Issue Spring 15
Given the importance of the work underway at an active oilfield, the last thing a hard-working crew needs is for progress to halt because the proper equipment is not in place. That is where Ketek Group excels.
Although the oilfield equipment rentals and service company has many other divisions, equipment rental “has been our core business and remains our core,” Vice President Brad Abel says. “Typically, we are serving drilling and completions companies on the oil-servicing side.” Ketek Group also assists facilities on the production side.
Some of its top rental categories are:
+ Power and lighting
+ Pumping equipment
+ Discharge and hose
+ Data loggers and meters
+ Heating equipment
+ Waste management
+ Drilling fluid handling
Other Ketek Group divisions perform consulting, power services, trucking and manufacturing, among others.
“We have been doing this a number of years and have noticed a shift in the industry away from relationship-based business to procurement-based business,” Abel states. Coincidently, due to the increased focus on performance metrics like safety, quality, and cost, customers are choosing fewer vendors to align with. Ketek Group is therefore offering more package deals and fewer single-item rentals.
“Instead of a single piece of equipment, customers are looking for service providers to supply more,” Abel explains. “This inherently allows them to reduce their costs and utilizes a greater percentage of our equipment on a per site basis so it is win-win on both sides.”
With an increased emphasis on safety and quality, becoming a qualified vendor can be an expensive undertaking. Once a vendor is prequalified, companies are more inclined to utilize them.
Declining oil prices mean that “everyone sees drilling activities significantly slowing,” Abel notes. However, this is nothing new. The oil business can be cyclical, so precipitous price drops are not unheard of. “We are approaching the timeframe for breakup season, though, due to the market shift, the racking of rigs and the return of equipment has started a bit earlier than it normally would, so the drilling industry is obviously a difficult one for rental equipment,” Abel says.
Ketek Group is fortunate to have equipment on a fair number of rigs, Abel says. “We have a pretty decent marketshare and we are not significantly leveraged so the bank won’t eat us up,” Abel says.
Work in completions, which is likely to have a lagged affect from the drilling slowdown remains steady, he says. Work is also continuing in the McMurray area of Alberta and the oil sands region. Although there has been decreased activity, companies still have to operate their mine sites and therefore remain engaged.
The company is repositioning its business in key ways, as well. For example, it is aligning with longer-term oil plays and maintenance work. Retargeting resources helps the company weather short-term economic blips.
Even with less drilling, there is still environmental and maintenance work to be done, often driven by regulatory requirements. “That is quite a significant focus of our attention,” Abel says.
Since its start in 1979, Ketek Group has grown to become a full-service provider to mining, forestry, oilfield, armed forces, agricultural, pipeline, municipal construction, institutional and international clients. The company Ketek Industries Ltd., founded by Richard J. Abel, began as a small oilfield equipment rental business with the idea that its clients deserved to know the true cost of the equipment they were renting.
Ketek was the first to include scheduled service and repair of equipment in the rental rate negotiated with the client prior to delivery. This allowed the customer to calculate the actual cost of the equipment without an allowance for additional fees to come later for field service, cleaning or repair after the equipment was returned.
Ketek Group succeeds because it helps its clients succeed. Its corporate vision statement is, “to be a team that provides industry leading service for excellent value.” Ketek Group helps customers execute plans. “We are the brawn and they are the brains,” Abel says. “We can physically get things done on their behalf and make what they envision happen.”