Sail­ing for the slices

In the lat­est in­stal­ment of our se­ries, En­ergy ed­i­tor Rita Brown ex­clu­sively talks to Wood Group’ s Robin Wat­son about nav­i­gat­ing the down­turn

The Press and Journal (Aberdeen) - - ENERGY -

Robin Wat­son had three choices in ap­proach­ing the down­turn.

The for­mer mer­chant navy mem­ber likens it to be­ing a ship in a storm.

“If we’re in a storm we can just hope that it changes. If we’re com­pletely op­ti­mistic we’d think it’s go­ing to be OK and let’s not do any­thing.

“Or, we could say we’re all doomed, which is hardly in­spir­ing. We’re go­ing to end up ship­wrecked, so let’s just fill our­selves with brandy.

“Or, you have to take a re­al­is­tic view of it and think: We’re on the bridge, can we see out? Is the sky clear­ing? Where is it clear­ing? Let’s sail for the chunks of sun­shine that we have.

“That can be dif­fer­ent basins. That can be new ser­vice sec­tors. But there is some­thing about seek­ing out those new op­por­tu­ni­ties for the fu­ture.”

It’s two years ago this month Wood Group con­firmed Mr Wat­son would take up the lead­er­ship reigns. His ap­point­ment was cast against a back­drop of an oil price de­cline and a squeezed sup­ply chain.

“The chal­lenge has re­ally been the down­turn in ac­tiv­ity. We are down about one-third in our head­count over the past two-and-a-half years. That’s a tremen­dous shift in the busi­ness. In many ways, yes it is chal­leng­ing for me, but I’m in work and there are an aw­ful lot of peo­ple who have not been as for­tu­nate th­ese past twoand-half-years.

“We were de­ter­mined to use the time to re­struc­ture the busi­ness and get our­selves on a solid plat­form. We’ve done that in way that we think is re­spon­si­ble.”

Mr Wat­son added: “I come from a fish­ing town in the west of Scot­land. I am very prac­ti­cally minded. It’s al­most as if the en­vi­ron­ment around you is ir­rel­e­vant. When I took over the UK busi­ness for Wood Group I saw things that weren’t right and wanted to put them right.

“When I took over the PSN busi­ness there were things that needed ad­dressed, like the back of­fice com­plex­ity and the num­ber of le­gal en­ti­ties.

“Sim­pli­fy­ing the busi­ness has been a big part of my role as a leader. Some­times in the or­gan­i­sa­tion you get the tail wagging the dog, or over com­plex­ity, and it be­comes hard to do the re­ally valu­able stuff.”

Valu­able in­cludes di­ver­si­fy­ing the busi­ness away from be­ing too heav­ily de­pen­dent on one basin or strand.

The com­pany leader ad­mit­ted Wood Group had nar­rowed its fo­cus too sharply, start­ing in 2011.

“Five or six years ago we would have been 40% plus North Sea. This last six months we were a 15% to 17% North Sea busi­ness,” he said.

“That’s been hugely im­por­tant, mak­ing sure we are trad­ing where there is trade to be done at the vol­umes that we like to have.

“We can’t be over re­liant on any one, two, three or four cus­tomers. We’ve got a good cus­tomer spread.”

But that graft served as a warm-up for Wood Group’s biggest leap un­der Mr Wat­son’s lead­er­ship – the £2.2bil­lion takeover of Amec Foster Wheeler. It’s a deal that Mr Wat­son and his team have been pur­su­ing for the past year and it is ex­pected to close by the end of this year.

“The more anal­y­sis we did the more we re­alised our over­lap with Amec is less than we or they would ac­tu­ally as­sume,” he said.

“We thought the over­lap was about 20% to 25%, largely in the North Sea.

“But if you looked at what we did in the US, they tended to fo­cus on Oil Sands. We tended to fo­cus on Gulf of Mex­ico and shale. They had a big power, nu­clear and min­ing foot­print.”

It’s all about broad­en­ing Wood Group’s hori­zons, sail­ing for the patches of sun­shine.

“This is a bold move we’re mak­ing to ac­quire Amec Foster Wheeler,” Mr Wat­son said.

“I do be­lieve in the strat­egy that we have de­vel­oped. I do be­lieve in the team I’ve got around me.

“We’ve kept the or­gan­i­sa­tion as healthy as it can be given the chal­lenges we’ve faced.

“I’m re­ally proud to be in en­gi­neer­ing 30-odd years later and run­ning a com­pany like Wood Group. I’m hugely proud of it be­ing Scot­tish based.”

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