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Q: How would you describe the overall contraction and recovery of the global market for Remotely Operated Vehicles (ROVs) throughout the last year?
A: We are starting to see some forward movement. When we started working in Mexico in 2017, ROVOP did over 200 days of ROV work. We then went quiet for two years as far as our presence in Mexico was concerned. Over the last year, we have finished over 300 days of ROV work in Mexico through two systems. In April, we began a new contract with Sapura. Additionally, we have mobilized onboard the Frida 1, which is a drilling rig operated by OOS Energy in the bay of Campeche. We have been working on those engagements since. This tells us that the market is on an upswing compared to where we were last year.
We see Mexico as an emerging market for ROVs. Traditionally, the Mexican oil and gas industry has involved shallow waters, which usually orbits around 300 feet of water depth, although some people consider that category to go as far as 500 feet. Either way, work in these depths is mostly managed through diving services. Over the last few years, however, Mexican companies have started to see the value of ROVs when compared to diving services. ROVs can be much more efficient than their human counterparts and they can stay underwater for longer shifts without having to resurface or be switched out. This has led to a great deal of positive momentum for the use of ROVs in Mexican waters, especially when compared to 10 years ago. This development resulted in our first contract in Mexico in 2017, for Drebbel. We worked on a series of huge pipeline mattress installations for Drebbel and the work went really well. I think we did more pipeline mattress installations that year than had ever been done in Mexico before in a single year. The rate of progress and efficiency that we demonstrated on those projects piqued the interest of more Mexican companies, and now they are starting to look at ROVs to do more of the work than ever before.
Q: The company identifies itself as the “world’s largest independent provider of ROVs.” What does that mean in terms of the value you provide?
A: We are an independently owned supplier of ROV services and we are focused exclusively in that segment. That makes us unique given that the market has many general subsea and even offshore, construction or oil field service providers with their own internal ROV department, as is the case with companies such as Subsea 7. These companies can be less agile and more unwieldy due to the implications of their size as institutions. We do nothing but supply the machines and the personnel to operate them, so we can move into position a lot faster. This also means that we do not often compete with our clientele for work, which is not something that some of those larger and more general service companies can guarantee. We can support our clients by becoming their sole ROV experts. We manage 44 ROV systems all over the world, 32 of which are “Work Class” ROVs, meaning they have a capacity of 150 horsepower or above. This is considered a large ROV inventory but it is still administered within the context of a relatively smaller company of just a little over 200 employees worldwide. Our value comes from offering a one-stop-shop solution for all remote services, so we can very quickly mobilize an ROV and its operators onboard a vessel in addition to the ROV expertise of our personnel. Large companies might struggle to get the approvals to do that in a similar time frame.
Q: How have you adjusted to the Mexican market’s cost limitations and the perception of ROVs as unaffordable?
A: We make clear to our clients in Mexico that what they pay per day, they are going to directly get back in efficiency. In that sense, I would not consider ROVs a high-end service. A vessel working with a diving team might take twice as much time to complete the same work. It becomes a matter of cost structure: the upfront cost might be higher but the implications on your OPEX will more than make up for it. Mexican companies are starting to realize this more and more, especially as the country’s specialized offshore infrastructure continues to grow and requires a vast amount of inspection and maintenance services that can be much more effectively executed through ROVs than through divers. For example, I mentioned our previous work in pipeline mattress installations; now, all of those mattresses require inspections and ROVs are suited to provide that efficiently as well.
ROVOP is the world’s largest independent provider of ROVs. It follows a substantial fleet investment program to serve the hydrocarbon, offshore wind and telecommunications industries, among others.