Dubai: The extreme temperatures and shallow waters of the Caspian Sea combine to create a harsh operating environment.

However, Kazakhstan's Kashagan oilfield is providing a bountiful source of revenue for Renaissance Services, a small but ambitious Omani offshore services company.

Renaissance is servicing the offshore Kashagan development - one of the world's largest hydrocarbon projects - with almost 50 of its specialised support vessels and barges. Lucrative contracts in Kazakhstan and nearby Azerbaijan are allowing Renaissance to breathe easier than many Gulf companies amid the fierce economic headwinds.

The company's main business remains in Oman, where it also has a large engineering division which repairs and manufactures energy industry components, among other businesses.

But Renaissance hopes the Caspian will in time prove as profitable a market for offshore service providers as the Mexican Gulf and the North Sea in Europe. Marine services contribute only a third of Renaissance's revenue but more than half its profits.

The energy sector has been hit hard by the slump in hydrocarbon prices but analysts say that the nature of Renaissance's business will largely shield it from the economic downturn and volatile energy prices.

Stephen Thomas, chief executive of the company, says: "The markets we work have more than 50 per cent of the world's hydrocarbon reserves and even if global energy demand is weak, there are still key projects going ahead in this region, and servicing on existing installations that needs to be done."

Crucially, about 70 per cent of Renaissance's lucrative offshore service contracts, particularly in the Caspian, are long-term agreements with leading national and international oil companies, such as BP, Shell, Petroleum Development Oman and Halliburton.

"The Kashagan project is going to be producing oil for 50 years so whatever the oil markets are doing now, the work will progress," says Ian Thom, an analyst at Wood Mackenzie, oil consultants.

This will ensure the main business remains robust in spite of the financial crisis, analysts say.

Renaissance admits demand for its engineering business has weakened somewhat, as some Middle East energy-related projects are cancelled, delayed or scaled back, but says its order book is still full for the next year.

"Wherever oil prices are, [companies] still need maintenance and logistical services at the offshore oilfields," points out Fadi Al Said, head of equities at ING Investment Management in the Middle East.

This week, Renaissance reported a 16.2 per cent rise in first-quarter revenue to OR58 million (Dh554.1 million).

Excluding capital gains from the sale of its technology business last year, net profit climbed 26 per cent to OR4.8 million in the first three months of the year. Most of the company's shares are listed on the Muscat stock exchange while 15 per cent are held by the local Tawoos Group.

The shares have more than halved over the past 12 months, inline with the Muscat Stock Exchange, but Thomas says this is due to misconceptions: "Our share price has tanked because of a perception that we were exposed to the oil and gas business, and because we were capital-intensive, so would struggle in this reality".

Neither is true, he says. Renaissance's long-term contracts protect it against earnings oil-price volatility, and even the short-term contracts often last several years and are largely in the Middle East, where day rates have been resilient, says Thomas.

Renaissance is set for the delivery of seven new vessels this year, and the company plans to invest more than $200 million in 2009, but the company says local banks are amenable thanks to the security of its long-term contracts.

"The credit crunch is costing us a bit more, but not punitively so," says Thomas. He estimates the current composite interest rate of Renaissance's debt at about 6-7 per cent.

Nor is the Caspian Sea the only area of potential growth for Renaissance. Though Saudi Arabia is reviewing many of its projects in the light of the global slump in demand for energy, the company expects the world's largest oil producer to continue to invest in its offshore industry.

"Saudi Arabia has pent-up demand for about 150 support vessels over the next four years for its offshore investment plans," says Thomas.

"We will not win them all, but we are a serious tender for most of them."

Renaissance's subsidiary, Topaz Energy and Marine, has therefore formed a Saudi joint venture with Gentas - itself a co-operative enterprise between the Al Shoaibi Group and Saudi Trading & Research Company - to help capture some of the resulting business.