Taking strategic action

Adrian Proctor (l) and Barry Newton at the Geos Group’s terminal in the Port of Blyth

Fuel Oil News recently visited the Port of Blyth to see the Geos Group’s terminal first hand. Specialists in marine gas oil supply and distribution, the group is now the largest independent marine fuel supplier in the UK

Keen to learn more about the company’s Sea Bunkering’s trading origins, and to discover what prompted the move into a physical fuel supply, editor Jane Raphael met with managing director Barry Newton and commercial director Adrian Proctor, both based at the company’s Henley-on-Thames head office.

Barry, who had previously worked with Phillips 66, joined Sea Bunkering in the city of Hull back in the 1990s with the emphasis firmly on oil trading.

“In those pre-internet days selling marine fuel literally meant driving to the port to ask if anyone needed it! Whilst our fuel supply was then sourced through a network of physical suppliers,” explained Barry.

“The biggest change to this market has been the internet which moved the industry from local to global – going into physical storage was an opportunity that we just had to take.”

The Blyth terminal – wholly-owned by the Geos Group – was opened in 2015 in a port which had previously been without any fuel provision. The project was led and managed by Liz Winship who now works alongside the terminal’s operations manager, Norman Donaldson and three operatives.

“From a strategic point of view, it is best that we control our own fuel stocks,” explained Adrian.

“Having a physical footprint gives us far better flexibility to meet customer demand and to be much more proactive on sales. Additionally, many of our customers work in environments where fuel is needed very quickly, particularly if another energy source fails.”

Working in partnership

Partnerships are very important to the Geos Group – for several years the company has worked closely with energy logistics specialist, Peterson (UK) which has tanks at sites in Aberdeen, Lerwick, Heysham and Great Yarmouth.

In addition to the above locations, Geos also stores fuel at Montrose and Peterhead, the latter being the largest fishing port in Europe for landing white fish. Presently being revamped, the expectation is that much larger fishing vessels will use Peterhead in the future.

With its Humber refinery well-positioned on the east coast, Phillips 66 is the Geos Group’s main fuel supplier. In January 2018 Geos also commenced marine deliveries for Phillips 66, with fuel distributor partner Par Petroleum undertaking road transportation.

“Loading at Blyth, Par’s drivers know the contracts we’re working on and provide an excellent interface with customers,” added Adrian.

With respect to shipping, the company has undertaken both short and long-term charters.

Geos now utilises the Thun Grace, a 5,800 tonnes capacity coastal tanker operated by Thun Tankers which works across the east coast. From Great Yarmouth fuel is also delivered to the Thames and Shoreham.

“Being a big fixed cost, it was a major step to bring in a long-term vessel but the carrying capacity of this vessel suits our business, plus the crew are fantastic and very proactive,” said Adrian.

“With logistics in good hands we’re able to play to our strengths and concentrate on the needs of customers, with pricing, in particular, needing to be tailored to best suit each business.

“All our chosen partners are like-minded people who share the same values and with whom there’s mutual trust.”

Broadening our opportunities

“Being in control of our supply chain from refinery right through to vessel gives us an important advantage over other marine fuel suppliers and, having a presence at more locations has broadened our opportunities,” said Barry.

Having the ability to drop fuel off at several locations, the company is now far more strategic. When work steps up in one area, additional fuel can be more easily transferred between locations.

Among those with whom Geos does business are blue chip oil & gas companies operating large contracts in the North Sea, bulk ferries – with tankers often driven on board to lessen the spill risk – dredgers, fishing and commercial vessels, HMRC, survey and smaller military vessels plus The Waverley, the world’s last sea going steam ship which visits the south coast each summer. Whilst now less involved in the super yacht business, the company is seeing more cruise ships along the east coast, and as the industry matures the expected decommissioning activity in the North Sea will maintain fuel demand.

Ready for 2020

Asked about preparations for the IMO 2020 regulation, Barry said: “Our product is already at a lower sulphur level and as we stand we’re in a good position.

“Globally refineries are changing their demand profile, we’re working with our suppliers to ask what this means for both them and us. We’re in wait and see mode at the moment, although we do expect an increased demand for distillates in general, and there will no doubt be a cost implication which will need to be absorbed between refiner, supplier and customer.

What next?

“Our biggest step has been opening the Blyth terminal – for a small company it was the right thing to do,” said Barry.

“Establishing multiple locations, arranging strategic partnerships and ensuring flexibility have also been key steps along the journey,” added Adrian.

“Barry has navigated us through these steps with our 18-strong team all contributing to ensure the safe delivery of a quality product with an excellent service.

“We are a reputable company with a good name and a lot of traders buy from us,” said Barry.

“The reputation of the Geos Group is important to me – it takes a long time to build but no time to destroy.

“We’re always asking where next? Our model has been noticed in the market place – our fixed costs are covered and we’re in a good place to extend our markets. Presently no one place is crying out for additional storage, although we do see more markets developing in decommissioning and renewables.

“I remain enthusiastic for this very interesting industry which I’ve always enjoyed. Whether I’m speaking to the world’s largest container shipping company or the owner of a small dredger, I just love the whole job and building Blyth was brilliant. The day I stop enjoying it will be the day I stop.”

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