Saturday Interview: The view is good for Ecosse as it looks somewhere beyond the sea

He took the position in March and has immediately been swept up in the momentum of a business which has defied the oil and gas downturn by diversifying into renewables with sagacious timing.

“Ecosse is a business I’ve known of a long time, I’ve known Mike a long time and we’ve worked together on opposite sides of the fence,” says Mr Gillespie, who arrived with 25 years’ experience in the oil and gas industry.

Established in 1996 by Mr Wilson as an engineering consultancy for the oil and gas industry, Ecosse now designs, builds and operates an array of subsea equipment.

In simple terms, Ecosse’s SCAR Seabed System is able to carry out preparation work, such as boulder clearing, before ‘ploughing’ trenches, laying cables and backfilling the trench.

Its tools are patented and adaptable for hydrocarbon, power generation and of course, renewables.

Ecosse’s diversification into the renewables sector began as far back as 2014, before the oil price tumbled, when it won a £5 million contract to lay cable to connect wind turbines off the Humber Estuary to transformer stations.

Companies it counts as clients include Dong Energy, Bibby Offshore, Shell, E.ON – in fact, most big names in the sector have worked with Ecosse in some form.

“I’ve seen the business evolve, where it’s come from, and where it’s started to squeeze into tech,” said Mr Gillespie. “Mike is a tech man. That’s where I’ve seen him, trying to bring something different in the days when the subsea market was very much in oil and gas.”

Such has been the extent of the company’s diversification that 90 per cent of its business is now in the renewables space – predominantly in Scotland, but increasing further afield, including the Baltics.

The company is poised to double turnover to about £25 million this year, with profits expected to come in at about £5m. The change, it is safe to assume, is working.

“The timing was right. Mike has taken what he has and saw an opportunity, he’s never been shy to do something different,” says Mr Gillespie.

Notably, in April, it was awarded a seven-figure seabed clearance project on the £2.6bn beatrice offshore windfarm (BOWL) in the Outer Moray Firth.

“Renewables is a great place to be,” says Mr Gillespie. “We’ve forged our way into it, building a track record as we go, but we’re also mindful where we came from, which is oil and gas.

“It will be telling that some of the lessons learned from renewables we’ll take back to oil and gas as operators now have commercial restraints that didn’t exist three years ago. We’d like to think our technology is going to be well-suited for that.”

Mr Gillespie says his appointment allows commercial director Keith McDermott to seek out international work, and provide Mr Wilson with the freedom to development new technologies.

The company certainly felt the benefit of a £1.4m investment in its SCAR2 seabed preparation system.

“The structure we’re putting into the business is deciding what one to take forward next,” says Mr Gillespie – without giving any more away. “There’s definitely one or two nice ones in there we can start to push forward.”

Above the seabed, Mr Gillespie said Ecosse’s engineering capability was growing, providing opportunities for onshore activity. This is driven by its 51 per cent stake in County Durham-based oil and gas fabrication specialist MASfab – which manufactures Ecosse’s SCAR equipment.

In January the company secured a multi-million credit facility from Handelsbanken to help it push further into the renewables market. It was a development Mr Gillespie says was “instrumental for us in beginning to have bigger eyes for what we can take on”.

Traditionally, the company operated as a service provider, but is now becoming a main contractor – meaning it provides all the services on the back of a contracted vessel.

“These project values have gone up significantly, and the reality is that we’re seeing even larger projects coming at us, so [the facility] gives us the ability to tender for larger projects,” says Mr Gillespie.

Brought up in Portsoy on the Moray coast, Mr Gillespie studied engineering at Robert Gordon University before embarking on a career in oil and gas that has taken him – and latterly his wife and two children – around the world.

This included a three-year spell in Houston, Texas, home of the US’ oil and gas industry. But for the majority of his time, he has lived in Aberdeenshire throughout roles with Technip, CSL, GE Oil & Gas, Centrica and Talisman.

He moved to Ecosse from project management consultancy PDi.

“At the end of the day I am an engineer, but I’ve diversified myself, it’s fair to say, towards commercial and contractual in different roles at different business,” he says. “It’s been a good journey, educational. Where I grew up, oil and gas is part of our DNA. We’ve been brought up in it for so long.”

With such a track record, he is well-placed to observe sentiment in the North Sea industry, and he says that while there is a recovery underway, it is also creating a new baseline.

“It’s going to be gradual, a slow process,” he says. “You might even find a lot of projects that kick off will be smaller, and that’s where there actually is a comfort; the North Sea was renowned for quick, fast-start projects and you can get after those quickly, rather than large-scale projects like West Africa.”

With most big players setting their budgets for 2018 over August and September, Mr Gillespie says the next few months will be “crucial” for the sector.

With its focus firmly in the renewables sector, any upturn in oil and gas will be a bonus for Ecosse.

“We’re anticipating growth over the coming year and years. Exactly how much that is depends on the strategy. There are certain steps we’ll look at now that will give us indications, but we’re pretty optimistic as to what the future looks like and how large it can be.”