High density mud for oil industry boosts Medserv’s exports

Medserv – shortlisted for Most Innovative SME Business Award (annual turnover more than €10m) and Most Improved SME Exporter Award (annual turnover more than €10m)

In its 35 years of operations, Medserv, a round-the-clock logistical and support service provider to the offshore oil and gas industry, has gone from strength to strength. A major contributor to its success has been its management’s verve to turn every challenge into an opportunity. Today, Medserv is the parent of two companies, one in Malta and another in Misurata, Libya.

Medserv listing on the Malta Stock Exchange also formed an integral part of its export strategy. Apart from the financial benefits, listing provides a guarantee to the multinational clients that the company operates in the transparent manner expected of listed companies.

Medserv attributes its success to its location, its facilities and its reputation in the industry. Diversification of its income stream has allowed it to maximise the utilisation of its bases and resources. In 2009, Medserv achieved revenue of over €17 million from home-grown services which significantly contributed to the Maltese economy.

The company previously targeted the international oil companies, but has now been working to win new business from the service companies operating in this industry, such as rig owners and mud companies.

Besides supporting offshore operations, Medserv now also attracts rigs and specialised vessels in the industry to use its bases for modification or repairs in between jobs. The Medserv brand, its ‘know-how’, is the latest addition to the company’s list of exports.

“In Medserv’s three and a half decades of operation, many obstacles have been overcome through innovation and lateral thinking,” company director Anthony Duncan said. “Going forward we will be identifying the right partners to form joint ventures with in order to increase our market share and break into new markets.”

One of the services which Medserv has been providing for many years is the supply of water- and oil-based muds to rigs operating offshore. The mud is used to lubricate the drill as it penetrates the rock strata and prevents the escape of gas and oil into the environment. Medserv has been investing in the upgrading of its mud plant facilities.

“The facilities we have today are unrivalled by any other service provider in the Mediterranean, in terms of volume, density and quality of the muds, as well as efficiency of the process. A client, one of the major international oil companies, came to us with a request in early 2009 as no other logistics support provider could cater to the volumes and density of muds requested. Within four months, our team was able to develop and implement a working solution. Today we can process double the volumes of mud we used to produce,” Mr Duncan added.

The company’s aim is to achieve a substantial growth in this line of business in the coming five years. In the meantime, yard workers have become more gainfully occupied, which resulted in increases in their financial rewards and, thanks to the enhanced knowledge they developed, are seconded to related and third party bases.

“The success of the project has led to a sense of pride in the workforce, knowing that we succeeded where others failed. As part of our business development and continuity strategy, we aim to ensure the project remains sustainable by marketing its achievements. The oil and gas industry in the Mediterranean is managed by only a handful of operators and the company is ensuring that Medserv is recommended as top choice for the provision of heavy mud.”

Knowledge gained in the construction of the Malta plant has been applied to develop mud plants at Misurata. Both plants have been audited by companies such as Exxon, HESS, Gazprom and Petrobras, from a health, safety and environmental perspective and from an operational one.

The process has led to an increase in exports out of Malta and there are increasing enquiries from other major international oil companies. Sales also lead to further ancillary revenues generated by the Medserv facilities, such as storage.

The three nominees for each of the four categories to participate in the final awards night on November 26 were selected by an independent judging panel made up of two senior officials from KPMG, Notary Clyde La Rosa and appointed officials from HSBC Bank Malta plc and Vodafone Malta plc.

HSBC - Vodafone Export and Innovation Awards

Earlier this year, HSBC and Vodafone Malta embarked on a joint initiative to reward Maltese businesses for their export and innovation talent. Three have been shortlisted in each of the four categories: Most Improved SME Exporter (annual turnover less than €10m); Most Improved Corporate Exporter (annual turnover more than €10m); Most Innovative SME Business (annual turnover less than €10m); and Most Innovative Corporate Business (annual turnover more than €10m). Winners in each category will be awarded at a gala ceremony on November 26. The Times Business is carrying highlights from each of the selected companies’ formula for success.