Industry leader: Rene Kofod-Olsen, CEO, P&O Maritime Logistics

Next phase of evolution

Topaz Energy’s evolution has now entered its next phase, following its acquisition in July 2019 by DP World PLC from Renaissance Services SAOG and Standard Chartered Private Equity/Affirma Capital for an enterprise value of US$1,079M.

At the time of the acquisition, DP World group chairman and chief executive Sultan Ahmed Bin Sulayem said the deal would further strengthen DP World’s position as an operator in maritime logistic services.

“Following DP World’s acquisition of Topaz, I have been asked to lead the consolidated global company under P&O Maritime Logistics,” says Mr Kofod-Olsen.

Mr Kofod-Olsen will tap into the experience and knowledge accumulated during his more than 25-year career in marine and shipping, including AP Moller-Maersk Group, serving in several senior leadership roles across a variety of multi-cultural organisations.

He explains that P&O Maritime Logistics will focus on three strategic segments: offshore; port services; and logistics.

Mr Kofod-Olsen says: “P&O Maritime Logistics is strategically positioned to provide a wide portfolio of services to our customers, be it within a unique segment such as offshore or port services, or an integrated logistics offering with a combination of services. Owing to the integration between the two companies, we will be able to offer it all and drive value for our customers across all seven continents, delivering a difference that matters.”

Calling DP World “a giant in global logistics and trade” Mr Kofod-Olsen says he strongly believes that the acquisition “is a clear sign of DP World’s further differentiation strategy in which the energy support industry is a key global segment, and thus the acquisition is further testament of Topaz’s success and leadership in the industry.”

Mr Kofod-Olsen believes the formation of P&O Maritime Logistics positions the company to grow and build further scale to continue to deliver value for its customers and shareholders alike – and to “add to DP World’s incredible vision of being an enabler of global trade and energy.”

Turning to the energy market, Mr Kofod-Olsen believes 2020 will be another challenging year, with the offshore industry remaining in a state of anticipated recovery. “Oil companies, over the past few years, have underinvested due to low oil prices, and investments will now need to increase to meet the rising demand – both on new assets and importantly on maintenance of existing assets,” he observes. “Without further investments, supply will decline. To sustain the expected demand, an additional 60M barrels need to be brought on-stream by 2023, which will require upstream capex to increase significantly – by approximately 10% by 2020 and 45% by 2022 for offshore alone, according to Morgan Stanley.”

With the substantial increase in upstream capex, he believes there will come “significant and continued opportunity for the offshore support industry. According to Westwood Global Energy, the E&P sector alone spent about US$11.9Bn on offshore marine services in 2018, with this market expected to grow to US$19.4Bn by 2023.”

Sustainability

While Mr Kofod-Olsen does see tendering and activity increasing in certain regions and utilisation and day rates returning to sustainable levels, he cautions that one must use the “right data and understand the global energy mix when we plot our future strategies.” He emphasises that “the world is fundamentally in need of both hydrocarbons and renewable energy sources to support global growth; however, we at the same time need to encourage and educate the world to reduce the use of energy from more high-emission sources.”

The drive towards global decarbonisation of energy will inform the company’s decisions and planning. “Historically as a company, we managed to navigate the turbulent waters and consistently reported market-leading contracting. Now as P&O Maritime Logistics, with a wider portfolio of services, we are even more prepared to lead the industry and serve our customers and stakeholders with excellence globally – also with sustainability as a core beacon.”

Mr Korod-Olsen points out that a number of operational and financial hurdles remain for the recovery of the OSV industry as a whole.

“The global market has historically been dominated by a few truly global operators, a large portfolio of regional operators as well as small and very country-specific companies, and is thus highly fragmented,” he says. “The biggest challenge is certainly the oversupply of operators and leveraged balance sheets. However, the depth of the crisis has reached a level where many have suffered from liquidation problems and more than a third of the global vessel pool has been laid up on its fourth or fifth year, rendering them obsolete from a return on capital perspective.”

He sees “a good opportunity for continued consolidation, akin to what we have done with P&O Maritime Logistics, building stronger companies able to deliver on an increased customer demand and importantly, building resilience.”

What does he see for the future of the offshore oil and gas industry and P&O Maritime Logistics?

“As our customers’ requirements become more complex, the way we see the industry evolving is that some companies will take over additional planning of the customer supply chains, handling their logistics planning and execution,” he explains. “The sector will largely be directed by the larger, more diversified operators, as we predict customers no longer want to deal with several suppliers – they’re increasingly looking for few operators who can supply them with a range of services.”

He concludes: “What we have, as P&O Maritime Logistics, is the ability to offer our customers a wide portfolio of value-added marine services and to integrate these services across continents.”

Rene Kofod-Olsen

Title: Chief executive officer

Company: Topaz Energy and Marine

Favourite books: Factfulness by Hans Rosling. I can only encourage everybody to read it, you will see the world and your own understanding of it, through a different lens.

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Most admire: Roger Federer. Perfection wrapped in humility.