BELMONT-BASED engineering company Velocious has doubled production capacity to accommodate actual and expected demand for its specialist tools and services.
The company has been developing equipment for subsea intervention in the oil and gas industry since 2006.
The growth of its workforce, from just three directors in 2008 to now more than 45, gives an indication of its success. Velocious also has some big-name contracts listed on its portfolio; last year it secured a contract to develop components for use on Chevron’s Gorgon project, and it has a $1.6 million contract with Exxon Mobil for after-market services including ongoing subsea tooling, consultancy and inspections.
Chief executive Brett Silich says the company’s revenue has been more than doubling year on year, and is expecting even greater growth in the next three to five years.
Velocious is operating in a market serviced by international suppliers such as FMC Technologies and GE Oil and Gas. During the past year both have announced contracts to provide subsea equipment for Western Australia’s biggest oil and gas projects.
FMC won a contract worth $US150 million with Woodside for part of its North West Shelf project and a contract for Chevron’s Wheatstone Project worth $US325 million.
Meanwhile, GE Oil and Gas recently announced a $US150 million contract with Apache for the Julimar project and contracts worth $1 billion to supply equipment and services for the Ichthys LNG project.
Despite being a small, privately owned company, Velocious has identified a gap in the market.
The company directors realised oil and gas operators often used second-hand equipment for some specific work, and identified an opportunity to enter the market by engineering the components needed – including hardware to be attached to remote operated vehicles (ROVs).
It has since developed equipment for BHP Billiton, Woodside and TS Marine.
Mr Silich claimed the company had been successful because of its narrow focus; it doesn’t own or operate ROVs and is often contracted to carry out work where other companies fail because they had a broader focus and provided inadequately engineered equipment.
“As such, Velocious is often brought in to complete a scope that has gone wrong under the supervision of our competitors,” Mr Silich said.
Despite Velocious’s past success and rapid growth, which propelled it to the top of WA Business News’ 2011 Rising Stars Awards, Mr Silich said the company was now putting itself “ahead of the curve” by going after business not offered by the big manufacturers.
“As some of these new gas fields are established – the Gorgons and Wheatstones – there’s a lot of specialist equipment coming from Europe that needs local storage and expertise to maintain, which the companies don’t have here,” he said.
Mr Silich said a significant level of expected demand had prompted the company to double its capacity through the acquisition of 1,500 square metres of additional office and workshop space.
Velocious is also the only Perth-based operation focusing on subsea intervention equipment that is 100 per cent Australian owned – a characteristic Mr Silich said worked to its advantage and would hopefully bring in more business.
“(Being local) is probably going to become even more important over the next four or five years as these big oil and gas projects take off, and the government will have to focus a little bit more on local contracts,” he said.
“Whether or not they put a mandate on the level of local contracts I’m not sure, but they’re going to have to do something to support the local industry.”
Velocious has also been trying other tactics to ensure demand for its services continues.
In what Mr Silich called a logical step, the company began to transfer its engineering expertise into the renewables sector – a move that is beginning to pay off.
It designed components for part of Carnegie Wave Energy’s CETO3 wave converter system and is expecting successive contracts with Carnegie to be announced in the next two to three months.
The design of the connection system for the world’s largest tidal turbine – operated at the European Marine Energy Centre in Scotland – was also down to Velocious.
Mr Silich said its presence in the Northern Hemisphere was an area the company was looking to expand into.
It currently had contractors and consultants working in the UK, but was planning to set up an office in the next 12 months, which would allow for further business to come in from the renewables market in Scotland.
But the company has also been successful with taking its skills in oil and gas component engineering to the international market with contracts worth more than $1 million for projects in Norway being negotiated.
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