SBO CEO Klaus Mader: "With this technology, we could generate energy anywhere in the world"

Klaus Mader, CEO of SBO, navigates the complex landscape of the global energy market, where geopolitical tensions and fluctuating oil prices present significant challenges. "It's not just about the oil price," Mader stated, emphasizing that while the Middle East is a key region for SBO with three locations in the UAE and Saudi Arabia, recent attacks there were unprecedented for his employees, who have never experienced war.

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It is not just about the oil price. We are strongly represented in the USA and Asia, so there are always many topics in the morning. But of course, after getting up, I am interested in how my company is doing and what's new on the market. Recently, the focus has been on the Middle East, which is clear in the oil and gas industry. We have three locations in the region itself, two in the Emirates, one in Saudi Arabia. When the attacks on the Emirates came, it was an absolute novelty for our people. These are people who have never experienced a war. We are talking about the Switzerland of the Gulf region. In the first few days, it was primarily about the safety of employees. Afterwards, we dealt with the impact on our business.

The immediate concern following the attacks was employee safety. Subsequently, the company assessed the business impact. Although the oil price surged above $120 per barrel after the conflict began, Mader clarified that SBO's revenue isn't tied to retail prices. "We earn our money when companies drill for oil and gas," he explained. Supply chain disruptions, such as the inability to deliver products from Austria or the US to regions where they are needed, hinder operations. Mader expressed a preference for a stable oil price between $70 and $90 per barrel, a range where projects are profitable and demand remains steady, a "sweet spot" the industry has rarely seen in recent years.

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We earn our money when companies drill for oil and gas. And this becomes more difficult when we cannot deliver products that we produce, for example, in Austria or the USA, to the regions where they are needed. The Iran conflict is slowing us down. We wish for the oil price to be sustainably between 70 and 90 dollars. Then our industry runs well. Then projects are profitable, and demand remains stable. We have not often been in this sweet spot in recent years.

Mader acknowledged that volatility is inherent to the business. SBO's revenue doubled from 300 million euros in 2021 to 600 million euros in 2023, a period of high customer demand. However, upon taking over as CEO on January 1, 2024, Mader recognized it was the peak of the cycle and adaptation would be necessary. "The curve was going to go down, and we would have to adjust again, as we have so often successfully done," he recalled. Indeed, an oversupply of oil and shifting US tariffs created significant uncertainty. Mader's primary goal is to make SBO more independent from these cycles.

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This volatility is part of our business. In 2021, after the pandemic, we had 300 million euros in revenue, and in 2023, then 600 million. Our major customers showered us with orders. When I took over SBO on January 1, 2024, we all knew: That was the peak of the cycle, the curve would go down, and we would have to adjust again, as we have so often successfully done. Exactly that has happened. There was too much oil on the market, and at the same time, the constantly changing US tariffs brought enormous uncertainty. My goal is to make SBO more independent from these cycles.

Regarding the potential for market oversupply after initial US-Iran rapprochement, Mader pointed to the recent conflict as the largest supply shock the world has ever seen. He noted that the feared chaos did not materialize due to decreased demand, high refinery activity, and the release of strategic reserves. Mader anticipates oil prices will remain above pre-conflict levels long-term as reserves are replenished. He also commented on the energy transition, stating, "A complete stop at zero percent oil and gas will simply not work out."

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A complete stop at zero percent oil and gas will simply not work out.