The raising of sanctions in Iran has already generated considerable interest in the oil and gas sector – and METS (Middle East Tubular Services) will be working with its new owner, Medserv, to tap into this country, seeing it as a major goal with top priority.

METS chairman Paul Hayward.

The $45 million acquisition contract was signed last Tuesday after a year of preparation but both companies have been working to be in position to leverage their complementary strengths. But while the long-term strategy of what METS can offer Medserv and vice versa is already in place, there is little time to waste in Iran – where the first mover advantage could make an enormous difference.

Paul Hayward, the founder of METS who will be staying on as its chairman, has already visited Iran, and identified a site for new operations in a free trade zone.

“We believe that even with the price of oil the way it is, the country has considerable infrastructure to catch up on and it will go ahead with that investment in spite of market considerations.

“The free trade zone is a model that we favour, one we use in Sharjah, Iraq and Oman. It means that you are operating in a legal structure which is well known and with tax structures that would be known before we started – for example, we would get a tax holiday there just as in our other bases.

“Free trade zones are very important for our line of business as they enable us to store and feed the supply chains for our clients, without their having to pay duty on the pipes,” he said.

Iran would be an exciting opportunity for Medserv but METS will also offer the Malta base the opportunity to offer inspection services to complement the storage it currently offers.

“We could set up a service there using our inspectors very quickly,” Mr Hayward said.

“And if we were to open a machine shop and get a VAM licence, it would clearly be of great interest to companies operating in Libya and the rest of the Mediterranean.

“Half the world’s proven oil reserves are in the Middle East. The market may be depressed at the moment but like Medserv chairman Anthony Diacono, we take the long-term view.”

Free trade zones are very important for our line of business

METS made a net profit of $2.7 million in 2015, and has no bank borrowings or long-term debt, having relied all this time on retained profits.

“Thanks to the acquisition investment, there is no reason we could not set up three or four sites simultaneously. This is a great time to expand the METS brand, which is already internationally recognised by mills around the world, oil companies, and trading companies.”

The move from a private company to a listed one will also be fairly smooth, he believes, as the stringent protocols mandated by METS’s clients meant that there are already robust structures in place.

“Over the past 10 years, METS grew because it had a strong team, with Gareth McMurray as regional director, and Peter Howes as construction and project manager. The acquisition means that we can grow much faster. It will be much easier for them to do than it would have been for me as an individual,” he said.

Timeline

1974
Medserv was set up as a joint venture between the government and Albert Abela Group. In 1997, the group bought the government’s 65 per cent shareholding.

1997
Medserv signed a 48-year lease for base at Malta Freeport. In 2012, this was extended to 2060. The footprint was also extended in 2014 through a €5.6 million investment.

2006
Medserv plc as created by AD Holdings, which bought out Albert Abela Group in 2001-2003. It sold 25 per cent of the shareholding to the public.

2007
The company set up a base in Misurata, Libya, in collaboration with the Misurata Free Zone Authority.

2012
Medserv (Cyprus) won a licence to operate oil and gas logistics base in Limassol. A year later, it also won a licence for Larnaca. In 2014, it won a contract for the support of ENI Cyprus’s drilling programme, which involved a €5.2 million investment.

2015
A port facility was opening in Astakos, Greece.