OTC 2018 Marks the First Anniversary HFI Milestone
By Hugh Fraser
The HFI Consulting International story comes full circle this month as the team returns to OTC Houston. But while this preeminent industry event celebrates 50 years of bringing innovation to the energy sector, HFI will be marking the first anniversary of the announcement of our return.
The last year has underpinned our awareness of how the market has changed since 2013 when the first HFI business was sold. However, emerging after four years under US ownership, we are responding with a series of innovative business models, the next of which is our bridgehead cluster ventures (BCV) initiative to help businesses break into the notoriously complex Saudi Arabian market.
We are currently in discussion with firms in the subsea and advanced drilling and well management sectors with a view to rolling out the initial clusters in Saudi Arabia, but we believe there is scope to tackle other regions and sectors.
I have personally been very surprised by the level of positivity about the cluster model, which seems to have resonated with SMEs in particular. The BCV model is specifically designed to attack the six key reasons why ventures fail: lack of market verification or connectivity; local partner malfunctioning; absence of full time senior management on the ground; absence of local legal presence; failure to address in-country value policy issues; and unrealistic timelines and revenues/costs budgets.
The key objective of the plan is to establish a solid platform for companies seeking to secure a sustainable level of US$5m to US$10m sustainable revenues per participant within a three to five-year horizon. As a cluster this would mean building a US$25m to US$50m revenues business, cluster by cluster. While consultations are still ongoing, we believe that this position is eminently achievable.
Hugh Fraser of HFI Consulting International with David Rennie of Scottish Enterprise
When we last attended OTC, I was honoured to be inducted into the GlobalScot network at a presentation by David Rennie, head of oil and gas at Scottish Enterprise. I’ll be attending this year’s conference in my capacity as a GlobalScot – an initiative which aims to help Scottish businesses make their mark on international markets.
Many Scottish firms which have huge export potential in the energy sector are very much at the SME end. However, it is often companies of this size that face the most barriers to expansion because of the costs, time and red tape that can be involved.
For many, the only option will be to hand total development of the venture on to a local agent and this, in my experience, is where too many businesses fall down. The cluster approach aims to step away from traditional entry to market, allowing for shared overheads and a much more focused, hands-on approach to set up and business development.
I’m looking forward to catching up with my fellow GlobalScots during OTC to discuss how we can better support firms with a North Sea focus to internationalise, and of course, I hope to meet with many Scottish firms too.
With over 70 companies, this year sees the largest delegation at the Scottish Pavilion to date and I am delighted to report that nearly half will be attending for the first time. If you’d like to set up an informal chat or an appointment, please don’t hesitate to contact me here.