Today’s oil companies will be tomorrow’s majors in renewable energy
Marc Meurisse, CEO of Engicon, has been proudly chairing the club for the past eight years. We asked him and Pieter-Jan Provoost, business leader of the club, how they envisioned a sector which faces many challenges. How has the club evolved over the years, in their opinion? And more importantly, which way do they want it to go in the coming years?
- Started his career just over 35 years ago at Geldof, a company specialised in the design and production of storage tanks and pressure vessels for liquids and the storage of dry bulk.
- Is the CEO of Engicon (formerly Geldof)
- Member of Agoria’s Board of Directors
- President of the Carbon Energy Club
- The little free time that he has, he spends it with his family.
- He also tries to broaden his knowledge of wine and whisky.
- With Agoria since 2007, was previously employed by member company Barco among others.
- President of the Belgian National Committee at the World Petroleum Council
- In his free time, tries to keep up with international trends in marketing and digital strategy, but if not possible, he’d rather socialise with family and friends.
- Married, two daughters, and avid yoga practitioner
You have been president of the club for eight years already. How has the club changed in that time?
Marc Meurisse: “The Carbon Energy Club used to be called Belgian Oil and Gas (BOG). In terms of business economics, things were not bad in Belgium and the club was working well. At the time, we had around 100 members, but that number was gradually dropping. Members were somewhat stuck in their ways. It was therefore time to breathe new life into the club, a job which Pieter-Jan undertook.”
“The change has produced positive results. Even though some members unfortunately dropped out, more have replaced them since. Including younger managers, who realised more than in former days that things had to happen outside Belgium. Over the years, we have managed to get the club to once again connect with the reality of the markets.”
“In Belgium, our sector stretches over a fragmented landscape. Not only is there a split between Flanders, Wallonia, the provinces, districts and local authorities; various interest groups such as Voka, VBO, POM, regional business associations and clusters all have a say as well. I think that we were fortunate in that we found an ideal position with regard to cooperation. We act as a politically and economically neutral body and we are greatly valued because of that.”
Pieter-Jan Provoost: “In Belgium, we are regarded as the reference when it comes to oil and gas business development and networking. We had to fight to get to that position, with the result that embassies, regional export agencies, VOKA, UWE… always consult us.”
Marc Meurisse: “We have indeed become a constant in the market, through our participation in trade missions and foreign operations. This has also led to higher membership numbers, but that increase is partly attributable to our new business model.”
What does this new business model entail exactly?
Pieter-Jan Provoost: “We switched from an all-or-nothing system, in which paying members would get services and non-members got nothing, to a flexible model with an all-inclusive option and a low cost option. Obviously, the latter includes a great deal less. From this year, events are open to anyone interested, even to non-members. The price range is just different.”
“We’ve recently accepted non-Belgian companies as new club members, to allow our members to take advantage of their network. We have therefore become a little less Belgian in order to nonetheless keep helping Belgian companies.”
Marc Meurisse: “From a club representing Belgian companies and promoting their products and services abroad, we are gradually moving towards becoming a club that is looking for joint ventures, collaboration and networking in order to improve our business position in the market. This international dimension is crucial to this process.”
Pieter-Jan Provoost: “The oil industry has been globalized for more than a century. It is therefore logical that, as a club, we should also join the international trend. Among all Agoria’s International Business Clubs, we are also the only club to operate in an informal European network, involving many companies in the supply chain, which generates a lot of mutual exchange.”
“We are also the only club with partners, comparable to ‘agents’, in other countries such as Canada, Mexico, Iran and Nigeria. These local consultants have a strong network and allow us to forge links with promising local markets. We attract big companies here, as we’ve recently managed to do with our seminar on the oil & gas industry in Sub-Saharan Africa or during the Belgian Economic Mission to Canada. Our partners find suitable speakers and, in return, we put them forward to the club members as preferential local partners.”
What is the impact of the oil crisis?
Marc Meurisse: “In any case, the price of oil is too low. Theoretically, if a barrel of oil costs less than 60 dollars, almost no one will invest. Major corporations such as Shell and BP and some large engineering firms have laid off thousands of people. In other words, they expect oil prices to remain low for a certain period of time, which will have repercussions on our companies. Consequently, we have to be even more vigilant and present in the market. As the cake is getting smaller, if we still want a slice of that cake, we have to try to be faster, better and cheaper than our competitors.”
Are special actions planned in this context?
Pieter-Jan Provoost: “We have selected a number of regions in which we believe our businesses to be well positioned. But some of these regions are under pressure due to low oil prices.”
“In our industry, there is the crude oil that is expensive to extract, but also the oil that is easy to produce. There is also the difference between private companies, such as ExxonMobil, and state-owned companies, especially in the Middle East. The latter have other objectives. Not only do they have to pump up and sell oil, they also need to invest in the youth and in jobs for the local economy. We have to find our niche between these four main drivers. This explains why we are strongly committed to Africa, where we went on a trade mission in August.”
“For a long time, we’ve focused on Alberta in Canada, which is now in a difficult position because of the low oil prices and the ensuing downsizing of many investments. However, we are seeing a number of very successful businesses, which came about through missions designed to attract Canadian oil and engineering companies to Belgium. In this context, our club has in a way acted as a facilitator by giving Alberta a prominent position among our members.”
Marc Meurisse: “The club’s purpose is to create the framework and conditions, and to bring the people together. But Rome wasn’t built in a day. It takes several years of effort before we can build lasting relationships.”
Pieter-Jan Provoost: “It goes without saying that the Middle East also retains its importance. I just got back from the ADIPEC trade show in Abu Dhabi. The event ended with an attendance of nearly 95,000 visitors, up 13% on the previous year. We were exhibiting there with a CEC pavilion representing 14 companies. Iranian visitors had come en masse with the hope that sanctions would be lifted in the short term. The market might become very promising, but hyper-competitive in the coming years. We will shift up a gear next year and also try to set up a larger exhibition pavilion. As you can see, the global oil & gas market is rapidly moving with some regions loosing ground while others have regained their stability or are slightly getting ahead.”
“At the moment, Asia is our blindspot. Even though many of our members are active there, as a club we have not done much as yet. Nevertheless, we must try and get a foothold there.”
Do you have any other plans for the future?
Marc Meurisse: “We will have to focus on consolidating and maintaining our position, unless the external circumstances change. The fact that we can say little about Europe is worth noting. In Norway, for example, the fortunes earned from oil and gas production have been invested into a state fund. For the first time in their history, the Norwegians are using these reserves to support the sector. Quite a striking observation. What’s going on in Europe? Not only do we hear that investments will be postponed, but it will actually be necessary to draw from reserves in order to conduct new research. Over the past five years, seven refineries were closed down, while no new ones were built. As a club we have to be aware of this trend and alert to what is happening in the market. Europe is under pressure. There was a time when we could perfectly profile Belgian companies as high-tech, innovative, faster and better than those of other countries outside Europe. Slowly but surely, however, we have lost our edge and we are being overtaken. Non-European countries have reached the same level of knowledge, which is bound to impact labour costs.”
What is the impact of renewable energy?
Marc Meurisse: “From time to time, new projects are set in motion with the potential to benefit many companies in our sector. This is always temporary, however, because the sector is subsidised. If grants were halved, such projects would be discarded.”
Pieter-Jan Provoost: “Some of our members are already active in renewable energy because their technologies can be applied there. The chemical process knowledge acquired in the refining and petrochemical industry can be used in biomass and biorefinery installations. The offshore experience and engineering can be directly transposed to offshore wind energy; only the wind turbine is a new component. Oil companies also invest directly in renewable energy, not in projects, but in fundamental research. I would venture that oil companies will be tomorrow’s majors in renewable energy. They have huge R&D budgets and they have acquired a great deal of know-how which they protect extremely well. Shell, for example, is active in smart grids; Total in solar energy; and ExxonMobil in algae and biomass. As a club, we have to keep our finger on the pulse of these developments.”
Is there a synergy between the Renewable Energy Club and the Carbon Energy Club?
Pieter-Jan Provoost: “Definitely! We carry out a number of actions jointly, and 25% of our membership overlaps.”
Marc Meurisse: “We understand each other well, yet our standpoint is different. While, with our members and customers, we are mainly concerned with business development and projects, the focus of the REC is more on the energy itself, as well as seminars, research and development.”
Pieter-Jan Provoost: “We saw a great example of this synergy at the ADIPEC trade show. An American company installed a 1 billion dollar solar farm in Oman which will generate power to extract crude oil. Before that, they used diesel generators for that purpose.”
Marc Meurisse: “We will be facing great challenges. We must continue to diversify, thanks to our foreign colleagues and competitors. Similarly, we need to encourage our young companies and entrepreneurs to look for new challenges and ways to drive our economy.”
Pieter-Jan Provoost: “We are improving the way we harness the collective intelligence of our club. Throughout the year already, we organised various internal workshops, allowing members to share best practices, contacts and experiences. With membership now close to 165, our members bring with them a wealth of information and global experience, excellent contacts and wide networks. We have to make full use of these assets to make sure members can help each other.”