Clover–Anotech Announces Its Baytown Branch!

We’re excited to announce our expansion into the Baytown area!

Over the past 20 years, we have consistently delivered top skill sets and workforce solutions to super-major clients who dominate this region with their petrochemical and chemical facilities.

Clover is proud to announce that the staff augmentation required by the large investments on LNG facilities, petrochemical plant expansions & turnarounds can now be supported locally from our recently added office in Mont Belvieu.

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Here at Clover, we acknowledge and appreciate the hardworking east side of Houston and that local presence is critical to understanding its community and projects.

Our portfolio managers’ main concerns are to always ensure candidates have a comprehensive understanding of the role – both technically and culturally.

Thankfully, Clover is no stranger to providing technically qualified downstream, petrochemical and LNG contractors. In fact, we currently have over 100 consultants in the Gulf Coast area, as well as approximately 120,000 individuals in our candidate database.

All the while, we have victoriously maintained our exemplar Safety record, which has been paramount to the company’s success.

In our expaCharlie Reevesnsion to a new side of town, we wanted to make sure we had someone as authentic as the area itself. We’re thrilled to have Charlie Reeves, our Downstream Portfolio Manager, represent the Baytown Area Branch for Clover. With over 10 years’ experience, Charlie Reeves, a subject matter expert in staffing, knows firsthand what keeps plant operators and maintenance managers up at night…Safety, Efficiency and Cost.

He was born and bred in this area of Texas, in the industry itself, and knows how to provide culturally and technically fit candidates. Having worked on both sides of contract staffing, Charlie has built up a network of approximately 10,000+ individuals who contribute to the downstream, petrochemical and LNG industries.

Charlie’s territory ranges across the Texas/Louisiana Gulf Coast. Should you have any inquiries about the support Clover can provide in this region, feel free to call his Direct line at 281-994-5996, his Cell at 832-603-7263 or email him at Charlie.Reeves@CloverGS.com.

Clover, an Anotech Energy company, is excited to be so close to all the action! We’re already seeing substantial requests for staff augmentation in the Eastern region and it’s our vision to continue being the premier provider for any staffing needs.

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ANOTECH Energy Acquires Clover Global Solutions, LP

Houston, TX – September 26, 2016 – Clover Global Solutions, LP, a contingent workforce solution provider to upstream E&P, midstream pipelines and downstream chemical plants, refineries, and LNG operations, was officially acquired by ANOTECH Energy on July 28, 2016.

The acquisition brings together the global business landscape of ANOTECH Energy and Clover’s long standing relationships with an impressive portfolio of North American based global operators and a deep talent pool of staff contractors. This acquisition should deliver an immediate positive effect and most importantly, each company’s business will carry on as usual.

For ANOTECH Energy, this acquisition will enhance their previous position with the “Super Majors” and mid-cap US energy companies that operate domestically and internationally. The companies’ union adds proven manpower for drilling and completions and project support services.

For Clover, this means adding support for the civil, infrastructure, and mining industry, while also opening up employment opportunities by expanding its global reach to 63 countries.

Xavier Feuillatre, ANOTECH Energy Director, said: “By optimizing the strengths of both companies, this acquisition positions us for rapid growth in North America within our existing and potentially new client base.”

Chris Sutton, Clover Director, said: “It was clear from the beginning that our cultures aligned. Clover’s lean business model could be leveraged, and we could expand our global footprints significantly. Clover and ANOTECH are well known brands, both have exemplary safety records, and our clients do not overlap. We’re a good fit for one another.”

Carolyn Sutton, one of Clover Global founders and Managing Partner, has retired and will serve in an advisory capacity. Her retirement has opened up the opportunity to increase participation in charities and services addressing young women’s entrepreneurial development, elder care, juvenile diabetes, and cancer research.

Chris Sutton, Clover Partner, will assume the Director position for Clover. He will facilitate integration of the two companies, while continuing to drive Clover Drilling and Completions International manpower support expansions and help.

About ANOTECH Energy:

anotech-logo-defHeadquartered in Labège, France, ANOTECH Energy is an engineering, construction and industrial projects consulting firm that specializes in Oil & Gas Exploration and Production, Petrochemical, Power Generation, Renewable Energy, Mining, and Water industries. ANOTECH Energy operates from over ten locations across five continents, providing local or regional local services to its clients, while still reaching other worldwide markets.

About Clover Global Solutions, LP:
clover-a-blue-iconHeadquartered in Houston, Texas, Clover Global Solutions LP provides energy companies with global staffing and workforce solutions. Clover markets to the Super Majors, mid-majors, pioneering independents, engineering and construction firms, private equity and venture capital funded firms. Clover’s solutions include; recruitment for contract staff and permanent hires, payrolling, alumni/retiree re-engagement, independent contractor risk management, and salary benchmarking. In addition to these contingent workforce services, Clover DCI is a specialized group focused on providing drilling and completions personnel for worldwide deployment.

Please direct all inquiries to:
Olivia Brescia
Clover Global Solutions, LP.
16225 Park Ten Place, Suite 420
Houston, TX 77084
P: (281) 994-5916
F: (281) 994-5917
E: Olivia.brescia@clovergs.com

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Employee or Independent Contractor? Follow the Money!

Chris Sutton – Partner, Clover Global Solutions, LP

The oil and gas industry has a strategic reliance on freelancers, 1099 contractors, consultants and small businesses, collectively referred to as “non-employees”. In both good times and current times of economic uncertainty the reliance depends upon continued availability and unique expertise of some contractors. Short-term, well-defined projects often turn into multiple years of full-time engagement.

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At some point an individual who may be an employee of a contractor, is provided advice by their tax accountant that they should set-up their own company and become an independent contractor. The resulting legal entity may be an LLC, LP, or Inc. However, nothing about the consulting assignment has changed except a desire to control more of their bill rate and plans to claim additional tax deductions.

This scenario is somewhat unique versus other industries in which employers do not want to engage workers as employees. In oil and gas it is often employees who are asking to be classified as 1099s and creating the huge risks for employers as to fines, penalties, back-taxes, overtime claims and benefits.

On July 15, 2015 the U.S. Department of Labor’s Wage and Hour Division Administrator Dr. David Weil issued Administrator’s Interpretation No. 2015-1.

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SUBJECT: The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors.

Excerpts of this guidance as related to the Fair Labor Standards Act (FLSA) to be utilized in properly classifying workers and curtailing misclassification of employees as independent contractors follow:

Dr. David Well articulates, “Understanding that combating misclassification requires a multipronged approach, WHD has entered into memoranda of understanding with many of these states, as well as the Internal Revenue Service. In conjunction with these efforts, the Administrator believes that additional guidance regarding the application of the standards for determining who is an employee under the […] (FLSA or “the Act”) may be helpful to the regulated community in classifying workers and ultimately in [limiting] misclassification.”

Well points out, “an entity ‘suffers or permits’ an individual to work if, as a matter of economic reality, the individual is dependent on the entity. The factors typically include: (A) the extent to which the work performed is an integral part of the employer’s business; (B) the worker’s opportunity for profit or loss depending on his or her managerial skill; (C) the extent of the relative investments of the employer and the worker; (D) whether the work performed requires special skills and initiative; (E) the permanency of the relationship; and (F) the degree of control exercised or retained by the employer.

In applying the economic realities factors, courts have described independent contractors as those workers with economic independence who are operating a business of their own. On the other hand, workers who are economically dependent on the employer, regardless of skill level, are employees covered by the FLSA.

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Moreover, the economic realities of the relationship, and not the label an employer gives it, are determinative. Thus, an agreement between an employer and a worker designating or labeling the worker as an independent contractor is not indicative of the economic realities of the working relationship and is not relevant to the analysis of the worker’s status.

The ultimate inquiry under the FLSA is whether the worker is economically dependent on the employer or truly in business for him or herself. If the worker is economically dependent on the employer, then the worker is an employee. If the worker is in business for him or herself (i.e., economically independent from the employer), then the worker is an independent contractor.

In summary, most workers are employees under the FLSA’s broad definitions. The very broad definition of employment under the FLSA as “to suffer or permit to work” and the Act’s intended expansive coverage for workers must be considered when applying the economic realities factors to determine whether a worker is an employee or an independent contractor. […] Each factor should be considered in light of the ultimate determination of whether the worker is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is its employee).”

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Questions for you to consider:

  1. Based upon these guidelines, how many workers within your “non-employee” workforce are classified as independent contractor and have been properly vetted?
  2. What is the percentage of your contingent workforce that should be properly classified as W-2 employee of your company or should be a W-2 employee of a staffing firm on a contract assignment?
  3. Are you aware of the overtime claims, fines, penalties, and loss of company reputation that may result from your company’s misclassification and continued use of 1099/Independent Contractors?
  4. Would you like some assistance in answering questions 1 – 3 above? If so, contact 1099audit.com.

Chris Sutton has a sound foundation in the energy sector contracting from both client and contractor sides with specific expertise in working with oil and gas operators, senior leaders and program managers who are significantly challenged by today’s state of the industry and must deliver optimal results now, without creating new risks in: Re-engaging prior employees and furnishing client identified resources, cost reduction, HSE, compliance (day rate compensation plans and 1099 contractor compliance), flight risk, existing Vendor Management System (VMS) cost/value analysis, and supplier/contractor consolidation.  To contact Chris with any questions or comments, please send an email to Chris.S@clovergs.com.

Posted in 1099 Compliance, Clover Global Solutions, Contingent Workforce, Oil & Gas, Opportunities, Risks, Workforce Changes | Tagged ,

Plant Turnarounds: Volatile, Challenging & Inevitable

Chris Sutton – Partner, Clover Global Solutions, LP

Plant turnarounds make up the single largest identifiable maintenance expense, and controlling their costs and duration is quite the challenge.

Turnarounds are scheduled periods of non-production within an industrial plant (refinery, petrochemical, power plant, and pulp and paper mills). Daily operations stop during the duration of a turnaround and instead, the focus shifts to maintenance related activities, cleaning, inspection and equipment repairs required to improve safety.

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During a turnaround, plant employees and other contractors work continuously to prepare the plant to resume its regular operations.  The short story: with no production, increased labor and equipment expenses, shutdowns are extremely expensive.

Turnarounds are essential to maintaining the peak efficiency of complex operations and the high costs are discovered when production losses due to downtime are factored in. They may take months to complete; and can require the management of possibly hundreds of contract and permanent personnel.

There’s no doubt that keeping all of those dollars, hours, and people on target requires extensive planning. Just preparing for a turnaround can be even more time-consuming than the turnaround itself, taking anywhere from a year to 18 months for an execution ranging 2 to 4 weeks.

However, even with the best set-up and preparation, turnaround predictability isn’t really that predictable. Experts say that there are three characteristics that can influence the outcome: the size of the project, measured in direct field labor hours; the amount of capital work; and the interval or timetable.

So, what is it that keeps plant operators and maintenance managers up at night? It’s the labor concerns – not having the resources to find the right people they need when every minute counts (and costs).

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Case in point: researchers at Independent Project Analysis (APA) evaluated more than 400 maintenance turnarounds, they heard a common refrain: there aren’t  enough people to do good planning.

The Need for Skills & Availability

Unfortunately, turnaround projects are facing a skills shortage just like the entire energy industry.  Many turnaround veterans are retiring and not enough new labor is entering the market. This makes the need for external expertise higher than ever, creating ample opportunities for individuals with specialized skills.  Their biggest paint point for a manager: knowing what they need, but starving for the right people simply because none are available or aren’t the right fit for the job.

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Skilled labor is increasingly hard to find because of many turnaround veterans leaving the workforce versus a bleak replacement of young professionals. Deficiencies of up to 50% are expected in mechanical trades in particular, but there is also a lack of project managers and planners – positions that require skills that are hard to develop internally, thus creating a need for external expertise.

According to a survey from T.A. Cook, skilled staffing will most likely be the main factor to cause turnaround budgets to blunder. With the expectation that turnarounds will be more expensive in the future, keeping staffing costs in line is a big part of a clean start for an efficient, effective turnaround.

Developing a Possible Solution to the Problem

In times of need, it is especially difficult for managers to find the right kind of people at the right time to fill their turnaround project needs. We’re developing a ‘turnaround bench’ concept that will solve the turnaround woes. POCHere’s the idea:  the client has to define the specifics of each turnaround project and the resources they need; and those resources can be client-direct or contractors.  In turn, the “resources,” or turnaround specialists will then have the opportunity to review future project scheduling needs and sign-up for consideration on-demand. These candidates are 100% pre-qualified and are available when needed – based on their own admission of availability.

Please note that these images are ONLY a proof of concept and are not indicative or accurate of current or past turnaround projects.

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If any readers are interested in learning more about our bench concept and can see the value in it, let’s have a conversation.

After having read this, here are some questions for the readers to consider:

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  1. Do you think there is an optimal way to structure an organization to facilitate a good project-turnaround, or is each case different?
  2. What are some of the current trends in plant turnarounds that will shape the future of this field?
  3. What are some of the challenges to recognizing that turnarounds are repeatable events that can be optimally challenged through proper planning and preparation?

 

 

Chris Sutton has a sound foundation in the energy sector contracting from both Client and Contractor sides with specific expertise in building alliances to facilitate service capabilities. To contact Chris with any questions or comments, please send an email to Chris.S@clovergs.com. 

Posted in Uncategorized

Reversal of Fortune: Converting the Golden Pass LNG Terminal

Chris Sutton – Partner, Clover Global Solutions, LP

On the banks of the Sabine-Neches Waterway outside the small town of Sabine Pass, TX, is a monument of sorts to the vast and rapid changes that are part and parcel of today’s natural gas sector. But it’s not a statue, museum, or culturally significant structure.

It’s the Golden Pass LNG Terminal, now essentially dormant but originally built to bring Middle Eastern gas to energy-hungry America. The facility was completed in 2010 at a price tag of more than $1 billion. If that figure seems steep, consider that it’s just one-tenth of what two energy companies are prepared to spend to turn the terminal from an import to an export facility so they can meet the needs of energy users around the world.

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Sending LNG to Asia, Latin America, and Europe

Constructed by American companies ExxonMobil and ConocoPhillips and state-run Qatar Petroleum, the Golden Pass LNG was intended to hold and distribute liquid natural gas (LNG) produced from offshore oil fields in Qatar. However, it served that purpose for only two years. It’s been idle ever since, a victim, if you will, of the surge in domestic natural gas emanating from American shale developments, which has virtually eliminated our need for Qatari gas.

When it was fully operational, Golden Pass LNG employed more than 1,000 workers and utilized numerous local workers, suppliers, vendors and subcontractors. Now, the terminal has about 80 full-time employees.  But the new project promises to bring a significant economic boost to the area.

Golden Pass Products, as the expansion project will be known, will create the equivalent of 45,000 U.S. jobs during construction and 3,800 permanent jobs across the U.S. during operation, including 200 at the facility itself.

Currently, the Golden Pass LNG Terminal is capable of accommodating 15.6 million metric tons of liquefied natural gas per year, or approximately 2 billion cubic feet of natural gas per day. That translates to nearly three percent of current US production. The terminal’s immense dual berth ship docks occupy an area large enough to hold about 77 football fields. Sticking with the sports metaphors, Golden Pass LNG’s five storage tanks are each large enough to hold the volume of 62 Olympic-size swimming pools.  The tanks were constructed with 50 million pounds of steel and 5,000 valves.  The terminal is designed to handle a range of LNG ships — including the largest vessels in service today, which have a total capacity of up to 266,000 cubic meters of LNG.

The proposed Golden Pass Products project is expected to cost $10 billion, 70 percent financed by Qatar Petroleum. The conversion will include adding three liquefaction process trains, each with a nominal throughput (in layman’s terms, volume) of 5.2 metric tons per year, plus associated treatment, power, and utility systems, and interconnections to existing import facilities.

The terminal connects to the national LNG pipeline grid via the 69-mile-long Golden Pass Pipeline. The conversion project also proposes reversing some pipelines.

Although the converted facility would be intended primarily for exports, the proposed project would actually allow Golden Pass to become bi-directional, with the flexibility to import and export natural gas in response to market conditions. In other words, ExxonMobil and Qatar Petroleum are doing what they can to make sure their investment is never rendered obsolete again.

Catching Up to Houston Ship Channel

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The 63-mile Sabine-Neches Waterway where the Golden Pass LNG Terminal is located is one of only a few deepwater ports along the Gulf Coast suitable for LNG carriers.

Although it’s not as well known as the nearby Houston Ship Channel, the Sabine-Neches waterway is not only the nation’s fourth largest waterway, it actually tops the list for transiting bulk liquid cargo and crude oil imports. The waterway handles about 100 million tons of cargo each year (about half the load handled at the Houston Ship Channel) and supports about 288,000 regional jobs. Refineries along its shores produce a minimum of 13% of America’s daily fuel consumption, 60% of the nation’s commercial jet fuel, and most of the U.S. military jet fuel.

The Sabine Pass area is also home to the LNG terminal that kicked off the export frenzy – Cheniere’s Sabine Pass facility, which is the only fully permitted new liquefied natural gas export project. It’s located on 1,000-plus acres along the Sabine Pass River in Cameron Parish, LA, on the Texas-Louisiana border.

Back on the Texas side is Sunoco’s Nederland LNG terminal. This facility receives, stores, and distributes crude oil, feedstocks, lubricants, petrochemicals, and bunker oils (used for fueling ships and other marine vessels), and also blends lubricants.

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Environmental concerns cloud blue skies?

Although the economic benefits to the community seem clear, environmental concerns may be clouding the outlook: Sierra Club has filed a protest with the US Federal Energy Regulatory Commission (FERC) against the proposed project.

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The Sierra Club is concerned about both direct and indirect impacts, such as emission of air pollution, discharge of water pollution, disturbance of wetlands, impacts of increase shipping traffic and the effects these issues may have on endangered species.

The organization is also concerned about the increase in domestic natural gas production that will result from exports from the LNG facility as well as indirect impacts caused by combustion of LNG in end-use or importing markets.

Sierra Club concluded that the Golden Pass LNG project will not deliver benefits that outweigh these impacts. However, the FERC has found Sierra Club’s previous protests against LNG export terminal projects to be unpersuasive.

Keeping Qatar’s hand in the global LNG market

Worldwide, the market for natural gas is enormous and growing. Global energy demand is expected to be 35 percent higher in 2035 than it was just three decades earlier, and natural gas is projected to be the fastest growing fuel source to meet those needs. It’s believe that much of the demand will be met by supplies from North America, Australia, and East Africa, which together will put downward pressure on prices.

Right now, however, Qatar is hamstrung when it comes to taking advantage of the opportunity to meet rising needs, and geography is to blame. Although the nation sits atop the world’s third largest gas reserves and has been the world’s largest LNG exporter since 2006, it may be dethroned by Australia as early as 2017. The problem is that in order to keep the peace with neighboring Iran, with whom it shares its main offshore field, Qatar has self-imposed a gas production moratorium.

But by keeping its hand in the US natural gas market, Qatar can overcome that roadblock. The Golden Pass Products LNG Terminal would give the Qataris more gas to sell while maintaining their home-field moratorium. What’s more, they’d be able to sell American gas at the low American price.

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Although the project has received US Department of Energy authorization for exports to Free-Trade Agreement countries and is awaiting DOE approval to export to non-FTA nations, its formal application with the FERC for construction and operation has yet to be approved.

Endless Opportunity 

Whatever the future holds for the Golden Pass LNG terminal, the project has maintained a goal to commit to the Port Arthur, Sabine Pass and greater Southeast Texas areas to build a mutually beneficial LNG terminal. Golden Pass LNG is also driving the business economy in the Southeast Texas area in attracting new business and retain existing jobs, as well as generating tax revenue. With such promising economy and community, it may be hard to argue the advantages of bringing the Golden Pass back to life.

Some questions for the readers to consider:

  1. Is it possible that Golden Pass could one day exceed Houston’s Ship Channel success?
  2. Do you see any truth behind Seirra Club’s view on the impacts of LNG projects?
  3. What does LNG mean to America’s future?

Chris Sutton has a sound foundation in the energy sector contracting from both Client and Contractor sides with specific expertise in building alliances to facilitate service capabilities. To contact Chris with any questions or comments, please send an email to Chris.S@clovergs.com. 

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