Chief Executive Officer
Topaz Energy and Marine
Occupying a place at level 8 on the Mohs scale, silicate mineral Topaz is renowned for its hardness and transparency, and was once regarded by the English to cure lunacy. These qualities of robustness and clarity have helped guide aptly-named Topaz Energy and Marine through the turbulent waters of the energy industry to become a flagship offshore service provision company in the Middle East and beyond.
In a time when many offshore energy companies have at least some idle vessels in their fleet, all of Topaz Energy and Marine’s vessels are on charter. DP World recently announced plans to acquire and integrate the company with P&O Maritime, which would lead to a combined fleet of over 250 vessels. With business on an upward trajectory, it’s an ideal time for Damen Offshore Journal to capture Topaz’s reflections on the past few years and consider what the future may bring.
“It’s crucial for Topaz to have suppliers that can understand our business,” René Kofod-Olsen, Topaz CEO, explains. “We always look to partner with companies who can consistently supply a high quality service through understanding our challenges and specific requirements as a client.” Albwardy Damen has been the service provider of choice for Topaz vessel dockings in the Middle East since first partnering in 2016, undertaking maintenance on 23 vessels in that time.
Catalysed by an existing business relationship between René and Lars Seistrup, managing director of Damen Shipyards Sharjah, the partnership was formed as Topaz was seeking to move away from a traditional vendor relationship and into a frame agreement that set out a true collaboration between client and supplier. With expansion in mind, Topaz was seeking a supplier who could guarantee a consistent level of quality and control for all vessels going through the docking process.
“This type of collaborative arrangement allows Damen to understand exactly what we need and expect in terms of safety and quality,” says René. “On the client side, it provides the opportunity for Topaz to even audit how Damen works from a quality, health & safety and environmental perspective, which are constant areas of focus for us as we consider our future development.”
Growth against the grain
The Topaz business model has developed considerably in the past five years, moving away from being a pure vessel operator to becoming a provider of complete marine solutions. As the energy business went through something of a downturn, Topaz responded to the challenge in ambitious fashion. “We decided to make some changes to adapt to a new business environment, and to identify new market opportunities,” says René. On this side of the crisis, Topaz is a provider of an entire portfolio of services, offering a more enlarged and tailored service to its clients. “Now we operate more as an offshore marine logistics company,” says René.
Through efficiency of scale, this expansion has helped reduce costs and has enlarged business opportunities in existing regions, while it has also created the opportunity to launch new businesses in the offshore marine logistics space. It’s this competitive advantage, René believes, that enabled Topaz to come through the crisis with positive results. “In order to create opportunity for this expansion,” he says, “we looked closely into what our clients would be able to procure in the future and how they would procure it, and we then figured out how to match that need through our own delivery.”
The success of Topaz’s approach to expansion and service provision recently caught the eye of DP World. As Rene describes, “Under this merger, we are bringing a new side to the DP World portfolio and we look forward to combining with those other great marine companies. We expect the combination of our knowledge and resources to yield great benefits in terms of technological development and innovation, creating a very positive future for our fleets and global footprint.”
DP World has made a lot of investments in the marine sector over the years, with Topaz being one of the biggest recent investments. As the bedrock of marine logistics in the area, René is confident the Topaz acquisition is wonderful news for clients and stakeholders. “The shipping industry has low margins these days, so economy of scale helps a great deal,” he says. “Grouping all the marine assets under the DP World umbrella allows them to benefit from sharing one platform. We know there are great companies under the P&O segment, and combining with these companies will help to create an exceptionally strong group and will lead to plenty of future opportunities.”
Creating the future
As part of this exciting new future, René points out that sustainability is bound to play a key role. “Anyone who doesn’t include sustainability as part of their strategy has not done their homework,” he says, “It’s a part of all our lives.”
Topaz has been making numerous improvements to its operations to maintain optimal performance while minimising its environmental footprint. “Besides ensuring our fuel adheres to all global environmental standards, we put tracking devices on our vessels to calculate the optimal fuel usage,” says René. “We take pains to operate in the most environmentally friendly way, with all necessary procedures in place to ensure there is no spillage on our vessels. We work with clients on this too, inspecting our supply chain to make sure standards are adhered to. When it comes to larger-scale jobs like drydocking, for example, we don’t select any supplier who doesn’t have a track record of environmentally friendly practices.”
In piloting Topaz into the future, René has also overseen the implementation of real-time data capture in order to achieve peak efficiency. “We took a leap about ten years ago,” he says, “in moving the decision making to on-board the ships where the action happens. This in turn created a strategic need to enhance the communication abilities on board the vessels, so our adoption of the technology evolved around ensuring our ships had the required connectivity to facilitate communications and that they had a single-system platform, with all inputs seamlessly feeding into that one platform.”
Data inputs include monitoring the consistency of the lubricant oil on board. In the future, each vessel will feature sensors that detect anything unusual in the composition of the lubricant oil, such as water or foreign particles, or even changes in temperature. “The lube oil is the blood of the ship,” says René. “It used to take us days to get hold of this data, but now we can access it immediately online, which allows us to make accurate predictive decisions in real time, so we can see if we need to dock a ship, or if we need to change things while it’s in the water. This kind of information we can feed to Damen to also help the engineers plan and operate on the vessels more efficiently.”
A working model
Topaz is seeing these initiatives come to fruition in working on a new contract with Chevron to transport oil into Kazakhstan from the Caspian Sea via the country’s river system. The vessels built for this purpose are fully digitalised, sending back 15 data points – including speed, routing and fuel usage – in real time, to ensure the vessels are running to perfection through the river system. René is positive about the effects of this digital change; “Using ‘Internet of Things’ capability on the vessels to feed information back into a central monitoring system gives us the power to analyse data in real time. We’re already seeing the benefits of this with our clients, as these insights help to make us more reliable and predictive than our competitors.”
René explains, “We can deliver that data to Damen in the Gulf and Damen can plan how to service the vessels. This kind of foresight provides the capacity for greater flexibility and efficiency at once, so it introduces the potential for Damen to conduct maintenance at a more competitive price. We hope this system will be a benefit to both parties.” René expects Topaz to further digitalise its fleet in the future and is training teams to embrace this change across the fleet. “All our vessels are capable of harnessing and benefitting from this technology,” he says, “and it will be important for suppliers who work with us in the future to understand the data and work together seamlessly with this capability. As a client, Topaz will have the information readily available on the ship, which enables the supplier to design an efficient operation around that, so the data helps both parties.”
As a collaborator, it’s also important for Topaz that Damen continues to innovate and maintain a position at the forefront of its industry. Topaz values working with suppliers who continuously understand that the client’s needs are also products of the oil & gas industry, and that margins affect expectations and business decisions. “We rely on Damen to maintain a cost-efficient business and strive to understand our needs,” says René, “and we greatly appreciate Damen’s ability to consistently supply quality and to understand the right requirements for each job.”