"Many international companies will keep small teams in each country and, if the climate turns negative, they simply leave. By contrast, Bourbon DNA has always embedded our operations in each country."
Bourbon has operations all over the world. Could you introduce our audience the work of the company in Gabon specifically?
Bourbon owns around 500 vessels worldwide, of which we have more than 30 in Gabon. The company went through a significant transformation following the post-2015 crisis, both at an international and local level. We changed from a simple vessels’ operator to an integrated service provider with three main arms: Mobility of personnel, Marine Logistics and Subsea services. Twenty of our boats in Gabon are for crew transportation and the other 10 offshore supply vessels are for Marine and Logistics Services. We serve most clients operating offshore, where the core of our business lies, as well as extending some services for onshore producers with our crewboats.
Could you elaborate on how has Bourbon adapted in Gabon?
What we learned in 2014-2015 is that the crisis faced was different from any others we faced, knowing that the market will never return to the pre-2014 numbers. Aware of this, Bourbon could not continue with the old model. In the past, a client would hire a vessel full time for a long period, even if it may not be actually used full time. Today, our model provides clients the opportunity to have a chartering scheme tailored to its needs. With such a model, we allow our clients to save money and, at the same time, we restore positive margins for Bourbon.
We now offer a wide range of Mobility Services such as door-to rig passenger transportation, flexible chartering, or vessel sharing between several clients. Our new fuel incentive offer is evidence of such win-win models: fuel is paid for by clients, so if we operate the vessel in a way that saves 20% usage, the client will be reimbursed the value of 10% while Bourbon takes the other 10%. Bourbon is also moving towards integrated logistics services through which we look to take care of all logistics needs involved in a drilling campaign.
Why did Bourbon choose to remain in Gabon when other companies withdrew after 2015?
Many international companies will keep small teams in each country and, if the climate turns negative, they simply leave. By contrast, Bourbon DNA has always embedded our operations in each country. In Gabon, Bourbon works in a joint venture with Gabon Oil Company, who own 40%. This is a sign of our commitment in the country, and we use the company’s history to our advantage: Bourbon has over 30 years of presence in Gabon, which means we have already faced most issues one can face and we know very well how to overcome these. For instance, logistics is a heavy challenge for service providers like us in Gabon, but we benefit from having well-established processes to overcome such issues and to bring spare pieces in the shortest time. During tenders, choosing a newcomer could be a significant risk for the client, and they often rely on a name with great experience already.
How can the government better support the development of local content?
The big difficulty for Gabon is that it is not a country with a strong history at sea. There are few people working offshore, there is no maritime academy and the country is not on the IMO white list. Bourbon maintain a great relationship with the Merchant Navy in order to develop training for local seafarers, but, as of today, we cannot rely on public training for our personnel. Every year we invest to train about 10 seafarers in Morocco in order to become pilots on our vessels. The problem for pilots is not one of talent, but of training and certifications. It takes time to have enough seafarers with the adequate certificates. On the other hand, all of our crewboat ABs are Gabonese. We are convinced that training is an important investment, because no foreigner can learn better than a local born here. This is a long-term commitment and, in times of crises, it was not an easy decision to continue training our people.
How do you believe the oil industry will develop in the future as we enter a depressed price-cycle with the stalled demand caused by the Covid-19 outbreak?
I believe the future in Gabon is in the offshore and deep-offshore fields. Looking at the 12th Licencing round, most of the blocks are offshore. For many years, Gabon focused on very shallow waters close to the coast, but we are progressively moving in deeper waters. Companies like Petronas already conducted a few drilling campaigns in deep-water and they will launch a new one at the end of 2020. Repsol and BW similarly looked at deeper water. The push to maintain production will continue to be strong, because oil remains central to the economy. Last year, all oil and gas companies (including Vaalco, Petronas, ENI, Perenco and Total) ran drilling campaigns and I am sure these will not cease in future years.
We cannot pretend or expect that Gabon will become a major oil producer, because its fields are small compared to countries like Nigeria or Angola, but oil activity will undoubtedly continue, even if in smaller volumes. I am thus convinced that opportunities are still here, but the question for investors is how to enter the market. French companies feel comfortable leading business in Gabon thanks to cultural and historical ties, while other foreign corporations have struggled and they need to be flexible to accommodate to the challenging business environment. A key driver for future investment in Gabon will be regulatory background where we see contradicting measures. The newly issued oil code is more flexible which is great news for everybody but, at the same time, the new currency exchange rate is implemented bringing a big constraint to the industry.