What's in Your Boat?

In 1970 the average depth of known oilfields was 177 feet. Today it is 2,873 feet, and the Gulf of Mexico will soon have an FPSO working in approximately 10,000 feet of water, the deepest field in the world. As the global search for new sources of oil and gas moves into ever more harsh and remote climates and deeper and deeper waters, it is having a major impact on the offshore support vessel market. 

Harsh Environments 

Take the Caspian Sea, for example. Although the sea is shallow, the climate is harsh, and the oil lies miles beneath the seabed. OSVs can only access the Caspian via the Lenin Volga–Don Shipping Canal and the Volga–Baltic Waterway. In order to pass through these systems, vessels often require significant modification, which can include removal of the mast and wheelhouse and then reassembly of the ship once it has reached the Caspian Sea. The process can take up to four weeks and cost $3–$4 million. Additionally, the Lenin Volga–Don Shipping Canal freezes annually from November to mid-April, rendering the Caspian virtually inaccessible to OSVs for half the year. ?

Dubai-based Topaz Energy and Marine is a leading OSV operator in the region, and the company has recently mobilized two new AHTSs, Topaz Dignity and Topaz Triumph, to oil majors in Azerbaijan. Topaz plans to expand its fleet of over 90 OSVs with another 11 new vessels in the coming year. Topaz supplied some vessels for the Kashagan development that commenced production in September. Located in the harsh northern region of the Caspian in the Kazakhstan sector, it is the largest oil discovery in the past 35 years, Kashagan has an estimated 13 billion barrels of proved oil reserves – roughly equivalent to Brazil’s entire proved onshore and offshore oil reserves. 

Offshore South Africa, heavy lift operator Jumbo Shipping early this year completed the transport and subsea installation of five structures for PetroSA’s Ikhwezi Project. Here the Indian and Atlantic Oceans meet at one of the world’s harshest offshore environments, characterized by rough seas and wild winds. Since the 1500s the region has claimed over 3,000 ships. 

Rotterdam-based Jumbo had very limited time to act before winter set in, and the success of the project proved that Jumbo’s unique method of providing a single solution for loading, transporting and installing subsea structures can be applied anywhere in the world, in the harshest environments and in water depths up to 10,000 feet, said Managing Director Michael Kahn. He added that the use of Jumbo’s specialized vessels eliminates the need for multiple vessels and barges and the associated double-handling, thereby reducing cost, time and risk to the project. 

With two new 1A Finnish Swedish Ice Class vessels under construction at Brodosplit Shipyard in Croatia, the company is also preparing for the Arctic offshore market. The vessels, the first of which is the Jumbo Kinetic, have a maximum heavy lift capacity of 3,000 tons, a large, unobstructed hold, flush decks, and a sailing speed of 17 knots. Jumbo Kinetic is dynamic positioning-capable, so a relatively minor conversion will ready it for FPSO mooring and other subsea lifting tasks in the region. 

With Jumbo Kinetic expected to enter operation next year, the company’s next generation of vessels is already on the drawing board as it continues to invest in a fleet renewal program. “We have the plans in place. We have the financing in place, but the most critical part is people,” Kahn explained. “The industry is really in a people crunch at present.” Jumbo is therefore active at universities and seeking engineering apprentices around the world. “We have a long-term view, and quality is crucial. It is not just the investment in tonnage. It is all about quality and reputation,” he added. 

Into the Deepwater 

Like others in the offshore industry, Jumbo is expanding its horizons into increasingly deeper waters. Kahn also sees a southward shift in the Atlantic as countries such as Brazil develop their offshore resources. In March 2013, Brazil launched a 10-year plan to expand oil production to over five million barrels a day with exports of more than 2.25 million barrels a day by 2021. More than 90 percent of Brazil’s oil production is in deep water. 

Formed just last year, Brazilian company ASGAARD Navigation has secured financing from the Brazilian Merchant Marine Fund to build 10 offshore support vessels on spec, including two oil spill response vessels currently being built at the Aliança S/A Industria Naval e Empresa de Navegacao shipyard. ASGAARD’s fleet will also include PSVs and AHTSs. 

“Recent developments in Brazil will boost the demand for OSVs from around 420 vessels today (50 percent Brazilian flag and 50 percent international flag) to around 550 by 2015 and 650 to 700 vessels by 2020,” says Patrícia Coelho, ASGAARD’s President. “New frontiers in deep and very deep waters will require larger AHTSs, increasing the demand for vessels of 200 tons’ bollard pull and above.” Although a new entrant, Coelho already plans to expand and take “our name and Brazilian industry abroad.” 

Orders for new drill ships, which can work in the deepest waters, are up, according to Clarkson Research, which recently set the tally at 80 compared to around 10 for jackups. This has forced new AHTSs to grow in size and complexity to support these deepwater drilling operations. Go Phoenix, the latest ultra-large AHTS from Singapore-based Otto Marine, has 24,000-bhp, 260 tons of bollard pull, hybrid diesel-electric propulsion and DP-2. 

Another Singapore operator, Swire Pacific Offshore (SPO), has taken delivery of a new AHTS named Pacific Discovery. The vessel boasts advanced technical capabilities to support the latest generation of semi-submersible rigs. Equipped with DP-2 systems and a maximum bollard pull of 230 tons, Pacific Discovery has clear deck space of 650 square meters and a 17,864-bhp engine certified to IMO Tier II standards. “The launch of Pacific Discovery is another important milestone for the company, particularly with respect to the development of our deepwater anchor-handling capability,” said Managing Director Neil Glenn. Eight similar vessels will be in operation for SPO by the end of 2015. 

Strategic Marine Mexico recently launched a second 52-meter crewboat, the LLuavi, for Arrendadora Ocean Mexicana (Blue Marine). The two boats make Blue Marine the only Mexican shipowner to build offshore vessels in Mexico. “Not only is this project a huge achievement for Strategic Marine, but for the Mexican community at large, helping to create over 160 jobs in total,” said Strategic Marine Managing Director Ron F. Anderson. “We are confident the Mexican shipping industry will take note and place a higher priority on in-country investments such as these,”  

Strategic Marine is headquartered in Australia, and Reece Newbold, Group Business Development Manager, sees an ongoing trend for their crewboats to be operating farther offshore: “This has several knock-on effects. Put simply, vessels are getting bigger, going faster and carrying more crew. They are more multi-functional with higher levels of inter-operability factored into their design and use. Because of this, of course, they have to meet stricter safety and class requirements as well.” 

The company is adapting to these needs by creating a line of stock vessels to cater to the high- (and low-) spec requirements of clients. The first round of 40-meter stock vessels is currently under construction. “We are also building vessels in a range of materials from traditional aluminum to high-tensile steel hulls. We jointly utilize our shipyard and technical capabilities in Vietnam and Singapore to ensure we can be competitive on cost without sacrificing quality. Right now we are building a total of 20 crewboats for the offshore market ranging in size from 19 to 42 meters.” 

Australia’s Mermaid Marine has continued to expand its fleet of over 40 vessels with the delivery of the OSV Mermaid Cove and the PSVs Mermaid Inscription and Mermaid Leeuwin in 2013. The company’s medium-term outlook remains strong with bids in for Australia’s remote Wheatstone, Ichthys and Prelude projects. Chevron, Woodside, BHPB, Apache, Santos, Total, Eni, ExxonMobil, Conoco Phillips are all conducting drilling programs in the region. 

Local operators in the Gulf of Mexico are optimistic about the supply vessel market. Jackson Offshore Operators in the U.S. has ordered four PSVs from Guido Perla & Associates and BAE Systems to add to its fleet over the next year. “These vessels will begin to enter the market in the summer of 2014 and should be a welcome change from the traditional Gulf of Mexico PSV as our vessels will be equipped with a totally integrated Rolls-Royce system, which will include Azipull drives,” said President and CEO Lee Jackson. “The market for technologically advanced deepwater PSVs at present is extremely good and, with many new floaters entering, will continue to improve.”  

There are currently 37 active floating rigs in the Gulf with another 21 scheduled to arrive by the first quarter of 2016, says Jackson. “That’s a 57 percent increase in activity, and it will require a great amount of new vessel support. As to further fleet expansion, we are continuing to monitor the market, and a key piece of that is to listen very closely to your clients and react accordingly.” 

Other companies operating in the Gulf of Mexico are also expanding their high-tech fleets. Eastern Shipbuilding delivered the HOS Red Rock this year, the second of four vessels designated as the HOSMAX 300 series by Hornbeck Offshore. The vessels are diesel-electric with twin Schottel Z-drives. Bordelon Marine has secured a term contract with Baker Hughes to use the first of its Stingray series vessels, the Connor Bordelon, as a well stimulation vessel. Connor Bordelon is the first of three DP-2 PSVs being built at Bordelon Marine Shipbuilders, all with twin Schottel Z-drives. 

Oceaneering has commissioned a subsea support vessel from BAE Systems for operation in the ultra-deep waters of the Gulf of Mexico. The DP-2 vessel will have accommodations for 110 personnel, a 250-ton active heave compensated crane, and a moon pool. It will also act as a platform for two Oceaneering Work Class ROVs capable of working in water depths up to 13,000 feet.  

Growing Vessel Demand 

The global supply vessel market has over 400 operators, and vessel supply globally is expected to increase by 45 percent by 2017. North America is expected to have the greatest demand, driven initially by the inspection, maintenance and repair market and then the region’s deep and ultra-deep market.  

However, Brazil is expected to lead the global deepwater market by 2017, and there will also be significant investment in West Africa, Southeast Asia, Australia, Europe, the Middle East and the Caspian. World energy use is projected to rise by 56 percent by 2040, and that’s good news for offshore vessel operators.  

Wendy Laursen is a New South Wales, Australia-based correspondent for the magazine.