Supply boat operators fear the future
Jaime Kammerzell
Gulf of Mexico Editor
The past 18-24 months have been medi-ocre for the offshore supply vessel industry, despite robust oil and gas prices. Last year saw oil prices peak at over $35/bbl and natural gas at a one-day high near $20/Mcf, but averaging $6/Mcf. Even so, the 2004 outlook doesn't look especially bright.
Although the Gulf of Mexico utilization rate is steady, today's rig count is lower than 2003.
"In the same manner, there are fewer boats out working, because there are fewer rigs to support," Robert Socha, Bollinger vice president of marketing and sales, explains.
Supply vessel owners are also seeing a lower day rate. With many deepwater rigs off charter, the big boats are struggling to find work, so they come down in class and find work in 1,000 ft of water instead of 6,000 ft and charge the same as the smaller boats, Ralph MacInvale, owner of Southern States Offshore, said. "Boat rates are cheap; rigs are cheap; we should have 160 to 170 rigs running in the US Gulf." MacInvale also said his day rates are 15-25% lower than they were a year ago.
Building programs
Bollinger Shipyard has seen a decline in capital projects due to a lack of vessels active in the market. Socha said the operators are worried because they see no discipline in the supply vessel market. "No one is holding up the rates," he said. Therefore, the boat operators considering new supply vessels don't see a return on their investment. Very few have building programs now.
Rigdon Marine is the exception with a 10-boat program underway, but none of the vessels is yet under contract. "I am building smaller state-of-the-art vessels that have a lot of capabilities for their size," Larry Rigdon, owner, said.
Tidewater Inc.'s Jonathan Rozier is a 207 ft, 4,750 BHP supply boat.
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Rigdon is building the vessels from the ground up, "which gives the designers a lot more flexibility in the layout of the tankage, interior space, and cargo space," he said.
The 210-ft vessels will provide the liquid mud tank capacity and delivery capabilities typically found in larger vessels.
The vessels will be diesel-electric driven, with electric motors driving the 360° thrust-ers. Each vessel will be equipped with DP2 capabilities for better maneuvering and docking procedures with rigs and other floating equipment. Rigdon designed the vessels to maintain a speed of 13 knots when fully loaded, which is 30% faster than existing vessels working in the GoM.
"There is nothing we are doing that is leading or cutting edge," Rigdon said. "We are just bringing in technology that already exists into a more flexible package."
Southern States Offshore is also building a new vessel – a 170-ft crew boat.
"The crew boat market is stronger than the supply boat market right now," MacInvale said. "A crew boat maintains its day rate a lot more than a supply boat."
Crew boats require a four-man crew versus a six-man crew on a supply boat. Plus, supply boats are expensive to maintain and operate.
"I think the future of supply boats is not in the US Gulf. It is too tough there to make it work," MacInvale said.
Supply boats and LNG
Where will supply boats be in the future? "A lot of people in the business think we have a good natural gas run for at least another five years, which is going to support the offshore supply boat industry very well," Charlie Kilgore, president and owner of Kilgore Offshore, said.
There is strong growth in natural gas demand projected for the future, and importing LNG will be crucial for supply.
El Paso Energy Bridge Gulf of Mexico LLC is building a deepwater LNG port in the Gulf of Mexico, and ExxonMobil Corp. is developing a $600-million LNG receiving terminal offshore Texas' Gulf Coast.
MacInvale is concerned about the LNG market and what it may do to the supply vessel industry. "In 1979, we had four times as many offshore oil companies with 200-300 more rigs working," he said. "The infrastructure just isn't there to support these boats and rigs, and the dollar isn't there to build new boats or rigs."
No one knows how big a force LNG will be. Before it becomes economical to tank-in LNG, the price of natural gas will have to exceed $4.50/Mcf, Kilgore said. "If the price of gas domestically drops below $4, people won't be tanking in LNG, because it won't be feasible."
2004 survey data
This year's survey includes 647 offshore supply vessels from 20 companies. The second column in the listing indicates the vessel type: anchor handling/tug supply, anchor handling tug, multi-functional support vessel, platform supply vessel, and supply.
Each listing includes the owner of the vessel, the number and type of vessel, size range, horsepower range, year built, builders, and location of the vessels, if the information was supplied or found.
The information presented in this survey appears as participating companies submitted it, with the exception of some data taken from the World Wide Web.
Click here to view Survey.
