelling to our customers, which encompasses our combined expertise and capabilities. Quite simply we can provide innovative technical solutions, which work.
Q3. Speaking of challenges, how can Wood Group overcome the challenges presented by the recent downturn in the oil and gas sector, how does it change the focus for the company, and the wider industry, going forward?
Michele McNichol: I think that the downturn has accelerated our need to look at how efficiently and effectively we are delivering services and take a critical eye over how we function, how we interface with our clients and how we solve their problems.
Over the past 10 years we’ve seen the cost of projects rise at an unbelievable pace. It’s time to take a step back, analyse and understand how we can operate in a more cost effective manner.
Bob MacDonald: Wood Group as a company has always evolved. Changes that we are currently making have undoubtedly been accelerated because of the market but they would have happened anyway as part of our commitment to continual improvement, development, and change.
Dave Stewart: I agree, and see the downturn as a strong opportunity for Wood Group to become a real business partner to our clients, providing efficiency through the broad provision of services we offer.
MM: Absolutely Dave, I think that our clients are in a different space. They are now looking for strategic partners and people who can bring a broader service offering to the table are more attractive. So I think that really sets us up well because of the breadth of what we have to offer. We’ve got something unique to take to these clients who are looking to minimise risk and interface.
DS: This first half of 2015 has been a difficult period for the industry and there has been a need to make tough decisions in order to become more efficient, to safeguard the sector and become fit for the future. The decisions we make today are for the industry’s long-term sustainability.
MM: And at the heart we are an organisation that is built on our people. We remain committed to finding ways to continue to grow as a business, develop people, and bring new talent into our industry because that’s just critical – it isn’t going anywhere in the near-term. We’re looking for people who are innovative, creative and are figuring out how to do this better, faster, less expensively. They’re the people we want to be surrounded with.
BM: Tough markets do give people the chance to excel. Those people in the business who are able to adapt and help us get through this are well positioned for when we do continue to grow as a business and expand internationally. What did Winston Churchill say? 'Never let a good crisis go to waste.' We’ll come out of this stronger than we went into the downturn. We’ll be ready for the challenge. Bring it on!
Q4: What do you feel are the big drivers that will shape our sector for the long term? How do you see the energy landscape evolving over the next 40 years?
BM: I think that Wood Group is committed to and focused on technology and innovation and seeking out the new opportunities advances in these areas bring to the sector. I think in 40 years it would be naive to believe that the energy sector won’t evolve and that there may be some new types of energy. For example we’re now getting more involved in carbon capture and CO2 transportation, and in subsea separation, which only a few years ago would have seemed like a futuristic development. Remaining at the forefront and making sure our customers get what they need is key.
RW: I’d build on this point. With more than 90% of our business being oil and gas related, moving forward this will remain a major part of the primary fuel mix. Most projections suggest around 60 million barrels per day of new oil will be required by 2040 to satisfy the consumption levels that are anticipated. So, from a fuel perspective, yes, we’ve made some tentative steps into renewables and carbon capture, but equally fossil fuels will remain a significant part of the world fuel primary supply and being part of this sector sets us in a healthy position into the long term.
MM: For me, the ultimate goal for the industry moving forward is standardisation. There is so much proven design but yet every time a new project comes up there is a tendency to begin all over again with a blank sheet of paper. That just doesn’t make sense. I think there is going to be more of an appetite to help reduce cost by using proven design, and this is something Wood Group plans to be at the forefront of steering. Whether it's components of a design or the whole design, replicating proven designs means that we can get to market faster and with a lot less expense.
BM: I think decommissioning is also a key area for Wood Group and the sector as a whole. There is sometimes a fear in the North Sea to talk about it, but just because sometimes superstructures are being removed it doesn’t mean that the field is actually necessarily depleted. There are a few superstructures that have been removed that will be redeveloped as subsea developments but to the public they think the industry is coming to an end. As Robin has referenced, it’s going to be part of our society for decades to come.
DS: It’s true and a point I’d add is that in such a mature basin as the North Sea, keeping the infrastructure going is hugely important in getting access to the remaining reserves. I think there is a real opportunity for Wood Group to play a leading part in supporting the ageing infrastructure and bridging the gap between late life asset management and decommissioning so that recovery of the basin is maximised.
BM: I think your point there, Dave, is really good because if we can make sure that some of the trunk lines across the globe are kept in a workable condition many of the marginal fields then become feasible. If that infrastructure is not there it just can’t work.
DS: And the fact is that as other frontiers open up this problem will eventuality become one which is faced by other basins, and I believe there is a real opportunity for the UK and US to take the lead in understanding the needs of mature assets.
Q5: What do you see as the benefits and challenges of being part of a company which comprises many, very different, parts?
MM: The key benefits are the breadth of service we have to offer and our geographical spread worldwide. But those benefits bring with them a level of complexity around how we get the best practice in each of those locations. Ensuring a consistency of standard across the world is a challenge for Wood Group - but one that we’re fit for.
DS: There is a commonality across our business, an anchor provided by our Core Values that means whichever part of Wood Group an employee is working in and no matter where they are geographically, we’re all talking the same language, working to the same objectives and behaving in the same manner. And at our heart we are a people organisation – our employees are the crucial component to our success.
Q6. Wood Group now operates in more than 50 countries. What are the challenges of working internationally?
RW: I think that our vast customer diversity and the range of services we offer across 50 countries is part of what differentiates Wood Group. When you get a reduction in the oil price, not every basin and not every service is affected in the same way. So in some regards our global footprint is what makes the company quite a durable investment and employment proposition. Also if you look at the foundations of Wood Group, we started as a Scottish company, and have diversified through acquisitions and growth. Wood Group Mustang for example is in origin a very American company. When you add the other smaller acquisitions we have done on a global scale, you realise it is difficult to pigeon hole Wood Group and that is a real strength of the organisation. It brings with it a genuine diversity of thought, range of experience, cultures, and thinking and this is what truly makes us a global organisation.
BM: It’s true. Within Wood Group Kenny’s offices in Aberdeen alone we have 32 nationalities. The youngest employee is 18; the oldest person is 74. This breadth of people and experience brings with it diversity of thinking that makes us even more capable of solving problems and that’s what our customers are looking for.
MM: I think another of Wood Group’s strengths is being able to bring our global experience and deliver it at a local level.
DS: Yes, we’re really committed to bringing our Social Responsibility Core Value to life by ensuring that we give back to the communities where we operate. Building skills sets within local workforces and buying products from the local supply chains are a key part of this. It’s about being global but providing opportunities locally.
BM: And the fact is there are still opportunities for Wood Group to grow. There are many locations we haven’t even touched yet, we haven’t been everywhere we need to go.