When Petrofac was first awarded the Northern Endeavour decommissioning project in April 2022, a commitment to community and economic benefits such as employment, training and local business opportunities was considered as important as the technical scope. 

Almost two-and-a-half years on, with the Floating Production Storage and Offloading vessel (FPSO) made safe, disconnected from its wells, and about to be towed away from its mooring in the Timor Sea, what’s the reality? How much of the value has remained in-country? And what new skills have been acquired across the supply chain?

“In the initial planning stages, we had an ambitious goal,” says Josie Phillips, Petrofac’s Regional Director for Asia Pacific, based in Perth. “Even though the Australian decommissioning market was in its infancy and there was limited capability and capacity in the local supply chain, we still said we wanted the majority of spend to stay in-country, and set a target of 52%. We are on target to end up at more than 90%, and that’s a good indication of the Petrofac approach to local delivery. Before we even started, we named two Australian companies – Monadelphous Group and Linch-Pin – as supply chain partners and have always made a concerted effort to work with as many local West Australian suppliers as we possibly can.”

As part of the strict project governance, Petrofac drew up an Australian Industry Participation Plan and an Indigenous Procurement Policy. Embedded within these are various key performance metrics, which means that local and indigenous spend are explicitly encouraged and closely monitored. Of course, this does include some spend with the registered Australian subsidiaries of a few international providers, such as DOF Group or Halliburton. But nonetheless, most of the spend has been with homegrown, Australian headquartered businesses, not just in engineering, but also in logistics, waste disposal, and everyday support services.

Often, it’s been about creative problem solving. For example, the disconnection of the Northern Endeavour from its risers and flowlines required an intricate and bespoke cutting approach. So, Petrofac turned to Blakemere, an Australian subsea engineering specialist, which adapted its specialist diamond wire saws for the task. Also, Bhagwan Marine, based in Geraldton, Western Australia, has been working on a uniquely challenging hull-cleaning campaign – which, because of the vessel’s complicated history, has involved the removal of an unprecedented level of marine growth.

Another regular supplier is Bunbara, an indigenous female-led company based in Perth, which provides integrated solutions in the oil, gas, mining and defence sectors. Working with Petrofac has enabled the business to expand into new areas. As Bunbara Director, Nikky Barney-Irvine puts it: “Working with Petrofac on the Northern Endeavour project has enabled Bunbara to further expand our procurement service capabilities. Bunbara supplies high-specification products such as piping components, valving, and instrumentation at our core. However, our procurement arm supplied for the first time a forklift to Petrofac. Supplying Petrofac deepened our understanding of how its projects are driven. This procurement service collaboration has strengthened our position as a reliable first nation, agile local supplier supporting major project delivery.”

Of course, it’s not just about placing contracts with local companies. It’s also about local employees acquiring new skills. This is one of the first major decommissioning projects for the Australian energy industry. So, almost by definition, teams working both onshore and offshore, either for Petrofac or its sub-contractors, encounter new challenges and unfamiliar scenarios. To work effectively and safely, they draw heavily on Petrofac’s Technical Authorities, typically based in the UK, who have a wealth of global decommissioning experience, but the delivery is managed locally. In this way, skills are constantly transferred and imparted.

The upskilling applies equally to many of Petrofac’s sub-contractors. As an integrated services operator, the company doesn’t try to do everything itself. Instead, the Petrofac team coordinates and choreographs the work of an extended supply chain. Peter Davis, Project Director at Monadelphous Group, one of the original supply chain partners, explains the impact. “Monadelphous is particularly proud of our association with Petrofac on the Northern Endeavour project, and the way our positive cultures and complementary skills have aligned on its delivery. The project enabled us to extend our experience and grow our capabilities in both maintaining and preparing for the tow of registered vessels. It also provided the opportunity to draw on our company’s wide-ranging services capability, such as our central welding group for the hull repairs, and our Darwin workshop for materials and equipment logistics management. At the other end of the experience scale, it has been the first decommissioning project for two of our young engineers who now identify this as an area of expertise for them – one that they might not have previously had the opportunity to be exposed to so early in their careers.”

Petrofac has also made a concerted effort to recruit internally, providing additional training and coaching to existing team members and fast-tracking their career progression. As one example among many, Operations Manager Scott Mclean initially joined the Northern Endeavour team as a trainee in the mid-2010s. After some time away, he returned to the vessel with Petrofac in 2022 as Transition Manager, then Offshore Installation Manager, before relocating to Perth to manage the onshore operations team. Meanwhile, the company’s Perth-based operation has grown significantly, from a modest representative to a fully staffed technical hub employing upwards of 100 people, most of whom could now be described legitimately as decommissioning specialists.

The Northern Endeavour project is characteristic of Petrofac’s wider way of working. As Josie Phillips puts it: “Local delivery is in the Petrofac DNA. Wherever the company operates, we aim to support local suppliers, employ local people, nurture local talent, and stimulate local economies. As well as being the right thing to do, it’s a source of competitive advantage – helping us reduce costs, de-risk delivery, and build strong, long-term relationships with local stakeholders.”

Looking ahead, the Australian government estimates that the country’s decommissioning sector could be worth as much as AUS$60 billion, and it wants to build a strong domestic industry to capitalise on the opportunities and ensure that as much value as possible is retained within Australia.¹  With this in mind, the Northern Endeavour experience puts Petrofac and its supply chain partners in a good position.

[1] Australian Department of Industry, Science and Resources, Building an offshore decommissioning industry, 2023