It could have been much worse for Maersk Oil.
One if its suppliers, US-based Hercules Offshore, was teetering on the brink of bankruptcy for the second time.
The Houston-based vessel owner was due to deliver a heavy-duty jack up rig destined for Maersk’s North Sea flagship project, the £3billion Culzean field.
Instead, Maersk Drilling, another part of the Danish conglomerate that owns the oil and gas firm, struck a deal to buy the rig just as it was completed and ready to set sail from its makers, Sembcorp Marine’s subsidiary Jurong Shipyard of Singapore.
All Maersk had to do was settle the outstanding £130million due to Sembcorp and it was theirs.
For Maersk chief operating officer Gretchen Watkins, the deal means Culzean is still on track for first gas in 2019 thanks to the broad shoulders of parent company AP Moller–Maersk Group.
She said: “Fortunately, for us it is more opportunity than crisis.”
Already the firm managed to shave off about £140million off the project’s capital costs as as it neared sanction in the third quarter of last year.
“That was a great opportunity for us right before sanction to tighten up our investment proposal,” she said.
“And of course there have been a few things we didn’t expect like the Hercules bankruptcy. “But we were fortunate Hercules were able to find a buyer for that – Maersk Drilling, a company we are familiar with. They are really a world class driller and we were able to work that deal with Hercules. “Everyone was aiming for the same goal which was great.
“We were very fortunate to have worked through the crisis and come out the other side with a pretty good outcome.
“We are on track schedule wise and budget wise.
“It really is our flagship project so we are extremely optimistic that when first gas comes in 2019, the gas market will have recovered a bit but we will also have delivered an exception project from a safety and performance point of view.”
American Ms Watkins has been with the Danish firm for two and a half years, in a career which saw her head-hunted into the oil and gas industry from her university dorm room and which has taken her and her family to live and work in six different countries. Prior to Maersk, Ms Watkins had 20 years experience of senior roles at Marathon Oil and BP.
Initially she had planned to study mechanical engineering and follow in her dad’s footsteps at GE Aviation near Cincinnati, Ohio. But then she got a call from Amoco Corporation who wanted her to come to Houston for a summer job. The invitation was part of the firm’s diversity recruitment programme as the firm pushed to get more women into the industry.
Ms Watkins is a firm supporter of efforts to attract and develop a wider range of talent.
She believes that American firms – like Amoco – have made greater efforts to widening their talent pools than in Europe. But she admires policies in Europe that have set mandatory quotas to increase the number of women on the boards of companies, such as in Norway.
“US companies in general have been at this a little longer than European companies,” she said.
“Some of the things that have produced some good results in Europe and Scandinavia have been more targeted at the board level. So you have seen some real efforts in some cases to legislate or encourage more equal board representation.
“I support that very strongly. It makes things happen faster than they would have normally.
“I am a supporter of targets and I understand they come with a downside, potentially where women might be told you got that job because you are woman and they need to meet their targets. But in my view we as a gender can stand up and deliver and show that is not correct.”
It is clear from her track record that Ms Watkins could hardly be described as a “token woman”.
Over the last few years Maersk has improved its safety record with fewer recordable injuries, while at the same time increasing efficiency – which is up from 62% to 74% in 2015.
“That is a great improvement, particularly given the maturity of our assets we run here,” she said.
Meanwhile, Maersk’s UK production has nearly doubled, rising from 40,000 barrels a day to 70,000.
“In my view that gives you the right to grow and a strong foundation to grow upon,” she says.
The company is also looking to use the strength of its parent company to make further acquisitions – although Ms Watkins declined to be drawn on any North Sea assets she might be eyeing.
“Maersk Oil has been very public about our desire to continue to invest through the downturn.
“We are actively screening opportunities that present themselves that fit our portfolio.
“We have been honing in on places were we already have an existing footprint and a proven track record of delivery and looking at acquisitions in those spaces. Certainly one of those spaces is in the North Sea.”
In addition to Culzean, which is expected to meet up to 5% of the UK’s gas demand, the firm also has a stake on Johan Sverdrup – one of the largest oil discoveries ever made on the Norwegian continental shelf. With assets in Algeria and Angola, the firm also recently paid £250million to farm into onshore licenses in Kenya and Ethiopia.
She added: “We find ourselves in a unique and privileged position of being part of a big conglomerate. That is what gives us the ability to be looking to grow in a down cycle.”
Questions and answers:
Who helped you get where you are today?
A lot of people have helped and supported me throughout my life and career. I’m the daughter of an engineer, so my dad helped to stimulate my curiosity and passion for engineering. I have also had, and continue to have great mentors, both male and female, who I have worked with over the last 25 years.
What do you still hope to achieve in business?
I am naturally driven to do more and take on new challenges but I am also immersed in what I am doing at the moment. Across the industry, the oil price means we have a big challenge on our hands and that’s my focus.
If you were in government, what would you change?
I think there should be more active collaboration between industry and government. To solve many of the world’s biggest challenges, I think there’s huge potential to be delivered from combining the best that government and business has to offer.
What are you reading, watching, or glued to on TV?
I am watching Blind Spot – it’s a US (NBC) show with a really interesting plot and has a great female lead. The story is of a woman who has lost her memory and identity and is discovered with a whole bunch of tattoos on her body, each of which is a clue to solving a different crime.
If you were a character in history or fiction, who would you be?
I am drawn to people who have pioneered in their field – in the case of women that’s often against strong odds. Someone like Amelia Earhardt who was the first woman to fly solo across the Atlantic. Marie Curie, a different context – scientific discovery – but a similar personal drive to discover and pioneer.
What kind of car do you drive and what do you dream of driving?
We have a very utilitarian station wagon – it’s all about practicality – plus in Denmark the motor car is a very costly luxury.
In an unrealistic dream scenario it would be a sporty convertible – in the reality of Northern Europe with the weather and three growing children – something with seven seats and plenty of space… and a cup holder for a big coffee!
What would your family say about you?
’Dad cooks better than you…’
What charities do you support?
I’m involved with a fantastic charity called Communities in Schools in Houston. It provides services and resources to under privileged students and their families in order to ensure these young people can complete high school and enhance their life chances.
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