The 1999 survey of offshore heavy lift vessels operating in the Gulf of Mexico, revealed few differences in the vessel count from the previous year's survey. With the year-to-year reduction in the US Gulf of Mexico drilling, platform fabrication, and operating company capital budgets, it is not surprising that there were few additions to the fleet and some deferments in contractor plans for vessel purchases and refurbishments. The 1999 survey, which was prepared by Mustang Engineering's Matt Luce, included responses from 26 contractors, with a total of 82 vessels represented.
When compared to the 1998 survey, the current year's survey indicates that two contractors - SVS Offshore and Terry Offshore - are no longer listed. The SVS Rambiz, a dynamically positioned stiff-leg barge, underwent modification to make it suitable for abandonment work and was originally scheduled to be brought to the GOM from the Netherlands in the 2nd quarter of 1999.
With the lower oil prices and drilling and construction day rates, it proved to be uneconomical for the vessel to relocate here at this time. The company will further evaluate the economics of such a move after the 1st quarter of 2000. Terry Offshore's TO-300, a derrick/pipelay vessel listed in the 1998 survey, was purchased by Horizon Offshore and is now being used exclusively for pipelaying, better lending itself to that activity than to heavy lift.
Vessel additions,upgrades
Of the contractors listed in both surveys, there were only two vessels added - J. Ray McDermott's DLB1601 and Saipem's Field Development Ship (FDS). McDermott's DLB1601 now is being outfitted and will be available for work late in the 4th quarter of 1999. Ideally, it will be marketed for pipelaying work, but will have the capability for heavy lift opportunities as well. Subsea lowering capabilities are being added to the DLB1601 and to several of McDermott's other vessels in anticipation of opportunities to be more versatile in deep water.
The Saipem FDS, while included in the 1999 survey, will not be available for service until October 2000. According to the company, its niche is deeper water. The multi-purpose DP vessel can be used for construction in 3,000 meters water depth, lift and transport on deck of subsea and surface modules and has a 14-knot cruising speed for transit between sites.
Brisk activity a year ago, along with a subsequent 180° reversal, has had an impact on vessel deliveries. Power Offshore Services' reported two vessels, Power 250 and Power 250B, as being available for 3rd quarter 1999. The company now plans for these vessels to be delivered in 3rd quarter of 2000. Searex made its entry into the US Gulf installation market in July with the Trident Crusader. The company has three additional class 260 liftboats under construction for delivery in year 2000.
Offshore Specialties has purchased a new 400 ft by 120 ft by 25 ft hull for its DB Raeford vessel. The upgrade, originally scheduled for early 1999, was put on hold because of the downturn and is now planned for mid-2000.
Because of current market conditions and major project postponements, Heerema Marine Contractors US indicated that they are now in the process of re-evaluating their fleet upgrade for US Gulf activity. They will make a final decision by first quarter of 2000.
Horizon Offshore's lift capability has been augmented from the 1998 season with the addition of the Horizon Pacific, which came into service in March 1999 after a $17 million conversion and upgrade. It marks another step in Horizon's progression. Initially, the company focused on shallow water pipelaying, expanding to intermediate water depths and then entering the derrick market with the 500-ton Horizon Atlantic in 1998. The company feels that, while it has not been available long, they have added significantly to their lift vessel fleet with the 800-ton capability of the Horizon Pacific.
Global Industries' overall fleet capability will be enhanced with the proposed acquisition of ETPM. Three dynamically positioned derrick/ pipelaying vessels - Polaris, Norlift, and Northern Explorer - would possibly be available for US Gulf activity if the market improves.
Removal activity
According to Jay Henderson, VP and General Manager of Offshore Specialty Fabricators' (OSFI) Offshore Division, they have seen an increase in platform removals as a result of the lower derrick barge prices. They have been using these removals as fill-ins since the first quarter of 1999, while continuing to concentrate on turnkey business. The company has added five turnkeys since the 1998 survey appeared.
John Buck of Cal Dive reported that his company has enjoyed excellent activity levels in the decommissioning segment during 1999 year to date, with an increase in volume above 1998. His assessment for this higher level is that in the past few years the operators' concentration was principally on installations, preferring to defer decommissioning work.
With installation activity reduced and MMS requiring the removal of non-producing platforms, Buck sees a growth in decommissioning activity into year 2000. His company is able to offer turnkey services and sees that method of doing business growing as well. Mr. Buck admitted that, as rates and installations have diminished, there is also increased competition for work in shallower waters (200 ft or less), as larger vessels move into that market to better utilize their assets.
Win Thornton of WinMar Consulting Services, a decommissioning management company, takes a somewhat different view. He sees deferment of decommissioning by the operator. He cites that as the budgets have generally been reduced from 1998, the level of overall decommissioning activity in the US Gulf is level with that of last year and certainly not any more. What he sees as a positive for market growth is the enhancement of the rigs-to-reefs programs. He sees the majority of jackets in 200-ft water depths and deeper as being excellent candidates to be turned back to the states as part of this program.
Diversification
Lift contractors have had to improvise in light of the activity downturn. One of the more creative diversifications was the pursuit and contract award to OSFI of a tripod structure fabricated and installed for the U.S. Coast Guard at the mouth of the New York City Harbor. The electronic tower was installed in 80 ft water depth with its DB# 1 vessel. The vessel then moved over and removed the historic Ambrose Tower and its semi-octagon deck with a 17-point, four spreader bar lift. OSFI is taking possession of the structure and is towing it to its Houma facility. This creative project kept the company busy from April through October.
Outlook, trends
Contractors have not been overly optimistic about the short term outlook. Global Industries noted that the market softness in both installations and removals showed no sign of abating before the end of the year. Similarly, J. Ray McDermott indicated that the lower rates have provided a 3rd quarter pickup in removal activity and in rig moves, but the heavy lift market continues to be stagnant. Offshore Specialty Fabricators had expected a pickup in the 4th quarter but is now resolved to a later recovery since the fabrication yard activity has still not picked up, which only pushes the installers' prospects out further into year 2000.
According to John Reed at Heerema Marine Contractors, there is a trend toward heavier topsides (10,000-20,000 tons) for use with TLPs and Spars that will result in heavier lifts. Reed also sees a movement toward operators relying more on a single contractor for all of its installations on deepwater projects - structure, topsides and pipelines. OSFI is now bidding heavier lifts (to 1,360 tons) using the DB# 1 and DB Raeford vessels in tandem.
Alternatives to conventional crane heavy-lift methods are also being considered by some of the contractors and could become a more substantial part of the competitive mix in the near future. The Versatruss lift method has a three-year history and initial success in the GOM.
Heerema has been evaluating modifications to its launch barge HH51 for floatover use on topsides, especially for SPAR installations. McDermott has developed its sand jack technology and Global Industries, through its ETPM acquisition, will have the smart leg system available for floatover installations. These alternative technologies can provide advantages and cost savings on certain projects, while extending the lift tonnage capability to 20,000 short tons and beyond.;
Author
Nick Bradshaw is a senior project manager at Mustang Engineering, and has over 25 years experience in the engineering and construction sector of the oil and gas industry, including major projects in the North Sea, Australia, the Pacific Rim, and the deepwater Gulf of Mexico. He was most recently associated with the Exxon Diana project in the US Gulf and the front end engineering for several large deepwater development prospects off the east coast of Africa.
