Harvey Gulf Flags Out Two More American OSVs

In a sign of the shifting global OSV market, U.S. offshore operator Harvey Gulf is taking some of its laid-up American vessels and reflagging them for work in Mexico. 

American-made tonnage usually commands a premium in the U.S. domestic market, as it is Jones Act-qualified for domestic trade. If flagged out and crewed with non-American mariners, the vessel no longer has this qualification. However, the vessels in question - Harvey Falcon and Harvey Sea Hawk - have been laid up due to the downturn in the American offshore sector, and have not been generating revenue. It is not a new development: in years past, many of Harvey Gulf's American competitors have made similar reflagging moves in the Latin American market. However, it is new for Harvey Gulf, and provides a way for the firm to diversify beyond its home market.

The Harvey Falcon and Harvey Sea Hawk will join the OSVs Harvey Leader and Harvey Legend along with the FSV Harvey Clipper to operate in Mexico. They will likely not be the last vessels that Harvey plans to flag out, as the company is opening new offices in Ciudad del Carmen, Mexico City, Trinidad and Guyana. 

Last year, Mexico moved to open up its offshore deepwater sector to foreign investment, and the new leases are expected to lead to increased E&P activity. Newly elected president Andrés Manuel López Obrador is broadly opposed to the involvement of foreign oil majors in Mexico's energy industry, but he has promised to leave existing leases intact

Guyana is a promising new frontier for offshore oil exploration, and ExxonMobil has discovered several significant oil fields off its coast in recent years. The company recently raised its estimate of its main Guyana find - the deepwater Stabroek block - to reserves to 5.5 billion barrels of oil equivalent, putting it in the same size range as the UK North Sea's Forties field or Brazil's Lula Field.