Fast mover

Babcock’s helicopter task in Australia has grown rapidly.

Under the ConocoPhillips deal, the company will take over the Timor Sea work from CHC Helicopters from next January, employing the two new Airbus H175 helicopters, worth about $20 million each, to support the Bayu-Undan field’s petroleum production in the Timor Sea, with the aircraft to be based in Dili, East Timor.

The 16-passenger utility helicopters will be used to transfer workers between East Timor and the Bayu-Undan’s production facility, about 250 km south-west of Dili, for ConocoPhillips and its Timor Sea production partners as well as having search and rescue and medevac roles .

The two new Airbus helicopters will be delivered later this year, the first of their type in Australia. The UK parent, Babcock International Group recently acquired two H175s for its Aberdeen base for North Sea offshore petroleum work.

The new Australian-bound aircraft will take the number of helicopters in the Babcock Australasia fleet to 32, operating from 13 bases.

Babcock Australasia has widespread engineering support activities in our region, but its move into the helicopter sector has been fast, riding on the coat-tails of its parent’s ambition to become a major force in the off-shore and on-shore helicopter support business globally.

Its two key local acquisitions have been Australian Helicopters and Bond Helicopters Australia, as a result of a $US1.5 billion takeover of the Avincis Group by Babcock International in May 2014, to expand its global helicopter operations.

“Its move into the helicopter sector has been fast.”

The huge deal delivered Bond Offshore’s North Sea contracts, UK search and rescue and other maritime roles, as well as military training, firefighting and medical work as well as Bond’s Australian offshore contracts.

The takeover also embraced Australian Helicopters, which Avincis had acquired from Archer Capital in 2010, through subsidiary Inaer.

At the time, Australian Helicopters had 21 helicopters flying from eight bases, making it Australia’s largest onshore helicopter company, providing a range of services including Customs, emergency medical, search and rescue, police and surveillance.

Since the takeover, the workload has increased significantly, from about 6000 missions annually to 8,600.

It has major operations in northern Queensland for Queensland Health, employing five Bell 412s, and has another two operating from Horn Island off Cape York for the Australian Border Force.

The Queensland Health fleet includes three 412s stationed between Rockhampton and Mackay, one on Horn Island and one on permanent back-up in case one of the mainline machines goes out of service, or additional capacity is required.

While the major workload is flying for Queensland Health, roles include maritime search and rescue.

In Victoria, Babcock operates the state’s air ambulance service and has six AugustaWestland AW139s. Two are based at Melbourne’s Essendon Airport and one each at Bendigo and Warrnambool, and one in the Latrobe Valley.

The sixth is a “floater” – another of the company’s back-up machines. Babcock Australasia’s chief executive David Ruff describes these as “fleet assurance aircraft”.

Not many aviation companies have the financial capacity to place spare machines on standby, he says.

But in “an extremely challenging” business environment, being part of the parent’s big global balance sheet – with annual revenues of about $A9.5 billion – allows the Australian business to keep aircraft on stand-by for use if required, improving service to clients and adding flexibility.

“It’s a pretty important point,” says Ruff, who took the top regional job in January.

In South Australia, Babcock runs the state’s Motor Accident Commission fleet of three helicopters – two Bell 142EPs and one Eurocopter (Airbus) EC130.

Bond Australia, meanwhile was well-established in offshore oil and gas exploration, development and production work for the petroleum industry at the time of the Babcock takeover.

Its present contracts include servicing PTTEP, the Thai petroleum group which operates the producing Montara oil and gas field in the Timor Sea. The five-year contract, flown from the former BHP Petroleum base at Truscott (now Mungalalu), in WA, 520km west of Darwin, involves two Sikorsky S-92s. An EC225 Super Puma is stored at Trustcott, awaiting the lifting of its grounding .

The European Aviation Safety Agency grounded all Super Pumas last June after a fatal accident in Norway when the main rotor detached. The EASA lifted the ban in October but the UK Civil Aviation Authority’s ban remains in place. John Boag says Babcock’s machine is not contracted to the Thai company.

In Darwin, Babcock has two S-92s, which are being used to transport workers to a ConocoPhillips drilling program in the Timor Sea, about 140km north of Darwin, and a pair of Airbus EC 65s, which were not operational at the time of writing.

Its other clients in northern and north-western Australia include Woodside Petroleu, Inpex and Italy’s Eni

Last year, Babcock won a major contract from Chevron Australia to serve the massive Gorgon LNG and domestic gas project based on Barrow Island, and the petrolem compay’s Wheatstone project, now under development. The five-year contract was launched in July last year with two Sikorsky S-92s but now uses three 12-passenger Airbus 139s.

Babcock has not revealed the value of the contract, which faces the prospect of further expansion as Chevron advances the Wheatstone LNG project, off Onslow.

The Australian offshore operations transfer about 9000 passengers annually, and carry about 30,000kg of freight.

Although it carries the “Australasian” name, Babcock does not operate any aviation services in New Zealand at present.

John Boag, head of helicopter services, says there is “talk” of future offshore petroleum projects, but nothing on offer just now.

At present, the combined fleets number 30 twin and single-engine helicopters, ahead of the arrival of the two new Airbus H175s, he adds.

Last year, Babcock renamed its two Australian helicopter companies to conform with the names adopted by the British parent after the Avincis takeover.

Bond Helicopters became Babcock Offshore Services Australasia and Australian Helicopters was rebranded as Babcock Mission Critical Services Australasia.

Babcock announced the rebrand last June when it opened a new $11 million operations centre at Darwin International Airport as a base for its fleet of helicopters servicing the Timor Sea and the Northern Territory’s offshore oil and gas industry.

Babcock relocated its “mission critical” division from Brisbane to Adelaide last December, adding about 50 jobs and taking its Adelaide workforce to 115 under a move which was backed by a $2.5 million State Government grant, which was made through its investment attraction program.

Subsequently, Babcock established a regional operations centre in Adelaide to co-ordinate all its helicopter services.

Babcock’s then chief executive, Craig Lockhart, said bringing the two helicopter operations under the single Babcock brand and centralising the business in Adelaide would provide economies of scale as well as being a key platform for strategic growth for the next decade.

He said the move also was aimed at encouraging “better internal co-operation, higher levels of employee engagement and greater cohesion around our culture and values.”

The move to strengthen its Adelaide presence is built on existing work in South Australia. As well as operating the SA Motor Accident Commission’s helicopters, Babcock manages the Qantas fleet of ground support equipment at Adelaide Airport, part of a major national contract covering 60 Qantas ports across the country which Babcock won last year.

And the company’s engineering division holds key contracts in the support and maintenance of the RAN’s Collins Class submarine fleet.

David Ruff says the submarine maintenance work was Babcock’s first major Australian contract outside aviation and remains a long-term commitment, in a field where Babcock International provides specialist support services to the Royal Navy, Canadian and Norwegian navies.

He is eyeing engineering and support work for the Future Submarines project, now that the Federal Government has awarded the prime design contract to France’s DCNS and the systems integration contract to LockheedMartin.

He believes discussions on support services, including engineering components, will start with the two prime contractors later this year.
“We are very much focused on those discussions right now,” he says. :

David Ruff says new “aviation-related” opportunities are emerging.

“We are developing some right now,” he says, but is not yet prepared to outline where those opportunities might lie. “But it’s not just helicopters.”

Ruff says Babcock Australasia’s helicopter division “has a fair bit on its plate”, spread evenly between off-shore and mission critical roles, but still has growth prospects.

The best potential hinges on a revival of the offshore petroleum sector in Australia, he says, with hopes based on such possibilities as mooted moves by petroleum explorers to tackle the deep waters of the Great Australian Bight, despite British Petroleum’s decision to abandon its plans. Other companies have exploration acreage in the Bight and are slowly advancing plans to drill their prospects.

Ruff says new “aviation-related” opportunities are emerging.

There’s also potential for a move into the offshore petroleum industry in Asia.

“We have a large footprint in northern Australia and we see opportunities in new regions to the north. Obviously Asia is a fast-growing area with greenfields (exploration) sites.”

However, any expansion into Asia was likely to be led by Babcock International, with potential sub-contracting work for the Australian arm as any future Asian projects gained critical mass.

Meanwhile, Babcock continues the major task of maintaining its own helicopters at its bases around the country. John Boag says maintenance is a crucial aspect of the business, to ensure Babcock can meet the demands of its clients.

The present maintenance workforce numbers 120 people, in a total helicopter complement of 325. Helicopter repair and maintenance is a core business for Babcock globally, he points out.

Recruiting air crew is not an issue at the moment, following the downturn in the petroleum sector on low oil prices. Boag says Babcock does not train its own pilots, and employs qualified flight crew from ex-military and civilian roles.