For many North Sea oil and gas supply chain firms, attending the annual ADIPEC conference in the Middle East has been a key part of efforts to expand internationally.
But amid rising political and fiscal uncertainty, securing contracts at the Abu Dhabi event is a growing priority for some companies operating in the maturing UKCS basin.
One north-east supply chain firm achieving recent success in the region is ICR Group. Recently, the company secured $3.5 million (£2.67m) in contracts this year across the Gulf.
The firm has seen growing demand for its ‘Technowrap’ product range in the region across offshore and onshore installations Oman, Qatar and Saudi Arabia.
It comes as ICR, acquired by private equity investors Graphite Capital in 2014, aims to build on a record year for the business in 2023 and secure more work in the Middle East.
Its success has seen the firm nominated for two awards at the 2024 Energy Industries Council (EIC) National Awards, alongside a nomination in the Business of the Year category at this year’s Northern Star Business Awards.
ICR international push
Speaking to Energy Voice, ICR chief operating officer Ross McHardy said the company’s success came after recalibrating its growth strategy in the Middle East.
McHardy said ICR is aiming to double the size of its business across its core offering by 2030.
“Most, or a lot, of that [increase] is international growth, and the two main businesses that we do that with are our Technowrap and our Quickflange products,” he said.
© Supplied by ICR Integrity“They’re already established in these markets, but it’s really a case of trying to push them a little bit harder and get some more growth.
“We’re looking to increase our footprint, which is primarily in the Middle East and the Americas, hence we’ve got quite a focused strategy for the Middle East.”
Middle East growth
This strategy includes working with local partners in the region from the company’s base in Abu Dhabi to rebuild its presence which “fell away a little bit” during COVID, McHardy said.
“We’ve been there and done quite a lot of work historically, and now it’s a case of rebuilding some of that with a little bit more focus,” he added.
“It’s not an easy region to work in, there’s a lot to it [and] there’s a lot of work to do.”
McHardy said working with a local partner network has been a key strategy for ICR.
© Supplied by Adnoc Drilling“The reason we use a partner network is trying to be as local as we can in that delivery and understand and respect all the customs, which in the Middle East is really very important as it is everywhere in the world,” he said.
“It really doesn’t matter which country you’re in internationally, they’re all looking for local content.
“We can’t get that without huge investments and we’re not ever intending to be that size of a business, so it’s far better for us to work with others.”
North Sea uncertainty
Alongside internationalisation, one of the main strategic objectives for ICR is to “protect and grow where we are already”, including in the North Sea, McHardy said.
But amid months of uncertainty surrounding the offshore sector in the lead-up to the UK budget, ICR is among many firms looking internationally to continue growing.
“Obviously the UK is making decisions to pull back on oil and gas investment, so for our companies to continue growing and to maintain their size, there is more and more [of an] international push on that, within oil and gas as well as diversifying into other industries,” McHardy said.
Middle Eastern governments are also taking a much different approach towards the energy transition compared to the UK, which is creating opportunities for companies like ICR.
“Some of the things that, particularly Saudi, are doing are incredible in terms of Neom and investing in different areas,” McHardy said.
© Supplied by Neom“They’re doing an awful lot of work in hydrogen just now, and it’s green hydrogen, so they are developing in ways which are ahead of the game [compared to] elsewhere, and they’ve got a lot of capital they can put into that.
“But I would say that they are less reticent to keep on going with their oil and gas. It’s two things in parallel.”
“It’s not to say that they’re not looking to decarbonise and move into different industries, they’re just doing it in a slightly different way and in many ways, they’re probably ahead of the curve than where we are in the UK.”
Retaining North Sea market share
Despite the challenges and uncertainties surrounding UK investment, McHardy said ICR is determined to retain its position in the North Sea market.
“But the reality is it’s a declining market,” he said.
“We work on physical infrastructure and a lot of that is going [away], so that is going to be a reducing market for us in the mid-term.
“Short-term, we are picking up plenty, we’ve been very busy this year and I guess there’s a reality that less investment means there’s more repairs to do to the corroded infrastructure, so we’ve been relatively okay… but we see that market is going to reduce hence our international push and diversification.”
© ShutterstockWithin the UK energy transition, ICR is keeping an eye on the emerging UK carbon capture and storage (CCS) market.
But McHardy said there is a lack of certainty surrounding CCS infrastructure at present.
The company sees its chemical injection, machining leaks and defence divisions as strong opportunities for growth.
“We’re already spread into some of these sectors and I think it’s just a continuation of that. It’s not a knee jerk, it’s just building that in parallel with everything else that we do,” McHardy said.
And despite the North Sea uncertainty, McHardy said ICR is still investing in its oil and gas product range.
“We’re not scared of oil and gas, it’s part of the transition and we’ve got new products on the way,” he said.
International oil and gas growth
Outside of the Middle East, ICR is also working to increase its presence in the Americas, particularly in the US market.
Despite strong demand, differences in regulation in the US mean ICR is subject to more restrictions on how it can market its Technowrap and Quicklfange products to American firms.
“There’s limitations on how long the repairs can be in service for by the regulator,” McHardy said.
“We can’t sell it the same way as we do elsewhere in the world where it is effectively a permanent solution in the US, it’s treated as temporary.”
ICR is working through the regulatory process and expects to overcome the challenges, and McHardy said the firm is investing in its presence there.
Elsewhere, the company is also building its business in Norway, Australia, West Africa, and in emerging markets like Guyana.
And the hard work underpinning its international push appears to be paying off for the Bridge of Don firm.
For its 2024 financial year, ICR set itself a goal to surpass its record-breaking results in 2023 and achieve £50m, a goal McHardy said the firm is currently on track for.
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