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PETROLEUM DIRECTORY: A unique service connects oilfield operators with top-quality equipment vendors Petroleum Equipment and Services provides access to specialized gear that wouldn't otherwise be available in Alaska Alan Bailey PNA Contributing Writer
Drilling rigs and oilfield facilities often require equipment that is manufactured by small specialist companies. These small companies tend to find it uneconomic to set up offices in Alaska. The resulting lack of sales and support in the state can limit oil operators' access to needed equipment.
Step in Petroleum Equipment and Services Inc.
For the past 20 years this company has filled a unique niche in Alaska by providing small equipment manufacturers with a sales outlet, office support and warehousing facilities.
"Our primary business goal is to bring to the Alaska marketplace products and services that aren't currently available and that offer customers competitive alternatives to existing suppliers," Kevin Durling, president of Petroleum Equipment and Services told Petroleum News Alaska. "Along with that we provide an economical solution for companies wanting to enter this marketplace."
High-quality products and services Honesty, high-quality products and exceptional customer service have remained core values since the company's formation in 1983. As a result the company has grown to become a major service provider with more than $6 million in annual sales.
The company operates an 11,000 square foot facility in Anchorage, with 17 offices and 6,000 square feet of warehouse space, as well as a warehouse and maintenance facility on the North Slope.
The company has also expanded to the Kenai Peninsula.
"We have a 5,000 square foot office and an acre yard on the Kenai Peninsula, right about a block from the airport in Kenai," Durling said.
Drilling equipment of all types forms the core of Petroleum Equipment and Services' product lines.
"We look at the drilling and production requirements as a whole and then we go and get products that are needed in that environment, from the top of the rig to the bottom of the rig," Durling said. "We can provide, either directly or through second sources, probably 70 percent of the equipment required to drill an oil or gas well."
However, the acquisition of MRO Sales in 1999 expanded the product lines to more general industrial hardware and brought in a substantial amount of business done outside the oil industry.
"We do a lot of sourcing and supply work for other industries — corrosion inhibitors or polymetric maintenance products for the repair of metals and the relining of pumps," Durling said. The company supplies industrial materials for the military bases and for companies such as Matanuska Dairy and Federal Express.
Since acquisition, MRO Sales has retained its distinct company identity as a wholly owned subsidiary of Petroleum Equipment and Services.
Value for the customer Although Petroleum Equipment and Services is in the business of selling equipment, the company distinguishes itself from more traditional suppliers by adding value through specialization and support services. Whereas a traditional supplier usually tries to sell many different types and makes of goods, Petroleum Equipment and Services focuses on finding and selling a suite of specialized, top-quality products.
As an example of the type of benefit that Petroleum Equipment and Services brings to its customers, the company has recently re-introduced Scientific Drilling Inc. to Alaska — the Alaska oil industry now enjoys local access to Scientific Drilling's state-of-the-art range of gyro subsurface surveying and memory logging equipment.
"We only take on the best we can find in an industry for the specific type of product that we are involved with," Durling said.
Then, by focusing on a relatively narrow band of merchandise, Petroleum Equipment and Services can ensure a high level of sales and technical support for each item.
"What we do is bring together complementary companies and represent them or have their own employees officed in our building," Durling said.
Benefits for the manufacturers And manufacturers also benefit from Petroleum Equipment and Services' business strategy.
A company that comes to this market on its own will have to rent a facility, get a bookkeeper, get a secretary, get a salesman — it's a huge capital cost, Durling said.
Instead, Petroleum Equipment Services can furnish the vendor with warehouse and office space, as well as office services. And Petroleum Equipment Services' sales and support reputation gives the vendor a major sales benefit — Petroleum Equipment and Services doesn't support competing products.
Vendors ship their products through the Petroleum Equipment and Services' warehouses in Anchorage and Kenai. In some cases the vendor will use the warehouses to stock product. Petroleum Equipment and Services also purchases some items for resale from its warehouses. We have the items right here, available for immediate shipment, Durling said.
Other services In addition to product sales and support, Petroleum Equipment and Services and MRO Sales provide several other value-added services.
For example, Petroleum Equipment and Services' North Slope facility maintains equipment such as well casing port collars.
"One of our very active service lines over the last couple of years is TAM port collars," Durling said. "(A port collar) allows the operator a secondary means of safely cementing its surface casing in the well if the primary cement does not go all the way to the surface."
As another service, MRO Sales does procurement for small companies.
"You've got to be a certain size to have staff assigned to do procurement," Durling said. "... companies that come up here and maybe only have one rig — we've been very successful in supplying their procurement needs — we just act as their procurement office."
Knowledge and experience Petroleum Equipment and Services and MRO's broad experience and knowledge of the procurement and transportation of equipment and materials in Alaska underpins all of the company's services.
"In our management group ... we've got in excess of a hundred years of Alaska-based, oilfield service-related knowledge," Durling said.
And the company excels at finding difficult-to-find parts. If a customer needs a product, company staff will locate it or find out how it can be manufactured.
"We've probably got one of the largest resource libraries in the city, maybe the state, of industrial products, especially the old ones," Durling said. "Perhaps there's a guy out in Aniak who has a such-and-such pump — he may be able to call us and we've got the original catalog from the vendor, where we can cross-reference the parts for him."
Durling sees his company's services matching the evolving Alaska marketplace. The company's low overheads and efficient operation seem a perfect fit for independent oil companies, for example.
"We deal with all the operators in ... Alaska, we deal with the military, we deal with the state of Alaska, the Municipality of Anchorage ... and the federal government," Durling said.
And with all of its customers, the company places quality service and value at the top of its priority list.
"Our goal is to add value, not just to sell products," Durling said, "... so that ... the customer looks back and says 'oh, this job was done for less because MRO/Petroleum Equipment and Services was able to supply this either faster or more technically correct'."
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