This past year, Rowan Companies Inc. divested its manufacturing and land drilling operations to continue to focus on building its offshore fleet by adding high-spec rigs. Assisting the company’s efforts to diversify its fleet toward key global markets is Thomas Steiner, project manager in operations. He works directly for Rowan’s chief operating officer, Thomas Burke, on new country entries, operational and process improvements and a variety of ad hoc tasks, from customer presentations to budgeting and economic analysis.

“It’s a mix of consulting and finance and leveraging my own operational experience and that of our seasoned people,” he says.

A native of Rochester, Michigan, Steiner graduated from the University of Michigan with a degree in industrial engineering. He became hooked on the oil and gas industry during internships with Schlumberger in West Texas, where he gained experience at the rig level, and with ExxonMobil in Houston, where he analyzed subsea strategies.

After graduation, he took a two-year position as a management consultant with McKinsey & Co. in Houston. There, he worked on projects involving strategy and finance for independents. On one team, he helped devise a divestment strategy for $6 billion in upstream assets for a large independent seeking to reinvest in unconventional natural gas plays. A second project involved designing a business plan for an upstream gas-focused startup led by the ex-CEO of a major corporation, to focus on assets in the Marcellus shale.

After his stint with McKinsey, he had an “entrepreneurial itch to scratch,” so he joined a former colleague in a subscription-based startup providing benchmarking, internal research and roundtables for chief procurement officers in the midstream pipeline sector. He next joined another former McKinsey associate in the startup of a commodities-focused consulting firm, Prestige Economics. There he did work for Burke, who was then president and chief executive of LeTourneau Technologies Inc., Rowan’s manufacturing subsidiary. When it was spun off, Burke asked Steiner to consult for Rowan’s maintenance department. In September 2011, Steiner joined the company.

Steiner soon will begin a master’s in petroleum engineering program, while continuing to work at Rowan. In a recent interview, he discussed the offshore driller’s strategy, and market opportunities in general.

Investor How are you involved in Rowan’s strategy shift?

Thomas Steiner

Thomas Steiner

Steiner We continue to emphasize the marketing and contracting of our fleet internationally, and I’ve been heavily involved in managing the process to enter countries such as Egypt and Indonesia, where we are moving rigs. Seven years ago, the vast majority of our rigs were in the Gulf of Mexico. As of March 2012, we have 11 in the Middle East, 10 in the Gulf, six in the North Sea and two each in Southeast Asia and Trinidad. We’re driving most of our revenues from the North Sea, followed by the Middle East and the Gulf. Even though production is declining in the North Sea, we think drilling activity will be robust due to workover and abandonment activity. By diversifying, we’re exposed to a wider variety of geologies and customers, mitigating risks and volatility in revenues and earnings.

Investor What are the trends in offshore drilling?

Steiner The shift to managed pressure drilling (MPD), underbalanced drilling (UBD), and dual gradient drilling is becoming the norm rather than the exception. Offshore wells are becoming more complex and expensive, and companies are embracing these new technologies to safely and economically deliver wells without compromising well control.

The trend to higher-pressure, higher-temperature wells is driving demand for newer, higher-spec rigs. We’re focused on having one of the youngest and highest-spec fleets in the business. We’re divesting lower-spec jackups, and over the past four years, Rowan delivered 11 new high-spec jackups. And we have three ultra-deepwater drillships under construction.

Investor Beyond the offshore, what opportunities do you see generally?

Steiner The limited availability of qualified people, from the rig floor to senior management, will be a constraint for some time. It’s not that there aren’t enough engineers; there aren’t enough who have been seasoned in the industry. You can’t just take an engineer from the manufacturing space in the Midwest and drop the person into E&P. It takes time.

Another significant opportunity is figuring out good solutions for wastewater management for unconventional drilling frac operations. Whichever operating or service company can develop something distinct, that’s a major advantage, not just because of lower cost, but also in terms of the right to drill, which is an intangible thing here in the U.S.

Investor What’s a long-term goal for you?

Steiner One of the aspects I like best about my current work is learning how the offshore drilling process works and expanding my knowledge of content. I’d like to continue focusing on the upstream, perhaps leading a company in the upstream space, or my own company, some day. That could take the form of raising money to buy offshore blocks or picking up acreage domestically for development.

Right now I’m focused on continuing to develop technical and operational knowledge as the foundation to achieve success long term.

—Susan Klann

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