Latest news with #Heiton
Scotsman
7 days ago
- Business
- Scotsman
Trump, taxes and takeovers: Aberdeen's OEG navigates its way to $1 billion sales goal
'Anything that increases costs and complexity - tariffs and taxes - can put you off investing' – John Heiton, CEO Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... OEG Energy Group, the Aberdeen-headquartered offshore services provider employing 1,500 people globally, remains on the growth trail with further acquisitions set to boost its burgeoning renewables business as it charts a course to $1bn (£750 million) of annual group revenues. Chief executive John Heiton said the 30 per cent growth seen last year was likely to be repeated this year despite volatile trading conditions on both sides of the Atlantic, US tariffs and higher taxes, with April's hike in UK employers' national insurance contributions adding a £1 million burden overnight. Advertisement Hide Ad Advertisement Hide Ad The company, which has roots stretching back more than 50 years, is also having to balance the demands of a pro-oil Trump administration that is pulling back on green investment, with a Westminster government that plays up renewable energy but is 'not so supportive' of offshore oil and gas. OEG's chief executive John Heiton. Heiton, a local to the Aberdeenshire area, who joined OEG in 2008, was speaking just a fortnight after the group sealed its first acquisition since being bought by US funds heavyweight Apollo in March. The takeover of Trinity Rental Services (TRS) - for an undisclosed sum - marks a 'strategic expansion' of OEG's US footprint and capabilities. Founded in 2013, Louisiana-based TRS has grown through acquisition and investment to become a key provider in oil and gas offshore container rentals in the Gulf of America. Its workforce of around 80 skilled employees now becomes part of OEG. 'We expect it to be quite a smooth integration,' said Heiton. 'It was a direct competitor so we expect the integration to happen pretty quickly. There are some common customers. Advertisement Hide Ad Advertisement Hide Ad 'We won a major new contract in the US and that led to a drive for more equipment and one way to fulfil that was to buy a competitor. Also, we admired Trinity for a long time and had talked about acquisitions with them for five or six years. This was the right time for them to do a deal.' Part of the business specialises in the supply of containers to the global oil and gas industry. OEG's 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 now derives about 55 per cent of its business from renewables work. That split is expected to remain about the same this year, even with the Trinity deal. During 2023, the group launched OEG Renewables in a move that brought 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. Heiton said the TRS deal, though a milestone one, did not mark a change in the group's strategy. Advertisement Hide Ad Advertisement Hide Ad 'If we do one or two acquisitions in containers over five years and probably do ten-plus in renewables, that is the weighting we expect to see in the business,' he noted. OEG's renewables business helps with the construction and operational phases for offshore wind farms on a global basis. Buying a US-domiciled business like TRS puts the group in an advantageous position with regards to tariffs, though the wider business has suffered some fallout amid President Trump's see-sawing trade levies. 'They have caused some delays and issues in terms of our US business and led to a general slowdown in the world economy,' Heiton cautioned. 'That then drives a slowdown in demand for energy. Anything that increases costs and complexity - tariffs and taxes - can put you off investing.' The group's fast-growing renewables business recently won a multi-million-pound contract to support the construction phase of the vast Inch Cape offshore wind farm, which is due to be operational in 2027. Once completed, the development - some ten miles off the Angus coast - will feature 72 giant wind turbines and an onshore substation, generating sufficient clean energy to power the equivalent of more than half the homes in Scotland. Advertisement Hide Ad Advertisement Hide Ad Under the terms of the contract, OEG will supply a package of specialist services including marine coordination, high voltage and ancillary port services. These will all be delivered from the company's new flagship facility in Edinburgh, which is equipped with the latest state-of-the-art technology for round-the-clock monitoring of operations. OEG will also operate up to ten vessels to help support the ambitious project. Heiton said the contract award reinforced the group's position as a key partner in the offshore renewables industry. And, despite the Trump administration blowing cold on wind, the US is likely to be OEG's second largest market this year for renewables, behind the UK. 'These were projects signed off in the Biden era that are in the construction phase,' noted Heiton. 'But in three or four years time that business will probably fall to almost zero as there are no projects coming through. However, we are in pretty much every major offshore energy market.' Headquarters Last year saw the group move into a new global headquarters at the ABZ Business Park in Dyce. The office can accommodate up to 100 personnel across three floors and supplements a number of operational bases in the Aberdeen area. Advertisement Hide Ad Advertisement Hide Ad Some 250 out of the 1,500 people employed by the group globally work out of the North-east and while Heiton said the firm was proud of its Scottish roots, the UK now accounted for just 10 to 15 per cent of its business.
The Herald Scotland
24-07-2025
- Business
- The Herald Scotland
OEG US deal as Aberdeen oil and gas outlook 'not great'
'Primarily during the last few years we've done a lot of acquisitions which were mostly focused on offshore wind," Mr Heiton said. "This one stands out as sort of our first oil and gas focused investment since 2021 when we acquired one of our major competitors. Read more: "We were awarded one of the big two oil producer contracts earlier this year in the Gulf of Mexico. The customer unfortunately won't allow us to mention their name, but the biggest two are BP and Shell, so take your pick. "It meant we needed some more equipment and that was how we got in discussions with one of our principal competitors as a way of sort of feeding that award." The company has effectively doubled its footprint in the US in terms of assets, employees and turnover, and now has a global headcount of approximately 1,500 employees. The UK, with 250 staff at the Aberdeen headquarters, remains the largest in terms of employment, now followed by 180 people in the US. The four-year contract in the Gulf of Mexico is worth "tens of millions", Mr Heiton added. Read more: Renewables contracts with the offshore wind sector continue to account for the majority of revenue, roughly 55%, at OEG and will represent the lion's share of future acquisitions even though discussions are taking place about other potential deals for offshore container operations that service the oil and gas industry. 'Frankly, we haven't made that many acquisitions [in the containers business] because there's not that many companies to buy," Mr Heiton said. "TRS driven by the contract, and they were people we had talked to off and on for frankly about the last four to five years already. "We also recognised them as an up-and-coming threat, so it was also a way to remove a threat as well." He added: 'This one is unusual in being a cargo logistics acquisition, which we have two others in discussion, but obviously discussions don't always lead to a deal. We have around 10 or 12 in discussions at the current time in offshore wind, so we still expect the majority of our M&A work to be in offshore wind going forward.' Read more: "Luckily", Mr Heiton said, OEG depends on oil and gas activity in the North Sea for only a small proportion of its revenue. The sector has been struggling under the UK Government's 78% on oil and gas operators via the Energy Profits Levy. 'Our oil and gas focused North Sea business is probably around about, certainly less than 10% of our overall business, but we are based here and we would love it if the government was more supportive of our domestic operations," he said. "We are a heavily production-focused business so we are not as affected by the new projects side, but also capital projects are what drive production. 'The outlook here is not great, the mood is not great. It has the benefit for us that we've managed to hire some really great people with really good experience and talents, but you would prefer there was a better domestic market and support from the government.' Apollo announced in March that it had agreed to acquire a majority stake in OEG from Oaktree Capital Management in a deal that valued the business at approximately $1 billion (£737 million). Apollo now owns about 70% of the business, with minority stakes retained by Oaktree and OEG's management team.
