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  • Gasfields Commission
  • 2016-09-06

Adapting and evolving with the changing needs of the onshore gas industry in Queensland remains key for long-time drilling and completion equipment provider, General Petroleum Oil Tools (GPOT).

GPOT Managing Director, Sam Cavallaro says change has been the one constant in their business since his father-in-law John McPhie, a veteran of the Canadian oil and gas equipment industry, started the company in Brisbane some 17 years ago.

General Petroleum supplies a range of wellhead equipment including pumps (artificial lift technology) and consumables for both drilling and completion teams in the gas industry.

Sam says their growth as a business has been very much synonymous with the development of the coal seam gas (CSG) industry in Queensland.

“In the early days, the business was very much relationship driven. The purchase order books were in the hands of very different people than they are today. They were looking for people who could provide a 24/7 type service. We were providing very much a value to the commodity.

However, he says over the last 5-7 years’ equipment supply has become largely a volume game.

“There’s always going to be a commodity aspect to some of the completion equipment such as that used to artificially lift the water out of the hole (to allow gas to flow).

“Yet we’ve started to see quite a few operational issues around that “one solution fits all” approach to equipment.

“We’ve seen that the ability to better understand the life cycle of the well, and to have equipment which is adaptable, is becoming extremely important,” he says.

Technology adds value

After successfully providing a range of quality products and service to the industry for 17 years, Sam says they realised their business needed to evolve by adding value through technical solutions.

“It’s about applying specific technology to reduce installation and workover costs, whilst also increasing the run life of the well.

“You’re always going to get a percentage of a (gas) field that operates smoothly and there’s always going to be a percentage of all the operators’ fields that have downhole issues. We want to help with those problem wells.

“We’re working on how we adapt and modify the technology to provide a point of difference so the well life is extended and there is increased production from the well,” Sam says.

Quality relationships

While their business might be evolving, Sam says the importance of building and maintaining relationships has remained paramount.

“Relationships are extremely important. We continue to try and communicate with our customers’ key decision makers and we think that through quality relationships we can continue to deliver good solutions.

“As a small organisation going into a bigger organisation, business development is an area that we’re continuing to work harder on.

“We do this through consistent contact with key people; utilising good CRM software to make sure that we’re maintaining those relationships; and making sure that we have a good sales team that is in constant communication with our key contacts.”

“A big portion of our business is direct with the drilling provider, and we will continue to do that. We think that we can continue to provide efficiencies in terms of a supply chain logistics type solution with our significant expertise and experience, and that has been a big focus of our facility in Dalby.

“Again, it has been an evolution of our business rather than just being a box in box out company because we want to be able to provide more value to our customers,” he says.

Dalby gateway

In addition to its Brisbane office, General Petroleum established a five-acre facility in Dalby about eight years ago.

“We really wanted to be part of the local industry. We felt that Dalby was an excellent location that was close to our key customers and felt it was a gateway through to Roma,” Sam says.

“We have management quarters on site, and a 1000 square metre shed; so it is our inventory, logistics, warehousing, service and despatch centre. We think it’s a facility which will continue to develop and evolve; and it’s well placed to deliver quality services.

In terms of employment, General Petroleum had 5 people in the business 7 years ago and that grew to 19 people as the CSG industry boomed.

Sam says they are now back to 13 people after a reduction in staff towards the back end of last year, however, in 2 years’ time he would like to think there is potential for another 5-6 people – so around 20-25 employees, depending on how far they take the deployment of their technology offering.

Tender Opportunities

He says, as a business they have been active in the tender process and look to not only add value but to also be cost effective with the products and services supplied.

“We’ve worked very hard on our tender submissions and how we respond to those tenders.

“There’s been a certain amount of upskilling; we have committed more resources within our organisation; and we have a better understanding from a technical level as to how we’re responding,” he says.

Strengthening communities

From his strong family and business connections with Canada, Sam says he has seen first-hand how the onshore gas industry can make a positive difference to regional communities over the long term.

“What I see is the big companies putting value in their local communities. I see this in Canada in rural towns like Stettler, Alberta with a population of around 5,000 people where the agriculture and gas industries work hand in hand.

“A majority of Alberta is very much a wheat-grain-cropping type community, and that’s very similar to what we are talking about in the Surat Basin.

“We are seeing communities in Canada which are extremely strong; they have access to all of the amenities that these smaller towns in Australia don’t necessarily have, and it’s purely because the oil and gas industries put back into the towns.

“The kids aren’t wanting to get away from town; they’re staying on and earning good incomes; it creates a good community and a good family environment.”

Sam says he would like to see even more gas industry investment over the long term in Queensland to help make a difference to small regional communities like he’s seen in Canada.

Sam’s tips for doing business with the onshore gas industry:

  • Relationships are key - the ability to maintain quality and respectful relationships is an area that needs consistent attention and focus
  • Value add for your customers – keep evolving and adapting to find new ways to add value to your customers, including through new technology and services
  • Continue to work hard on your own business - be respectful of your overheads, and find that balance between cost and the ability to compete.