K2 Adapts to Oil Market Shifts, Aims for Global Leadership

A flexible approach

Founded in 1998, and becoming part of international Velosi Group (now Applus Velosi) in 2007, K2 Specialist Services has grown to become a leading supplier of inspection, repair and maintenance services throughout the oil and gas industry. The company provides asset life cycle services including periodical inspection and survey repair and maintenance, upgrade services and engineering. However, with the drop in oil prices across the global market, K2 has been forced to shift its focus and demonstrate its flexibility in order to remain successful.

“As a measure, we are pleased to report that our revenues haven’t dropped at nearly the same percentage as the price of oil,” highlights Managing Director, David Griffin. “The bread and butter contracts will continue to carry us through and support our baseline. However, we have had some projects taken off the table in areas that we were expecting to see more revenue. We have had to respond in a number of ways, we have had to reduce our headcount, push a number of full time employees into freelance roles, whilst at the same time ramping up areas where we have had some slow projects ongoing for supporting infield services. We’ve also taken some product development off the table, and shored those projects until we think the time is right for them.”

It is the company’s flexibility that gives it the strength to adapt to challenging market conditions successfully. One thing that facilitates this is the breadth of services K2 has in its offerings. “By being focused on the lifecycle of the assets we can move our area of focus and influence within the offshore industry to different parts of the cycle when demand requires it,” explains David. “For instance, significant capex investment has driven construction demand in the industry. Where K2 have had a heavy focus on construction in the last five years or so, as this declines we have the ability to re-focus our personnel and capabilities in the construction sector and push them into infield service support roles, and we’ve been very successful at this.”

The other strength is the level of scale the company has built up in order to compete on international contracts. With areas of growth within West Africa and the Gulf of Mexico, K2 has been able to positively react. As David says: “In preparation for supporting more of the infield services, we set up a US office last year to focus on the Gulf of Mexico, which was set up at the right time and we have seen a pleasing increase in opportunities there. We have also been able to develop our capability with our sibling companies from the parent company in Africa, which again is allowing us to tap into opportunities there.”

This relationship with the parent company, Applus Velosi, is something David points out is becoming increasingly important to K2 as a growth initiative. Being spread across five continents in every major oil and gas hub it gives K2 access to local manpower, finance and office support wherever it needs to operate. “It gives us much faster access to establishing opportunities and gives us more capability on the ground so we can be up and running faster,” adds David.

The shift in focus at the moment has been very much refocused on the training part of K2. The company’s training services broadly encompass a breadth of safety focused courses including working at height, confined space, first aid, DROPS and rigging and lifting training, amongst many others. “One of the real positives we’ve seen in the Gulf of Mexico is a focus on offshore safety and competency,” expresses David. “There are a number of opportunities driven by majors like Shell, BP and Chevron who are continuing to drive a very proactive line in terms of requiring safety standards from suppliers. So we are seeing an increased opportunity in terms of supplying competency training, safety training and delivering more safety orientated periodical safety surveys offshore. The ongoing commitment to offshore safety is a very positive sign in these tough times.”

Looking forward, K2 is very much focused on positioning itself to take advantage as soon as the market picks up again, and its flexible range of services allows it to do this. “Our key objective that we are pushing at the moment is to keep our eyes open for any opportunities. Now is also the time to be looking at the quality of service, and how we are looking after our clients in a time when we are all vulnerable and can’t afford to make mistakes,” David concludes. “In the longer term, it’s really about being really focused on delivering the safety and quality services we claim to stand by, and delivering those standards through our staff. Now, more than ever, is a great time to consolidate our position in the industry ready for the upturn.” The oil and gas industry is going through a particularly challenging period at the moment and success within it depends on a company’s ability to find opportunities within it. K2’s breadth of services, and large geographical footprint has put it in a good position to do this, and a continue commitment to safety and the quality of service it provides will help ensure it is not only able to survive, but come out the other side a strong player.

K2 Specialist Services

Services: Inspection, repair, maintenance and training services for offshore oil and gas industry

Issue 122 July 2015