Svitzer shakes up the tug business

New oil and gas terminal towage contracts for Svitzer underline the potential of the company’s strategic ambitions to grow this more lucrative side of the business, as well as the impact of major improvements to the company’s safety profile.


Raise the wind
Key planks of Svitzer’s business strategy

  • Elevate safety to industry-leading standards with the implementation of the Global Harmonised Safety Management system that meets OVMSA standards
  • Grow the oil and gas terminal towage business to 50% from 30% of the towage portfolio
  • Improve profitability of existing harbour towage operations

One of Papua New Guinea’s largest oil and gas exploration and production companies, Oil Search, recently signed a five-year USD 75 million contract with Svitzer to provide marine support services for its Kumul Marine Terminal in the Gulf of Papua.

Together with other oil and gas terminal deals in the Australian region, the new contract confirms both the growth potential for Svitzer in the oil and terminal marine support side of the business and the impact of implementing much higher safety standards.

“This is an exciting contract and is precisely what we’re aiming for in our ‘Raise the Wind’ business strategy,” says Kasper Nilaus, Head of Business Development for Svitzer.

“We are improving the profitability of our harbour towage business and pursuing growth in the oil and gas terminal towage side where the contracts are long term, and our expertise and industry-leading safety standards can add real value to customer operations.”

Two recent 20-year contracts with Chevron to provide marine services for its two large LNG projects in North Western Australia are good examples of what Nilaus means. These customers are major participants in the country’s economy, with no tolerance for anything but the safest and most reliable operational partners.

“This isn’t just about the tugs. We have a huge responsibility here as a small but essential part of the transport supply chain to ensure the safe and reliable movement of critical cargoes. That was an understanding we wanted to make clear to both Chevron and more recently Oil Search in the tender process,” says Alan Bradley, Chief Commercial Officer for Svitzer Australia.

More than a contract

Svitzer will supply the marine assets and highly trained crews required to ensure the safe movements of vessels, in and out of the facilities. This will involve the provision of four tugs and a pilot boat at each of the Chevron facilities, and two large anchor-handling tugs at the KMT offshore facility in the Gulf of Papua.

Svitzer’s experience in Australia and Papua New Guinea and a clear emphasis on safety and operational excellence were important factors for the oil majors



The multi-year nature of these contracts together with the need for operational reliability meant that Svitzer was evaluated on much more than price and equipment. Mark Malone, Head of Svitzer Australia, says both Chevron and Oil Search made it clear that they wanted a business partner with similar values and commitments for the contract, not just a service provider. He says Svitzer’s experience in Australia and Papua New Guinea and a clear emphasis on safety and operational excellence were important factors for the oil majors.

“They liked how we talked about safety, that we would have ongoing safety performance discussions. In particular, they liked that we raised our global safety standards beyond requirements on our own ini- tiative. It’s a long-term partnership, so there was definitely a cultural dimension to our negotiation that was quite important,” says Malone

Poster image

The industry’s highest safety standards

Svitzer is the first towage company to meet these safety standards.

It has been two and a half years since Svitzer began a complete overhaul of its safety management systems and standards as a part of its ‘Raise the Wind’ strategy.

The backbone of this is the new global harmonised safety management system rolled out this year. Fully electronic, it is one system accessible to all Svitzer employees via computer or mobile devices and includes all categories of procedures, all necessary checklists, forms, risk assessments, certifications and much more pertaining to every kind of job.

It is so comprehensive that the new Svitzer system meets Level 2 of the Offshore Vessel Management and Self-Assessment (OVMSA) standard that oil companies follow. Svitzer is the first towage company to meet these safety standards.

With the new system, no job begins without filling out forms and checklists. To newcomers or outsiders it can seem bureaucratic, but in the towage and offshore industries it reduces risk.

“A big part of safety is communication, making sure people understand what and why you want them to do something,” says Bent Nielsen, global Head of Safety.

“The checklists ensure our people do the right things every time, that the right people with the right training and equipment are always in place before an operation begins.”

Having one system also means employees can communicate more effectively. Nielsen says safety updates are now received instantly across the globe. It also ensures people have the same knowledge, that they share the same thinking and if they move to another location they don’t have to learn a new system.