BOURBON Banks its Future on "Smart Fleet" Tech; The 75 Million Euro Plan to dump 'Dumb' Vessels
BOURBON Corporation, like nearly every other player in the offshore oil and gas sector
, is scrambling for its very existance as the dynamics in finding and producing energy from subsea plays have changed dramatically with the 4 year long global energy slump
. While offshore activities remain depressed, companies like Bourbon are accelerating its transformation to meet the needs of the new reality in the market.
"As the market cycle has bottomed out, BOURBON must focus more than ever on operational excellence, fleet utilization rates, cost reduction program and free cash flow preservation. However, we need to go even further, because market overcapacity is driving prices down sustainably and we believe that tomorrow will look very different from yesterday. The crisis has highlighted the need to change our model and this is what the #BOURBONINMOTION plan is all about," said Gaël Bodénès, Chief Executive Officer of BOURBON Corporation, in a press release to unveil the new plan.
To facilitate its future, BOURBON Corporation will divide into three distinct affiliates: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility. These three entities will be able to implement their own strategies and will be supported by a dedicated governance structure (management team whose Chief Executive Officer will report to a Board of Directors). They will focus on profitable growth changing their model to develop more integrated services.
A key part of the new strategy is to invest nearly 75 million Euro over three years to create a "smart, connected" fleet of offshore vessels, with the main objective of improving operational excellence at optimum cost. The "Smart shipping" program will connect the fleet of 132 modern Supply vessels (known as the "smart fleet") of Bourbon Marine & Logistics.
Within Bourbon Marine & Logistics’ traditional fleet of 65 vessels, the 41 oldest vessels, which cannot be connected, (known as the "non-smart fleet") will be sold at current market price. This planned disposal of 41 owned vessels is expected to generate an impairment loss of about €170 million in the 2017 financial statements.
"We are ready to meet the challenges of the transformation profoundly impacting the Oil & Gas industry and already driving major changes at our key customers," said Jacques de Chateauvieux
, Executive Chairman of BOURBON Corporation. "The #BOURBONINMOTION action plan unveils the new face of BOURBON, which is, as in the past, not afraid to reinvent itself and innovate with the commitment of the women and men who contribute to its development around the world. Indeed, beyond the technological revolution lies a personal revolution for all BOURBON team members."