WESTERN Australia’s oil and gas services providers are increasingly catching the eye of bigger European rivals keen to cash in on the state’s offshore oil and gas boom.
WESTERN Australia’s oil and gas services providers are increasingly catching the eye of bigger European rivals keen to cash in on the state’s offshore oil and gas boom.
WA is in the midst of an unprecedented offshore development boom, with five major projects worth $65 billion, including the giant Gorgon LNG project, currently under construction. A further seven projects worth $120 billion are in the advanced planning and design phase.
Not surprisingly, WA has become a premium business address for a growing number of specialist European services groups.
Fresh from buying a controlling stake in Malaga-based Modern Industries in June, Dutch offshore construction and maintenance group Hertel is planning an aggressive expansion in WA.
Modern, which has 300 workers in the state, is a leading specialist insulation service provider to the LNG and petrochemical industries. It also provides large-scale heating, ventilation and air-conditioning (HVAC) solutions and specialist rail signalling solutions.
Hertel, which turned over more than $1 billion in calendar 2009, is understood to have paid around $10 million for its stake in Modern. But Modern’s local management, which owns the remaining 49 per cent, will continue to run the business.
HertelModern managing director Andrew White said Hertel’s balance sheet strength would better enable the company to compete with bigger international rivals for major contracts at projects such as Gorgon.
“Here we’ve managed to retain a strong Australian ownership in the business, and still have the strength to take on major projects,” he said. “So we have created a real force, with a fairly large Australian ownership, to compete with foreign companies.”
Mr White said Modern was a platform to aggressively grow in Australia, particularly in the LNG and offshore oil and gas sectors.
As a pointer to Hertel’s aggressive approach, Mr White noted it had made 200 acquisitions in the past two years, and had high expectations for its new Australian arm.
HertelModern could realistically aim to account for up to 10 per cent of Hertel’s global business within five to seven years, he said.
Meanwhile, Norwegian well services specialist Seawell Group has just wrapped up its $10 million takeover of Perth and Singapore-based oil rig auditor Rig Inspection Services.
Seawell agreed to pay $5.2 million upfront, with the remainder due in two years subject to the business meeting performance hurdles.
RIS, which employs 56 staff at its Welshpool and Singapore bases, provides rig inspection services to major companies, including BHP Billiton, Chevron, and Shell.
