Oil & Gas News
Monday, 29 March 2010
ROGTEC talks Exclusively with Tom Blades, CEO for Oil & Gas at Siemens
Energy Sector, CEO Oil & Gas Division
Having previously held senior positions at Schlumberger and Halliburton, Tom Blades has taken the reigns at Siemens Oil & Gas during turbulent times. ROGTEC caught up with him to discuss his strategy.
1. You started your position at Siemens in what was undoubtedly a tough year financially across the globe for most. "In at the deep end" comes to mind, so how was your first year at the company?
The last fiscal year which ended September 30th, 2009 was a record year for the division both top line and bottom line performance. The healthy backlog we had built prior to the downturn has enabled us to maintain momentum even in these difficult times. I am particularly pleased with our 1.1 book to bill ratio and even more so when I compare this to our main competitors' achievements.
2. Having previously held top positions within Schlumberger and Halliburton who have great industry reputation and market positioning, what made you decide to join Siemens - who although a huge company, do not have the same positioning within the O&G sector?
During the first 30 years of my career I was serving the oil and gas industry from inside. Although I never was in direct contact with Siemens products I became acquainted with the line of products used by the oil & gas industry, such as gas and steam turbines, electric motors, compressors, controls etc. I am familiar with their application in upstream, midstream and downstream processes, the technical issues faced in the oil & gas industry and the expectations and challenges the operators demand of the manufacturers.
Given the current direction that the oil & gas industry is moving in I see tremendous opportunity for Siemens to move up from a tier 2 supplier to a tier 1 'partner' for our customers. Getting us there is the strategic challenge that attracted me to my present position.
3. What major changes have been implemented since your arrival and how have they benefited both Siemens and the client?
Traditionally, Siemens has been a component supplier. However, nowadays customers are no longer looking to us for components, but solutions to problems. So we had to grow from a pure component supplier to solution provider, reorganizing our internal structure to accomplish the transition. This is a general trend encountered by other Siemens business units, but it is particularly exacerbated in the oil & gas industry. We are entering into a partner type relationship with our customers, providing them with solutions to their current application problems but also with innovative ideas that our experts are jointly developing in anticipation of future market needs.
Within Siemens, we have an array of products and services that allow us to develop packaged solutions where all the core components are provided in house. A single supplier source has always had a special appeal to customers as it de-risks their projects and accelerates completion times.
4. It has been a pleasure for the ROGTEC team to have partnered with Siemens and to have met your teams at many events throughout Russia and the Caspian over the last 5 years. But how successful is the region for you at the moment and do you have any plans to expand this area?
We are very successful in Russia and in the Caspian Region. For instance, we received an order from Rosneft for the supply of gas turbines as power plant solutions for the Tuapse refinery to accommodate its expansion following the order for the gas turbine power plant power plant at Priobskoy oil field in 2008.
We expect that the two megaprojects in the region - the Kashagan oil field in the Caspian Sea and the Shtokman gas field - will be a good business opportunity for Siemens.
As I already mentioned our aim is to complete the migration form product supplier to true solution partner. Our aim is to enter into dialogue with our customers on long-term oil & gas projects development as early as the Pre-FEED / FEED phase so that we can coordinate the total Siemens portfolio in order to leverage our technical capabilities as single-source partner the across the board from power generation and distribution to automation and turbo-machinery. We already have about 1,200 engineering employees in place around the world and we will further strengthen our regional presence in key areas like Russia.
We have already established local offices in all federal districts in Russia. i.e for the Caspian pipeline we use our service centre in the south to provide our customer with latest service offering on our installed turbines.
Additional we are also active in the countries around the Caspian sea with several projects in the total energy conversion chain.
5. As I understand it, Siemens is stronger within the pipeline and downstream sector than upstream. What are your upstream offerings to Russia and the Caspian and how are you looking to compete in this arena?
You have analyzed the competitive situation very well. Unfortunately we were not in the upstream focus as much as we could be, because we can offer a wide range of solutions especially for energy efficient solutions and clean energy.
6. The low cost of oil seen at the start of the year and the financial situation put many projects on hold, and in many areas, market confidence was low. We all agree some confidence is coming back - but what are your thoughts on current market conditions and what do you forecast
I agree with you on the financial situation. Due to the strong decrease of the oil and gas prices and additionally the ruble devaluation in November last year some projects in Russia have been postponed for 1-2 years. Currently we expect a small increase in 2010 and 2011. The main positive impact for the oil and gas sector we expect from the mega-projects and also from the new energy efficiency law in Russia. This will support huge investments in the next years. I am convinced that with our solutions oriented approach we have the right answer to these challenges.
7. We read many stories relating to "Peak Oil" and the need to look towards alternative energy. I understand Siemens have a strong renewable division - but what is your view on "peak oil" and where will the world's oil be found in the coming decades.
The Oil price hit a rock-bottom low, but in the mid-term and long-term perspectives nothing has changed essentially. Energy demand will continue to grow in the years to come. It is anticipated that it will nearly double by the year 2050. The share of renewable energy will increase significantly but nevertheless fossil fuels are and will be the backbone of the energy supply. But we do have to accept that "easy oil is over" - and this is the point where Siemens can step in because we have the right portfolio and cutting-edge technology. Depletion of resources is the main driver of our business. Technologies such as steam or water injection, gas compression and advanced subsea systems are all areas which are becoming economically viable as oil prices increase and are all technologies in which Siemens is active and can provide solutions, both now and for the future.
For example, Siemens will invest a lot of money in Subsea technology in the coming years. We are thinking a long way ahead and are trying to picture a future where no more platforms are needed and all of the oil production will be done Subsea with onshore control. It is a big challenge to keep the oil production at the same level as it is today. New technology must be developed for better exploration of all the different oil and gas fields. Subsea technology and solution are not only environmentally friendly but with this technology fields can be reached that previously were unreachable. Subsea equipment is more expensive but the processes and maintenance will be far cheaper for a period of 30 years. We will supply solutions down to a water depths of 3000 meters. Our goal in Siemens is to be number 1 in specific Subsea technologies and solutions by 2017. As per today we have no competition with the same technology and we are working hard on joint industry programs to co-operate and involve large oil companies in the development of our solutions.
And I would like to mention another example: One third of natural gas reserves are wet or sour gas, there is a need for high reliability and availability for the equipment with, long average maintenance intervals. We developed the compressor for sour gas applications and have reduced the number of required components and auxiliary for compression systems to a minimum. Our solution is the STC-Eco which integrates a high-speed induction motor and a multi-stage centrifugal compressor on a single shaft in a single casing. No need for seal gas system, lube oil system, gear box etc.
8. In a highly competitive marketplace - what makes Siemens stand out from the crowd?
Siemens Oil and Gas Division has a broader portfolio than any of its other competitors and the Siemens brand enjoys an extremely positive recognition. We are part of the Siemens Energy Sector and backed by the Siemens AG building together this big company which is present in some 190 countries. In Russia, Siemens is doing business for more than 150 years now. We have excellent people in place and as mentioned before, a single supplier source has always had a special appeal to customers as it de-risks their projects and accelerates completion times.
Energy Sector, CEO Oil & Gas Division
Born on September 17, 1956 in Hamburg, Germany
Electrical Engineering in Salford (UK) and Lyon (F)
1978 Schlumberger, 1993 - 1996 Vice President and General Manager Schlumberger/Geco-Prakla
1996 NUMAR Corporation, COO
& Executive Vice President
1997 Halliburton, Executive Vice President
1998 SPECTRO, President & CEO
2004 CHOREN Industries, President & CEO
Since 01/2009 Siemens Energy Sector,
CEO Oil & Gas Division
Labels: siemensposted by The Rogtec Team @ 14:18