Afloat atop a sea of change. The normally staid workboat sector is suddenly in the midst of a shake-up
Upstream, March 9-15
By Robert Smith
The workboat segment of the offshore industry has not historically been a hotbed of change, either technologically or strategically. However, there are developments in the sector that suggest something of a makeover is in progress.
Since the forward wheelhouse design and aluminum crewboat were introduced by Tidewater in the 1950s and 1960s, offshore support vessels and the rest of the offshore flotilla have looked and performed pretty much the same as they do now, give or take a bow thruster here and a bigger winch there.
Nor has the basic interface between vessel operator and customer changed. The Gulf of Mexico, despite the best efforts of the operators, remains after half a century largely a spot or hail-a-taxi workboat market, characterised by short-term contracts and intense price volatility. Overseas markets that developed subsequently are somewhat more orderly.
A major and growing problem of workboat operators is the shortage of qualified crews, especially experienced captains. Another concern is a concerted union organising effort aimed at operators across the Gulf Coast but primarily in south Louisiana. To ensure it stays competitive and ahead of union pressure, one company is reviewing wages every six months. "We anticipate an increase of 2% to 4% at the April review and possibly another in the autumn," says Tidewater chief executive Bill O'Malley. "Our cumulative wage increases this year could be as much as 8%."
Tidewater controls about a third of the US Gulf's workboat market while five other companies, led by Trico Marine and Edison Chouest Offshore, control another third. About two dozen companies share the balance of the market, with none having more that 5%. Tidewater's share, once near 40%, has slipped over the last decade due largely to the company's reluctance to make an early commitment to the deep-water market, leaving a niche open to Chouest and other operators.
However, there are signs that a more diverse and dynamic workboat segment may be in the making. In the deep-water segment, Tidewater has decided to flex its considerable muscle, initally in a game of catch-up on deep-water assets and in the longer term in a major rebuilding of the entire ageing Tidewater fleet. It began last year with the acquisition of eight vessels from Sanko and an additional five large vessels, all of which could qualify as deep-water assets. O'Malley says that with these acquisitions, Tidewater has effectively bought out the worldwide speculative deep-water newbuild inventory.
Additionally, the company has its own deep-water newbuild programme in high gear, placing orders for five anchor-handling tug supply (AHTS) vessels with Far Eastern yards along with orders for three deep-water platform supply vessels. Four more big PSVs are to be built in the company's own Quality Shipyard in Houma, Louisiana. The 20 acquisitions and newbuilds represent an investment in excess of $325 million.
"That will be close to the end of Tidewater's high-end purchases and construction," says O'Malley. Thereafter, he says, the company will focus on replacing its 180-foot vessels, likely with 200-foot to 220-foot boats, judiciously scrapping old iron as the replacements are delivered. The company's fleet presently totals about 500 vessels worldwide.
Meanwhile, family-owned Chouest, which garnered a lot of sometimes unfavourable attention from competitors and the financial community when it launched an aggressive newbuilding programme and gained a beachhead in the deep-water market several years ago, is at it again.
To augment its approximately 50-vessel fleet, the company has booked construction of six more 260 foot deep-water supply vessels, a 347-foot anchor handler -- said to be the industry's largest -- and conversion of a supply vessel to 320 feet, again thought to be an industry record. Trico Marine's 94-vessel fleet, including 18 deep-water platform supply vessels and anchor handlers, is deployed in all four of the world's premier offshore markets -- the US Gulf, the North Sea, west Africa and Brazil. Trico is the only operator to have such a presence.
In the brown-water sector a major change is the entry of Chouest and Seacor into the inshore and inland waterways business through acquisitions of existing companies. In the fallout from the Transocean Sedco Forex/R&B Falcon meger, the new company will transfer to a joint venture with Gary and Laney Chouest holding a 75% interest in Falcon's brown-water assets, consisting of 202 inland tugs, crewboats and barges plus 10 crewboats under construction. The move is required to meet US maritime laws for the merger of the drilling contractors.
Called Delta Towing, the joint venture will be independent of Edison Chouest Offshore although the Chouests see it as an extension of service capabilities for their company. At the end of last year, Seacor acquired SCF, which owns and operates inland river barges. It was owned by several Seacor directors. SCF's brown-water inventory includes 280 barges it owns or manages plus a commitment to build an additional 60 barges. Seacor's offshore fleet totals 300 vessels.
Two years ago, Hvide Marine, parent of Seabulk Offshore, was in bankruptcy, a victim of over-expansion in several market segments as its bread-and-butter offshore business vanished. As the company works its way back to fiscal health, directors have decided to change the name to Seabulk International in recognition that the offshore segment provides nearly half of its revenues. Seabulk operates 24 supply boats and 30 crewboats in the US Gulf, 59 anchor-handling tugs, tug supply vessels and 30 crew/utility vessels in overseas venues, making it one of the major workboat operators in the world.
Under so-called Fresh Start Accounting adopted at the end of 1999, the company had operating income for 2000 of $25.4 million versus an operating loss of $9.5 million a year earlier. Because they operate under the corporate banners of much larger drilling contractors, two workboat companies are often overlooked.
Sea Mar, a unit of Nabors Industries, operates 30 OSVs in the US Gulf, the 10 most recent additions representing an investment of about $100 million. While not specifically styled deep-water, they are proving capable of commanding as much as $9500 per day in the frenzied natural gas drilling environment that prevails on the shelf.
Ensco, the marine transportation arm of Ensco International drilling contractor, has 28 supply vessels in the US Gulf that also command high-end dayrates upto $8900. The company has been active in upgrading its vessels and expects to have 10 of them in drydock for periods of 45 days during 2001. |
