Renewables milestone as Aberdeenshire's OEG Energy Group hails ‘transformational year’
Aberdeenshire offshore services provider OEG Energy Group has hailed a “transformational year” during which its fledgling renewables business generated half of group revenues just three years after being set up.
Chief executive John Heiton said 2023 marked a key milestone for the company, which has roots stretching back five decades and now employs more than 1,000 people globally. Its predecessor companies - Ferguson Seacabs, Containental and Vertec Engineering - were among the pioneers in the supply of equipment to the North Sea oil and gas industry, but the group, which is headquartered in Kintore, now derives half its business from renewables work.
Releasing results for the past year, OEG said revenues had grown by 35 per cent to $434 million (£344m), compared with 2022, thanks to a year of strong financial performance and acquisitive growth. Its newly branded OEG Renewables division undertook five acquisitions in 2023, including subsea cable construction firm Pelagian, submarine cable installation specialist 23 Degrees Renewables and survey provider Geosight. The group also expanded its international footprint with growing activities in the Americas, Europe, the Middle East and Asia Pacific.
Heiton, a local to the Aberdeenshire area, who joined OEG in 2008, said: “2023 was a transformational year for OEG as we took large strides towards our strategic goal of building a more material business that is diversified across complementary energy markets. Such was the rate of growth of our renewables business in 2023 that, despite continued growth of our offshore business through the year, group revenues are now well balanced across our two divisions, which is a major milestone when one considers OEG had zero exposure to renewables in 2020.”
He added: “2024 looks set to be another year of strong growth for OEG as it leverages its established profile, expanded service offering, global footprint and strong balance sheet to achieve its near-term target of generating $1 billion in annualised group revenue in the next few years.”
During 2023, the group launched OEG Renewables in a move that brings all subsea, topside, cable handling and marine specialist services under one roof to service both the construction and operational phases for offshore wind farms on a global basis.
A new management structure was established to strengthen the group’s leadership team and its ability to accelerate OEG’s ambitious growth plans. A new brand identity was created to reflect the “rapid expansion and strategic diversification” that has been achieved over the last few years and to support an “evolving market focused on sustainability”. Thanks to continued growth and acquisitions, headcount across the group increased by 10 per cent through the year to over 1,000.
Heiton said: “As the offshore energy industry continues its structural transition, OEG is firmly positioned for growth, leveraging our core capabilities in supporting offshore energy projects honed over our 50-year history. The growth has resulted in a step change in our financial profile and the group has substantial financial firepower to pursue opportunities that will maintain this growth trajectory. OEG will continue to place a significant emphasis on innovation in technology and sustainability.”
The group is targeting overall group turnover of $1bn in the next five years or so, boosted by the raising last year of $140m in financing. That fresh funding was backed by NatWest, Citi, Santander and Goldman Sachs. OEG expects to deliver revenues in the region of $500m for its current financial year.
In November, the firm unveiled the acquisition of Dutch firm Bluestream Offshore, a specialist in subsea and topside services, for an undisclosed sum. It marked the fifth acquisition undertaken by OEG in 2023, and the 11th since the group began growing the renewables business in 2020.
Heiton said the takeover would allow the business to pursue further opportunities in the growing offshore renewables industry in mainland Europe. He noted that while the oil and gas side of the business was very much focused on Aberdeen and the Peterhead area, shipping stuff to and from offshore installations, the rapidly expanding wind business was spread more widely.
News of OEG’s expansion came as the UK division of Hendrik Veder Group cheered a year of growth that saw the steel wire and fibre rope products and services provider achieve its highest earnings since 2019. Across 2023, Hendrik Veder Group UK, which has offices in Aberdeen and Sheffield, completed several large-scale projects throughout the UK.
On the back of this growth, the Aberdeen operation undertook” significant” internal investment; creating five new positions, bringing its team to 34, expanding its office space, implementing a new operational IT system and investing in new gear. A new deal has seen the group supply lashing materials for the transportation of windmill towers for a major Scottish offshore wind farm.
UK managing director Bertwin Zonneveld said: “2023 was a successful year. Through our sales efforts, excellent customer service and sustainability-focused product line, we reached new highs not experienced since the market disruption caused by the pandemic. This is a positive sign of shifting market trends and opportunities for those in the supply chain, particularly within renewables.
“For 2024, alongside the continued output of carbon-reducing alternatives, we intend to increase our service activities and double our existing service team. We are in the best position to deliver these aims through shareholder support that shows their belief in the group’s Aberdeen office. With this support, we will continue delivering innovative sustainable solutions for our customers, generating positive results across projects and contracts.”
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