Tom Ehret has been a prominent figure in the subsea contracting community for decades; Energy’s editor first encountered him in 1990 when he was CEO of Stena Offshore.
A few years ago and it seemed that Ehret was for seeking a quieter life than the high profile one he had led for so long.
And then suddenly he pops up as the figurehead . . . chairman . . . of a brand new subsea inspection, maintenance and repair company with four centres . . . Aberdeen, Dubai, Perth and Singapore.
When Harkand was launched in February, Ehret spelled out the ambition to become a $1billion per annum turnover player within five years.
Following investment by Oaktree Capital Management in Iremis, Integrated Subsea Services (ISS) and their sister company Andrews Survey last year, the decision was made to gather them together under newly-created umbrella brand, Harkand.
The new adventure that Ehret has been roped into is not simply a repeat of his past.
“For most of my career I have been on the construction side, working with the various companies that have put so much of the infrastructure that is out there (offshore) today,” he said.
“As is of course very well known, there is a need to keep that infrastructure going. With commodity prices continuing to rise, it makes a lot of economic sense to continue to take hydrocarbons across that infrastructure,” said Ehret.
“Much of it is now pretty old, yet it continues to spread because of step-outs and add-ons over the years.
“All that needs maintaining, modernising and kept going. Such activity is a lot less visible; less glamorous than new projects: you don’t hit the headlines, yet it is absolutely essential.
“It’s much steadier work (than new projects) and there is growth. Also, the requirements with regard to integrity are getting progressively more demanding and that creates more IMR opportunities.
“Another reason, and I should know given my history, is that the companies that were doing this historically, including those I have led, have become a lot bigger.
“They had to if they were going to take on challenges that have grown in scale . . . like deep water subsea construction where projects are costing a billion dollars and more; also, being forced by operators to take on a bigger share of risk, requires bigger, stronger, richer contractors.
“Harkand is a completely different animal to what I have done before,” said Ehret. “It’s not in any way competing or going against what the companies that I worked for in the past stood for and did.”
Ehret believes that Harkand occupies a niche that subsea heavyweights Technip, Subsea 7 and Saipem have largely vacated. Routine IMR (inspection, maintenance, repair) was no longer attractive enough.
“Culturally, I used to say that you can’t ask the same guys who have been hunting for elephants to go shoot rabbits,” he said.
“Of course the big guys will continue to do some of that work, but it’s a lesser part of their portfolios than it used to be. At the same time as there is growth in demand, there is probably a shrinking of supply for that particular activity . . . hence a bit of a gap has opened.”
Ehret says the space occupied by Harkand really is different, even though with IMR it can get to the point where it is hard to discern the dividing line between repair work and actual construction.
This is why one of the roles that Harkand will hopefully play is to be a sub-contractor to the big companies, carrying out modest construction tasks that they are no longer interested in or geared up for. However, the company has no intention of carrying out pipelay operations.
“One of the notions that we have is that Harkand makes itself available to not just the main contractors, but also the oil companies including independents. It’s about being able to work in a complementary way.”
Ehret is clear that the company’s fleet will marry proven survey, inspection, repair and maintenance services. At its disposal is the Iremis fleet of multi-purpose diving support vessels: ROV and air-diving support vessels and ISS’ fleet of 23 remotely operated vehicles (ROVs); and teams of ROV operators, surveyors and divers.
The fleet also includes the new state-of-the-art multi-purpose 150m diving support vessels, Harkand Atlantis and Harkand Da Vinci. Further new tonnage is in the pipeline.
Ehret is clear that it is client needs that must drive Harkand, not the company’s assets, and that being ruled by utilisation rates is not the way forward either.
Rather, Harkand has to be driven by cost-effective IMR service offerings, including traditional air diving, the value of which has re-emerged in recent years, and by being prepared to base ROVs on board client platforms if that proves to be the most cost effective means of satisfying said client’s needs.
Ehret: “Getting this service orientation right is very important. It’s often the case that the financial world will look at boats as big, shiny, expensive assets. And they are of course big enablers.
“But, at the end of the day there is one central idea that I have held throughout my career; and I’ve never changed it. It is that I have a very deep belief that you need to combine enabling assets with a service orientation.
“Harkand is meant to be a reflection of that. If you look at ISS; this was a pure service provider without its own fixed assets. Iremis on the other hand had assets but very little by way of services. Harkand was actually born out of bringing these two companies together.
“For me it is absolutely essential going forwards to continue to have that balance between enabling assets . . . meaning boats, ROVs, dive systems and so-forth . . . and actual delivery of a high quality service.
“Remember, what the client is buying is not a boat, or ROV or dive system; he’s buying a service . . . expertise.”
Though Harkand is new and the service it offers is niche IMR and discerning, for Ehret there is also a great deal of familiarity.
“What we’re doing today is nothing new really. I’m supposed to be an intelligent guy and yet I keep on repeating things!
“But don’t forget, I don’t manage the company. I’m chairman. Harkand has, in my view, a very able team. All I do is advise them and seek to help by bringing experience and ideas to the table. It’s all about trying to give something back.”
Tom Ehret: Questions and Answers
Age: 61
Education: Graduate engineer from Ecole Nationale Superieure des Arts et Metiers
Main roles in career and dates:
MD of Comex Houlder Diving Ltd, Aberdeen 1982 – 1988
CEO of Stena Offshore, Aberdeen 1988-1996
COO of Coflexip Stena Offshore (CSO), Paris, 1996-2001
Vice-chairman of Technip, Paris, 2001- 2003
CEO of Stolt Offshore/Acergy, London, 2003-2008
What has been the hardest decision you have made in business? The merger between Stena Offshore, medium size, privately held, growing business with a great management team, and a listed French company
Who do you admire in business? My inspiration came from my father: lost his job at age 50 (at a time when full employment was the norm in Europe), and thought it was great because that made him feel young again; started from scratch again working from home and build a successful business by the time he retired.
What do you regard as being your greatest success to date? Probably the acquisition of Santa Fe’s pipeline business in 1989 for Stena Offshore, thus creating the first (and for a while, the only) integraed subsea business.
What do you do to relax? Gardening
What charity do you support? Cancer research
If you were not in the job you are in, what job would you like? To be a farmer
Where would you like to retire to? Venice
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