Audrey Raj speaks with Singaporean OSV provider Vallianz Holdings about the group’s growing presence in an emerging offshore market such as the Middle East.
Crew onboard Rawabi Integrity. Images from Vallianz.
Vallianz Holdings chief executive says he expects significant growth in the company’s chartering business and still sees a strong demand for all types of offshore support vessels (OSVs), especially in the markets where the group operates.
Most of Vallianz’s activity is presently in the Middle East where offshore projects remain active despite of what we are hearing about the current state of the oil and gas industry, said CEO Ling Yong Wah.
“The Middle East region is dominated largely by national oil companies (NOCs) that take a longer term view in their project planning and provide more stable demand for offshore marine services,” he told AOG.
Headquartered in Singapore, Vallianz is a provider of OSV and integrated offshore marine solutions to oil majors and national oil companies globally. The company owns and operates a young fleet of 48 OSVs, which support offshore exploration and production operations in the Middle East, Asia Pacific and Latin America.
Over the past year, Vallianz has been working to cement its leadership position in the Middle East by becoming one of the biggest OSV service providers in the region. In the latest, the group secured contracts for the supply of 13 OSVs in a single tender worth up to US$210 million. Boosting order book to $1.2 billion, these wins comprise mainly long-term charters that stretch up 2025.
Wah said in the last six months alone some $370 million in contracts have already been secured and this is expected to contribute positively to company performance in the current and future years.
“Looking at the contracts that have been announced, we see that there is demand for OSVs, ranging from anchor handling tug supply vessels; maintenance, work, safety and utility vessels; and liftboats,” he said.
Working with Middle Eastern NOCs
While the drop in oil prices has taken a toll on vessel utilization and day rates globally, Vallianz has been one of the few OSV providers that continue to secure long-term charters and a relatively healthy fleet utilization rate.
Wah said specifically for the Middle East, the group collaborates with a strong partner in Rawabi Co. Holding. Working together, the duo has been successful in building the branding and track record of their joint venture company, Rawabi Vallianz Offshore Services Co. (RVOS).
“Both Rawabi and Vallianz have an alignment in terms of our long-term interest and business strategy, with each bringing our local and global connections to benefit RVOS,” he said.
“We believe that we have proven our operational capabilities and resilience in this tough market environment. Nonetheless, we are continuing to push forward even harder to meet future challenges.”
Wah noted that the NOCs in the Middle East have demanding and stringent requirements, as well as high expectations of their service providers to maintain operational excellence. They also do not grant special favors, and Vallianz has to be able to compete with the best in the world to continue doing business in the region.
“While the present market environment is highly stressful, it has molded our people to have an operational excellence mindset,” Wah said. “We are forced to step-up our game every single day, 24/7, until it becomes second nature to us.”
OFSSV Rawabi Integrity recently deployed to a customer in the Middle East.
Although, the current focus is to maintain superior market position in the Middle East, Vallianz is also seeking immense opportunities to make deeper inroads in this region by expanding reach into emerging markets such as Egypt and Iran, as well as West Africa.
As the group has already established operations in Latin America and Asia Pacific, Wah said they are ready to take advantage of opportunities in these markets when there is a pick-up in offshore activities.
“Vallianz has an order book of $1.2 billion with contracts that stretch for the next seven years,” he said. “We are working to add to this impressive order book and currently bidding for contracts with a combined value of $1.5 billion.
“To strengthen our competitive edge, we have been actively expanding and diversifying our product offerings to our customers. Leveraging on our in-house technical and engineering capabilities, we have developed an offshore floating storage and supply vessel (OFSSV), which is a one-of-its kind storage hub.
“We believe this solution-based chartering service is a game changer and, we therefore want to capitalize on our first mover advantage,” he concluded.
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