Launching a privately funded company specialising in offshore remotely operated vehicles (ROVs) in an era of rock-bottom oil prices, asset sales and cost-cutting seems at best counterintuitive, right?
Wrong.
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For Brian Allen, formerly a superintendent at subsea services company Deepocean and now CEO of UK ROV start-up Rovco, the industry downturn represents a unique business opportunity.
“We’ve been planning Rovco for the past three years, pulling investment together and purchasing assets, waiting for the right time,” he explains. “We officially went live to market on 5 September serving the oil and gas and renewables markets along with developing solutions for inshore harbours and shipping companies looking to complete underwater inspections in lieu of dry docking.
“Being a lean start-up operation gives us a number of advantages in the offshore ROV, surveying and subsea services market sectors in that we can be very competitive with our pricing since we maintain low overheads − I doubt any competitor could come close without deliberately running at a loss.
“However, it’s not all about pricing. Rovco will also differentiate itself in an increasingly competitive market by constantly striving to innovate and solve client issues, even those they’re not aware of yet. We have many products and services we want to develop and will bring each to market in time.”
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By GlobalDataFocus on quality: 4K cameras and 360° scanning technology
Allen’s bullish talk is given added credence by the latest edition of Douglas-Westwood’s World ROV Operations Market Forecast. Annual expenditure on work-class ROV operations is predicted to increase from $1.6 billion in 2013 to $2.4 billion in 2017, at a CAGR of 11.3%, while the ROV market is expected to total $9.7 billion over that period, a growth of 79% over the previous five-year period.
As offshore exploration, appraisal and development increases so will demand for ROVS in repair and maintenance, construction and drilling support, and hydrographic survey and inspection projects.
Initially, Rovco plans to service this latter market using its ten-strong fleet of underwater vehicles fitted with high-resolution, state-of-the-art 4K cameras and 360° scanning sonars, as Allen explains.
“Our initial product offering focused on rapid deployment inspection ROVs including SubAtlantic Mojaves, Seaeye Falcons and VideoRays, but we’re now looking at using larger ROVs such as the Seaeye Tiger and/or Super Mohawk,” he says. “We see underwater camera technology and clients’ needs only progressing to the highest possible quality, so we already run 4K cameras on our ROVs. Rovco can complete visual 3D modelling surveys with comparable accuracy to laser scanning, and 3D sonar pointcloud surveys using a Blueview BV5000 360° multibeam scanning sonar.
“We’re also seeing demand for standard ROV and hydrographic survey projects and have developed our survey service in response, using a simple pole set up that can be fixed over the side of a vessel. This gives us the ability to mobilise a good-quality system quickly, while removing the need for full vessel dimensional control surveys. Our last full ROV and survey mobilisation took just three hours.
“We can improve inshore survey accuracy relatively cheaply using an RTK Basestation and line of sight radio modem; offshore surveys require an upgraded differential global positioning system.”
Deep impact: operating ROVs at depths of 6,000m
The Douglas-Westwood report also notes that operators are undertaking more complicated offshore field development programmes in order to access marginal reserves in deep and ultra-deep water, particularly in the deepwater ‘Golden Triangle’ regions of Africa, Latin America and North America.
These complex, capital-heavy plays in turn require higher-specification, higher-cost ROVs with drilling support of exploration and appraisal and subsea development wells identified as the main activity demand driver, accountable for 75% of the total expenditure between 2013 and 2017.
With a growing offshore infrastructure of platform installations, subsea wells, flowlines and cables driving the use of ROVs in the deepwater subsea inspection R&M market, how will Rovco respond?
“Our main deepwater product is based around ensuring asset integrity using 3D modelling, and the challenge this poses is ensuring that the camera housing is rated to the correct depth,” says Allen. “In time we’ll need to ensure our ROVs can cope with depths in excess of 6,000m and at that point we’ll enter the market with the most up to date technology and vehicles for those environments.”
“There’s a lot of interest and a number of grants available for automation in extreme environments, as well as a number of research projects related to this and ROVs in various locations around Europe. I expect ROV technology to move down this route in the medium to long term, and at Rovco we’re looking to start work on an automation project of our own soon. We’re also applying for government Innovate UK grants to automate our 3D solution to run with AUVs and auto piloted ROVs.”
New frontiers: regulation and 3D modelling asset inspection
Allen is also keen to emphasise that industry cost-cutting in response to the low oil price does not equate to compromises on safety in the ROV sector, which is not especially stringently regulated.
“In Europe the most relevant changes to ROVs are coming from OSPAR, the mechanism by which 15 governments and the EU cooperate to protect the marine environment of the North-East Atlantic,” he says. “Regulation aims to reduce by 2020 the amount of oil discharged to a level that does not harm the marine environment. Initially, that means ROV oils need to be entirely biodegradable.”
Allen is not discouraged by the fact that demand for ROVs is in decline in Europe, thanks in part to a marked fall in production and drilling activity on the UK Continental Shelf. He is confident that Rovco’s independence and global reach − coupled with its focus on high quality and low costs − means that the UK’s newest subsea robotics company will thrive, despite low oil and gas prices.
“Rovco offers inspection and survey services, but we’re about to launch an underwater 3D modelling asset inspection solution that we expect to change how subsea assets are managed,” he says. “For example, there’s no need for thousands of hours of video logs of a subsea tree or field; instead, clients could have a high-definition, graphical 3D model that allows onshore personnel to rotate, pan and zoom in to whatever individual valve, weld seam or flange bolt they wish to look at in detail.
“This type of inspection could be completed from a desk in the office, meaning offshore teams can be smaller and inspection projects faster, bringing huge cost and time savings to the industry.”
