In 2009, operating and service companies will stave off the negative effects of an economic downturn by diversifying their offerings and creating new avenues for revenue generation. There are many operating and service companies that have enhanced their standing in the marketplace by continuing with their traditional services while developing new programs or business arms to find previously untapped sectors of the oil and gas industry.

One such example is Boots & Coots. While its Safeguard program is not new, the company is currently reaping benefits from its worldwide consulting arm, which began more than a decade ago.

Beginning in 1997, the company developed its WellSure program to help independent operators work with their insurers to meet specific blowout prevention requirements. Within a few years, Boots & Coots set out to develop a similar program for international and government-owned oil companies.

What has come to be known as Safeguard now operates throughout the world on both onshore and offshore projects. The program uses Boots & Coots’ expertise to perform a wide variety of preventive and training services including, but not limited to:

• Performing rig audits (primarily on contractors’ surface blowout equipment);
• Using its well control knowledge to perform inspections and to analyze well plans; and,
• Helping companies design effective contingency plans in the event a blowout should occur.

According to Safeguard Vice President Bill Markus, “We focus on limiting exposure to various levels of risk by suggesting enhancements to existing processes and procedures.”

The company has performed its Safeguard services in most oil and gas regions, including North Africa, North and South America, Asia, and the Middle East. The benefit for Boots & Coots is clear. “Our diversity allows us to sustain a sizeable employment group so that we can maintain and expand our expertise,” Markus said.

Commenting on the origins of the program, Markus explained that Boots & Coots consolidated its response services to include prevention. “If we’ve seen the worst out there, why couldn’t we step in and help to prevent them from ever happening?”

The company has developed relationships with many national oil companies (NOCs) and is continuing to see results for their bottom line. More importantly, in areas like South America where oil prices have been subsidized for some time, the recent downturn has had little or no effect on NOCs. This provides a “business as usual” scenario for Boots & Coots’ Safeguard service.

The company is currently expanding its expertise by working to map out a risk management program for simultaneous operations otherwise known as “pad” drilling. The challenge of drilling, snubbing, and completing separate wells within walking distance in these types of operations provides a considerable risk for equipment and crews. Boots & Coots is working to deliver a safe program that can assist operators in reaping the biggest advantage with identifiable and manageable risk.

In January, the company renewed one of its Safeguard contracts in Africa. The three-year deal was signed with an optional two-year extension period. Valued at US $58 million, the contract includes $23 million in new Safeguard services. The majority of services provided under the contract include training, rig audits, risk assessments, on-site competency programs, and related prevention services, with minor provisions for third-party services.

“Companies don’t have to buy the whole ball of wax,” Markus said. Domestically, many operating companies stay within the best practices due to mandated standards from the MMS, OSHA, and API. Safeguard makes it easy for these operators to bring in specialty consultants for training and to achieve specific objectives.

“In the beginning, we thought that by focusing on prevention we would eventually work ourselves out of a job. What we’ve found is that the number of blowouts doesn’t decrease. However, any holes left between our traditional services are ultimately filled by Safeguard. It’s just another avenue for assisting our customers,” Markus said.

By working on both sides of the coin, companies can survive the pending economic crunch.