| Description | DEREK BLACKWOOD interview at The Sir Duncan Rice Library, Kings College, University of Aberdeen, on Thursday 21st December 2017. Interviewer Eric Crockart. Summary by Eric Crockart.
Three sessions were recorded on a Zoom H6 digital recorder. Interviewee and Interviewer wore Rode Lavalier lapel microphones. Interviewee is recorded on the left stereo channel, and interviewer is recorded on the right stereo channel. Indicative timings in the summary are given in (hour:minute:second) format.
SESSION 1. (0:00:00) DEREK STUART BLACKWOOD, born Buckhaven, Fife, Scotland on 4th December 1954. Father George Blackwood and mother Agnes Blackwood, father a miner, mother worked in schools. Mine-working community. From early age was encouraged by parents to do well at school, did not want him to become a miner. Explains why. Schooled at local primary school, recalls walking a mile to school and back home for lunch, and then again two mile round trip in afternoon, thought nothing of it. Then went to Buckhaven High School, exam success, got 9 O-levels and 6 Highers. After High School went to Southampton College of Technology. Was there as an employee of BP Tanker Company, after learning about their student apprenticeships while still at school. Explains attraction. Derek one of six successful students from about 1500 applications. Student marine engineering apprentice. Undertaking Higher National Diploma (HND) in mechanical engineering. Spent four years between Southampton and various industrial assignments, one on a 270,000 ton supertanker. Joined it in Wales, over next seven months travelled via South Africa to Persian Gulf. Explains what was involved, very little time ashore, came back to Scotland then out to Middle East again, then back to Scotland. (0:07:04) Explains where impulse to do engineering came from. Enjoyed and was good at science and maths and technical subjects at school. More explanation. Did not think this would take him to the UK North Sea industry, it was very low key when he was at school. Only recollection he has of anything to do with the industry was the yard at Methil, adjacent to Buckhaven. But not anything he recalls speaking about with his friends. North Sea had not made its mark or affected them. (0:10:23) Perceptions changed in last six months of his apprenticeship training, when he went to John Brown Engineering in Clydebank. No longer a shipyard building ships, now manufacturing gas turbines used in oil industry. Was with BP Tanker Company from September 1972 – March 1976. Joined John Brown then and was there till 1982. Explains why he made the move from BP to John Brown. He got married 20th March 1976. Planned to complete apprenticeship and then work for BP as a marine engineer and travel the world at sea with his wife. But BP then made a corporate decision to get out of owning tankers, involved a huge reduction in their tanker fleet. Meanwhile John Brown won some big contracts to supply turbines, company growing and expanding, and international in nature. Decided to leave BP and joined John Brown, a dynamic company that was reinventing itself. Turbines made under license from General Electric in the United States. His first assignment was offshore Abu Dhabi for six months. During his time with John Brown was assigned to various departments, this included doing training for client personnel. Explains he was involved in commissioning John Brown turbines in Abu Dhabi to pump oil for two offshore fields. That was Derek's first exposure to offshore work. In subsequent six years with John Brown he caught hepatitis in Sri Lanka and had to come back to UK for treatment. Was recommended not to travel abroad, as part of treatment. By that time John Brown had supplied a lot of their turbines to the North Sea. He went to Oxy's (Occidental) Claymore platform to commission two turbines providing the platform's electricity. Claymore was separated by a few miles from Oxy's Piper platform, where John Brown turbines were already operating. (0:18:22) Describes the two platforms. Piper amazing from production perspective, explains, comparisons with much smaller American offshore platforms. Was involved in commissioning Claymore, during which he visited Piper a couple of times when it had problems. Talks about flying with American ex-Vietnam helicopter pilots, who aimed to give passengers a fright. In early days amazing difference with American oilmen, different ways of speaking and conducting themselves. Gives example. Eye-opening. Added to some of the experiences he had had in the Middle East with different cultures. (0:21:45) Clarifies his career progression with John Brown Engineering, from junior field engineer to field engineer, to senior field engineer, then resident engineer, then senior resident engineer – over period of about three years. Explains in detail about his areas of responsibility, and the types of equipment then involved. Explains about his working regime offshore, different clients had different regimes, gives examples. (0:26:29) Talks about his working relationship with people offshore on both Claymore and Piper, and Beryl. Was in privileged position working for John Brown. Explains. No real segregation or difference between oil company and contractor personnel, but recalls different experiences with drilling company and drilling contractor personnel, Us and Them attitude. Explains about the maintenance regime on Piper and Claymore. On Claymore initially commissioning and starting things up, so not really a maintenance regime. But on couple of occasions he went to Piper, the original manufacturers of the equipment issued instructions to owners of their equipment. Talks about them using acronym OEM (original equipment manufacturer), explains in detail how this worked. Oxy for both platforms had a documented structure maintenance plan, a whole series of cards in a big box organised by date. Shortly after the time he was involved in commissioning work, computer systems began to be used for this workload instead. So maintenance regime was 50% planned, and the other 50% breakdown and repair. Explains that back in those days a lot of the equipment had not been designed for use on a North Sea platform environment, or to be squeezed together with other equipment. Not one hundred per cent fit for purpose. (0:30:55) Standards of maintenance carried out – his role was specialist, so did not visit all areas of the platforms, but did help other OEM engineers like himself, and Oxy engineers when it was general pieces of equipment. Saw a high degree of competence, capability and workmanship on all the North Sea platforms he worked on. Explains in detail why this was the case. (0:33:59) Talks about attitudes then to safety. A general respect for safety. But also feeling that it was inevitable that somebody will get hurt sometime, try our best not to let it happen too often. Very different cultural attitude from nowadays. Explains how he would go about his work offshore, and how he was one of the trusted people, so if he forgot to return his permit to work at end of the day, the operator attitude was okay we'll get it in the morning. That would never happen now. There was a lot more pragmatism, electrical safety was high in electrical people's minds, they often came from coal mining industry, aware of explosive atmospheres, so a lot of the mature practices from the mining industry came to the North Sea very quickly. More seriousness about electrical safety than there may have been about mechanical safety. Does not recall anything different about Piper Alpha as an operational platform, compared with others he worked on. People very positive and intense in trying to do the right thing. Re design of Piper, with accommodation on top of the processing, says none of them gave that a thought. Even compared with working for Mobil, says the platforms were all the same in terms of how they worked. Jumps to latter part of his career with John Brown, and talks about his time offshore in Norway, from mid-1981 to mid-1982, working on Phillips' Ekofisk platform. Resident specialist for all GE gas turbines. Thing he noticed was different, multiple platforms all joined up, so the accommodation was away from the processing. Explains differences in more detail. (0:42:04) His recollections of hearing about the Piper Alpha disaster in 1988. He was working for Marathon, and was on shore at the time. One week previously had been on a drilling appreciation training course for non-drillers, he was the OIM (Offshore Installation Manager) on Brae Bravo. Went to Brae Alpha where our drilling people gave us a two-day appreciation of what it was like to be on the drill floor. Derek had an accident there and lost the end of his finger, explains he was taken for treatment to hospital in Aberdeen. Was due to go back to Aberdeen Royal Infirmary (ARI) to have it looked at the morning after the Piper Alpha disaster. Thought that with what had happened no one there would be interested in seeing him, but went anyway. Quite weird because there were so few survivors, they had this huge medical staff who had been activated. So he was seen that morning by three doctors and four nurses. Medical people wanted to be doing something, his finger became something to look at. Talks about knowing people who worked, or had worked on Piper, and getting more information from his opposite number who was listening in to what was happening offshore. It was unbelievable. (0:45:44) Talks about how the disaster changed attitudes to safety offshore. The event, the Cullen inquiry (the public inquiry into the Piper Alpha disaster chaired by Lord Cullen), changed UK North Sea culture 100%. Compares this with his recent experience of working in the Gulf of Mexico, which he thinks is closer to pre-Piper than post-Piper. Talks of how regard to safety matters in the North Sea changed. Goal-setting. Talks about how his opinions were regarded as a contractor employee, and the responsibilities he had when he was still in his twenties with John Brown. Was a younger man's game, in the main. Explains how things worked in practice. Issues of communication in days of telex machines, before fax machines or smartphones. (0:52:36) Crises dealt with – nothing in North Sea, coups and uprisings in North Africa but not directly affected. Recalls an experience in the Sahara, in which their driver was put in jail after another vehicle driven by a local ran into theirs. (0:54:43) Joined Marathon Oil UK in July 1982, starting as control engineer on Brae Alpha platform (also referred to in interview as “Brae A”). Interviewer tells him that was the first offshore platform he visited as a young BBC reporter. Derek recalls a week long visit to the platform by renowned TV journalist Alan Whicker and camera crew. Explains reason for move to oil company Marathon, his wife was tired of travelling with the kids. Gives detail about the move, did not know anything about Marathon, which he associated with the then name of a popular chocolate bar (Marathon bars later had a name change to Snickers). Move came about through a man called Bill Watson, who had been the maintenance supervisor on Claymore, who had moved to Marathon. Explains about this, Derek invited to join Marathon. Moved from being a technical specialist to more general technical matters, also managing people and budgets. (0:58:56) Now working for an American company for the first time – talks in detail about how this was different from working for British employers. Significant number of Americans in senior positions, did things the same way they did in the States where the oil industry was mature. Challenge to adapt this to needs of UK North Sea. Accents, more positive “can do” attitude of Americans, rather than Scots way of pointing out all the problems. (1:02:28) Talks about what he first did on Brae Alpha. Control engineer responsibilities, reporting to maintenance and production superintendents. We were inventing Marathon in the UK. Helped develop permit to work system, isolation system, building up a number of processes and procedures we would need when we went offshore. Engaged in commissioning and startup, gives detail about this. Compared with Oxy's Piper and Claymore platforms, this was new generation, high sophistication computerised control system. Thinks they had ten floors of accommodation, at one point six hundred people on the platform, and twelve hundred on support barges. Scale much bigger, a lot had been learned. Talks in detail about issues faced in commissioning Brae A, and also planning Brae B. Marathon really good at continuous improvement, lessons learned. He and Bill Watson left Brae A fairly soon after it became operational, to become operations team involved in Brae B early design. Explains in detail how this brought together operations team with construction and design team, getting operations input into the design stage and not when it had already been built. Thinks this was probably in 1985 or 1986. Clarifies that when he became involved with Brae Alpha in July 1982, production was not close – he was in office for seven or eight months while the platform jacket was being towed out and the modules were being put on the platform. (1:08:53) In early 1983 he was one of the team that got the electricity on the platform working. Always under pressure to get the job done, not to cut corners, but huge investment involved and need to get this first platform for the company working. Wanted to move on to Brae B as well, did not want to break up the team, wanted continuity. Completely broadened his horizons – explains in detail, expertise coming from other platforms, but also other industries. One of the best times in his career was moving to Brae B and knowing they could do things better, master plan with Bill. Had huge influence on the second platform. Things went a lot faster, and a lot less expensive. (1:14:50) Explains in detail how they went about creating and preparing operating and training manuals etc for Brae B. Moving to condition-based maintenance – a new culture and framework. Explains in detail how this differs from how it had been done before. Importance of introduction of fax machines. (1:18:38) Talks about how he was promoted to become the Offshore Installation Manager (OIM) of Brae B. Role of OIM by then, post-Piper, was number one the safety of everybody on board and the facility. Stresses this. (1:21:02) Talks about what it was like at time of first oil production on a North Sea platform. Two worlds – prior to start up and hydrocarbons being present, and post startup when hydrocarbons are present. An offshore platform prior to start up is like many industrial facilities. Different order of magnitude when hydrocarbons are present, because can no longer do things the same way you did previously. Explains in detail how this worked on Brae. Then talks about how he was affected by the oil price crash in the mid-1980s. (SESSION 1 ENDS 1:25:31)
SESSION 2. (0:00:00) In March 1991 Derek was head-hunted and left Marathon to join a joint venture (JV) company formed by two local contracting companies. Atlantic Power and Gas (APG), mainly a mechanical, construction, pipe-fitting and welding service and supply company. And Salamis, a subsidiary of the Maersk Group, whose business was scaffolding, painting, shot-blasting etc. Leaders of those two companies had got together to figure out how they might participate in a new move being introduced to the North Sea predominantly by Shell and BP. This was to modify the contractual arrangements between the oil companies and the main contractors, so the main contractors provided more of a managed service than the provision of people and parts on a cost plus markup basis. Explains background to this in detail using example of Shell. Far fewer sub-contracting companies working in their business, and more of a partnership than a client/subcontractor relationship. These contracts were called Maintenance, Modifications and Services Contracts (MMSC). To be considered by Shell and BP for these contracts you needed fairly broad range of service capabilities. At that time vast majority of Aberdeen and North-east companies tended to be fairly specific in what they did. So Salamis and APG proposed joining up, and Derek was taken on to head this up. Thinking and acting like the oil companies had done in the past, and contractors had not needed to. Challenging custom and practice, because in North Sea even back then Shell had estimated the economic viability of their various fields, and some of them would only have lasted five or six more years before having to be shut down. But significant reserves of oil left, so started thinking out of the box of new ways of doing things, reduce cost base and extending the economic life of the oilfields. So APG/Salamis JV Ltd brought Derek in and initially tendered for Shell's three northern field platforms. (0:06:00) Clarifies that APG and Salamis continued to run their own separate businesses, even when they had this joint venture company. Normally in a joint venture approximately half the input comes from each of the two partners. But explains this was very different, a new legal entity where someone had been brought in to run it who came from neither of the two partner companies. It was to operate autonomously, while being supported by the two partner companies. Describes in detail the process of getting ready to bid for the Shell contract. Mentions John Milligan, the managing director of APG, was coaching them, and various others. Derek had prepared on cards what he was going to say, but on the day John Milligan said everything that Derek had been going to say to the Shell representatives, and then handed over to him. Remembers putting the cards aside and just talking, no memory of what he said. But two of the Shell people he later became friends with told him that he was the most natural of all the people they heard. This was transformational in terms of North Sea contracting business. Big issue was not only did the service company have to carry out the services, but had to plan, manage, figure out and be responsible for them in the way that the oil company used to. Other difference was that previously service contractors would be paid a rate plus something for profit. All that went, what was agreed was a budget to provide these services over a period of time. If you can do it for less you get a share of the savings, if you don't do it for less you don't get anything. If you do it for more, oil company will absorb that but it won't look good in terms of renewal. So very much an incentive-based, performance-based regime that was very very different. Neither the oil companies nor the service contractors had a clue how to do it. So another exciting time in terms of going forward. We had to create and develop a computer management system so we could track lots of things. In many ways the MMSC contractors ended up with far superior systems and processes than the oil companies. Explains in detail about the culture and the mindset, and how it differed from being in an oil company. Real improvements in costs and safety. Gives examples. Thinks this helped some of these companies to go overseas and introduce some of these practices - mindset and key performance indicator and so on. Very effective in internationalisation of many companies. (0:16:34) Addresses the question of whether this system might encourage people to cut corners in order to make more profit. Uses example of an overseas pipeline safety valve that was supposed to be operated every year to ensure that in an emergency it could shut down production. Had been signed off for three years, even though production had not ceased. So impossible, it had been falsified. So way we did things in the North Sea not only specified it needed to be done, but that it had been properly done. It was a joint thing, we wanted to introduce new ways of doing things, best practice for global export. Derek was involved with the Health and Safety Executive (HSE), he was part of the team that developed Shell's safety cases. Post-Cullen Inquiry no longer government setting the standards, it was goal-setting where onus was on the asset owner to identify the risks, and then how to mitigate them. In those early days none of us knew what a safety case really looked like, so they were invented and achieving best practice took four or five years. Eventually we got what we have now. Ties this in with his MMSC experiences with BP and Shell. Derek also involved with introduction of the safety committees offshore, and Step Change in Safety. Very close interaction with HSE (Health and Safety Executive). They thought it was a positive change because more people offshore thinking about safety. (0:21:16) Explains in detail what his day to day role was in this new joint venture between APG and Salamis. Fell back on a lot of the stuff he had done with Marathon. Met with people from Shell, but not always so positive for them because we were going to be taking over their jobs. Shell senior management made clear this was not going to be a one-year oil company fad. Derek thinks some of the contracting companies that thought that it would be a fad, and did not really engage with it, did not last as a result. Built on success of dealing with Shell to expand to include BP North Sea platforms, the Shellhaven refinery and offshore Brunei. Internationalised the JV company. (0:25:32) Explains how many people he had working under him in this joint venture company. At time awarded a £20m annual contract by Shell there were three of them – Derek, a commercial guy and a secretary. Recruited everybody thereafter. Shell aware we were going to hand pick people because it was a new approach (recording was paused at this point so Derek could check some figures). Corrects annual contract figure to £18m. During three month mobilisation period recruited 50 onshore technical and support staff, and more than 200 offshore personnel. In expansion over next three years, including Brunei and Shellhaven, other North Sea contracts and Venezuela, turnover of just over £50m per annum. Explains that BP were doing same thing in parallel. Shell contract involved Tern, Eider and North Cormorant platforms, what Shell termed the Northern Business Unit. BP were the JV's second North Sea client. Interesting that our work for Shell led to interest from Shellhaven refinery in Essex about this new way of working. Pays tribute to their client in Shell who turned out to be the best salesperson they had in terms of getting them the Shellhaven contract, by telling his colleagues internally what they were doing. Also another Shell operation in Brunei, explains about what this involved. Another opportunity with BP in South America. Thinks this was a very significant period in maturity of the North Sea, where service contracting industry took a step change in approach. (0:30:20) Clarifies that BP development did not depend on success of Shell venture, both happening at same time. Does not know if there was a sharing of ideas or strategy, just that they seemed to do it in parallel. Explains his involvement with CRINE (Cost Reduction In the New Era initiative) took place later, after he left APG/Salamis JV, when he joined Wood Group. MMSC came first, then companies went to ISC (Integrated Service Contracts). Also in parallel with MMSC there was ESC (Engineering Service Contracts), alongside offshore maintenance, construction, and support services. Then combined them into Integrated Services. So ISC replaced MMSC and ESC. Explains how this developed – more and more integration from fewer and fewer companies. Clarifies that 90 per cent of the time he was with APG/Salamis was spent onshore in Aberdeen, with occasional trips offshore or elsewhere. Explains there were positives and negatives to this. When he was working in an offshore role, would spend two weeks there, then two weeks onshore. Used to joke that when he was ashore, he would decorate a room in the family home each time. But when working full time onshore, never had time to do that sort of thing. Two weeks onshore was good family time, recreational activities. Explains more about how he worked. (0:35:15) July 1996 joined the Wood Group – explains how this came about. The JV came to be seen as a competitor to the parent companies. Things got more complex. Two different company cultures, one Danish, and the other Scottish. Derek was head-hunted again, this time by the Wood Group – big local Aberdeen success story. Thought the time was right if he was to grow and develop. Describes his perception of the Wood Group before the move as being in the same business as APG/Salamis, did not understand all they did, but quick to adapt. At time he joined, Wood Group involved in big joint venture with AOC Technical Services, very large offshore traditional hook-up company. Had come together to help Shell with big project, the Long Term Field Development project for the Brent platforms. Part of Derek's remit to be responsible for this, became the LTFD project director, opposite the Shell project director Tony Brown. Explains what this project involved, as the Brent platforms began producing more gas than oil, and reason for the joint venture. Wood Group had MMSC for Brent Charlie and Delta, AOC the MMSC for Brent Alpha and Bravo. Shell thought greatest benefit if the two companies combined in joint venture to do all four platforms together, and shared the learning experiences. Thinks something like 3.8m man hours spent doing the first platform, that had come down to 1.0m man hours for the last one. Fourth one cost 35% of the cost of the first one. LTFD was a classic example of how bringing the right people with the right attitude can bring transformational change. (0:43:17) Explains what the Wood Group was like to work for as an organisation, and its boss Ian Wood. Derek joined as managing director of integrated services, the Aberdeen-based division to do the activity already described. Remit to expand the North Sea business and internationalise it. In many ways the Wood Group was similar to the JV, they were just bigger. Ian was a great delegator, did not get involved very much day to day, but kept informed of key things that were happening. Ian Wood more involved at looking at the other divisions, which were much smaller, and operations in the United States. Gives more detail on this work being done by Ian Wood, including gas turbines. Concerns about the cyclical nature of the oil industry. Did not want all your divisions hitting a low at the same time - nor a high at the same time, because then you struggle for resources. By getting into gas turbines, the cyclicality of the gas turbine business very different to oil and gas services. Well support and electro-submersible pumps, although still in oil and gas, had their own cyclicality compared to engineering and new projects. Explains why. Had within Wood Group what Ian Wood called “joined up thinking” - three pretty autonomous divisions, and within each division there was autonomy between companies. Role of Ian, Derek and other executives was to provide the links between these autonomous companies, to encourage them to work together when it made sense to collaborate. (0:48:20) Explains about his role in internationalising the Wood Group. Tells story of how a Shell manager did not rate the Wood Group highly because he had no idea that they actually had an engineering division employing 800 people. That was an eye-opener, Derek realised he had to spend some time getting round Shell and telling people all the things the Wood Group could do. Ian helped us with that. We won the Brent ISC. Amoco went through a similar process, they called it the Northern Assets Strategic Alliance (NASA). We got the business for all of their platforms and several others. So there was period of about eighteen months which was pretty intense, new wave of development in the North Sea, more integration, more partnering. Ian Wood wanted to take this know-how out of the UK. Brunei became a target, and they won the Brunei integrated services contract from Derek's previous company APG/Salamis. South America another target. Two things there. One an extension of the North Sea into Colombia and onshore. BP had two huge fields, and wanted to introduce performance-based contracting. Explains about this, and how Wood Group formed a consortium with three other companies to win contract. In parallel there was an opportunity in Venezuela – state oil company PDVSA (Petroleos de Venezuela SA) looking for gas turbine overhaul and repair services. That expanded over a period of two years, and became without a contract being awarded a long-term 16-year contract to take over complete operation, maintenance and performance of 14 water-injection platforms on Lake Maracaibo. Design, operation and maintenance of five new platforms was added. And takeover of two water treatment plants. We had to predict sixteen years ahead what we would charge for every barrel of cleaned up water we injected. And explains other charge prediction challenges involved. Won the $800m contract with a bid that was $2m less than the next competitor. Derek remembers hoping that they had got it right. Was very successful contract for Wood Group until it was nationalised. We were taking the North Sea division and expanding it. Realised they needed a presence in the global headquarters of the oil industry, which is why he moved to Houston. (0:57:27) Significant period for the Wood Group, foreign companies seeking the company out to do work elsewhere in the world. BP, Shell and others very proud of their achievements in the North Sea. Gives statistics on the cost reductions achieved. Reduced sustainable operating costs with MMSC by 33% in three years, further 20% over next two years. Reduction in offshore personnel by 40%. BP and Shell telling their colleagues internally about this, but also at offshore shows, became point of interest for many companies. Including Petrobras in Brazil, who see the North Sea as a sister operating environment. So Wood Group got involved in Brazil, and still involved. Period of the North Sea exporting know-how. (0:59:58) Explains in detail about complexity for him of handling the Brent LTFD project. Like building a new house on an old base. Logistics challenge. Finding best way to do things. Explains risks of the project in detail. Like a hook-up and commissioning in reverse. Accidents? Their record was better than normal day-to-day running – explains why.
(SESSION 2 ENDS 1:07:05)
SESSION 3. (0:00:00) Explains how the Brent LTFD project was actually done. Equipment on the four platforms no longer the right size and fit for the change from predominantly oil to predominantly gas from the Brent Field. (0:02:40) Lessons learned. Wood Group and AOC joined together so that they could have continuity from the first platform to the fourth. Bit of inter-company rivalry to bring the most improvements, knew that at the end there would be a tendering session to get business for all four platforms. Explains. Great integration between oil company and contractors, contractors in charge of Shell people, Shell people in charge of contractors. Did not matter who paid you, all part of the Brent team. Explains in detail how this worked. (0:05:42) Wood Group – Derek joined them in 1996, when already well-established success story of local Aberdeen company making most of the opportunities of the oil business, how did he regard them? Wood Group role in Aberdeen focussed on one of its three divisions – predominantly engineering, operations maintenance, surface-related oil and gas facilities. Bit of the gas turbine business here, never really much of the well services group here, so Wood Group from Aberdeen perspective is really the North Sea support contractor. Different perspective in Houston of Wood Group, where known for well services work. In Connecticut it is known for gas turbines. Part of Derek's role, along with Ian Wood, to encourage the different Wood Group divisions to collaborate with each other. Gives example of success in this, the Venezuela contract. (0:09:22) Still fair to say people in different parts of globe still have limited perception of breadth and depth of Wood Group – even with recent acquisition or merger with Amec Foster Wheeler, now part of Wood. When Derek joined Wood Group had a joint venture with Foster Wheeler, but that ended after two years, now come full circle. Derek thinks Wood is no different in this respect than other multi-nationals – most people have limited view of what they do. (0:10:58) Explains in detail his reasons for moving to America to work for Wood Group in 1999. Need to globalise capabilities, adapting North Sea expertise. Became obvious needed a presence in Houston. Family issues involved in decision to move. Was meant to be a two-year assignment, but 19 years later still there. Explains how approach in North Sea had been successful, but did not necessarily fit in other places. Huge amount of oil industry in America is onshore. Big differences in what makes commercial and operational success. But lots of things in the UK were transferable, safety-related things, and were welcomed. Had to be adapted. Gave Wood Group a differentiator in North and South America, which they had for a long time. (0:18:22) Views on the United States oil industry, and Houston as the centre of the global oil industry. Americans have a “can do” attitude. Positive belief you can make things better. Market in Houston is huge compared with Aberdeen and the North Sea, American oil industry companies much more international. Wood Group best example in Aberdeen of internationalisation, expresses disappointment in other oil-related companies in Aberdeen area and UK in this respect. Speculates why this might be – more negative outlook a factor. (0:24:57) Talks about other Scottish expatriates in Houston – estimated to be 80,000 of them, he understands. Some in really senior positions, mentions CEO of BHP Billiton, David Dickson CEO of McDermott. Explains he has met Scots everywhere he goes in the world, and in senior positions in big organisations. No problem with individual Scots. But reluctance of Scotland or Scotland Inc companies in growing and developing and continuing. (0:26:41) Explains why his initial two-year assignment in Houston has not ended after 19 years. More growth and opportunities. Thinks that in 1999 the Wood Group division out of Houston business was worth £19m a year, when he left executive role with Wood Group in December 2013, in the part he looked after just £20m short of £2 billion. The part he had looked after up till 2004, when Greenfield Engineering separated from operations and maintenance, worth another £1.6 billion by 2013 – so total of £3.6 billion over period. Huge growth and development, partly acquisition and partly organic – 20% and 80% respectively. Explains what sort of things were involved. Stayed because he enjoyed it. Talks of BP Colombia wanting him to discuss sharing the pain when oil price dropped to $9 a barrel, but observed that companies not so keen to share the gain when opposite happened. Liked seeing younger talent develop and mature in places like Colombia, Venezuela and Trinidad – gives examples. (0:32:50) Ceased work for Wood Group in September 2015. Stopped being president for Wood Group Americas in 2013, two guys who worked for him took over and ran the business. Derek provided a consulting, support and coaching role. Took on some special projects – explains this followed legislative changes in the States following the Macondo blowout (involving BP) in the Gulf of Mexico (in 2010). Involved adapting work done on North Sea safety cases, and making it relevant to the Gulf of Mexico. (0:34:30) Talks of things he likes and enjoys and still wants to participate in. Joined a company in September 2015, which he had bought for Wood Group in 2000, and was then sold back to son of the founder in 2011. Explains this was originally Wood Group Venezuela, an engineering company. Using his experience. Talks of his son and daughter's careers. Would like to help Scottish companies replicate what Wood Group did – explains in detail. Recalls conversation with Shell managing director two years after MMSC had been started, MD admitted he did not know what would be achieved. But achieved two significant things – can now account for every penny spent, also been able to get rid of entire mid-management level of Shell managers. (0:40:13) Sums up how he feels about his role in the North Sea oil industry. Lucky to be involved at period when transitional changes were happening. Predicts that going forward from present time will be like going forward with MMSC, because there has been two or three years of apparent downturn. Every time there has been a downturn, something positive has come out of it. Innovation not something that comes naturally to oil companies, explains why. When there's a downturn, that completely changes, explains why. Industry is very good at finding ways to survive, as his story has illustrated. (SESSION 3 ENDS 0:45:01) |