Bentec Strengthens Management Team as Business Continues to Grow

Bentec Drilling and Oilfield Services, the leading drilling rig fabrication and engineering company, has restructured its management team in anticipation of the continuing growth of the business, which has seen a three-fold increase in turnover in the last three years to US$139 million in 2006.

Norbert Gebbeken and Arend Lődden have been appointed joint Managing Directors with responsibility for the commercial and technical sides of the business respectively. Mike Salter, Chief Operating Officer of Bentec's parent company, Abbot Group plc, has been appointed Chairman of the Bentec board. These new roles have been created to replace Uwe Singer, former Managing Director, who sadly died earlier this year after a long illness.

Mike Salter said: "Norbert and Arend each bring with them more than 20 years experience in their respective areas within the drilling rig and contracting industry and together represent a formidable force in driving the business forward to achieve an anticipated turnover of US$230 million this year.

"As well as its continuing success in winning contracts for innovative, new build rigs for the European market, Bentec has made significant inroads into the Russian market with its hybrid rig designs and in the Middle East and North Africa with its fast move 'Nomad' class rigs for desert terrains.

"An extremely healthy forward order book, combined with a growing rig servicing operation in the Middle East and a recent move into OEM manufacture with its own drawworks, mean that Bentec is in a strong position to continue its current level of growth."

Following Abbot Group's acquisition of Bentec in 2001, the company has experienced considerable growth year on year as worldwide demand for drilling rigs has soared. Today, between 70% and 80% of Bentec's turnover is accounted for by third party contracts, with sister company, KCA DEUTAG, making up the remainder of contract awards.

More than 300 personnel are employed at Bentec's Bad Bentheim and Nordhorn manufacturing operations in Germany, where the company builds about 10 drilling rigs a year and manufactures a range of components for major oil operators worldwide.

Arend Loedden explained how Bentec's reputation as an innovative systems manufacturer and rig builder has gone from strength to strength: "Our project management skills, combined with our engineering capability and high technical standards mean that clients can rely on Bentec to supply state of the art, high quality rigs in time and on budget."

Testament to the company's capabilities is the considerable success Bentec has achieved in the challenging Russian market where it has sold 10 of its hybrid HR-5000 and HR-4500 type rigs to clients including KCA DEUTAG, BKE and TNK-BP.

"Having identified a requirement for between about 400 and 600 rigs in Russia over the next five to six years, we set about designing a drilling rig specifically for that market, said Arend Loedden. "We looked at existing Russian-built rigs, identified the elements in their design which particularly met the demands of that market, such as the need for cluster drilling, low temperature housings and easy dismantling for transportation via the Russian railway system, and combined these aspects with state of the art western technology and engineering to produce the HR-5000 series. This was closely followed by the HR-4500 series, developed in response to feedback from the client, which has a 250 tonne hook load and is even faster and more compact."

In recognition of the importance of the Russian market to its business, Bentec is investing in a major fabrication facility in Tyumen, Siberia, which is scheduled to become operational in mid-2008.

Other key target markets for Bentec include Europe, where the company's innovative T-208 rig, which is ATEX certified, is designed to work in locations where space is at a premium and environmental considerations are paramount. The first T-208 was built to fulfill a KCA DEUTAG contract with OMV in the Vienna Basin, and a further rig of the same 'Euro Rig' type is currently being built for MND Servisni, a drilling contractor based in the Czech Republic. Bentec has received another three enquiries for this design.

North Africa, particularly Algeria and Libya, is another important market for Bentec. Last year Bentec delivered four land rigs into Algeria and has designed and is currently building two 'Nomad' class rigs under contract to sister company KCA DEUTAG, for BP Algeria. These are designed to achieve fast rig moves over flat terrain by roving on wheels largely rigged up, but can also be disassembled into smaller packages for moves over sand dune conditions. Further potential orders for this type of rig are already in the pipeline.

In the Caspian, Bentec has had a brownfield engineering operation in Azerbaijan since 2002 and in Kazakhstan it operates a service facility for Bentec land rigs sold into that market.

Bentec also has a 2,500sqm mechanical workshop and 6,500sqm yard in Ghala near Muscat, Oman in the Middle East, for servicing land rigs. Arend Loedden said: "Two years ago we set up International Drilling Technology Co. LLC (IDTEC) which currently employs 40 people. We service all of the drilling contractors in Oman, who operate a total of about 40 rigs. These previously had to be sent to Dubai for repair and maintenance. We also service contractors in neighboring Yemen, Qatar, Bahrain and Saudi Arabia and even as far afield as Brunei in the far east. Our intention is to build on this operation and add diesel engine and electrical repair capabilities."

As well as growing its operations in key markets, Bentec has diversified into manufacturing major components, such as drawworks, which has enabled it to boost its cost efficiency, as well as creating an additional income stream.

Norbert Gebekken commented: "In the past we have been primarily rig integrators and we have bought in components such as pumps and drawworks.

This meant that when the market picked up the cost of buying these components became prohibitively expensive, significantly impacting on our cost efficiency. We therefore decided to start designing and manufacturing our own components, starting with the mast substructure, the first of which we manufactured for one of the HR-5000 series rigs.

"We now make our own drawworks also and have sold 11 of these to date, a number of which have been incorporated into the HR-5000 series rigs destined for arctic conditions in Russia."

Looking to the future, Mike Salter said: "Bentec's international reputation for rig design and construction continues to flourish and has led to significant levels of activity this year, which we anticipate will continue at a similar level for the foreseeable future."