The Abu Dhabi Ship Building PJSC (ADSB), a provider of construction, repair and refit services for naval, military and commercial vessels, announced during ADIPEC last week it is venturing into the oil and gas industry.
This is the company’s first foray outside the maritime and defence sectors, as it opens up to opportunities beyond its traditional areas of focus.
“ADSB has a proud past, with over 20 years of experience in delivering uncompromising quality and reinforcing the UAE’s significant naval capabilities. With ADSB’s strong performance and recent win on providing marine support services for the UAE’s naval fleet, we are leveraging our relationships with our core government clients in the region to move into a new industry, as we feel that oil and gas has the potential to grow our business beyond ship building,” Dr Khaled Al Mazrouei, CEO of ADSB, was quoted as saying in a press release:
The instability in oil prices since early 2014 has led the oil and gas majors into rethinking their capital expenditures, a move that has benefitted companies like ADSB, according to Al Mazrouei.
“Today, the supermajors and national oil companies are tightening their spending. Investments into new offshore and onshore assets are being put on hold, and are instead funnelling their spending into routine maintenance work — a core ADSB capability,” Al Mazrouei explained.
“In the near- to medium-term, analysts have predicted that oil companies will spend tens of billions in refurbishment, upgrading and purchasing new offshore and onshore assets, meaning that we have a unique opportunity to grow our portfolio in this sector. When the oil and gas industry finally gathers its momentum for major refurbishments and upgrades, there will be a huge demand on shipyards like ours. Our move into this sector demonstrates that we are gearing ourselves to meet this challenge,” Mazrouei said he feels.
Following a review of its operations in 2014, ADSB implemented a new business strategy which aimed to broaden the shipyard’s traditional customer base. Since then, the company has seen green in its account books: net profit climbed to $19.2mn in 2016 from a $24mn approximate loss in 2014. Last year, the shipyard docked, repaired and serviced 285 vessels.
Over the past year the company has completed six oil and gas projects from regional, national and international companies. Its local client base has grown to 135 from 31 UAE entities within the last three years, with its international customer portfolio growing during the same period.
The ADSB shipyard is tapping into new revenue streams in the merchant and offshore sectors, and has partnered with international marine sales services and agents in 17 countries that promote new build and repair services on behalf of the company.
“We are optimistic about the future,” Al Mazrouei said. “We have the expertise and experience in some sectors. We are confident that our 1,200-strong team can expand our capabilities to ensure the longevity of our organisation, while helping our customers realise their business goals.”