Operating out of the Ajman free zone, Millennium Offshore Services Management Company (MOS), has built itself a strong reputation in the regional offshore accommodation marketplace. The company maintains operations in Abu Dhabi, Alexandria, Egypt and Doha, Qatar.
The jackup accommodation management company was formed in the middle of 2007 with the firm’s first acquisition of offshore accommodation units followed by a second series of acquisitions later in the same year. The company currently manages a fleet of five with a high utilisation rate according to Jake Schimberg, managing director.
Schimberg used to work in the marine division of Qatar based Mannai Corporation until the early part of 2000 when
the division and its assets were sold off.
He says the sold-off assets changed hands a number of times before MOS finally acquired them. “A Texas oil figure bought the rigs and he approached me to set up a company to own, operate and manage these rigs and that’s the genesis of this company,” Schimberg explains.
The majority of MOS units are usually deployed for infrastructure maintenance or specific construction programmes, with the smaller units assisting in well-intervention campaigns. The company’s largest unit is capable of accommodating up to 430 people.
MOS services much of the Gulf region and the Gulf of Suez. With regular major clients in the region hiring out the company’s fleet of jackup accommodation units to facilitate their maintenance/shutdown work, there is plenty of work out there for MOS. The company has worked with a combination of national oil companies, and operators.
Flow of business
MOS saw relatively steady business up until early April when it experienced a downward trend, says Schimberg.
“We had a confluence of events, we had the Gulf of Mexico spill, we had a broad recession for which no end was really in sight so there was quite a bit of anxiety about the sustainability of demand and oil price.
“And then we had Ramadan and summer. Summer itself always produces a low in contracting because everybody goes away. We just saw a period where absolutely nothing was happening by way of the tendering process,” he says.
Schimberg says the fourth quarter has delivered something of an uptick, and there is a flourish of tendering activity at the moment, following the lull which he attributes to the sheer enormity and scope of the projects underway which NOCs had already committed to.
“They were just so big that they couldn’t get their heads around the contracting of the works that were going to be undertaken. The tenders are pretty complex and they’re very high value and these guys are going to spend a lot of money here over the next five years,” he predicts.
With its strongest regional markets in Saudi Arabia, Qatar and Abu Dhabi, Schimberg is confident that the market is robust adding that the Gulf of Suez holds some promising opportunities with an anticipated unit deployment of first quarter 2011 there.
Ambitions in a challenging market
“We have a pretty focused and well-defined plan, we’re going to expand our small fleet by two to three units in the next 18 months and over the course of the next two to three years we are going to double the size of our fleet overall,” he says.
Such as a bold forecast is down to favourable debt market conditions which allow the firm to buy second-use units and convert them. “We obviously can’t build new units within the time track that we defined but this is an excellent time to acquire high quality, robust jackups that have benefited from real extensive renovations, says Schimberg.
“There are a lot of factors that are driving the major drilling companies to get rid of some of these jackups, not the least of which is that things are moving into deepwater beyond the capacity of the rigs. These rigs are quite exceptional. They’re in extremely good shape, so we don’t have to do any structural work to convert them which is why we will be able to effect these conversions and upgrades within the timeframe I’m indicating,” he says.
Bank turnaround
“What I am starting to see in the last three or four months is that banks are starting to approach us. And that’s how it should be, because we are ultimately the client,” he says.
“We’re getting inbound calls instead of us chasing down banks to see if they will lend to us, that’s not just unique to the Middle East region, we’re talking to banks in Europe now who are interested in investing in asset-backed business.
I think the pointers are all heading in the right direction, and we see definately see demand bouncing back there. We’ve targeted which assets we’d like to go out there and buy,” Schimberg adds.
He says currently the Gulf of Mexico presents a great opportunity to buy high-value units but he does not believe that sellers are necessarily motivated or incentivised by cash injections.” “They’re moving to semi-submersibles and towards the really massive jackups,” he explains.
