Who’d start a business on the eve of a pandemic?
For Scott Cormack, regional director of Mermaid Subsea UK, the timing has in fact proved “a bit of luck”.
A subsidiary of Singapore-listed Mermaid Maritime (SGX: MMPC), the firm launched its North Sea arm in early 2020, targeting a gap for smaller and mid-level work scopes and dive operations that may be overlooked by larger contractors.
The gap has widened in recent years, not least in the wake of Boskalis’s 2021 buyout of the Rever Offshore subsea business (formerly known as Bibby Offshore).
Yet breathing room and a slower Covid-bound market have allowed Mermaid to lay solid ground for its expansion plans.
“I think the timing now in hindsight has been pretty good actually,” adds Mr Cormack.
“We’ve taken our time during a softer market to build that foundation, and our hand-picked team of people.”
While it can draw on the support of the wider group, the company is “essentially independent” owing to the UK’s differing legislation requirements, and has since made a name for itself taking on a growing pile of decommissioning work.
That has included a major four-operator decommissioning campaigning for the likes of Ineos, Bridge Petroleum, Ithaca Energy and Serica Energy working alongside Exceed during Q4 2022.
This was followed up by a 22-well plugging and abandonment (P&A) campaign over two years awarded by an unnamed operator last spring, Mermaid’s largest contract to date and believed to be the North Sea’s largest ever vessel-based P&A campaign.
“We’re being well received and our feedback is that the market, as we hoped, requires another diving contractor which we’re going to provide to bridge that gap.
“The company is very supportive, but also very committed in the long term to build the proper foundation and take their time,” he adds.
“There’s no quick win here, they’re in it for a long-term, sustainable business and that’s what we’ve been building.”
Doubling headcount
Speaking in late January, 2024 appears to be as busy, if not more so, than last year.
“We continued to work on various projects last year, we’re now planning to go offshore in early March with another charter vessel, which we have long term for the season, the Island Valiant,” Mr Cormack explained.
It’s the “perfect vessel” for the scale of projects on its books, he said, which he hopes will ensure it stays busy most of the year.
Previous charters include Reach Subsea’s Olympic Challenger vessel which undertook the firm’s inaugural North Sea decom deal, carried out in partnership with well management firm Exceed.
© Supplied by IslandHeadquartered at Westhill, Aberdeenshire, the firm is currently comprised of around 15 staff, plus contractors brought in on a project basis – though its headcount could roughly double by the end of the year according to demand.
Its equipment spans a selection of mobile dive assets and packages onboard for both air and saturation diving, as well as a fleet of ROVs servicing those vessels.
Mr Cormack said two “significant roles” looking after procurement and contracts are actively being sought to join the existing commercial, QHSE and project managers, and an engineering team.
“We’re quite busy with two pretty major contracts right now,” he added.
“We’re tendering furiously for various other pieces of work that we did actually extend our operations this year but also out to 2025 and as far as 2027, some of the tenders we’re working on.
“Obviously our focus is right now is steady growth we’re not going to go and overcommit. We’re going to deliver and take on within our capability and resource, and deliver a good project – and build our track record from that.”
Successful delivery should unlock repeat business, he suggests, with Mermaid aiming to continue its work primarily with majors and smaller independent operators – relationships, he hopes will grow in tandem with the basin’s decommissioning requirements.
“The decom market has picked up significantly over the last few years and given the experience of myself and the team, it’s a natural sector to go after. So as long as there’s enough work there, we’ll continue to do that alongside the diving,” he said.
And while he intends to focus on these “core” markets, more renewables work could be on the horizon, with Mermaid able to draw on a wealth of expertise and experience from work in the Middle East. It’s not yet a major part of the business, but the promise of further work around ScotWind and the wealth of offshore projects due in the coming decade is encouraging.
“It’s how decom was a number of years ago,” he added.
“It used to be one or two projects a year so you couldn’t really model a business around it, but now the volumes there and the projects are starting to come through that there’s enough work there to be in that space a bit more permanently.”
New vessel plans
While the firm has so far opted for the flexibility of chartered vessels, it does plan to bring a ship of its own to the UK this year.
Mr Cormack declined to offer further details on the ship’s size or capability but confirmed it would sit within the Mermaid fleet, which itself is currently in the process of overhaul due to increasing work requirements.
Meanwhile, a few familiar people are also in the wings to crew the new vessel.
Based in the UK, he envisions the vessel being based primarily out of Aberdeen and the surrounding Scottish coast from where it would serve the wider North Sea and Northern Europe market.
Alongside equipment, Mermaid is on the hunt for talent, though like much of the subsea sector, it faces a squeeze on some of the more experienced people it’s after.
“The diving world’s always been quite tight and is as tight as it’s ever been for resources” Mr Cormack notes.
“In general across the subsea sector we’ve seen a lot of people take early retirement, move out of the region or the country, join different sectors.
“The middle-aged group I would say, that where it’s lacking – some of the older ones have gone and we’ve got a lot of young people out of university – which is great – but for that middle section who have got the experience, it’s a tight pool and we’re all fishing from the same resource.”
However, he believes that while the firm’s offering will be competitive with the rest of the global market, its pragmatic approach to time onshore may be what makes the difference in its recruitment efforts.
“What we’re finding as we’re looking at people is it’s more about the other benefits, such as flexible working time coming out of COVID, or adapting to people’s caring or other requirements around working hours – and we can offer that.”
In 2022, Mermaid spoke of the importance of fostering trust and a solid track record with its customers – a process which appears to have paid off ahead of a busy 2024.
“Our plan is to be here for long term and to grow as the market requires. We’re quite flexible in that if the market is there, we will allocate resource,” Mr Cormack says.
“My intention is to grow quite a bit over the next five years, but not massively aggressively – nice and steady.”
