VISIONARY ROB CROSBIE: Business Offshore

The OGM:

What strategies have you implemented at Crosbie Salamis to continue to win contracts and build the business in low oil dollar times?

Rob Crosbie – CEO, Crosbie Group:

As the economic landscape has changed, we have diligently worked through the traditional activities around prudent budgeting and fiscal restraint.  However, we continue to spend funds researching new and innovative ways to execute services for our key clients.  We have also continued to invest in improving our business processes to ensure we can deliver as high a service level as possible for the best dollar.

The OGM: 

What advice do you have for local suppliers, who are struggling right now?

Rob Crosbie – CEO, Crosbie Group:

Watch what you spend, try to get as much information as possible from your client base on near-term activities that might generate revenue so you can focus your use of capital in those areas.  Stay on top of the competitive environment.

The OGM:

What do you think are the leadership attributes that support growth and prosperity in difficult times?

Rob Crosbie – CEO, Crosbie Group:

Work with your team to ensure they are watching the current environment closely, but are also looking forward and trying to position the business to be ready for the new reality.   There will be significant changes in the business as it goes through tough times, so work with your team to make sure they understand the reasons and what the leadership expectations of the market are in the near term.

The OGM:

Where do you think the government should be focusing their initiatives for long-term offshore developments?

Rob Crosbie – CEO, Crosbie Group:

The government needs to ensure the regulatory environment is positioned with the best framework to support the growth of the industry while maintaining its responsibility to ensure the industry is safeguarding the environment and people working in the industry.  To grow revenue, the projects need to be brought forward in the most cost-effective manner with some resident business opportunities being made available and executed here on the island, but the main focus should be on ensuring locally-owned or NL head office operations have a truly full and fair opportunity to compete for business.  This might mean that the large international companies may need to work with local service suppliers and businesses and not just lift in global frame agreements or implement their services.  If they wish to execute themselves, then they should be required to compete for those services in a fair way by pricing against local competition and not have the services bundled into unfair packages that put large international companies at a distinct and predictable advantage.

There are some opportunities for the operators to do subsea tie backs in the near term if the regulatory and other issues around benefits and royalty can be resolved.  That should provide more stability for the current assets and get some much-needed revenue for the government to pay down on the massive deficit spending that has been allowed to be structured in over the past decade.

The OGM:

What needs to be improved, what else can government do?

 Rob Crosbie – CEO, Crosbie Group:

There has been discussion around overhauling the regulatory environment to ensure it is best positioned to deliver on its mandate in the most cost effective fashion.  There is currently an exercise under way, and I would hope that the results will be beneficial to all stakeholders.

The balance between royalty payments, industrial benefits approach and equity participation by government needs to be resolved.

The OGM:

What are your thoughts on the industry being collaborative and unified at this time?

Rob Crosbie – CEO, Crosbie Group:

I do not see a lot of collaboration.

The OGM:

On the global market, what’s your prediction for the price of oil and our progress given the US election?

Rob Crosbie – CEO, Crosbie Group:

My guess would be as good as anyone’s, and I’ve been wrong up to now. I thought we would be back around $60 by now with a $70 to $80 comfort level by 2018.  At that level with the cost reductions that have been implemented in the industry could attract the capital for long-term projects offshore.  But who knows?

The OGM:

Crosbie Salamis has been awarded some great contracts recently.  Tell us about them and how you gained a competitive edge and won those contracts.

Rob Crosbie – CEO, Crosbie Group:

Yes, CSL was recently awarded the Deck Services contract for the Hebron Platform with ExxonMobil.  One of the keys to CSL’s success over the last 20 years has been a deep set of global strategic partnerships and alliances.  This allows us to offer leading edge options to our clients and broaden our local service offering.  Despite changing market conditions, we have found this strategy continues to be an enabler of our success, as our goal is to look for innovations that can add value for our clients.

The OGM:

What’s the long-term “energy” picture for Newfoundland and Labrador, in your view?

Rob Crosbie – CEO, Crosbie Group:

I do not see the requirement for oil and gas to be reduced significantly over the next couple of decades without a technology breakthrough that is not obvious to me right now.  Through investments in science and resulting improvements in the environmental performance of fossil fuels I believe the industry here will continue to invest and grow if we get the balance between regulation, royalty and benefits sorted.

The focus of the Newfoundland-based businesses should be on operational excellence and be competitive in a fair tendering process.

The OGM:

What do you think about the implementation of wind energy and the possibility of the Canadian Grid access?

Rob Crosbie – CEO, Crosbie Group:

I believe all sources of energy will be needed going forward and each source needs to have equitable access to the marketplace. The projects should pay a fair price for access to transmission it does not own. This is a regulated industry, so I’m sure for viable projects these issues can be worked out.

The OGM:

What are your thoughts on the Energy East Pipeline?

 Rob Crosbie – CEO, Crosbie Group:

The project should go ahead as a key piece of infrastructure.  I believe it is the most cost effective and environmentally safe method of transporting product over long distances and Canada needs to get its energy to the local and international markets.  If Canada does not supply to markets, then other countries like the USA and less environmentally regulated countries will.  If demand dries up due to environmental reasons, then that is a risk the proponents are prepared to take.

The OGM:

Through the land tenure process, the province has attracted many new oil companies in the last 12 months through the last two land sale plays. What do you think that means for the province and our progress?

Rob Crosbie – CEO, Crosbie Group:

Having more investors rather than few is good for the province; they all bring their perspectives and have their way of doing business.  It is best to have a broader base of different investors than one or two investors determining the future of the province.  Nalcor has done a pretty solid job of positioning some of the new areas for investment and removing the risk in the early stages of the investment for the investors.  I’m not convinced that the government should be taking equity positions in offshore projects unless it is key to getting the projects sanctioned.   It puts the government in a significant conflict in many areas.

The OGM:

Crosbie Salamis has successfully built a business, been one of the top managed companies and regularly wins awards and accolades for peak performance.  What’s your formula?

Rob Crosbie – CEO, Crosbie Group:

We have a group of very talented, client-focused people who enjoy hard work, who are highly motivated by being part of a local company trying to make a difference here, at home.