Polarcus: Seismic Acquisition Restructuring | In Practise

Polarcus: Seismic Acquisition Restructuring

Former CEO at Polarcus

Learning outcomes

  • Challenges for Polarcus competing with larger seismic acquisition companies
  • Polarcus' 2015 Agenda to restructure the business and reduce operating costs
  • How to make tough decisions in a crisis
  • The importance of communicating clearly internally and externally
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Executive Bio

Rod Starr

Former CEO at Polarcus

Rod has over 30 years experience in the oil and gas industry. From 2015-17, he was the CEO of Polarcus, an offshore seismic acquisition company with over $400m in revenue, which he led through the 2015/16 oil price shock. Rod was leading Polarcus during one of the lowest oil prices on record and led the company to restructure the capital structure. Previously, Rod spent over 6 years at TGS Nopec and 16 years at Unocal Corporation. Read more

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Rod, what does leadership mean to you?

I think being a leader commands that an individual creates a path for people, or the organization, to follow. By that, I mean establishing your usual objectives; a mission, a vision, a strategic plan. Literally, personally, from the leader, establishing a culture and exemplifying values. It’s also important to guide the organization to those plans. Actually, there are so many organizations that have done a great job, from the marketing perspective, for the organization, setting forth a vision and a plan and values and so forth. But so many times, leaders don’t guide the organization towards those. I think it’s key to execute upon, whatever you put together and that’s key to leadership.

Again, you can’t be a leader if you don’t have a set of followers. There would be nobody to lead. I think, creating that following is really important for the organization.

How did you go about in motivating or influencing others, to follow you?

It sounds a bit old school, but I think, rolling up the sleeves and participating in that. Not just setting forth a bunch of slides and posters and a few speeches here and there. But actually living the values and getting stuck in to help execute upon that plan. It doesn’t mean you have to do everything yourself. You do need to delegate and you do need to assign responsibilities and hold people accountable. Again, getting in the trenches and working with everybody, across the organization is critical. And communicating; constantly communicating, I think, helped in my career, to generate those followers.

What do you think that does, when you, as you said, roll up your sleeves and participate next to those followers?

I think it demonstrates to your employees, your co-workers, that you care about what they’re doing. Firstly, that you can understand a bit about what they’re doing and I also think it helps to build a bit of trust that you can share in what issues they may be facing, budgetary restraints, work challenges and so forth. I think it helps to build a little bit of collaboration, which is critical to leadership. You have to collaborate and, again, share with the employees, as best you can, what they might be going through. Additionally, as I said earlier, to help guide them towards the objectives.

Could you just set some context to when you joined Polarcus, as CEO?

The board of directors bought me in, as CEO, really, I would say, to help drive a bit of business acumen, bring some commercial aspects to the company. In terms of seismic acquisition companies, it was relatively new. It had been operational for about three years and my predecessor, who had an operations background, did a great job getting the company running, vessels on the water, operating crews on boards those vessels and so forth.

When I arrived, I looked at the organization as, wow, this is still in start-up mode when, in fact, it had been operational for three to four years. The whole organization, starting with the management team, the executive leadership team, was still working as though they were in start-up mode. I think the board recognized that. The industry, which I’ll get to, was starting to crumble and become very, very challenging. Again, I think bringing some business acumen, some market perspective to the organization, was really the challenge that I saw, when I walked in, and the reason the board brought me in.

How did you approach that, with Polarcus being one of the smaller seismic players in the industry?

To put it into perspective, for seismic acquisition, which includes those companies like ours, with vessels, there are five, roughly, six, in the market, at that time. Three to four of those companies were majors, meaning they had 12 to 16 seismic vessels and had been in business for many, many years, long-standing customers, etc. Two of those seismic companies, Polarcus being one, were new entrants, relatively small, with seven to eight vessels, so roughly half the fleet and just a fraction of years in market.

The challenge was to be competitive and to demonstrate our technical capabilities. I saw the real challenge as, let’s leverage what we do best, which in that case, was operational. It doesn’t have to be everything in the geophysical space, or the geoscience space. We were competing with fully-integrated seismic companies that had research and development, manufactured equipment, acquired data like we do, sold that data like we do and then entered the data processing side of things, as well as some geophysical services on top.

As a new entrant, again, limited cash and a crumbling market. We couldn’t do all of that, as much as we would have liked to. So it was really to focus on the core business and what we did best, which was operations and acquiring seismic data and handing it to our clients.

What was the biggest challenge that you faced, being a new entrant in such a market?

I think, part of it, was to earn our stripes with major oil companies or the super majors. If you look at our customer list, when I joined the company, it was the independents that were looking for new technologies, in some cases, but new players, to help support competition, to help drive prices down, keep their prices at market levels and so forth. So our challenge was, how do we penetrate the major companies? We had to prove our health and safety environment record, our operations record. We were leveraging other’s technologies, which is fine, in this case. Really, how do we get that contract with a major oil company? An Exxon, a Shell, a Total, from France. That was really our challenge and what we focused, from a strategic standpoint. Let’s go prove to ourselves, to those super majors.

Did you approach that from the position of, we have the most efficient operational structure? How did you look to prove yourselves to those big customers?

It was interesting. The seismic market then and, I would argue today, was fairly commoditized. Technologies had advanced, yet it was commoditized, prices were being squeezed quite a lot, meaning acquisition contract prices. Oil companies weren’t willing to pay for the next shiny bell and whistle. They wanted their project done, hand them the data and move on. Our goal was to leverage technology, not develop new technology, but try to deploy it in a new and creative way.

We had some very talented geophysicists that would work, one on one, with oil companies. This is interesting, because again, from a commercial aspect, where we had to differentiate ourselves with our clients, we exploited and developed some relationships with clients where we could actually send geophysicists into the company and work with their geophysicist, to try to figure out a way to deploy existing technology, that we had access to, as well as others, in a more unique way, to reduce costs or to, effectively, create a better image, so they could explore and find oil and gas.

That was very effective and, again, it was working closely with clients. We had some big company clients that said, “Wow, you’re new, I’ve never met the CEO of your competitor, who we’ve worked with for years. We’d like to work with you.” Again, I think it was that openness and willingness to share our geophysical resources with those companies, to help solve a common challenge.

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Polarcus: Seismic Acquisition Restructuring

March 19, 2020

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