For many companies over the past year, survival and growth has come down to finding value in strategic partnerships that lend themselves to broader horizons and opportunities for greater profitability.
So is the case for Medserv, which offers integrated shore base logistics to the offshore oil and gas industry, who announced a strategic agreement with Regis Holdings last month, also a logistics and equipment provider to international oil companies. Subject to all the required approvals, the partnership will see the two companies operate as MedservRegis from June 2021.
“The pandemic played a part in the decision, but we had already realised before February 2020 that we could strengthen our position in many ways and become bigger players globally through a business agreement. The pandemic made us zero in,” says Anthony Diacono, Chairman of Medserv.
Client’s requirements had begun to change before the onset of the global pandemic, and both companies sought to anticipate them, and therefore explore new ways of operating. “Joining forces with Regis has given us greater strength in terms of presence around the world to be global players. Together, we are now on four continents,” says Mr Diacono, adding that Regis’s know-how and operations in sub-Saharan Africa open new opportunities in a market Medserv had already identified for growth.
“This coming together of the two groups places us in a position to offer a quicker, more cost effective and competitive service to our clients. It also makes us stronger financially, enabling us to fund programmes we have planned ahead of us, so really, it is a win-win situation and I am cautiously optimistic going forward.”
On behalf of Regis Holdings, CEO Dave O’Connor says that an ever-evolving world economy as well as ever-changing energy industry called for his company to also keep apace. “We felt that, in light of constant changes and our own internal growth, it would be a very good fit for us to join forces with Medserv Group to the benefit of both parties, to create a larger entity with a bigger global footprint.”
Mr O’Connor describes the coming months as “exciting times” as the companies integrate, enabling them to launch into new regions and markets, build value for shareholders, and offer competitive professional services to clients. However, he’s also aware of the challenges that lie ahead.
“Some of the challenges we face right now are out of our hands, but none are insurmountable. For instance, the insurgency in northern Mozambique, where we are supporting the gas projects and building of the LNG facility in the Cabo Delgado province, is tragic, and ensuring the safety and security of our staff and equipment is challenging,” says Mr O’Connor.
“However, the most obvious challenge we all face right now is that there’s very little clarity and surety in terms of when and how this pandemic will come to an end. We’re all having to work within restrictions, which in this business also means having people on the ground unable to travel home for months on end.”
Mr Diacono is in agreement, adding that both companies have experienced working in very challenging jurisdictions. “In North Africa, we’ve witnessed wars, revolutions, downturns – but we have proven our resilience year on year and need to look forward. When there are downturns, the people who get the forecasting right and position themselves well are the ones that come out on top.”
The Chairman says that the services industry is witnessing many mergers and acquisitions, and with respect to the oil and gas industry, this is partly due to new realities regarding the world demand for this product.
“The big players in this industry now refer to themselves as energy companies, because it is a fact that the sector is no longer limited to oil and gas. American companies, for instance, are investing heavily in carbon capture and storage, while European companies are investing in alternative forms of energy. Either way, as a service provider for their logistics requirements, we must be prepared for such transitions to provide a seamless service, and the coming together of Medserv and Regis will allow us to be big players in this market.”
Mr Diacono and Mr O’Connor agree, however, that the use of fossil fuels will take many years to be phased out, and during that time, “we have a commitment to be a part of the transition and work within the energy sector as a whole.” Regis’s experience operating in Mozambique, Angola and Uganda will bring new opportunities for Medserv, whilst operating in the Middle East and the Mediterranean will be new territory for Regis. Together, MedservRegis are also eyeing expansion in South America, Libya and West Africa.
With combined decades of experience, the business leaders have witnessed several changes to the industry over the years, including increased automation of processes. “We are geared up for this and will be investing even further in technology, to drive down costs and increase efficiency. Changes are taking place and will never stop – we have to be ahead of the game,” says Mr Diacono.
“The pandemic has focused our minds on speeding up what we already knew needed to be done. Survivors must adapt. Dave and I have taken action and found better ways to service our stakeholders and our clients. A satisfactory service is not acceptable in this field – it has to be top end, and this coming together will allow us to do so for the forthcoming years.”
In the immediate term, Mr O’Connor says they are focused on the successful integration of the group and aligning all systems and staff to work together as one entity to ensure continuity. Following this, MedservRegis will be focusing on penetrating new markets, with the long-term goal of being a respected, leading, global logistics service provider within the energy sector.
