In order to survive the prolonged downturn in the offshore oil and gas market and position for a recovery and growth, OSV owners need to take decisive action, says Bourbon chief executive Gaël Bodénès
“In my opinion, there are two ways of facing a crisis as violent as the one our industry has weathered over the past four years,” Mr Bodénès tells Offshore Support Journal.
“The first one consists in turning inward by strongly adapting oneself, reducing the (number of one’s) supply of vessels to be ready for the upturn. The second favours action, ambition, and the search for innovative solutions. These two ways complement each other.”
A naval architect by education and one-time shipbroker early in his career, Mr Bodénès joined Bourbon as marketing and development coordinator of its offshore division in September 2002, overseeing the commercial management of the international fleet. In September 2005, he was appointed deputy CEO of Bourbon Offshore, before being promoted to group CEO in September 2017.
Since his appointment, Mr Bodénès has focused on transforming Bourbon to confront the offshore crisis, embracing the ‘digital revolution’ in order to best position the company to propose the most “efficient integrated solutions” to its clients.
“One of the consequences of this prolonged downturn is the overcapacity in supply vessels, Mr Bodénès points out. “It became a blocking point to any significant recovery of day rates. We have reacted vigorously to this challenge by implementing our #BOURBONINMOTION strategic action plan, which is based on transforming our business model and capitalising on technology to cut costs.”
One of the largest owners and operators of OSVs in the world, Bourbon has drastically adapted the size of the company to new market conditions. “We are now in the phase of real transformation,” he says.
Mr Bodénès explains that Bourbon has made real progress on the four axes of its strategic action plan:
“Reorganisation proceedings have been opened since last summer for the two holding companies Bourbon Corporation and Bourbon Maritime,” says Mr Bodénès. “This procedure has been launched to rapidly find a positive outcome between the main stakeholders. By the end of the year, a solution should be implemented to protect the interests of all parties and enable us to further carry out our strategic plan.”
Mr Bodénès emphasises that the reorganisation proceeding does not affect operations: “Neither the group as a whole nor the operations are at risk today.”
In February 2019, Boubon laid out #BOURBONINMOTION strategic action plan to the market. “It is the message of a proactive group faced with the evolution of its environment and ready to make every effort to respond to the challenges of the new offshore, which is more demanding and in a constant search of optimising costs,” he says.
He says the transformation undertaken by Bourbon in recent months requires a real change in mindset and aims to give the group control of its own destiny through “a paradigm shift, an evolution of its business model, and by recasting its service offer for the benefit of our clients.”
Mr Bodénès says this new mindset is reflected in each of the recently created standalone companies: integrated logistics services for Bourbon Marine & Logistics; turnkey projects for Bourbon Subsea Services; and the improvement of the passenger experience via new digital services for Bourbon Mobility.
Bourbon is also committed to sustainability and reducing its carbon footprint. “At Bourbon, we have been very focused, for years, on optimising fuel consumption. Most of our vessels are diesel electric as we think that diesel-electric propulsion is the necessary base for an agile management of the vessel’s energy needs.”
Bourbon has been involved in utilising energy optimisation, fuel management, battery packs, LNG propulsion, solar cells and operational performance measures. “In Gabon, as an example, we proposed a ‘fuel incentive’ contract to the client (bonus or penalty on the day rate depending on fuel consumption objectives),” he says.
While Mr Bodénès sees emission-reduction technologies such as battery packs as worth consideration he says: “A new business case has to be jointly supported with our clients, as the generated cost reductions don’t allow us to justify vessel conversion investments plus battery ownership. A sharing scheme needs to be put in place.”
Furthermore, Mr Bodénès thinks that optimisation will come from a global approach based on three main levers: vessel design (diesel electric including batteries); leadership (clients, shipowners and captains); and optimisation tools (digitalisation and performance management).
“The market needs both the will and the fundamental work of valorisation of emissions reduction, win-win contractual propositions and also digital maturity in order to optimise vessel productivity thanks to new battery technologies,” he says.
Mr Bodénès says that oil companies are proceeding with a close eye on cost control: “Offshore investments even grew in 2019, for the first time since 2014, following productivity gains in drilling and production. However, oil customers remain cautious and continue to favour projects with short returns on investment. Furthermore, they are particularly attentive to keeping their operating costs under control in the long term and take a keen interest in new models and working methods, aimed at providing new productivity gains.”
As a result of the market recovery, Bourbon has reactivated 15 platform supply vessels from layup since the beginning of 2019. To address vessel oversupply, Bourbon has rationalised its fleet, divesting and scrapping about 50 vessels since the beginning of the downturn.
“In a particularly difficult context for the company, in 2019, our teams have been intensely mobilised to maintain the service provided to customers,” says Mr Bodénès. “The signing of a three-year cooperation agreement with Total E&P for the deployment of our Smart Shipping programme in Angola is a strong symbol of this.”
Where does Mr Bodénès see Bourbon in five years? “Our business model is changing in line with our strategic action plan,” he says. “The future of the company is about improving performance through integrated services based on data. It’s about capitalising on the digital revolution to connect the fleet, a Smart Shipping programme to improve safety and technical reliability, together with cost reduction. It’s about building industrial partnerships with technical partners, locally and globally. Finally, it’s about changing culture and communication.”