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Azerbaijan 2016 | ENERGY | INTERVIEW

TBY talks to Brian Garrad, Acting Director of Caspian Marine Services (CMS), on innovations, partnerships, and challenges to running an offshore company in the Caspian region.

Brian Garrad
BIOGRAPHY
After starting his career working on different marine vessels for various shipping companies, from 2005-2010 Brian Garrad worked as HSSEQ Manager and HR Manager at P&O Maritime Services (Europe and Middle East). From 2010-2013, he worked as a Principal Marine Surveyor and Marine Consultant at Global Maritime Consultancy. From 2013 to 2015 he worked as COO at Caspian Marine Services. He was appointed Director of Caspian Marine Services in November 2015.

CMS struck a $34 million deal with Austal to build a 70m fast crew boat. What are some of the added benefits this acquisition will add to your fleet?

In 2015, we received the delivery of the first fast crew boat, capable of carrying up to 150 passengers offshore, which, at the time, was unique in the world. It is the first vessel of its type to be fitted with DP2 and the Ampelmann (walk to work system), which is a gangway mounted on the back deck of the ship that allows the vessel to connect to an offshore platform. It is like an inverse flight simulator, where the module stays still and the vessel moves about underneath it. That vessel was delivered in early 2015 and then, in June 2015, we also signed a contract with BP for a second vessel, which is being constructed with Austal, in Freemantle, Australia. It will be a sister ship to our current fast crew boat, and we expect delivery in October 2016. We have fixed five-year contracts for both vessels, which is very good in the current market.

What was the reason for opening an office in Astrakhan, Russia, and what are some other markets that you are looking to expand your operations?

The office in Astrakhan is already up and running, and it is part of our decision to start expanding outside of the region. While we predominately work in oil and gas, we also now own three cargo vessels in Azerbaijan outside of our offshore support fleet. We are looking to do the same with the Astrakhan office. At the moment, we are an OSV company; however, we are willing to expand outside of that sphere of operation. The vessel we sent up to Filanovsky is being looked after by the Russian office. At present Astrakhan is only an office without any assets or a fleet: it is more a management system for us at the moment, but the idea is to grow and find business opportunities in Russia. Soon, we are also going to Iran. We see it as quite an exciting area of growth. There is a lot of potential down there, both on the Caspian side and the Persian Gulf side for us as a company. We do not have an office in Kazakhstan; however, we are going to an oil and gas show in Atyrau soon to see what the market is like in the region.

What are some of the challenges to running an offshore company in the Caspian region?

Local supply is a considerable challenge. Most of our vessels have Caterpillar and Mercedes-based engines; hence, getting the supplies and materials in the country is a challenge because everything is imported. Everything revolves around timelines and customs clearances, for example. We have to be careful in our stock and material management because it can take a long time to wait for parts to arrive. Also, the only way to bring ships in to the Caspian is through the canals. This is not only a size restriction, but also a time constraint because the canal completely freezes in Russia during the winter. Other challenges we face involve the crewing of our vessels locally and regionally, as the salaries are not as high as they are in certain other regions. However, we offer great benefits like a 28-28 day rotation, so employees have a clear idea of when they are going to be home. As a company, we are about 99% nationalized. Out of 640 staff, there are four expatriates here. In 2014, we made a conscious push to nationalize our offshore staff and our crews now operate at the highest levels. Our biggest clients, BP and Saipem, do not require us to have expatriate staff on board, for example. The challenge comes for us to keep a fully nationalized crew of 550 staff and maintain a high skill level.

How would you assess the competition in the Caspian region?

It is a fairly closed market here and we have limited competitors in the region. The ability to bring assets into the country is limited now with all new assets needing to be built locally; therefore, companies cannot simply bring in new ships. There is definitely a competitive nature, but because it is a closed market, it is easier to manage with ourselves and our competitors in the region. A closed market is good for us because it gives potential stability, but it does not necessarily offer the benefits of the major peaks in market rates as seen in other outside regions.