A new age for contractors

After a brief stint as a graduate with Esso Australia, Mr Cummins joined McDermott International in Perth during the boom period of the North West Shelf. His enjoyment of the contracting side of the business – plus a yearning to see the world – led to his international postings working on projects in South East Asia, the Middle East and eventually to the UK.

Mr Cummins’s impressive 30-year career has involved many different roles, including project and fabrication management, commercial, business development, and finally general management. His career at McDermott ended as Executive Vice President in charge of offshore operations and commercial business on a global basis, based in London.

Throughout this career at McDermott, Mr Cummins’s clients included Chevron, Shell, BP, INPEX, Woodside, and Esso Australia. While the work undertaken for these clients has primarily been in an offshore environment, he has extensive experience in fabrication for onshore projects – including the fabrication of LNG modules for Chevron’s mammoth Gorgon LNG Project out of Batam, Indonesia.

Speaking to Gas Today at the company’s headquarters in Hawthorn, Melbourne, Mr Cummins is confident his experience will hold him in good stead to lead McConnell Dowell, where he formally commenced employment in September 2015.

“I bring a strong understanding of the challenges and opportunities faced by clients within the oil and gas industry and a collaborative approach to partner with these project teams to deliver cost effective solutions.”?

And while Mr Cummins’s first six months at the company has been spent understanding the organisation’s capabilities, markets, and customers, he is now looking to embark on a strategic planning process that will set the contractor on a new, and even more international, path for the future.

The business objectives

So what business objectives will Mr Cummins pursue over the next few years?

First up is a focus on developing the business’s infrastructure focus, and diversifying its market spread.

“Market conditions have obviously changed significantly in Australia over the course of the last year, and everyone is familiar with the decline in mining and oil and gas investment in Australia.

“I think equally people are well versed on the need for civil infrastructure development, and whether it be in Australia or internationally, the public only has to have a look at population growth that is being experienced and is being forecast and the corresponding need for new infrastructure.

“So I think it’s very important that McConnell Dowell has the right strategy for the prevailing market, and for us to adjust our organisation’s focus accordingly.”?

The second priority is further developing the company’s international growth opportunities – particularly in South East Asia, New Zealand, and the Middle East.

Mr Cummins says that when it came to taking up the role at McConnell Dowell, he was attracted to its multi-disciplinary capability and international track record, particularly given his familiarity with those markets.

“I was familiar with Australia, but particularly familiar with South East Asia and the Middle East where I have spent most of my working career.

“All countries in those regions are very different in the way business is executed. But if you know the business environment, it makes it that much easier to establish the business approach and the appropriate strategy to take the company forward in those markets.

“McConnell Dowell is fortunate in its diversity, both geographically and capability wise. From major cross country pipelines like the QCLNG and APLNG pipelines in Australia as part of the MCJV, to the remote Komo airport in PNG for ExxonMobil and developing Thailand’s pipeline projects for PTT, McConnell Dowell has an exceptional, long history in these areas.

“I particularly look at South East Asia as a very robust market with significant growth potential for McConnell Dowell. We have had a real presence and strong local staff resources from executing projects in South East Asia the past four decades and our fabrication and plant yards in Thailand and Batam, Indonesia.”?

Mr Cummins is emphatic that a contracting business gains most value from having a diversity of geographies.

“If one market is good, and another is suffering, having geographical diversity enables us to spread our risk; it allows you to retain a good resource base.

“It is very easy if you have a project in South East Asia, Australians are very mobile and willing to go work on a project in, say, Thailand. Our operations in these regions are also well placed to support specific Australian project requirements.

“Overall, it makes so much sense for an Australian organisation to be a part of the South East Asian and Middle East markets; it is one flight away, time zones are not problematic – it makes a lot of sense in terms of making all that that synergy work across all of those geographies.”?

Papua New Guinea is also a key area of focus for the company.

“PNG is certainly a country of interest. It’s great having the knowledge that McConnell Dowell has a long history of delivering projects in PNG, such as the recent Komo Airfield for the PNG LNG project. There is also going to be continuing significant investment in PNG which we are well placed to support.

“There are obviously issues [working in PNG] that need to be addressed, but if you partner and work collaboratively with your client, you would work out what the problems are and work through them together.”?

And on that, herein lies Mr Cummins’s third business objective: early, collaborative client relationships.

Change and progress

“I have seen a lot of change for contractors over my 30 years in the industry, but also for the clients,” says
Mr Cummins.

“The first change is that the size and the complexity of the projects are much bigger than what they were 30 years ago. I used to get excited when we had won a $100 million contract; now it’s $1 billion or $2 billion contracts, or even greater than that.

“Due to this size and complexity, effective project planning and coordination is critical. McConnell Dowell has demonstrated the success of early development of collaborative relationships with clients and stakeholders on many major projects.”

A focus on quality and safety has also been a big change for clients and contractors.

“The oil and gas industry has become a lot bigger – the projects are bigger, the water depths they’re operating in are greater, and the focus on quality has just been tremendous. It is well acknowledged that the reliability of oil and gas facilities is very high in terms of industry standards, so having that has been a big change.

“I also think the business has progressed significantly in terms of safety, and I think it needs to continue progressing. I think that the oil and gas industry has been exemplary in leading the path in the engineering and construction world – it has set the bar.

“It’s great to have that bar there, and I know I will use that in McConnell Dowell. I know what safety execution is at the highest level, and we need to be striving to that in all of our industries.”?

New relationships

Finally, Mr Cummins believes developing early solution focused strategies for project development is not only critical to the future of client-contractor relationships, but in getting projects going in Australia full stop.

“I think that as a consequence of all of the above – project complexity and longevity, the need to drive safety and have an excellent standard of quality – is the recognition and effectiveness of customers, contractors and governments working in a more collaborative, solution-finding mode.

“I think the challenges we are seeing in the industry today are potentially going to bring that into sharper focus.

“The process of “˜here’s a project, here’s a contract, you sign it and deliver’ is not necessarily the most cost-effective way to do things. I think now the industry is being asked that, given the challenges we’ve got and the emphasis put on cost-effective solutions, it’s going to drive the contracting and client organisations closer together to work out how to more cost-effectively execute and reliably deliver projects.

“I’m a real believer in having the right relationships and involvement early on. That’s one of the biggest things I’ll be driving with McConnell Dowell – yes the oil and gas industry is a bit pressed at the moment, but let’s make sure we have the right relationships with people, and are at the solutions table early on.

“Because of the size of projects, not all of them have gone as well as what people would have liked. When you have a market that we’re in now, none of us can afford to take on a project and for it to end up costing twice as much as everybody thought.

“We have got to get that reliability around schedule and cost, so that as an industry we can proceed ahead with developments in confidence.”?

Mr Cummins concludes: “If you can’t proceed with confidence, the project won’t proceed – or it won’t proceed in Australia. And it is certainly in Australia’s interest that we reach these common goals and get these projects up and running.”?

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