Caspian connection

zoom

ENVIABLE POSITION: Topaz's CEO says the company is not reliant on the changing oil price.

Fazel Fazelbhoy, Topaz Energy & Marine CEO reveals how his ships will survive the financial crisis.

Topaz Energy and Marine is one of the region's leading marine and oil and gas fabrication and service providers, and the group is riding high after a bumper 2008.

The company is Dubai-based, but has operations extending throughout the Middle East, Caspian and is growing its presence in South East Asia. At the helm is Fazel Fazelbhoy, former CEO of the Nico International subsidiary and in the top spot at Topaz since April.

"2008 has been the best year yet in the company's history. All of our business units have out-performed their budgets, and that's set a very strong stage for 2009 as well," beams Fazelbhoy.

The summer spike in the oil price, and a sustained period over US$100 saw many companies in the region out-perform their annual targets, but the CEO says that in spite of the current price drop, the ongoing picture for the Topaz group of companies is rosy thanks to the nature of the contracts secured. "65% of next year's target is secured, either as part of long-term contracts or our order backlog," he confirms.

With delivery schedules running to 2010 and beyond, this means the company's performance is not reliant on a sky-high oil price, a luxury many firms will look upon with envy, as the markets seem set to close the year way down from the summer peak.

One notable success of the year was the acquisition of Doha Marine Services, which saw the Topaz fleet swell to around 100 vessels. The deal was finalised in May for a reported $124 million, crucially giving Topaz an instant 20% market share in Qatar.

"Due to the massive demand for offshore marine services in Qatar, we've actually been moving vessels from UAE waters into the Qatar space, in addition to the vessels we took control of through the acquisition," explains Fazelbhoy.

The move into Qatar couldn't have been better timed, with LNG and offshore oil developments reaching a zenith.

Capitalising on the Qatari boom was a crucial objective and has enabled the firm to provide additional support to the operations of Oxy and ConocoPhillips, delivering both kudos and profits. "Qatar's a great example of how we characterise our vessel profile," continues the Topaz CEO.

"We have a combined hydrocarbon support fleet - we don't discriminate between serving the oil or gas business because for either operation you need platform supply vessels, platform support, anchor handlers and tugs. This is all our core business."

In August, Topaz subsidiary BUE Marine was awarded a 10-year $225 million contract from BP Azerbaijan to custom-build and supply three support marine vessels.

BUE saw off competition from across the globe for the three vessel package, which followed the award of another long-term three-vessel contract by BP to BUE Marine in 2007, and reinforced Topaz's position as the leading provider of marine support services in the Caspian Sea region.

"The significance of the BP contract cannot be overplayed; it is one of the most important that we've had," Fazelbhoy states.

"In these troubled times a firm, long-term contract with a blue-chip company like BP is just what the doctor ordered. It adds a very steady earning capability with predictable margins, and moreover, it's a return order, so highlights the fact our relationship with the majors is a very healthy one."

"The biggest highlight of the year came when the BP President's Award was conferred to the crew of the ERRV MV Baki in recognition of outstanding services rendered on 17th September," says Fazelbhoy, proudly.

The MV Baki was on-station at the Central Azeri platform in the Caspian Sea when the master received a call from the offshore installation manager informing him that a gas leakage was suspected, and that all the 211 persons on the platform had to be evacuated.

Within one and a half hours all personnel were safely transferred from the platform to the emergency recovery vessel, and safely transported to the SPS base in Baku Azerbaijan.

"What gave the award extra gravitas was that this was the largest evacuation of personnel from an offshore installation - ever. This was a huge testimony to our operations, and something that's very close to the heart of the management here and our team in Azerbaijan."

No manufacturer or service provider in the UAE will have been exempt from the rising cost of business in the Emirates. However, those increased costs are lamented without a full appreciation of how that cost is offset.

"Although the UAE has become a lot more expensive, that cost is balanced somewhat because it has some formidable assets for any business," Fazelbhoy remarks.

"It is a good environment to operate in from a regulatory standpoint, and you save a lot of money by virtue of being here in terms of delays, approvals and all the associated aspects of running a successful business."

For the Middle East market, Fazelbhoy says the company will continue to build on spec, and that asset mobility will be a massive advantage.

"We have the flexibility to move our vessels around from Saudi into Qatar, the UAE and further afield into Libya and North Africa. We've got enough strength in the core markets we operate in to be able to find an imbalance of supply and demand in one region and exploit that."

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM