Business interview: Alexander Temerko of OGN

From Russian coups to running one of the North East's top companies - the incredible journey of Alexander Temerko

Dan Aziz Alex Temerko of OGN Group
Alex Temerko of OGN Group

Alexander Temerko was not only a witness to some of the most momentous historical events of the last century, he was an important participant.

As an ardent reformer and supporter of the then Russian president Boris Yeltsin, he played a key part in negotiations with Soviet military chiefs during the attempted coup against Soviet leader Mikhail Gorbachev in 1991.

Gorbachev was being held prisoner in the Crimea by government members who were opposed to his reforms and who had staged a coup. Yeltsin and his supporters, including the 25-year-old Mr Temerko, defied the coup leaders who surrounded them in the Russian parliament with troops.

In the face of mass popular support for Yeltsin, the troops defected and the coup failed.

Mr Temerko describes his role in a matter-of-fact tone when we met in Newcastle’s Malmaison Hotel on the Quayside.

He has a slightly dishevelled and fatigued air and a pronounced Russian accent. He is measured, almost deadpan when recalling these dramatic events but, at other times, when talking about his beliefs he is impassioned, waving his arms and banging the table.

Was he scared during these events in 1991?

“It was not dramatic, it was a very exciting time for me. It was an extremely traumatic time for the communist party and for us it was a dream, a time of excitement and inspiration.

“I loved it. Maybe I was very brave or just very stupid. It was risky because the Russian police are extremely brutal. But probably God loves me because I am still here.”

He acted as the line of communication between Yeltsin’s team and the Soviet military, persuading them to stay neutral. This neutrality was to prove crucial in the coup’s failure, the collapse of the Soviet Union and Yeltsin’s later progression to the presidency of the new Russian Federation.

Temerko was then invited to join the Defence and Security committee as a member of the management board responsible for the formation of the new Russian armed forces.

In 1991, he became chairman of the Committee for Social Welfare of Military Personnel, an independent government agency that subsequently became part of the Defence Ministry.

In 1995 he assumed the leadership of Russkoe Oruzhie, a corporation that produced armaments for Russian military forces. He held this post for five years, then, in 2000, he joined Russia’s booming energy sector, taking a position as deputy chairman and member of the board of directors at Yukos Oil.

However, when the company’s head Mikhail Khodorkovsy fell foul of Vladimir Putin and was arrested and imprisoned on fraud charges, Mr Temerko took over. In 2004, however, under mounting pressure from the authorities, he was forced to move to the UK where he continued his opposition to the Russian government. In May 2005, after the expropriation of Yukos assets in favour of Rosneft by Putin’s administration, Mr Temerko left the company to focus on private business ventures.

Dan Aziz Alex Temerko of OGN Group
Alex Temerko of OGN Group

Falling out with Putin is not always healthy. One opponent, Alexander Litvinenko, was famously killed in London by being poisoned with radioactive polonium 210. Is Mr Temerko not afraid for his life?

“Probably there is a real threat because I continue to fight with Putin,” he says. “I continue to support the protest movement in Russia and I continue to support many friends of mine who continue fighting and I am one of the big supporters of the new Ukraine movement. But no, I am not afraid. I do not have any protection. God protects me.”

Russia’s loss has been the UK’s gain and the North East has most reason to be thankful that Mr Temerko has made his home in the country.

In 2008, he became director and deputy chairman of Newcastle-based OGN Group, a major provider of engineering, procurement and construction services to the offshore oil and gas and renewable energy industries.

OGN builds platforms for operations in the North Sea and is active in the development of wind farms, building foundations for offshore turbines.

The company was originally based in Lowestoft and one of his friends was a shareholder who invited him to take a stake in the company, run it and develop it.

He recalls: “We had a small yard and a small company in Lowestoft and we used this mostly for the renewables business. We understood that if you want to develop businesses and create massive platforms and provide engineering consultancy and procurement we needed a bigger yard, a huge yard.”

Five years ago they found what they wanted in Amec’s old Hadrian Yard, which was then being used as a huge car storage park. OGN bought it for £15m and spent another £15m refurbishing it, in addition to tens of millions of pounds on staff and systems to relaunch the business on the Tyne. Now the group employs over 1,000 people and over the summer it won its first export contract to provide equipment to Kvaerner for the Shell operated Nyhamma onshore gas plant project. The success story all began with a £200m turnkey contract for Apache to design and manufacture a jacket and topside for the Fortes Field.

“OGN under its former guise of SLP was for many years a subcontractor and fabricator for BP,” says Mr Temerko. “Apache accepted us as main contractor and building from an empty yard was a huge challenge because we needed to build a topside, jacket, and bridge, very serious and complicated drilling and piping and anti-fire system and system for control separation of oil and gas. It was a serious job and the challenge I think at that time to take the Apache contract was much more brave then joining the Yeltsin team.”

Since then, OGN has secured contracts with Talisman for an offshore jacket and with EnQuest for finishing and commissioning works on the Producer FPSO.

Now he has great ambitions for the company, developing new processes and techniques.

He says: “I think we can build much more and we can fulfil much more complicated parts of the platforms and be much more deeply involved in the North Sea on the high and top technical level. We definitely want to develop in the renewables sector, if the government will support the development of offshore renewables.”

He has great ambitions for the region and the industry. He wants to form a trade body for fabricators and to lobby government to specify British content in components in offshore installations.

Mr Temerko says: “We push government and parliament to focus on British content, because today government is not an effective supporter. In our industry we try to raise our voice and create a stronger voice.”

He also wants to see changes in the way in which contracts are written in the sector to give greater protection to subcontractors.

“We are a source of employment and we want to make these contracts equal and fair,” he says. “Probably this will be my next battle actually. It’s quite unfair and creates massive problems for constructors. For example, if a client says, okay we’re changing the contract and saying we want a new part of the job, and we say this is a variation and they must pay, they can refuse and we must complete this project and only after that can we go to court and only if we win will we be paid. These variations could be bigger than the original amount of the contract. We say that it’s definitely unfair, it has smashed and then destroyed all profit in the fabrication industry and we will fight to change that.”

Dan Aziz Alex Temerko of OGN Group
Alex Temerko of OGN Group

He believes this is a fight worth having for the North East.

He says: “If London is the financial capital and Aberdeen is the oil and gas capital, maybe Newcastle will be capital of fabrication. We have fantastic yards, our guys have experience, we have a very good tradition and a very good qualified technical university, in Newcastle University.”

Mr Temerko thinks he is making some headway with the politicians.

“We are very excited by our Prime Minister’s speech at the party conference because he said something quite important for us. He said, ‘New oil rigs - not made in China but built on the Tyne’. Now that is our target to implement. These are good words but now we will fight for the reality.”

It was no accident that Mr Temerko was present at this year’s Conservative Party conference. This passionate anti-communist has been a supporter and member of the party since 2012. He is a member of the party’s Leader Group and is the current vice-chairman of the Cities of London & Westminster Conservative Association, and he is an active contributor to other regional party associations.

He says: “The Conservative Party today helps business and construction business, not so effectively as me and my colleagues expected but it is still true. They spend time and they listen to us, they change the law and they change the regulation, and the regulation today is simpler and much more effective and today there is real partnership between business and government.”

He is anxious to make clear that he is not an unconditional supporter. He is, for example critical of the frequent changes of minister and policy in the Department of Energy and he has no sympathy with euroscepticism.

“I am a pro Europe person, my business depends on Europe and I see so many buildings built in North East and Newcastle built with European money,” Mr Temerko says. “I think it would be a disaster if we leave the European Union and inside the party I will fight for European interests. I believe we need people who can raise their voices for the European interest. I tried to be elected as European MP, but unfortunately I was too late for the application. I would also like to become a Member of Parliament representing a North East constituency.”

He is also a passionate believer in training and the opportunities it can bring to the North East.

He says: “Today we have a problem with apprenticeships. Why? Our welders and riggers are 55, 56 plus years, and we try to invite the younger generation but the younger generation don’t want to join us because they think, ‘Okay today, we have prosperity but maybe tomorrow all the contracts will be gone and rigs will be built in China or South Korea and so on’.

“We need to look at the long term interest, and if government and local authorities will support us and trade unions - we talk to trade unions very seriously - if they want to really help improve employment then they need to join us. They can be an additional help to put pressure on young people to join us and this industry. I think this is my mission and we try to do that because the North Sea is very good resource.

“The Norwegian [North Sea] sector is smaller than the British sector but they extracted two million barrels a day, but we today extract about one million barrels a day. If the government changed the regulation and implemented a more effective tax regulation, there would probably be massive interest in the North Sea from American companies and European companies.

“We know that because the government distributed so many licences. I’ve only been involved in this business for last three years and they’ve distributed a record number of licences for oil and gas development in North Sea. If you take all these licences, they’d probably equate to more than two million barrels per day. It’s huge, it’s definitely, definitely a very good prospect for North Sea and definitely a very good prospect for a company like OGN.”

Alex Temerko - Working day

“In the early morning I jump onto a train at Kings Cross and then by 10am I am here at the Malmaison Hotel.

“I have a morning meeting at the yard and I have a meeting with the chief executive and the financial director and then a meeting with some key personnel, some top managers, and then if there’s problem on the yard I deal with that.

“Then I might visit another business in the area.

“Usually I try to stay the night in Newcastle and have dinner with the senior management team or people with political and/or business interests in North East.

“I may meet with a local MP. I usually go to bed about midnight, I love sleep actually.

“Then morning next day I sit on the train and return to London.”

Questionnaire

What car do you drive?

Mercedes Benz, in a car I prefer reliability, comfort and safety

What’s your favourite restaurant?

I enjoy trying various new places. I experience life through cuisine.

Who or what makes you laugh?

If it is funny it can make me laugh

What’s your favourite book?

The Bible

What was the last album you bought?

I buy separate songs. Haven’t bought an album in ages

What’s your ideal job, other than the one you’ve got?

City mayor

If you had a talking parrot, what’s the first thing you’d teach it to say?

I wouldn’t have the time to teach it anything

What’s your greatest fear?

To be a witness of a large scale war

What’s the best piece of business advice you have ever received?

To think globally – not to engage in self-deception and remember that a contract is not only an agreement between the partners but also a reason for a trail.

And the worst?

To take a decision based on impulses

What newspapers do you read, other than The Journal?

I try to skim through all major national newspapers

How much was your first pay packet and what was it for?

I cannot remember

How do you keep fit?

I am keeping fit through optimism, strong appetite and good night sleep

What’s your most irritating habit?

Have not noticed one

What’s your biggest extravagance?

Jumping from a plane with a parachute

Which historical or fictional character do you most identify with or admire?

I cannot identify myself with anyone, but I admire Winston Churchill and Alexander II of Russia

Which four famous people would you most like to dine with?

In this world and in this life I would like, if it is possible to dine only with the living. Therefore Sir John Hall, Roman Abramovich, Sir Alex Ferguson, Arsene Wenger. And I would like just to listen to them in silence. And feel the emotions.

How would you most like to be remembered?

I would let people to have their own image of myself

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