Energy’s editor first encountered Ciaran O’Donnell 12-13 years ago at oilfield engineering consultancy CSL of which he was a co-founder and grew for seven years until acquired by DOF Subsea in 2007.
O’Donnell transferred across as part of the deal and stayed until 2010 before taking some time out, yet keeping his hand in too as a non-exec of Glacier Energy Services, which board he continues to serve on.
In 2012, he was approached regarding taking the helm at Aberdeen company Flexlife as prior CEO and co-founder of the business, Stuart Mitchell, was shouldering the role of global business development director and is now building the firm’s Houston business unit.
Bringing a new boss into someone else’s creation, especially a lively engineering-related enterprise such as Flexlife, can be fraught. That said, O’Donnell had already been there and done that, so to speak, with CSL.
So he instinctively knew the score including where to be tough … making decisions that others might find hard to swallow.
“But when you come into any business that isn’t your own from the outset, you have to allow time to really understand how it works,” O’Donnell told Energy.
“Look, you’re not going to attack the engine of your car with a spanner until you know how it works. Of course, some people dive straight in, but I like to give it time and really understand how it works. What are the good things, what is there that could be done differently.”
From the outside, O’Donnell had, like many others in the offshore business, watched Aberdeen firm Flexlife come from nowhere to today’s successful high-tech enterprise in just a few years. Moreover, it had grown up fast of necessity, perhaps in large part because the company had identified a very specific niche to do with the integrity of flexible production riser systems, and the most desirable client to land by far then was Petrobras.
“Like any business that moves from zero to £15million in just six years, Flexlife had to grow up fast,” said O’Donnell. “Look around the rest of the UK and it is hard to find many companies like this or an environment as dynamic as Aberdeen’s.”
He agreed that for companies like Flexlife that are focused subsea and technology-led, Petrobras was and should be the dream client. Doing business with this semi-state petroleum company demands that you grow up rapidly and that you are very sure of your technology offering.
But like all dreams, they don’t always come true; or at least not as true as you would like, including for Flexlife.
“I’ve been the party pooper on Brazil,” admitted O’Donnell.
“The reason for that was that we’d spent three years there (in Brazil) and we seemed to be pursuing in the main just one customer.(Petrobras).
“I think we were doing all the chasing; we’d invested a lot of money into it and, quite frankly, we weren’t getting much in the way of results out of it.
“So we backed out and we’re now based in Houston where we have a wide range of customers doing business in myriad countries. Strangely enough, Petrobras is among them.
“For our kind of niche, which is built around flexible risers and the integrity of them, then a global approach out of Houston is more solid than what we had before.”
Among Houston-headquartered clients for example is Apache, which is now one of the firm’s biggest customers … not just to do with flexibles but the whole subsea integrity management piece, something that O’Donnell considers a huge success.
“So now we see ourselves more as a life of field subsea engineering and technology business,” he said.
“I’ve just been in Houston and it’s amazing how much interest we’ve generated there, and in such a short time. I think the US companies operating out of Houston are starting to become very interested in flexibles.”
All this makes Stuart Mitchell’ job in the global oil and gas capital that much easier as Flexlife is no longer regarded as perhaps ultra-niche. The Houston team currently stands at three; but 10-15 could be on board by this time next year.
Whilst O’Donnell has worked to broaden Flexlife’s marketplace, he is seeking to do the opposite with technology development, even though technology is the mantra on which the firm was launched.
“Before I arrived, we might have had eight or nine or even 10 potential technologies that Flexlife was trying to take to the market, which was a lot,” said O’Donnell.
“I have had to rationalise that. There were obvious technologies in there like our annulus testing, scanning, and repair systems. These had obvious markets and customer pull.
“But there was a lot of other stuff that we seemed to be developing where there wasn’t that much pull and I wasn’t really sure if there was a market for it. So we’ve iced some of that.
“If out of eight or 10 different products that you’re trying to develop, you manage to bring three or four of them successfully to market, and still have quite a way to go, that’s not a bad success rate.
“I don’t think people should be turned off by that, especially if the ones you opt for turn out to be a major success.
“You’ve got to play to your strengths; like ultra-sonic testing of risers. It’s taken us a long time to bring that to market but now it’s becoming the norm in the North Sea for very definitive analysis of what’s happening with a (riser) annulus in the splash zone … the first 50m of the catenary.
“There is now a lot of interest in that coming from the GoM. We’ve also used it in West Africa and Australia. That market is continuing to develop. We have a unique patented technology that we deliver with the assistance of Oceaneering. It’s a very valuable part of the business.”
The link with Oceaneering is important to O’Donnell. It is an example of how strategic partnering can deliver value.
In this instance the US subsea-to-space major provides the hardware … ROV-mounted ultra-sonic testing equipment whilst Flexlife holds the patent for scanning. The two companies have a five-year agreement.
Another partnering arrangement that O’Donnell is keen on is with northeast Scottish firm Aubin.
“That’s built around Flex-gel and anti-lock products, which we’ve used in-field over the past 12 months to isolate sections of pipeline for operators,” he said.
“There’s a lot of innovation involved in what we’ve developed and we’re working jointly on the development of other products on the back of ongoing projects.
“We would like to do more of this sort of thing. Collaboration fits well with us.”
Have the past 18 months been a doddle for O’Donnell? Not entirely, doubtless, given what he’s had to do.
“We needed to refocus, rather than trying to be all things to all comers.
“Boring old me … that’s hopefully what I’ve brought to the party. It’s a bit more rigour.
“I think the business was wanting to grow up … mature. There was a willingness on the part of everyone who wanted to stay with the business to have a more sustainable business.
“I think we have a lot more structure in the business now; a lot more sustainability; a much wider range of customers. There’ a lot more clarity and consistency of message.
“If anything we’ve narrowed our range of services and the products that we’re trying to bring to market, but we’ve widened the customer base.”
So what’s ahead for the next three years or so?
“It’s more of the same; more organic growth initially because I think we’ve a long way to go on that yet,” said O’Donnell. “And for our flexible pipe specialism, well there’s a lot of space in that market and we have a lot of pull from customers.”
At HQ in Aberdeen and the company’s Tyneside satellite, the core staff currently stands around 90. The latter has been developed from a cold start two years ago to 35 specialists.
“Newcastle is a very important hub for us. If you go back to the key reasons why I joined the company, the first was the special way in which Flexlife combined engineering and technology where flexible pipes and umbilicals are really understood.
“We don’t want to get obsessed by headcount; our job is to bring enabling technologies to the industry. If we have another 20 recruited over the next year that would be great. That would be a mix of Aberdeen, Newcastle and Houston.”
However, strong growth is absolutely on the agenda. The objective is to grow turnover at Flexlife to £30million by 2017. Is it a tall order?
Main investors Maven and Simmons believe the target is achievable O’Donnell is not afraid to give it a go.
“The stall we’ve laid out is that, by 2017, we want to have doubled the revenue of this business and deliver an appropriate level of profit,” he said.
“I think there’s still a lot of organic growth potential with this business. But acquisitions and strategic partnerships are definitely on the agenda. We are actively pursuing on this front.
“Since I’ve been here, the potential that I saw from the outside hasn’t waned at all. It just needs to be realised. And that’s what’s great about the challenge here.”
BOARDROOM Q&A
Age: Just 52!
Education:
University, college, other: BEng. Mech. UCG
The 2/3 main roles in career and dates:
Co-founder and CEO of Construction Specialists Ltd. 2000-2007
Senior vice president DOF Subsea – Atlantic region 2007- 2010
CEO Flexlife Ltd – September 2012 – present
What has been the hardest decision you have made in business?
Buying 100% stake in CSL
Who do you admire in business? Or Who has inspired you most in your career?
Nobody in particular, I am inspired everyday by all the terrific people I see doing great work.
What do you regard as being your greatest success to date?
The building of successful management teams, and watching these individuals develop and go on to do many great things.
What do you do to relax?
Play golf, ski, appreciate good food and well crafted wine
Where is your favourite holiday destination?
Portugal
What is your favourite gadget?
Range Rover Vogue
What charity do you support?
Various – local and international
If you were not in the job you are in, what job would you like?
Film director; It must be so much fun and satisfying to see such a well engineered finished product, with so many constitute parts.
Where would you like to retire to?
HQ Scotland
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