GPB Global Resources B.V is a Company for the Current Moment
GPB Global Resources B.V., based in Amsterdam, is one of a new breed of innovative, sophisticated mineral resource companies that are reinvigorating the resource extraction industry. Founded by Boris Ivanov, a former Soviet diplomat who rose through the ranks of the energy sector after the fall of communism, it operates throughout the world — including Africa, South America, and the Middle East — and employs over 4000 individuals.
It was not so long ago that there were credible concerns that the global economy was about to face an energy bottleneck as the world’s remaining easily accessed gas and oil reserves dwindled. The per-barrel price of oil reached over $140. Falling under the concept of peak oil, the fear was that more-and-more expensive extraction costs would drive up the price of oil to the point that it would be a significant drag on the modern economy.
As is obvious, these concerns have not become a reality. Today, oil is selling for under $60 per barrel. Like the Malthusian theory of population, which was overcome by technological development that increased agricultural efficiency, these fears have not materialized. The energy market is full of complexities, but one clear reason for falling prices is that the oil and gas sector is adopting new technologies and strategies for accessing reserves — at a low enough cost — to ensure stable energy prices.
GPB Global Resources B.V. is one company that has made this possible. It provides cutting-edge technology to areas that do not have the in-country assets to bring online the technological innovation now possible. Coordinating the services of a wide range of linked companies, GPB Global acts to acquire and manage both oil and gas development projects, provide consulting services for companies engaged in developing these natural resources, spearhead infrastructure development in emerging markets.
As its founder, Boris Ivanov sums up when describing the company’s ethos, “I guess, we can sum it up in two phrases: ‘We dare, where others do not’ and ‘can do.’”
The Founder of GPB GR
Much of GPB’s adaptability and nuanced approach to exploration and production flows from its founder, Boris Ivanov. Born and raised in the Soviet Union, he was in his first professional incarnation a member of its diplomatic corps. Eventually, he took his skillset and adapted it to the market realities of the new Russia.
His first foray into the private sector was becoming Vice President of Oil and Gas Projects for Unibest Bank in Moscow in the early 1990’s. The contacts he had made while assigned to the Soviet embassy in Washington, DC — and his understanding of western economics — made him a perfect go-between as international investment flowed into the heart of the former Soviet Union.
His next position was serving as First Deputy Director General for Strategy for the Russian Aircraft Corporation MiG (RSK MiG), the free market successor to the Soviet maker of not only the MiG fighter, but also a range of passenger planes. This position took him all over the world as a representative of the company — and expanded Ivanov’s business connections in many developing nations.
This understanding of a wide range of regions where oil, gas, and other mineral deposits are located eventually led him back to the extraction industry when he was hired to advise the chairman of Gazprombank OJSC (the financing arm of Gazprom, the Russian natural gas concern)and appointed Director General of GAZPROM Exploration & Production (E&P) International, a Gazprom affiliate registered in the Netherlands. His role there was to diversify the company’s holdings outside of Russia, which put him at the forefront of the natural resource industry.
In 2011 Ivanov left Gazprom and founded GPB Global Resources B.V., where he took over as Managing Director. A 2016 financial restructuring resulted in him becoming its major shareholder.
Ivanov has built a company that reflects his experience and outlook.
“Our principal concentration is the people. We try to keep and take care of the people we have hired over the years, as in our business they are the principal resource. So, I guess in a way, you can speak of an ethos and culture of ‘people-orientedness,’” Ivanov states about his management priorities. “In 10 years, we have looked at over 200 projects, undertook 11 of them and had two major successes — this is a very high success rate for a mineral resources venture.”
The company, operating under the umbrella of Dutch laws that incorporate dozens of bilateral treaties the country has in place with other nation-states, oversees a host of projects globally.
“I like people who hit the ground running. I set objectives and leave them to figure out the details,” is how Ivanov sums up his leadership style. “I also make sure I make principal decisions, thus providing a steady direction for the business. After all, it is my business!”
The Broad Portfolio of GPB GR
That business of Ivanov’s is now one that acts as both a clearinghouse and an initiator. It provides dozens of other companies — and through them nations — with the technological and financial resources necessary to discover and unearth carbohydrates. It also pushes forward new opportunities to extract these building blocks of the modern economy — when it is safe and wise to do so.
GPB Global brings deep experience and resources in the petroleum industry to bear. This includes a highly developed geological database that supports analysis via sophisticated geo-modelling (leading to more efficient and thorough decision-making). In addition, the company’s financial experience and acumen — along with its ongoing relationship with regulatory agencies worldwide — often makes it a key player in the developing markets.
The stakeholders GPB GR serves are wide-ranging — as is its geographical reach.
“Governments and government agencies of the countries we operate in, local communities adjacent to our project-sites, partners, and shareholders,” are part of the engagement network for GPB GR, according to Ivanov. “New business targets include prospective licenses in deposits for which we never stop looking. We are engaged in several African countries and are also looking at opportunities for more oil in South America.”
The company’s functions break down into four broad categories.
Consulting and Engineering Services, project operatorship
Finding potential sources of hydrocarbons is the first step to bringing these crucial resources to market. GPB GR provides preliminary consulting — and subsequent exploration and geophysical surveys — that act as the long-term blueprint for any successful extraction operation.
This work includes taking the preliminary data that clients have developed and then bringing to bear the cutting-edge analytical tools — which can include additional data collection — that GPB GR specializes in. All current planning is also reviewed by GPB GR so that its institutional knowledge can be incorporated moving forward. This includes gauging the long-term outlook for the assets in question and providing a forecast of the likely potential of the deposits being developed. GPB GR has the people and the know how to fully operate an oil & gas project.
Consulting and Accounting Services
In addition to the resources regarding geologic realities that GPB GR brings to the table, the company also provides the same kind of support with regards to the capital-intensive nature of the resource-extraction industry. As with its geophysical consulting services, GPB GR brings a tech-infused capacity to provide clients with financial modeling that gauges the economic feasibility of any project. Budgeting, analysis of financing requirements and realities, and tax consultation are all aspects of building a solid financial infrastructure moving forward.
A large measure of GPB GR’s internal development has been creating a suite of IT services that can be quickly “plugged-in” by a client, saving crucial time and money as an efficient extraction operation is shaped. These capabilities include system set-up and monitoring, real time well-telemetry, ongoing technical support, and corporate services like communications infrastructure and data storage.
Part of this process for GPB GR has been joining other players in the petrochemical sector to adopt advanced digital solutions to their business models. Though playing catch-up when compared to some other sectors, digitalization is now transforming the extraction industry and GPB Global has been a leader in this process.
These new tools allow GPB Global to better handle the wide range of challenges that the mineral extraction industry poses.
“That creates massive pressure on logistics, dealing in unique local currencies. A virtual lack of any kind of infrastructure for business, compared to the developed world — things that people do not think a second about in the developed world, like making phone calls, delivering goods and services, or sending money somewhere, or even getting an internet connection — can be a massive, sometimes insurmountable logistical challenge,” Ivanov explains about the core of GPB GR’s services. “Access to capital and reliable partners with whom one could share the risks is also limited or restricted. There are security threats and political stability challenges. No doubt there are quite a few challenges.”
Africa as a Major Area of Operations
Although GPB GR is active in much of the world, it has been particularly active in Africa. The company has been able to bring contemporary tech and financing options to areas in need of such tools.
These areas represent long-term development opportunities that require underlying physical and financial structures to succeed. GPB GR is helping to build opportunity by committing to work closely with local officials and stakeholders.
“Investing in local infrastructure and creating an appealing fiscal and regulatory regime that aligns with the long-term interests of private companies are not overnight ventures,” Ivanov noted to African Business in November of 2019. “This ability to execute across the entire value chain requires good governance and will remain the biggest challenge to the development of Africa’s energy market.”
Over the last decade GPB GR’s business initiatives covered a wide range of countries in Africa, including Algeria, Chad, Congo, Cote d’Ivoire, Eritrea, Ethiopia, Mali, Mozambique, Namibia, Niger, Nigeria, Swaziland, and Zambia.
“These involve all kinds of resources from oil and natural gas to uranium,. Some of them — for example, our uranium project in Niger— have gone through several seasons of exploration and our specialists are now working to confirm the discovered reserves,” Ivanov explained to Buziness Africa in 2015. “Others, like the recently signed Petroleum Production Sharing Agreement with Ethiopia, are at their launching phase and we look forward to 3 to 5 years of work.”
The background of GPB GR’s founder in the at times “under construction” business climate that was the reality of post-Soviet Russia gives the company some innate advantages in Africa.
“Competition is a natural state of business. Russian companies historically have profound experience in infrastructure, but also, if we talk about Africa, face the reality of history, when there was a gap in the Russian engagement with African states following the collapse of the U.S.S.R.,” Ivanov noted to Buziness Africa. “In many cases, Russians have to retrace their steps back to the continent.”
Another factor when operating in the African marketplace is that the governance structure differences between African nations can be profound. Unlike, for example, the European Economic Community — with its consistent legal structure spanning over two dozen nations — African governments are highly diverse, which makes GPB GR’s experience another strength.
“The field we operate in is very complex. We are more experienced than most companies in Africa — simply because we’ve been around quite a while by now. We are faster at execution than many, because we made enough mistakes to learn from them,” Ivanov explains. “We build true partnerships sharing risk and reward with our local partners and governments, if local law favors or requires that. We have a network of contacts that is not easy to match, and we have reviewed over 200 projects in 40-plus countries — we know the lay of the land so to speak.”
For GPB GR, operating in Africa also means supporting efforts to maintain that land and mitigate the ramifications of extracting and using carbon-based commodities. The company has actively supported the effort to plant four billion indigenous trees in Ethiopia, the “Green Legacy Initiative” of Prime Minister Abiy Ahmed. The company sponsored the planting of trees in two communities as part of the effort that saw seedlings rooted in over 1,000 jurisdictions on July 29, 2019.
The Path Forward
The foreseeable future sees both the continuing extraction of traditional sources of energy — oil and gas — and the ongoing expansion of access to the raw materials needed for renewable energy to continue its rise. These facts put GPB GR in a strong position moving forward.
“In old sectors of the economy, like oil exploration and production more and more countries borrow best practices in terms of production sharing agreements and national legislation on mining and thus open licensing areas and resources not available before,” Ivanov muses. “The mineral extraction industry will continue to see increased demand for rare earth minerals such as lithium, which is needed to manufacture battery storage systems — a key component in the booming EV market. Exploration for sources of these rare earth minerals will continue and has increased markedly over the last decade.”
The business model and maturation of GPB GR has left it well positioned to continue growing as the realities of the energy industry — in the era of climate change — become starker.
“The mineral resources industry still has plenty of opportunities for future global growth. Some visionaries already discuss and even make investments in ventures that would send the extraction industry into space, where endless future reserves of energy and materials for humanity await in the solar system’s asteroid belt and other planets,” Ivanov sums up. “This megatrend impacts prices and affects long-term investment plans. It also puts greater emphasis on R&D, technology, and innovation investment. We are already starting to witness, and in the future are likely to see more and more investment funds placing emphasis on improving energy sources that are not fossil fuels. Some have speculated that this will cause less technological advancement in the oil and gas industry as those specialists currently at the cutting-edge of energy industry technology development look elsewhere.”
It is clear that GPB Global is ready for that future.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.