Ingenuity, like virtue, may be its own reward for some, but for Ben van Bilderbeek the excitement of coming up with innovative ideas isn’t enough.
“My job involves creating new things and making them actually work,” he says. “There’s a lot of people that have lots and lots of good ideas – but at the end of the day a good idea has to be turned into something that produces more than it consumes. It has to become a positive cashflow idea.”
The founder and chief executive of oil and gas technology group Plexus Holdings can boast of being the inventor of POS-GRIP technology, which aims to prevent the type of blowout behind the 2010 Gulf of Mexico disaster.
“When you develop a new way of doing things you have to find a market for it – and you look for the market that is easiest to reach – in our case that was exploration drilling,” the engineer and entrepreneur says.
The firm is looking ahead to a new chapter after striking a deal that Van Bilderbeek says will enable the development of POS-GRIP into new areas of the energy sector.
The system’s first application in the oil and gas industry was through the introduction of an adjustable rental wellhead system for jack-up exploration drilling. Plexus says POS-GRIP’s ability to withstand high pressures and temperatures will be pivotal to the industry as it goes in search of oil and gas in ever more challenging environments.
Van Bilderbeek set up the organisation more than 30 years ago, after moving from his native Netherlands to the US to study, and then working with Vetco, which later became part of GE Oil & Gas.
He was moved to Aberdeen from California during his time with the business, taking on an engineering management role after heading up its research and development, and product development activities.
In that period he developed what he describes as “a bit of a reputation for being able to innovate”, subsequently deciding to start his own company, focused on trying to create a safer environment for jack-up drilling – the use of mobile, self-elevating platforms for oil and gas exploration.
Most jack-up systems at the time required the blow-out preventer to be removed during critical installation stages for each well, he explains, and he spotted a gap in the market for his solution to the problem.
Plexus was started in Aberdeen, listing on the Alternative Investment Market in December 2005. Van Bilderbeek later said the flotation raised the profile of POS-GRIP and subsequently saw the company sign new contracts with top global operators including BP, British Gas and Shell.
Now, he believes Plexus has had a significant impact on the safety of drilling over the years. “I would say that the large market share in jack-up drilling that we had in the North Sea has resulted in wellheads and subsea systems that could be classified as being top of their class in terms of safety – not only for the environment, but also for the people who work with it, and we’re proud of that.”
Yet Plexus’s success in the North Sea inevitably saw it ride both the crest of a wave and the subsequent crash in the sector’s fortunes.
Van Bilderbeek does not hold back when detailing the “double-whammy” to Plexus as a result of the downturn. “One of our weaknesses was that not only were we counting on the North Sea as the market for our technology, we were also selling it in other parts of the world through agents that were located in Aberdeen.
“When people decide to stop drilling, no matter how good your gear is, you can’t deploy it – and they stopped drilling altogether.”
Van Bilderbeek was also sorry to say farewell so many of his colleagues, who he also counted as friends. “We lost a lot of people, a lot of good people.” The number of staff at Plexus sat at 35 on 31 December, down from 81 in June 2016, and 157 the previous year.
The chief executive still wonders how such a critical commodity facing increasing demand could have fallen victim to such a cycle, in which the oil price fell to $29 per barrel in January 2016, its lowest level in 12 years. “It is still a mystery to many of us”.
None the less, Van Bilderbeek – a keen sailor who has won Cowes Week – has navigated through these troubled economic waters.
“We’re not the only company that suffered setbacks during this period, but our response has been to try to continue to focus on the intellectual property in our company and to try to manage cashflow to continue to be in a positive cash position, which is where we are today.”
Cash held by the group stood at £18.8 million as at 1 February. “We’ve been able to maintain a strong balance sheet by being able to sell the merits of the technology to investors and some of them were actually operating companies that wanted to participate in the potential of the technology.”
The business in October announced the sale, worth up to £42.5m, of its wellhead jack-up exploration application business to FMC Technologies (FMCT), a subsidiary of major oil services provider TechnipFMC.
Commenting when the firm published its interim results to 31 December – with its underlying loss regarding continuing operations growing to £1.9m from £1.7m – Van Bilderbeek said the performance for the period “bears the hallmarks of the severe downturn that has continued to blight the sector in recent years”.
He added that Plexus’s confidence was driven by the “landmark” sale plus the signing of a collaboration agreement with FMCT, providing Plexus with cash resources and an industry major as a partner, but also freeing up capacity to develop and monetise other products based on its technology.
POS-GRIP, he explained, has been successfully deployed on more than 350 jack-up exploration wells by blue-chip operators, including Royal Dutch Shell and Statoil. Now that Plexus’s jack-up business has been sold, “we can move on to the next phase of our growth strategy: the development and roll-out of POS-GRIP-enabled applications for larger and more lucrative markets, such as production and subsea wellheads, where we are confident POS-GRIP can raise industry standards, just as it has done with jack-up exploration.”
Van Bilderbeek says the collaboration part of the agreement “is going to play out well for us,” adding “As a small company, which is technology-based, having to compete with very large organisations has always been a challenge for us.”
Van Bilderbeek also points out that in September Plexus inked a deal with Centrica to supply POS-GRIP technology for a gas production well in the UK Southern North Sea, beating several large rivals.
Also in his sights are CO2 storage applications and geothermal wellheads, for example. Regarding the latter, “we need to focus on trying to make equipment last much longer life cycles and be resistant to corrosion and temperature-related wear and tear and so on. We think our IP [Initial Production] fits well there and we want to build on that.”
He adds that overall, there are many areas where its expertise can be considered. “We’ll probably be looking to form some alliances and look out for some partners to help us develop the technologies and stay on the IP side for ourselves – where we think we’re actually performing the best,” he explains, adding that such partners might be on the technology start-up side.
Van Bilderbeek is also relocating to Singapore to seek opportunities outside the North Sea and help solidify the relationship with its deal partner. “I think with TechnipFMC we’ve been given a lease of life here, because not only did they provide and will be providing cashflow to the company in a strong balance sheet situation – but they also have elevated our direction in design by recognising that our technology can help them.”
And, of course, there has been a recovery in the price of oil. It recently hit $75, its highest level since November 2014.
Looking back on the painful downturn, Van Bilderbeek can afford to be philosophical: “I think the industry recognised that it had grown quite lethargic and heavy, and therefore there was an adjustment necessary. That adjustment has happened. In a way it helps people with IP that saves money, so it may very well have been the silver lining for Plexus that the industry and the cycle that we went through has focused people on solutions that can deliver real results in terms of cost savings.”
With Plexus now closely intertwined with TechnipFMC, “as long as we produce smart ideas that can help them I’m confident that they will want to be helped”.
Van Bilderbeek, still a keen skier and tennis-player at the age of 70, is looking forward to Plexus’s next chapter. “We have a lot of things that we can be doing in terms of innovation – and that’s a very exciting part of working.”