Two pioneering technology firms from Aberdeen are combining forces to serve subsea energy producers, particularly those looking to extend the life of offshore oil and gas assets.
Verlume will supply its innovative subsea power solution with Proserv’s control and communications system, powered by the older, larger firm’s reach into the North Sea, the Gulf of Mexico and other international markets.
The partnership is on the basis of a “memorandum of understanding” (MOU) rather than anything more formal although the pair don’t rule out further merger or acquisition.
Proserv chief executive Davis Larssen said while becoming one is not the main objective of the agreement, he observed: “You tend not to get married until you have dated somebody.”
He added: “A strategic alliance helps prove out the relationship. It helps demonstrate to the clients what you can do together. It helps make sure that there’s cultural alignment between the organisations as well.
“The reality is, it’s easy to go and buy a company, but unless there’s a cultural and philosophical alignment, a lot of those acquisitions tend not to work very well, because the cultural alignment isn’t there.
“So we see this, I think, as a great way to put that to the test and prove it. And if that leads to something more than a strategic alliance, then so be it.
“It’s not an agreed, up front objective, but if works down that path and both sets of shareholders and leadership teams feel that’s the right way to go, why wouldn’t you explore it?
“But initially, it’s about responding to a specific need in the market where clients are increasingly pulling us in together and saying, ‘we think you guys collectively can solve a problem’.”
© Supplied by Jonathan Addie/ VerlThe duo, which have worked together on projects since Verlume’s inception in 2013, believe their system integration will enable customers to reduce energy consumption by as much as 50%.
Larssen says his firm has around 350 control systems deployed around the world. He estimates a significant proportion of the world’s 5,000 subsea oil and gas wells will need them.
“At least half of those, have got control systems and infrastructure that’s probably considered obsolete in most cases, and we’ve got the ability to upgrade those control systems and bring them into the 21st century, and then keep them in a safe and reliable and efficient manner.
“Combining that with balloons power solutions becomes critical as there’s less exploration and development.
“Anywhere that there’s kind of marginal areas, old aging infrastructure there’s a big demand for this.”
Proserv recently completed a multi-million management buyout from its private equity owners in a deal backed by strategic investor GIIL, a UK-based investment vehicle of Glenn Inniss, the founder and owner of the London-based GII Finance Group.
Verlume has been developing its subsea power storage solutions and smart management system for various users, starting in oil and gas, also including wave and tidal and now major grid balancing efforts in offshore wind.
Richard Knox, CEO of Verlume, highlighted the potential benefits to the energy industry.
He said: “This MoU with Proserv opens a world of possibilities for both companies and the wider energy sector.
“By working together, we can harness the strengths of both our organizations to develop cleaner, smarter subsea power delivery solutions that contribute to the decarbonisation of the energy industry.
“We are confident that this partnership will drive significant value not only for Proserv and Verlume, but for the industry as we pursue our common goal of delivering sustainable energy solutions.”
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