James McCallum, co-founder of Senergy, is hardly your typical North Sea heritage oilman. For a start, the Scottish company’s CEO bases himself in the Middle East and not at HQ in Aberdeen.
He is a vigorous promoter of the UK upstream offshore capability, of Senergy and of himself. He is unafraid to express opinion and clearly does not kowtow.
Some would describe such characteristics as arrogance, but flip the coin over and they could be interpreted as strength – someone who knows his own mind and is willing to break the mould.
For McCallum, the glass is never half empty; more likely it is three-quarters full. He is capable of picking up the globe and looking at it from different angles, not just a parochial Caledonian eye.
He is the kind of person who sees the Middle East for what it has been for thousands of years – a vital and vibrant crossroads between East and West; equally West and East, notwithstanding current tensions. No wonder he deliberately chose to live there and run up horrendous phone and travel bills in the process.
McCallum is an energy man rather than a died-in-the-wool oilman, despite his North Sea heritage. He talks of “balanced” energy but, at the same time, acknowledges that now, and for some time to come, the UK must capitalise on its enormous, hard-won oil&gas capability.
And that’s an interesting point as McCallum sees Britain as being very strong in this regard, in large part thanks to the strength of leadership provided by trade body Oil & Gas UK and steering group PILOT.
“The good thing about Oil & Gas UK and, indeed, PILOT is that there is an industry forum that actually debates what is actually happening in the marketplace, takes a perspective and feeds it back to the industry.
“I think it’s a terrific forum for quality discussion, and you’d be hard pushed to find this happening with any other industry anywhere else in the world.”
For all the cohesion, McCallum warns that the North Sea is but one part of a global energy game and that the supply chain should not feel constrained by what is, in any case, a declining province.
“The marketplace is now fully global,” said McCallum.
“Over the last four to five years, there has been a great deal of consolidation in the supply chain, particularly in equipment and drilling-rig supply. Service companies increasingly take a global view of the marketplace; you wouldn’t expect them to do anything different. Of course, the customers have been global for a very long time.
“One of the advantages of being not solely immersed in the North Sea environment is that one can actually look at the UKCS and compare it with other opportunities in an objective manner, or at least I can.
“There is no doubt in my mind that the UKCS continues to be recognised overseas as a terrific centre of excellence with a highly skilled workforce capable of achieving quite extraordinary technical performance against the harshest of weather conditions.”
But as to whether the UK Government fully understands the value of this asset, or that the companies understand just how collectively valuable they are, McCallum appears doubtful.
“I see about two delegations a year coming through the Middle East, with the Government setting up a forum for companies to present their capabilities in the region. But I believe the responsibility to do that starts at home. Companies like ourselves (Senergy) need to be out there. That said, there’s no doubt that, occasionally, a heavy-hitting Government-led representation in overseas markets is very well received, particularly in places like the Middle East.
“That is something the Middle East market likes to see happen. However, you can’t rely on that as a robust reason for building your business overseas. You have to understand the culture of the market that you’re targeting or operating in. You can’t do that through a delegation. You have to be on the ground.”
McCallum said that Senergy, for one, had done its homework and that the decision to locate its CEO in one of the prime target markets was a clear declaration of intent.
“This is the difference between push and pull. In the first three to four years of Senergy, we sought to internationalise our business by pushing into overseas markets. But we’ve ramped up much more strongly since we got out into the markets and started pulling.
“It was the right decision to make. The logic that we applied was that we saw the home market softening. We decided to get out there.
“I think our timing was sensible. I think we took advantage of the marketplace softening and I think we’ve got ourselves quite a way ahead on the learning curve, and that has to have been a good thing.”
McCallum agreed that the credit crunch and so-called global recession were more of an American-European affair than a world event.
“Brazil, China, India, Indonesia and Australia … those marketplaces saw a softening of growth, but they did not slip into recession.”
He suggested this was very evident in the Middle East, where the media had painted a picture of gloom and doom because Westerners had stopped buying expensive apartments in Dubai. However, all that had happened was that they were replaced by wealthy Chinese shopping for bargains like there was no tomorrow.
As for Senergy’s aspirations, McCallum said the objective remained to create a balanced energy group capable of capitalising on a very scarce resource – the wisdom of really experienced people – and becoming known for technical excellence.
In terms of funding future growth, he said that the options remained going for a listing on AIM in London, securing private equity or perhaps the commitment of a high-net-worth Middle East family or individual.
One thing is certain, Senergy can no longer self-fund, such is the scale of the company’s ambition. So which does McCallum favour?
“A very good question. I believe we will probably end up with a marriage of two things … northern European P/E and a high-net-worth individual within the Middle East. That way, we would get the best of both worlds. But that’s pure speculation.”
Recommended for you
