MMA Offshore chief executive David Ross believes an OSV owner’s success is going to be underpinned by one critical element – people
“It is all about the people!” David Ross, chief executive MMA Offshore, exclaims; “Assets or vessels are just one of the tools we use.”
Mr Ross points out that the five-year slump in the offshore oil and gas sector has resulted in skilled and experienced mariners leaving the OSV market. “Given the industry has been through some very difficult years with low levels of training and high levels of attrition, finding and attracting high quality people back to the industry may be challenging,” says Mr Ross. “We need to retain quality people – and we have at MMA Offshore – and find new talent to meet the growth.”
In 1986, Mr Ross began his seagoing career as a junior engineer on a livestock carrier sailing from Australia to the Middle East. Then in 1990, while he was studying to complete his engineer’s qualification, he secured a seagoing engineering position with BHP, sailing on bulk carriers and breakbulk container vessels.
In 1995, he moved into a shoreside position with BHP Transport, Melbourne, working initially as ship operations officer. After several managerial promotions, Mr Ross moved in 2001 to the Netherlands with BHP Billiton as operations manager and then commercial manager responsible for the development of chartering and trading controls.
In July 2005, he joined MMA as the general manager operations, with the mandate to steer the three operating divisions of Vessel Operations, Slipway and Supply Bases through a period of rapid growth.
His success led to a promotion to chief operating officer in 2009 and elevation to deputy chief executive officer in November 2018. In July 2019, Mr Ross was named chief executive officer. He is also is the executive director of MMA Offshore Asia Pte Ltd and director of MMA Offshore Asia Sdn Bhd.
As CEO of ASX-listed MMA Offshore Limited, Mr Ross is maximising returns from its core vessel business as the market improves and growing its subsea and project logistics businesses.
Key metrics for financial year (FY) 2019 presented at its annual general meeting in November are trending positively for MMA Offshore, with revenue up 15% and EBITDA up 50% over FY2018. Vessel utilisation was 72%, up from 68%, with the start of some rate increases in more specialised segments.
“We are seeing utilisation of the modern fleet and more technically advanced assets improve,” says Mr Ross. “It is quite natural to see utilisation of the newer, higher quality assets increase first, before the more commoditised vessels increase.”
He says: “For most classes of vessels, we are certainly not yet at investment-grade rates. There is still some way to go to see fixtures at levels which would be deemed sustainable for the long term.”
Mr Ross warns that some owners are still “pricing irrationally” for vessels in the next tier below high specification vessels.
While faced with a challenging pricing market, MMA Offshore reports nine of its OSVs were chartered on long-term contracts with Inpex, Woodside, ConocoPhillips, BHP and Santos during FY2019. For the first time, it also undertook walk-to-work (W2W) campaigns for Southeast Asia, India, Africa and Australia.
Growing subsea service
In a move to grow its presence in the subsea services market, MMA Offshore acquired Neptune Marine Services in a transaction valued at about A$18.5M (US$13M).
“We have a fully resourced and dedicated integration team working through a detailed project plan to integrate Neptune into the MMA group on a fast-tracked schedule,” says Mr Ross. “The quicker we integrate, the sooner we will realise the benefits of the acquisition.” He sees synergies between the services Neptune provides and the MMA Offshore fleet of vessels working in the subsea space. “This will increase utilisation for both companies’ assets and services. As well as generating both revenue and cost synergies, the transaction will improve the service offering to our clients, enhance our return on assets and thus generate benefits for our staff, shareholders and stakeholders,” he says.
MMA Offshore services the subsea market as predominantly a vessel provider. The acquisition of Perth-based Neptune Marine Services will allow MMA Offshore to expand its subsea service footprint, offering commercial diving services, specialised dry underwater welding, survey, geophysical and geotechnical services, subsea inspection, repair and maintenance and customised fabrication services.
Besides the benefits of the Neptune Marine Services acquisition, Mr Ross is optimistic about the outlook for the market, buoyed by “a stronger flow of project FIDs and pre-FID work and commitments taking place, which bodes well for activity in the coming years.”
There are almost two dozen oil and gas projects in the pipeline in Asia, the Middle East and Australasia, with FIDs on projects such as Coral South FLNG and Mozambique LNG in East Africa, Zabazaba, Pecan and Tortue/Ahmeyim in West Africa, KG D6 in India, Limbayong in Malaysia, Gorgon Stage 2 in Australia and Marjan, Berri and Zuluf in the Middle East.
MMA Offshore has a projects logistics arm, MMA Global Projects, to manage marine logistics services for offshore projects. The service is geared towards supporting engineering procurement and construction (EPC) contractors in developing global energy hubs. Mr Ross says MMA Offshore is enhancing its international project logistics experience to ensure the company “can capture a share of the upcoming LNG and renewable projects in our key areas of operation.”
Those key operating regions for MMA Offshore are Australia, India, Southeast Asia and East and West Africa, where significant investments are being made by Petronas, BP, Inpex, ExxonMobil, Woodside, Chevron, Eni, Total Saudi Aramco and ConocoPhillips. All of the project activity is expected to drive global vessel utilisation.
While there are no current plans to build any new vessels, Mr Ross says MMA Offshore continues to look to use technology in its current fleet to enhance reliability, capability and productivity. “It is key in ensuring we can deliver high quality and ever improving services to our clients. When it come to new vessels, we are constantly assessing this, but at present we feel there are sufficient vessels in the marketplace for us to charter in or purchase, should we have a contract with the strength to support additional vessels.”
Mr Ross concludes: “We see, as many others have also stated, that the market is beginning to recover. This, combined with our modern fleet, our increased subsea service capability and the newly created MMA Global Projects business, positions the organisation well to grow with the recovery. MMA Offshore is focused on being a service provider to our clients rather than just being a vessel provider and we strive to ensure our service offering is of the highest quality in safety, productivity and effectiveness.”
Title: Chief Executive Office, MMA Offshore
Executive Director, MMA Offshore Asia Pte Ltd
Director of MMA Offshore Asia Sdn Bhd
Board Member of Maritime Industry Australia Limited (MIAL)
Education: Engineer Class 1 Motor – (Marine Chief Engineer)
Favourite app: Trip Advisor
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Favourite saying: “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck”