IMAP Egypt advises Globaltronics on capital investment from International Finance Corporation
The International Finance Corporation (IFC), a member of the World Bank Group, is investing $10 million in Egyptian company Globatronics
IMAP Florida (Falls River Group) attended the Offshore Technology Conference (OTC) 2017, the largest event in the world for the Oil and Gas industry
This event, founded in 1969, featured more than 2,300 exhibitors from 100 countries and over 90,000 attendees. While offshore oil & gas is a major theme of the conference, the event brings together the entire industry including manufacturing, technology, and service companies.
In the miles we walked around the conference halls and the hundreds of conversations we had, we discovered a few pervasive takeaways at the conference regarding the general mood of the industry, technology, and private companies.
The Worst is Over: Now there is a sense of stability and predictability
We attended the NAPE Conference in 2016 and reported about the "elephant in the room" being the low and uncertain future of the oil price which created a downright depressing conference mood. We found a very different situation at OTC earlier this month. While exhibitors and participants had been bruised and battered over the last couple years, uncertainty has diminished and there is a general sense that the worst is over. The companies that are surviving have restructured costs and operations and are seeking to gain competitive advantages by developing new products, technologies, and services. We heard many accounts of revenues declining dramatically over the last couple years and, conversely, increased revenues expected for 2017.
While no one expects the oil price to jump to $100 a barrel, companies seemed more confident in being able to plan and develop their business based on relatively stable and predictable oil prices in the $50 to $60 range (with spikes above $60 and dips below $50). We also heard a lot of enthusiasm for the expected rationalization of U.S. federal regulations affecting the industry. This stability and predictability generally supported a sense of optimism among the conference attendees.
Technology is changing the industry
The showcase of new technologies being developed and applied in the industry was nothing short of amazing. Along with new technologies being developed specifically for oil & gas applications, we saw numerous cross-over technologies from other industries including the medical field, artificial intelligence, and even space exploration. Confirmed by private discussions we had with representatives of companies like Shell and the U.S. Department of Energy, technology is the key focus for the industry to enable companies to find and produce oil & gas cheaper, faster and safer.
As an example of the types of companies and technologies emerging, we attended a fascinating presentation by Patrick Sullivan, CEO of Oceanit (www.oceanit.com), a disruptive technology development company working across numerous industries including energy, life sciences and space. Oceanit defines its core competency as "The Impossible" and is partnering with energy companies like Shell. The technologies being developed and applied by Oceanit are futuristic and represent the transformation of the industry where technology is becoming the key competitive advantage for upstream companies as much as the quantity and quality of their reserve bases. The game-changing effect of technology in the industry is reaffirmed with an example in a recent Economist article (Oil Struggles to Enter the Digital Age) which described how Shell used remotely operated technology, "virtual drilling", in bringing down the cost of drilling a well in Argentina from $15 million to $5.4 million.
Private companies express confidence and M&A activity on the horizon
We were pleased with the high percentage of private and family-owned companies represented at the conference. These companies typically had products and technologies applicable across multiple industries in addition to oil & gas. Several people we met were either being approached to sell, planned to sell, or had recently sold their companies as the sector continues to recover.
Consistent with the general mood of the conference, the owners of companies we talked with articulated a sense of confidence and optimism for the future of their businesses.
About Rob Van Genderen
Rob is the head of the energy practice at Falls River Group based in Naples, Florida. Falls River Group is a middle market M&A advisory firm working across the US, and with a platform in 35 countries around the world as a partner of IMAP. Rob is also a member of IMAP's global oil & gas leadership team. Rob has over 25 years of professional experience in industry and investment banking including over 15 years of advising oil & gas sector companies from upstream to downstream to services to technology in the U.S. and internationally.
Prior to joining Falls River Group, Rob was the Head of Oil & Gas Investment Banking at Deutsche Bank (Russia) as well as the M&A Partner at KPMG for natural resources. As Founder of Energy Advisors Group, he served as an expert for oil & gas M&A in the High Court of London, and he assisted in private equity financing efforts for U.S. oil & gas developments. Rob has advised energy companies and private equity funds on M&A, finance and restructuring transactions collectively valued in excess of $15 billion. Noteworthy deals include advising the Italian firm ENI on a $5.5 billion acquisition of Siberian natural gas assets, advising the Indian national oil company ONGC on a $2.5 billion acquisition of a London Stock Exchange listed oil & gas company, and advising BP on the acquisition of a $1 billion stake in Russia's national oil company Rosneft.
At Falls River Group, Rob is advising U.S. oil & gas companies through the current environment which presents both challenges and opportunities. Rob is also advising oil field service companies and specialty chemical companies.
Rob received his BA from Dartmouth College and an MBA from the University of Virginia. Rob is FINRA-registered through StillPoint Capital LLC, and speaks fluent Russian.
Based at the IMAP office in Munich, Ruta will be responsible for national and international buy-side and sell-side mandates within the healthcare sector, focusing on medium-sized companies.
Begra Group annually equips over 15,000 warehouses of various sizes with new and used warehouse racking and related materials.