The View From OTC: State of the Industry

Something for everyone: technology, green marine, politics & oil…

Houston, TX: In a former life – long ago and far away – I lived and worked in Houston. In fact, I spent more than 14 years here; first as a base from which I went to sea for almost six years, most of which was spent on oil and chemical tankers. Later, I toiled as a marine transportation consultant, principally servicing that same market segment and serving as a field representative and then as a manager. Curiously, during all of that time, I never once attended an OTC conference, despite living less than ten minutes from the venue. This week, however, I attended my first Offshore Technology Conference (OTC). What I saw, heard and experienced was a real eye-opener.

I would be the first person to admit that the offshore exploration market segment is not necessarily my strong suit. That having been said, it was clear to me that the parallels between this unique and fascinating end of the supply chain and the traditional marine transportation and transportation logistic sectors are many and robust in nature. The two markets are inextricably linked by any number of variables and in many cases – the same vendors and service sectors. Hence, what happens here is important to those who toil in the downstream transportation sectors. Here's why:

As I trudged the enormous floor show this week (unsuccessfully trying to keep up with Brett Keil, our SVP of Sales), I saw many of the same faces and LOGOs that you would expect to see and find at the other industry shows such as Workboat, CMA, Intertanko and others. Beyond this, and more importantly, I've come to realize that what happens in the oil patch will directly impact the bottom lines of the same companies; albeit in different cost centers and/or corporate divisions. And like the domino effect of a national sub-prime mortgage crisis on the general economy, success in the increasingly important area of deepwater exploration will, to a certain extent, define the health of other maritime related efforts.

Strikingly, the same challenges facing the transportation sectors are now manifesting themselves in similar proportions in the oil fields. This week, I was told of widespread mariner shortages in many disciplines. And where personnel are available, many may not be up to the task of mastering the new, cutting-edge technologies now being employed on a regular basis. The lack of dynamic positioning skills was an especially worrisome metric in a business where this aspect of offshore construction, support and supply operations is rapidly becoming a bread-and-butter aspect of doing business. The demographic of the brown water mariner has had to change with the times and it is a fact that the shortage of trained offshore workers may now be more acute than that which is being experienced even in the LNG transportation business.

Operating in a "green" mode was predictably a hot topic this week in the Bayou City. The same regulatory issues facing local port authorities and steamship lines have arrived offshore, as well. And the traditional players – engine manufacturers, service outfits and parts vendors – were here in strength. The message from many was clear: "We're clean, we're green and we're here to help you achieve that same goal." More than a few exhibitors admitted, off the record, that there are many forms of "green." Rough translation: there is money to be made in this effort – whatever your motivation to join in.

Finally, and as a former blue water mariner, I had to be tremendously impressed with the breadth and scope of the technology on display here. At one time, the offshore and brown water sectors of this industry could arguably be described as the low-tech, redheaded stepchild of the marine sector. No more. The typical wheelhouse of a new generation of offshore support vessels is remarkable in this regard. More than a few months ago, I had the opportunity to visit the bridge of the Harvey Discovery, Harvey Gulf's formidable, DP2 capable, new addition to their fleet. I was, frankly, afraid to touch anything. The full array of equipment on display this week in Houston was ample notice to all that these trends will continue.

Despite all the good news, there is ample reason for concern. The U.S. Congress and the executive branch – incumbents or probable incoming elected officials alike – show little inclination to open up the proven resources that we all know exist in U.S. waters. The sizable international contingent attending in Houston, in contrast, by and large face no such restrictions overseas. This is a time where the available technology will easily produce vast energy quantities while leaving an environmental footprint that will be less than 10 percent of that seen in the 1970's. At the same time, American energy policies (or lack thereof) are threatening to leave the domestic sector of this impressive industry at the altar.

I spent a good part of the past week visiting with and interviewing the personnel and executives who make up the wide expanse of talent in the offshore exploration sector. I'm not particularly concerned about their ability to overcome any of the formidable challenges facing their particular industries. We've touched upon only a few of these issues, of course, but you (I hope) see my point. In the end, regulatory and operational obstacles are minor speed bumps on the road to actually getting the opportunity to deploy these many remarkable technologies. Having said all of that, if the current political climate does not make you uneasy about the future of domestic offshore exploration, then you are clearly not paying attention.

There was a bullish atmosphere this week in Houston. And although I'm no expert on turnout for these sort of things, I'm pretty sure that I was staying in the very last motel room available within fifteen miles of the old Astrodome complex and the new Reliant Center. Consistent with the optimistic outlook that permeated the exhibit Halls, press conferences and technical discussions, there were many stories to tell. Look to the pages of MarEx – online and in print – to be a primary conduit for that message in the months to come.

In this e-newsletter, you can read about Aberdeen-based Triton Group Holdings, an international group of businesses offering a range of control system-based products and complementary services. Download the .PDF file from the "Featured Archive" article section. And, stay tuned for more. – MarEx.

Joseph Keefe is the Managing Editor of THE MARITIME EXECUTIVE. He can be reached with comments on this or any other article in this e-newsletter or our print edtions at jkeefe@maritime-executive.com.



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