How will 2023 shape up for a global energy supply chain business?

From Dermot Clarke, MD, Alderley Middle East

The Alderley perspective

With a month of the new year already gone, I thought it would be timely to pen some reflections on the last year – an incredible year for global energy – as well as my thoughts on what might lie before us in 2023.

Reflections on 2022 – an incredible year for the global energy sector and energy in the Gulf

Last year was truly momentous for the global energy sector as it continued to reconfigure post-Covid.  The war in Ukraine caused further disruption accelerating in many instances the shift to renewables while highlighting the vulnerability of many countries’ energy security. 

On the ground in the Gulf and North Africa we saw greater interest than ever in the region as a provider of energy, as the region stepped up to fulfil demand for traditional hydrocarbons.

For Alderley, we saw pent-up customer demand at first-hand with our Dammam and Dubai operations working extremely hard to meet client interest and a growing portfolio of work in our Aftermarket Services business across all of our regional centres including in Qatar.

2022 was notable for the diversity of projects and clients from across the region.  Our Systems and Projects, as well as Aftermarket Services divisions penetrated new markets and secured contracts for projects such as Hydraulics and Produced Water Treatment (PWT) – areas not traditionally executed from Dammam or Dubai.

Growth in the Gulf was matched elsewhere showing how securing energy assumed greater importance than ever before.  Our Indian team grew and performed strongly.  Plans are underway for our Pune office to open soon thereby supporting our ambitions and growth trajectory into 2023.

One trend of last year that I anticipate will continue into 2023 has been true intercompany cooperation.  This was most evident in the execution of the Global Hydraulics project for Yinson, with members from the UK, India, Saudi (KSA) and UAE operations coming together to play key roles in the project.  The fabrication and assembly is currently ongoing in Dubai and it remains a terrific example of how international cooperation can bring benefits to the entire group and our clients.

Further, we added significantly to our global engineering capability through the fantastic work of Dan McKim, Group Technical Director, who has established a model of how we can execute future projects more efficiently with the obvious cost-savings that this engenders.

Our Sourcing Team headed by Nick Doherty continues to beef up its offer by strengthening personnel and has greatly added to the overall capabilities of the team with pre-award savings increasing our competitiveness to allow us to win new work, while strong post award negotiations have contributed strongly to our profitability.

A dynamic outlook for 2023 – spotlight on the Gulf remains

Now turning to 2023…

We have a strong order backlog for all parts of our business in region, which offers challenges and opportunities for the team to grow.  The Gulf region is still basking in the glow of a successful FIFA 2022 World Cup in Qatar that has been an empowering event for the whole MENA (Middle East and North Africa) region and has encouraged countries to fast-forward their ambitious investment and infrastructure plans.

This trend will continue with COP28 taking place in the UAE in late 2023.  Growing recognition of the importance of the environment has put additional focus on the energy transition among countries in the Gulf region. 

Leading regional players such as Saudi Arabia and the UAE have announced ambitious green energy projects especially in hydrogen, CCUS and solar. 

2023 will be an exciting time for Alderley as we help develop and grow the greening industries regionally.  The Middle East has decided to take a leading role in the new energy transition and Alderley, with its decades of experience providing energy solutions to clients in the region, is perfectly placed to actively participate in this nascent industry.

Further afield, the work we’re doing in Singapore led by Sales Director Martin Bell is proving fruitful with it opening new opportunities and new clients for the Gulf business with orders that we might not have landed previously. 

Our operations in Singapore have meant that we’ve been able to get much closer to our clients in the growing FPSO sector and we have offered them specialist solutions including retrofit for redeployment vessels – important strategically to us.

We have continued to develop global projects from Dubai with remote but close-to-the-client build projects in Vietnam and India allowing us to grow our turnover significantly.

Our successful model in Dubai and the wider Gulf region builds on Alderley’s engineering and project management combined with local fabrication partners.  Building closer to our clients improves engagement, fosters innovative collaboration and reduces the impact of our operations on the environment.

A major driver of growth this year will be in both Systems and Projects led by Vince McCulloch and in Aftermarket Services headed by Brian Scorer.  The outlook for Aftermarket Services looks particularly bright.  The work that this team has done in Oman has seen an award for our Systems and Projects off the back of this initial success.

Similarly, Special Projects has successfully executed and shipped solutions to clients in Oman, while Alderley’s Spares and Services business continues to expand across MENA.

Digital remains a core growth area in the Gulf – this has come about through our product offerings to oil and gas companies across the region.  We have now dedicated specialised digital resource in Dubai to accelerate this growth.

It’s self-evident that the Gulf region has recovered more quickly and more strongly than many if not most regions of the world.  Business levels are above pre-Covid levels – a challenge will be keeping up with the growth and interest particularly in terms of resource. 

A particular thanks must be given to our fantastic clients in the region, partners and of course colleagues across the Gulf without whom this success would not have been possible.

One thing is clear – 2023 offers a host of great opportunities.  We have the energy, expertise, and appetite to make this an incredible year.

This article was written by Dermot Clarke, Managing Director of Alderley Middle East.