osj may 2016

May 2016 www.osjonline.com

Bourbon bets on gas growth rather than offshore support vessels

Seismic ship is next step in Indonesia’s evolving offshore industry

Corruption scandal sees Brazilian market go from bad to worse

“With a healthy cash position and debt profile, undrawn bank lines and support from bondholders, we are financially resilient and able to withstand the downturn.”Datuk Tiong Su Kouk, executive chairman, Nam Cheong, see page 12

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www.osjonline.com Offshore Support Journal | May 2016

Regulars5 COMMENT7 BEST OF THE WEB10 VESSEL NEWS49 ROV/AUV51 COMPANY NEWS52 IMCA NEWS

Area reports12 Southeast Asia: although its order intake has declined significantly, Nam Cheong is well placed to withstand the downturn

14 Southeast Asia: cabotage has long been a part of the offshore vessel market in Indonesia, and now an Indonesian company plans to enter the seismic market too

16 Brazil: the market in Brazil has gone from bad to worse as the corruption scandal spreads

21 Australasia: design and analysis work undertaken by IMC has assisted its long-term client MMA Offshore to secure a new contract with ConocoPhillips

22 Gulf of Mexico: the offshore oil and gas industry has reacted with considerable disappointment to a decision by the Obama administration not to allow exploration off the Atlantic coast of the US

24 North Sea: the challenges continue to come thick and fast for operators in the North Sea offshore vessel market – diversification is one potential solution

26 West Africa: Cairn Energy’s oil discoveries in Senegal and Kosmos Energy’s gas finds should open new development opportunities that will require offshore support vessels

29 Middle East: vessel operators and offshore engineering contractors have secured contracts in Abu Dhabi, Saudi Arabia and Qatar

30 Caspian/Mediterranean: BP and Eni are planning subsea projects in Egypt, while Total is drilling for gas off Bulgaria and Vittoria Shipyard has delivered a new PSV to Bambini

Crewing33 GulfMark Offshore explains how it is going about cutting costs and reducing its headcount

Propulsion34 Waterjet propulsion is growing in popularity in the crewboat sector

0514

16

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May 2016volume 19 issue 4 contents

Offshore Support Journal | May 2016 www.osjonline.com

Disclaimer: Although every effort has been made to ensure that the information in this publication is correct, the Author and Publisher accept no liability to any party for any inaccuracies that may occur. Any third party material included with the publication is supplied in good faith and the Publisher accepts no liability in respect of content. All rights reserved. No part of this publication may be reproduced, reprinted or stored in any electronic medium or transmitted in any form or by any means without prior written permission of the copyright owner.

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contentsMay 2016volume 19 issue 4

Editor: David Foxwellt: +44 1252 717 898e: [email protected]

Deputy Editor: Martyn Wingrove t: +44 20 8370 1736e: [email protected]

Brand Manager – Sales: Ian Glen t: +44 7919 263 737e: [email protected]

Sales: Indrit Kruja t: +44 20 8370 7792e: [email protected]

James Bentley t: +44 20 8370 7791e: [email protected]

Colin Deed t: +44 1239 612384e: [email protected]

Head of Sales – Asia & Singapore: Kym Tan t: +65 9456 3165e: [email protected]

Sales – Asia & Middle East: Rigzin Angdu t: +65 6809 3198e: [email protected]

Sales – Southeast Asia & Australasia: Kaara Barbour t: +61 414 436 808e: [email protected]

Production Manager: Ram Mahbubanit: +44 20 8370 7010e: [email protected]

Chairman: John LabdonManaging Director: Steve LabdonFinance Director: Cathy LabdonOperations Director: Graham HarmanEditorial Director: Steve MatthewsExecutive Editor: Paul GuntonHead of Production: Hamish DickieSubscriptions: Sally Church

Published by:Riviera Maritime Media LtdMitre House 66 Abbey RoadEnfield EN1 2QN UK

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ISSN 1463-581X (Print)ISSN 2051-0594 (Online)

©2016 Riviera Maritime Media Ltd

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Dual Fuel FlexibilityMAN 35/44DF – versatile propulsion power Rescue boats/daughter craft

37 Norsafe’s MkII version of the Magnum 750 is proving popular, as is its new service plan

Crewboats38 Demand for crewboats is being affected by the low oil price, but opportunities exist in related markets

Deck machinery40 Technology used in deck equipment such as winches is evolving, with concepts such as permanent magnet motors coming to the fore

Load handling42 MJR Power & Automation in the UK has unveiled the X-Wave, an active heave compensation system

Dynamic positioning45 Leading satellite position reference system specialists Kongsberg Maritime

and Veripos have upgraded the positioning services they offer

Market data55 Statistics

Next issue• Main area reports: East Africa, Mexico & Mediterranean• dynamic positioning• propulsion/thrusters• bulk handling and tank cleaning• oil spill response• special reports: Spanish shipbuilding & Turkish shipbuilding.

Front cover photo:

Bourbon recently took delivery of Bourbon Arctic, a high spec anchor-handling vessel, but rather than invest in more OSVs, it is diversifying into gas transportation (photo: Bourbon)

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Service scheduling and notification should be automatic, parts need to be in the right place at the right time – all with minimal impact on the offshore unit’s ability to operate. Decades in the business tell us safety equipment servicing can be streamlined in over 80 percent of cases, reducing administrative overheads and lowering compliancy risks.

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COMMENT | 5

N ot many people understand the offshore vessel market better than Jacques de Chateauvieux, Bourbon’s former chairman and chief executive

officer, who, it seems, is about to take the reins again at the company. So after many years spent building one of the biggest and best known offshore support vessel (OSV) companies in the world, when he decides to invest in another market altogether, it tells you a lot, and Bourbon’s decision to diversify into the gas transportation business – announced on 29 March – tells you a great deal about the state of the OSV market and what one of the leading players in it thinks about its revenue-earning prospects in the short to medium term.

Bourbon, founded in 1948 as a family-owned sugar cane producer in Reunion Island, became a purely offshore marine services-focused company with a fleet of more than 480 offshore vessels. It shed its other businesses – including the sugar business, and later tugs and bulk carriers – in order to focus on OSVs. In recent years, it has invested massively in OSVs, building large numbers of diesel-electric platform supply vessels and anchor handlers. However, the market for OSVs has changed out of all recognition in the last 18 months since the steep fall in the oil price, and the company has decided to refocus its attention on the ‘energy transition’ by investing in the gas sector.

In a statement, the company described the offshore vessel market as “very difficult” but noted it had been “resilient” due to its operational performance and cost control. It also pointed out that its investment programme has enabled free cash flow generation. In fact, in 2015, Bourbon achieved adjusted revenues of €1,437 million, showing resiliency despite a very difficult market. “As the industry remains in this prolonged downturn, Bourbon remains focused on what it can control: safety, cost control initiatives and operational efficiency,” said its current CEO,

OFFSHORE VESSEL INVESTOR DECIDES TO LOOK OUTSIDE SECTOR

Christian Lefèvre. However, it seems Mr de Chateauvieux has decided that, although offshore vessels will continue to be a big part of its revenues, he wants to spend the money Bourbon generates outside the OSV industry and diversify its activities in order to open up growth prospects in other markets.

This being the case, Bourbon is acquiring the activities of a number of companies active in the transportation of ethane, a market that is expected to have strong growth. The companies in question are currently owned by their majority shareholder Jaccar Holdings: Greenship Gas, which owns a fleet of 17 vessels (of which 13 vessels are currently in service) dedicated to the transport of ethane gas, ethylene and liquefied natural gas (LNG); Evergas, an operator and contractor of gas transportation services; and Greenship Gas Manager Pte Ltd. It will also acquire 80 per cent of JHW Engineering & Contracting Ltd, which designs and engineers vessels and contracts and manages gas projects.

Completion of the deal, which was authorised by the company’s board of directors on 28 March, is subject to ratification by shareholders at an annual general meeting on 26 May 2016. The purchase price for the companies is US$320 million with a net debt as of 31 December 2015 of US$389 million. Once the transaction is completed, Bourbon plans to proceed with the resale of 80 per cent of the ownership of the vessels, which will then be retained on bareboat charter for a minimum period of 10 years. The bridging loan signed at the time of the acquisition will then be reimbursed and the impact on Bourbon’s debt significantly reduced. Following approval of the transaction, Mr de Chateauvieux is expected to become chairman and chief executive of Bourbon. He is currently chairman and chief executive of Jaccar. Mr Lefèvre is expected to remain at Bourbon and head the company’s OSV division. OSJ


David Foxwell, Editor

Service scheduling and notification should be automatic, parts need to be in the right place at the right time – all with minimal impact on the offshore unit’s ability to operate. Decades in the business tell us safety equipment servicing can be streamlined in over 80 percent of cases, reducing administrative overheads and lowering compliancy risks.

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WE SHARE YOUR GOALS OF PERFORMANCE, EFF ICIENCY AND COST-EFFECTIVENESS. WHEN IT COMES TO PROVIDING INNOVATIVE SOLUTIONS FOR AN INNOVATIVE INDUSTRY, WE’RE ALL IN THIS TOGETHER.

WWW.DAMEN.COM

THE FUTURE HAS ARRIVED

OFFSHORE WIND

We take pride in building you an efficient ship

Kommer Damen

BEST OF THE WEB osjonline.com

Viking Supply Ships says a bondholders’ meeting recently took place iregarding ISIN NO 001 0638158 – FRN Viking Supply Ships A/S Senior Unsecured Open Bond Issue 2012/2017. The meeting took place as per a summons to a meeting of 22 March 2016 in which the company said it was seeking an extension of a standstill period with banks until 13 April 2016. The resolution obtained 84.69 per cent of the votes, and the proposal was adopted according to the voting requirements of the bond agreement.

http://bit.ly/OSJ_VSS

Bondholders give Viking Supply Ships more time

Viking Supply Ships says bondholders have supported a standstill agreement with its lenders

Island Offshore has secured contracts with Norske Shell that will see two vessels, Island Valiant and Island Constructor, undertake work at the Draugen field. Island Valiant will start with inspection, maintenance and repair (IMR) work on three wells in April, preparing the wells for the work that Island Constructor will perform later this summer. The timeframe for this task is about two weeks.

In addition to Island Constructor, Island Offshore’s other two light well intervention (LWI) vessels, Island Wellserver and Island Frontier, are now back in operation and started work on contracts with Statoil on 1 April. This contract secures Island Wellserver and Island Frontier 200 days each year until 2020. “These contracts are very welcome after a challenging winter with our LWI vessels being laid up for the season. It is very gratifying to see our crews and our vessels mobilising and returning back to work after the winter,” said Håvard Ulstein, the company’s managing director.

http://bit.ly/OSJIsland

Island Offshore brings well intervention vessels back into service

BEST OF THE WEB | 7


WE SHARE YOUR GOALS OF PERFORMANCE, EFF ICIENCY AND COST-EFFECTIVENESS. WHEN IT COMES TO PROVIDING INNOVATIVE SOLUTIONS FOR AN INNOVATIVE INDUSTRY, WE’RE ALL IN THIS TOGETHER.

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THE FUTURE HAS ARRIVED

OFFSHORE WIND

We take pride in building you an efficient ship

Kommer Damen

Respected industry analyst Rystad Energy says tax breaks designed to help the offshore oil and gas industry in the UK may not have the beneficial effects claimed. Amid prevailing low oil prices, the UK Government recently announced tax cuts for energy companies, in order to support the oil and gas industry in a difficult macro environment.

The proposed tax manoeuvre essentially reduces the supplementary charge paid on company profits from 20 per cent down to 10 per cent and abolishes the petroleum revenue tax still paid on some producing fields. Both these measures are effective from 1 January 2016. Only last year, the UK Government reduced the supplementary charge from 32 per cent to 20 per cent.

However, Rystad Energy’s analysis shows that, while the supplementary charge cut would benefit companies under a high oil price environment, the effect could in fact be the opposite under a low oil price scenario.

http://bit.ly/OSJ-Rys

Rystad questions effectiveness of North Sea tax breaks

In the new edition of Douglas-Westwood’s Iran Oil & Gas Market Forecast publication, covering a forecast period of 2016–2020, the analyst says the lifting of international nuclear-related sanctions on 16 January 2016 represents a significant step forward for Iran’s re-entry into the global oil and gas market. However, it notes that several barriers to entry remain for investors in the post-implementation day environment. Notably, the US continues to enforce bilateral sanctions ›››

Analyst sees long-term potential offshore Iran

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A recovery in the offshore support vessel (OSV) market lies in the industry’s own hands, the Asia Pacific Maritime Offshore Market Analysis conference in Singapore was told. “We have bigger problems than the oil price,” M3 Marine Group founder and chief executive Mike Meade said. “The market imbalance was there before the oil price drop.”

Captain Meade said that, with about 1,200–1,300 OSVs inactive out of a fleet of about 5,000 and another 500 still on order, without major scrapping, it will take at least 10 years before the market regains balance.

“The problem is that there is no discipline in our business in terms of agreement about taking older vessels out of the market,” he commented.

Swire Pacific Offshore commercial director Duncan Telfer said, “Owners cannot control the oil price, but we can control the fleet.” However, vice president of V Ships Offshore Alessandro Ciocchi said there are still a lot of older vessels in good condition. “Why should owners scrap them?” he asked.

http://bit.ly/1QrwY2H

Scrap old OSVs to rescue the market

Demands for increased collaboration in the offshore oil and gas industry are being reflected through a record rise in offshore vessel shares, according to Peterson, the energy logistics provider. The company, which is making extensive use of collaborative vessel sharing, has seen a record number of vessel-sharing arrangements since the turn of the year.

Seven shares were arranged between operators in the central and northern North Sea through January and February. All were facilitated by Peterson through the Aberdeen Marine Logistics Alliance (AMLA), a vessel-sharing initiative designed to maximise efficiency and reduce marine logistics costs.

As the facilitator of AMLA, Peterson helps members source cost-effective solutions for unscheduled shipping requirements by arranging vessel shares with other companies operating in the North Sea, thus reducing both financial costs and environmental impact.

During 2014 and 2015, despite increasingly challenging market conditions, the combined financial benefit for companies participating in ALMA shares was £2 million (US$2.84 million), together with a reduction in CO2 emissions of approximately 800 tonnes.

Peterson director of projects Loek Sakkers said, “As was recently highlighted by Oil & Gas UK and others, there is an urgent need for widespread collaboration in the North Sea. We share this view and believe significant opportunities exist within the supply chain to do just that through increased vessel sharing.”

As well as addressing operators’ reactive vessel requirements through AMLA, Peterson is working with a number of UK Continental Shelf operators to establish a formal pool for scheduled cargo movements.

The pool offers members significant efficiency gains together with maximum fleet flexibility. When an operator charters a vessel independently, it is usually hired on a per day basis regardless of requirements.

In a pool, the operator can use a vessel one day, and the next day, the vessel can be used by another operator. When the fleet available consists of multiple vessels, the flexibility and availability is increased. Peterson’s role is to focus on maximum fleet utilisation and optimising vessel use per individual operator to reduce overall idle time.

http://bit.ly/1pnVqvO

Vessel sharing reducing costs in North Sea

OMM and Rederij Groen to build SOV

Offshore Marine Management (OMM) has formed a partnership with vessel owner Rederij Groen for a purpose-built service operation vessel (SOV). The companies have engaged Saltwater Engineering in The Netherlands for the design of the vessel. OMM said the SOV was designed based on two main principles: experience during the offshore installation, maintenance and repair phases of offshore energy projects; and the requirement to stay offshore longer due to increasing distances from base ports to windfarms.

OMM said the vessel “is readily adaptable to support full O&M work

throughout the year, both planned and ad hoc work. The back deck of the vessel will be strengthened to carry spare cable for emergency repairs of infield cables whilst still meeting its primary role of supporting the turbine technicians.” The vessel has the endurance of 30 days offshore and will support work around turbine masts, substations platforms, topsides and subsea tasks, power, telecoms and mattress applications as contracted. The companies are working towards delivery of the vessel in the fourth quarter of 2017.

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8 | BEST OF THE WEB


››› against Iran, including a prohibition on engaging in financial transactions with Iranian financial institutions. Consequently, foreign banks are adopting a cautious approach to processing Iranian payments. Iran’s nuclear-related activities are also subject to a monitoring period of 15 years under the Joint Comprehensive Plan of Action (JCPOA), with the potential for sanctions to be reintroduced should Iran fail to meet its commitments.

These factors have contributed to Douglas-Westwood retaining a relatively conservative outlook for Iranian oil and gas production in comparison to targets announced by the Iranian Government.

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Bourbon has taken delivery of the ice-class anchor-handling tug/supply (AHTS) vessel Bourbon Arctic, and the vessel has started work for Lundin Petroleum in the North Sea. Bourbon Arctic was delivered by Vard Brattvåg in March and recently completed its first anchor-handling operation. The vessel was engaged in the disconnection and unmooring operation of Island Innovator on the Fosen field in the central North Sea.

Bourbon Arctic was designed to operate in remote areas worldwide and equipped for advanced anchor-handling and towing operations. The vessel has a bollard pull of 307

tonnes in boost mode and 193 tonnes in diesel-electric mode, this being among the highest bollard pull of any AHTS vessel.

Apart from anchor handling, the vessel can undertake a range of tasks, such as supply duties, oil recovery, standby operations, fire-fighting, rescue (up to 300 survivors) and operations with remotely operated vehicles. With a strengthened hull and enhanced winterisation equipment, the ice-class vessel is suited for work in temperatures down to -20°C and has SPS class and accommodation for 60 people. The vessel can also be used as a flotel when not engaged in anchor-handling operations.

Bourbon takes delivery of ice-class anchor handler

Bourbon Arctic was designed to operate in remote areas and has a bollard pull of 307 tonnes in boost mode

Selah Shipyard in Turkey has launched Ievoli Amber, a newbuild platform supply vessel (PSV) for Marnavi in Italy. Ievoli Amber is a sister vessel to Ievoli Cobalt, which was launched by Selah in November 2015. Broker Seabrokers said the dynamic positioning class 2 diesel-electric vessels are of the MMC 879L CD design, giving them a length of 83.8m, breadth of 16.8m and deadweight in excess of 4,000 tonnes. Selah Shipyard also delivered Ievoli Ivory to Marnavi in 2015, a vessel built to the MMC 887 MPSV design.

Turkish yard launches another vessel for Marnavi

SOC wins deal for walk-to-work vessel

Siem Offshore Contractors, a wholly owned subsidiary of Siem Offshore, has been awarded a contract for the provision of a walk-to-work service operations vessel (SOV) by Ocean Breeze Energy GmbH & Co KG for the Bard Offshore 1 windfarm in the German Bight sector of the North Sea. The contract will involve deployment of Siem Marlin followed by Siddis Mariner in walk-to-work mode. The firm charter period is 700 days with options to extend the charter period by three additional years. The charter follows a previous assignment that the vessels Siem Emerald and Siem Moxie have undertaken as walk-to-work SOVs in the last year.

10 | VESSEL NEWS

MMA Offshore has accepted delivery of MMA Brewster from the Vard Vung Tau Shipyard in Vietnam. MMA Brewster is the second of two sister vessels, with MMA Plover delivered in November 2015. Seabrokers reports that the units were built to the VARD 1 08 PSV design, giving them a length of 81.7m, breadth of 18.0m, deck area of 810m² and accommodation for 27 people.

Both vessels have been chartered by INPEX to provide production support at the Ichthys Project offshore Australia. The five-year firm contracts come with two further five-year options.

Vard design PSV delivered to MMA Offshore

Chouest takes delivery of PSV

Broker Seabrokers reports that Edison Chouest Offshore has taken delivery of the newbuild PSV Dauphin Island from Gulf Ship LLC in Mississippi. Dauphin Island was built to the NA312E CD VE design and has a hullform designed to maximise deadweight while significantly reducing hydrodynamic resistance, thereby improving fuel efficiency.

Dauphin Island has a length of 95m, breadth of 20m and deadweight of more than 6,000 tonnes. The vessel has also been chartered by BP for operations in the Gulf of Mexico.

Island Offshore in Norway has decided to lay up the PSVs Island Dragon and Island Duchess with immediate effect. Island Dragon has been on contract with Lundin Norway since it was delivered in June 2014 and will now be replaced by Island Commander. The reason for making this

change is a request made by the oil company, wanting a vessel with larger deck capacity. Island Commander has now been prepared for standby duty.

“The situation in the spot market is still fragile, and we cannot justify letting Island Dragon operate in this market. This means that we will have

to lay her up indefinitely. As Lundin is an important customer to us, we want to be flexible to adapt to their change of needs. It is an implicit strength to be able to meet their requests,” said the company’s managing director, Håvard Ulstein. Island Duchess has been in Las Palmas for some time, being available for

jobs off the coast of Africa, but the low level of activity has made Island Offshore decide to lay it up too. The vessel is now back in Ulsteinvik.

Island Offshore now has four PSVs in layup and, until recently, had three light well intervention vessels and one ROV/construction vessel laid up too. However, two of the intervention vessels were mobilised recently for this year’s campaign for Statoil.


The launch has taken place of the latest Ramform Titan-class seismic vessel, Ramform Tethys, for PGS.

“With the increased power output and the back deck modifications, we are enhancing the Ramform Titan class,” said Per Arild Reksnes, executive vice president operations at PGS. “Productivity, safety, stability and redundancy are the key benefits of these vessels. Their ability to tow many streamers gives high data quality with dense cross-line sampling and cost-efficient acquisition with wide tows. This enormously stable platform has outstanding seakeeping characteristics that take full advantage of our GeoStreamer technology. Like her Titan-class sisters, she has the flexibility to encompass virtually any acquisition design. Safety, efficiency and productivity are the best in the industry.” OSJ

Latest Ramform seismic ship delivered

Island Offshore lays up more vessels

VESSEL NEWS | 11

Farstad Shipping, through its wholly owned subsidiary Farstad Supply AS, has sold the AHTS Far Sea (1991, ME 303 II, 13,219 bhp). Delivery of the vessel to the new owner took place on 3 March 2016. The sale of the vessel resulted in a loss of NKr32 million (US$3.8 million), of which NKr30 million (US$3.6 million) has been booked as impairment in the company’s fourth quarter 2015 accounts.

Farstad sells another vessel

Vroon Offshore has taken delivery of the PSV VOS Prince. Following a delivery ceremony held on 1 March 2016 at Fujian Southeast Shipyard, the vessel left on its maiden voyage.

VOS Prince, a KCM-80m PSV, is the fourth of eight sister vessels being constructed at Fujian Southeast Shipyard for Vroon Offshore. The vessels were designed to comply with the SPS code and are equipped with full (underdeck) supply capabilities, including stainless steel tanks for the carriage of methanol.

Another PSV delivered to Vroon

Ramform Tethys is the latest in a number of Ramform-type vessels built for PGS

The multipurpose PSV Troms Polaris was launched at Tersan Shipyard in Turkey on 4 March. The vessel is being built for Tidewater company Troms Offshore.

The PSV will have an active heave compensated crane with 150 tonnes capacity, which can be quickly and easily fitted when required. The vessel is also prepared for a helicopter deck, which would usually be needed during extensive subsea construction work.

Tersan launches Troms PolarisReferring to an announcement dated 27

October 2015 regarding an agreement to postpone delivery of its newbuilding number 123, Norwegian offshore vessel builder Havyard says that, in light of the continued challenges in the offshore market internationally, Havyard Ship Technology and the buyer of the vessel have agreed to cancel the deal. The agreement involves payment of compensation to Havyard.

The vessel was originally due to be delivered in the second quarter of 2018 and will therefore have no effect on liquidity and profits at Havyard Ship Technology for the financial year 2016. The cancellation will, however, lead to a lower level of activity at the yard and a small margin loss in Havyard Design & Solutions AS for 2016.

Havyard newbuild cancelled


2015 was a very challenging year according to Datuk Tiong Su Kouk,

executive chairman of Nam Cheong in Malaysia, in a statement in the company’s newly issued 2015 annual report. “Globally, the world was shaken by the Greek impasse, which threatened the stability of the European Union, after the election of an anti-austerity party into government. The stock market crash in China and subsequent depreciation of the renminbi further affected financial markets globally. The US Federal Reserve hiked rates for the first time in almost a decade, which led to a round of rising short-term interest rates around the world. For the oil and gas sector, the collapse in oil prices as a result of oversupply caused by the shale oil boom in the US caused more uncertainty.”

Mr Tiong said that, in 2015, Nam Cheong was affected by the ferocity of the global downturn in oil prices as were other industry players. “This can be seen from the lower inflow of orders for vessels,” he said, “and the adverse impact on our FY2015 financials. With a slowdown in market momentum, our

top line decreased 51 per cent to RM950.0 million (US$146.7 million) in FY2015, from RM1.9 billion (US$293 million) in FY2014,

due mainly to a reduction in our shipbuilding business segment’s revenue as we completed and delivered a lower number of vessels. The

vessel chartering business segment’s revenue declined by 50 per cent to RM44.4 million (US$6.9 million) in FY2015 from RM88.1 million (US$13.6 million) in FY2014, due primarily to a lower utilisation rates during the year. Gross profit correspondingly dipped by 60 per cent to RM150.0 million (US$23.2 million) during the year, in line with the lower revenue, while gross profit margin was 16 per cent compared to 20 per cent in FY2014.” As a result, Nam Cheong’s net profit after tax in FY2015 fell to RM27.9 million (US$4.3 million) from RM302.2 million (US$46.7 million) in FY2014. Net asset value per share grew by 12.9 per cent from the previous year whilst shareholders’ equity rose by RM157.8 million (US$24.4 million) to RM1.4 billion (US$216 million) as at 31 December 2015.

Mr Tiong said the company’s gross orderbook of approximately RM1.2 billion (US$185 million) as of the end of 2015 consisted of a mix of offshore support vessels that are due for delivery from this year through to 2018. “With a healthy cash position, a well spaced maturity debt profile,

Although its order intake has declined significantly, Nam Cheong in Malaysia says it is well placed to withstand the downturn in the offshore oil and gas sector and reduced demand for vessels, and its experience of similar downturns means that it knows how to weather the storm

ASSET-LIGHT STRATEGY MEANS NAM CHEONG IS WELL PLACED DESPITE DOWNTURN

12 | AREA REPORT Southeast Asia

Datuk Tiong Su Kouk: “asset-light strategy and healthy cash position mean Nam Cheong is well placed”


EMAS AMC JV formalisedEzra Holdings Ltd in Singapore and Chiyoda Corporation in Japan have confirmed that Chiyoda has completed its investment into Ezra’s subsea services business, EMAS AMC, to form EMAS Chiyoda Subsea, a 50/50 joint venture (JV).

The companies signed a memorandum of understanding for Chiyoda to invest in EMAS AMC in August 2015. This was followed by a binding share sale and subscription agreement on 29 September 2015.

In a statement, Ezra Holdings said that, by leveraging Ezra’s and Chiyoda’s combined capabilities and global experience, the two companies hope to be able to offer clients better support and service offerings, strengthening EMAS AMC’s position in the upstream oil and gas industry, especially in the engineering, procurement, construction and installation (EPCI) segment.

Chiyoda’s engineering and project management capabilities as well as its wide network of global clients, including Japanese clients, will allow EMAS Chiyoda Subsea to extend its current geographical reach and derive synergies across the subsea value chain, including integration from concept phase to execution for EPCI projects.

Mermaid draws in contractsMermaid Maritime Public Company Ltd says its subsidiary Mermaid Subsea Services (Thailand) Ltd has been awarded a remotely operated vehicle (ROV) services contract in the Gulf of Thailand with a major upstream oil and gas company. The scope of work includes but is not limited to structure and sea line inspection, free span correction and corrosion prevention. The contract is awarded for a two-year term from March 2016 to March 2018, with an option for a one-year extension. The work will utilise the DP2 ROV support vessel Mermaid Sapphire along with a deepwater work-class ROV plus associated equipment, if required, and specialist personnel. The value of the contract for the initial term is estimated to be circa

US$10 million.Earlier, the company also

confirmed that its Qatari business unit Mermaid Subsea Services LLC, which is based in Qatar, has been awarded an additional subsea cable installation and diving services contract by an existing customer, which it described as “a global cable manufacturing, installation and commissioning company”. The work scope has an estimated value of US$10 million and is scheduled for completion within three months. Commencement was expected in April 2016. The work will utilise a chartered-in DP2 construction barge, Mubarak Supporter, along with other specialised vessels, if required, plus associated equipment and specialist personnel. OSJ

sizeable undrawn committed bank lines and strong support from banks and bondholders, we are financially resilient and able to withstand the current downturn,” he said. “Further, in July 2015, we bolstered our balance sheet by raising S$75 million (US$55 million) under our S$600 million (US$443 million) Multicurrency Medium Term Note Programme as part of our refinancing efforts. This places us in a good position to cope with further fluctuations in the market.”

As Mr Tiong noted, national and international oil companies have announced plans to further reduce capital and operating expenditure and defer projects. Closer to home, Petronas has announced further spending cuts of an additional RM15–20 billion (US$2.3–3.1 billion) in capital and operating expenditure in 2016 as it braces itself from a drop in earnings.

“We have expanded our presence globally in the years before the slump and managed to reduce our reliance on revenue from Malaysia,” Mr Tiong said. “This strategy of geographical diversification and a larger footprint across the world has contributed to a certain level of business stability and wider customer base. Our role as a partner to our customers by providing them with quality vessels driven by cost and fuel efficiencies is more pertinent than ever before. By doing so, we seek to improve the bidding competitiveness for charter contracts by our customers. This places us in a mutually beneficial relationship to potentially secure additional contracts from our customers in the future when the tide of uncertainties in this industry turns.”

Mr Tiong said Nam Cheong had also taken advantage of its operational flexibility by deferring deliveries of vessels that are currently under construction, at the

request of its customers and at its own initiative, to help ride out the storm.

He said that, despite the downturn, Nam Cheong had received encouraging enquiries from customers in countries such as Thailand, India, the Middle East, Africa and Mexico, in addition to Malaysia and Brunei. He said the company’s top priority is to focus on developing strategic partnerships with regional players to collectively capitalise on business prospects. He said that, for the time being, the company was operating on the assumption of a sustained low oil price environment, and this continues to be Nam Cheong’s guiding business strategy.

“We have gone through many such similar cycles over the past four decades and have in place time-tested strategies that will help mitigate the effects of the down cycle,” Mr Tiong said. “In particular, we have an asset-light strategy through the outsourcing of vessel construction to reputable shipyards that are financially sound in China. This business model drives cost efficiencies and has allowed us to avoid excess capacity during difficult periods. We believe this industry cycle will inevitably reduce the competition, leading to a leaner environment going forward. As such, it benefits players like us, given our global market position as a cost leader in the offshore marine sector as well as our strong track record of building a sustainable business and in deploying capital prudently.

We will continue to calibrate our cost, optimise financial flexibility and maintain a sound financial structure. With a balance sheet that is not overly stretched and having raised additional funds recently, we believe this will enable us to weather the current volatility,” he concluded.

The new JV will enable Emas Offshore to extend its reach


E nergy services provider PT Elnusa Tbk (Elnusa) has taken what could be an important step in the evolution of Indonesia’s offshore marine industry with the acquisition

of a seismic ship to undertake surveys in the waters off the country. Indonesia has been a cabotage market for some time, with a growing number of offshore vessels for use in the country’s offshore oil and gas industry now built in the Southeast Asian country or acquired and operated by Indonesian companies.

The cabotage principle was first enacted in Indonesia in 2008 and came into force in May 2011. Under the cabotage principle, foreign-flagged vessels are prohibited from operating in Indonesian waters, although foreign-flagged vessels were able to continue to operate in Indonesian waters, with varied exemptions expiring between December 2012 and December 2015, depending on the type of activity and type of vessels. The exempted vessels were primarily those engaged in offshore drilling activity. Since the end of 2015, all vessels operating in Indonesian waters need to be registered in Indonesia and be Indonesian-flagged, which means they must be owned by an Indonesian company (or a joint venture).

Elnusa said it sees “tremendous opportunities” to develop the marine seismic market in Indonesia, since there are still plenty of oil and gas reserves in deepwater areas. This being the case, it has decided to acquire an as yet unnamed seismic vessel that it

plans to use for seismic surveys to support the country’s future oil and gas exploration activity. The company said the acquisition was a response to Indonesian Government policy to encourage the shipping and offshore industries in the country. It noted that only a few Indonesian-flagged seismic vessels work in Indonesia waters.

The company also noted that the seismic vessel it has acquired “has some advantages and capabilities that have never been held by another Indonesian-flagged seismic vessel”. It said the vessel has the capacity to tow 12 streamers, each of up to 10km in length, “hence it is ideal to carry out seismic surveys in deep water and is capable of producing 3D seismic data.”

The company went on to say, “It is our duty, as the only national asset that has competence and experience in integrated oil and gas services, to work and develop marine seismic in Indonesia. We are ready to fully support the programme of the Ministry of Energy and Mineral Resources of the Republic of Indonesia to restore the glory of the national oil and gas production and become an oil and gas exporter and contribute to the income of the country.”

The company claims to be the only Indonesian company that has competence in every area of the offshore oil and gas market, from drilling through the supply chain. It has usually chosen to work in strategic alliances with other offshore oil and gas companies and is affiliated to Jakarta-based oil and gas and energy company PT Pertamina, which is its majority shareholder.

Cabotage has long been a part of the offshore vessel market in Indonesia, and now an Indonesian company plans to enter the seismic market too

SEISMIC SHIP IS NEXT STEP IN EVOLUTION OF INDONESIA’S OFFSHORE INDUSTRY

14 | AREA REPORT Southeast Asia

Nam Cheong Ltd says it has received a notice of termination/cancellation from Petra Offshore Ltd (POL), a wholly owned subsidiary of Perdana Petroleum Berhad, purporting to terminate/cancel a contract in relation to the sale of an

accommodation work barge entered into between POL and Nam Cheong International Ltd, a wholly owned subsidiary of the company, on 23 June 2014.“The group’s position is that the termination/cancellation is not valid,” said Nam Cheong, “and

is tantamount to a repudiation of the contract by POL, pursuant to which the group is entitled to compensation.“The group intends to fully enforce its rights against POL and, if necessary, seek legal redress. The purported

termination/cancellation of the contract is expected to have an impact to the earnings of the group for the financial year ending 31 December 2016, the extent of which cannot be conclusively ascertained at this point in time.” OSJ

Nam Cheong takes action over termination

Elnusa said it sees developing a domestic seismic capability as a key plank in the country’s offshore oil and gas industry

16 | AREA REPORT Brazil


OFFSHORE MARKET GOES FROM BAD TO WORSE AS SCANDAL DEEPENS

The maelstrom enveloping Brazil’s state-owned oil company Petrobras

continues to worsen, and the market for offshore support vessels (OSVs) isn’t getting any better, as the latest figures released by the Association of Brazilian Offshore Support Companies (ABEAM) makes clear.

The publication Frota de Embarcações de Apoio Marítimo no Brasil (Brazil’s OSV fleet) is produced about once a year, and the latest version, published in late March and covering the

fleet up to the end of February 2016, revealed that the overall number of OSVs registered as operating in Brazil had fallen from 476 (at the time of the previous report in March 2015) to 426.

That is bad enough, but the devastation wreaked on the foreign-flagged fleet was horrendous, with the numbers falling from 229 down to 154, whilst Brazilian-flagged numbers rose from 247 OSVs to 272.

Ronaldo Lima, president of ABEAM, said that the massive decline in the foreign-flagged fleet was the most noticeable aspect of the new fleet statistics and noted that not many of the 154 still remaining in Brazil were on long-term contracts.

“Many vessels are now laid up or operating, or at least trying to operate, in the spot market,” Mr Lima told OSJ, when we met him in his Rio de Janeiro office recently. “It all makes me very sad. It is also significant that the ratio between Brazilian-flagged and foreign-flagged vessels operating in Brazil today has changed so dramatically, from more or less 50/50 in recent years to the point where we now see more than two-thirds are Brazilian-flagged.”

Mr Lima explained that Petrobras is cutting back on its OSV requirements because of the dire state of the international oil industry and the cripplingly low oil prices and, while doing so, is giving preference – in accordance

THE OFFSHORE VESSEL MARKET IN BRAZIL REMAINS IN A DIRE STATE WITH FOREIGN-FLAGGED VESSELS DEPARTING, OWNERS STRUGGLING TO SECURE WORK FOR THEIR SHIPS AND SEA-GOING PERSONNEL BEING LAID OFF

BY ROB WARD

Brazilian-flagged vessels are still being built in Brazil and continue to enter an already depressed market

Brazil AREA REPORT | 17


with Brazilian maritime law – to Brazilian-flagged vessels rather than foreign-flagged ships and has caused many foreign-flagged units to leave the country.

“One of the problems is that Petrobras doesn’t explain to us exactly what their requirements are, so every month, we are being surprised – unpleasantly surprised – as to how many vessels they are cutting from

the roster,” Mr Lima explained. “Many tenders are still open and many are still undeclared. There is one for PSV 4500s [which opened more than a year ago], and whenever there is re-bidding, it pushes the prices down even further.”

On top of that the Lava Jato (Car Wash) corruption scandal – which started out with a focus on contracts signed with shipyards for vessels that were

not needed in order to generate money for the ruling parties in Brazil and some unscrupulous politicians – has continued to enmesh more parts of the offshore industry. Now the scandal has developed to such an extent that the Brazilian president, Dilma Rousseff, could be impeached.

“Petrobras cancelled more than 30 orders for drillships, and that affects everyone, the whole industry,” explained Mr Lima, “because with each drillship, you need three or four OSVs to support them. So with that Petrobras manoeuvre alone, you can see that around 100 ships are taken out of the game. Then you add into the mix the process of blocking, and it leads to a dire situation for foreign-flagged vessels.”

While Mr Lima is a realist rather than an optimist, he believes the oil price will “come back up at some stage”, and when it does, the Brazilian OSV market will be “lean and hungry” and ready to reactivate itself back to where it was two years ago.

“I think we are looking at least a year ahead before things start to move again and probably to 2018 for the OSV market to start growing again,” he said, “and I think it will need the oil price to go into the US$60–70/barrel level before things move again.”

Other observers of the scene are more pessimistic and believe that the oil price would need to be more in the order of US$70–80/barrel for a significant improvement in the market to occur.

As has been previously recorded in OSJ, financially troubled Norwegian outfit World Wide Supply has been hit hard with the cancellation of contracts for three vessels and is reportedly preparing to sue. There have also been numerous other recent departures from the Brazilian scene, including K Line Offshore.

There seems to be very

little light at the end of the tunnel, but one small avenue for survival could be to follow the old adage ‘if you can’t beat them, join them’. This being the case, a number of foreign-flagged owners and operators are looking at ways to become EBNs and put some of their foreign-flagged ships onto the Registro Especial Brasileiro (REB) or Special Brazilian Register, which allows them to bareboat charter a foreign-flagged ship and operate it under Brazilian flag rules.

Norwegian operator Havila Shipping do Brasil has followed this line and, apparently, was given EBN status by Antaq, but following some complaints from local trade unions that the Brazilian-flagged vessel they purchased wasn’t really an OSV, full status was revoked. Now the company is in limbo. They had joined ABEAM but now their membership is said to be on hold until full EBN status is granted.

Havila currently operates three OSVs offshore Brazil – Havila Faith, Havila Favour and Havila Fortress – which have, until recently, been operating under the EBN status provided by Acamin for the first two and Astromaritima for Havila Fortress.

The manager of one foreign-flagged operation, who has been thwarted on several fronts by Petrobras over the past few years, says that his company, like many others, has had enough of the shenanigans at the oil company. “What we are seeing is that Petrobras is a broken company,” the manager told us recently. “It is running out of cash, and this means they are running after money in any underhand way they can. This is leading to them fining everyone for every tiny break of what they perceive to be contract infractions.

“People have been putting up with outrageous behaviour – which is bordering on the illegal – for many years and

The scandal that started at Petrobras has ensnared more and more people – now president Rousseff could be impeached

18 | AREA REPORT Brazil


putting up with it because of the pot of gold that always ‘might’ be at the end of the rainbow. I don’t think that rainbow is going to appear any time soon, and this market has no chance of reviving again until the oil price reaches at least US$70. We will certainly consider legal action if this continues.”

As highlighted above, World Wide Supply is seeking redress through the courts after its contract was terminated last year. When asked if ABEAM would support any of its members who wanted to take legal action against Petrobras, Mr Lima said, “That’s their decision if they decide to go to court. If they want to sue Petrobras, then it is up to them, but it is not for ABEAM to get involved on the commercial side of things for our members.

“We often go to Brasilia and try to show the relevant government ministers the issues that we face and the concerns of the market, that many vessels are now out of contract but owners still have finances to be paid. Many people are being fired because contracts are expiring. This is a major concern for everybody, but the government doesn’t seem able to do anything about it. We are complaining to them and explaining that we are very worried, but the problem is that no one at Petrobras wants to

take any decisions any more, so the problems continue to pile up.”

Some optimists in the OSV market are hoping for the cutbacks at Petrobras to level off and for Brazil’s largest company to start growing, but the opposite is happening. According to the respected Valor newspaper, the number of jobs related to Petrobras, including third-party service contracts and suppliers (including crew and onshore-based staff at OSV operators) has been slashed by a massive 169,700 from 446,300 in December 2013 down to 276,600 by the end of February 2016, a collapse of 61 per cent.

Valor estimated that 85 per cent of the job losses have been inflicted on service providers, where numbers have fallen from 175,800 in December 2013 to 30,800 in February of this year. Thousands of qualified offshore and OSV personnel

are now out of work in Rio de Janeiro. Petrobras has already cut its own workforce by 8.7 per cent and has declared that more job cuts will follow.

As OSJ went to press, the state-controlled oil giant announced that it was offering voluntary redundancy packages to all in a bid to cut another 20 per cent from the current workforce. This will have a knock-on effect on the OSV market.

When you consider there are around 50 fewer OSVs operating in Brazilian waters today compared to just over a year ago and 30–60 anchored in Guanabara Bay waiting for work or suffering from the ‘blocking’ process, that means at least 2,000 seafarers have lost their jobs, with more to follow.

Armando Freigedo Rodriguez, a consultant for Aquapar in Rio, estimated that, in Brazil, vessels that are at anchor for long periods

or laid up will have around 30 per cent of full crew in attendance. He told OSJ, “OSVs operate with crews that go from a minimum of 12 on a PSV to about 18 on a big AHTS. You can use 15 as an average. All boats operate with two full crews that will change every 15 or 28 days depending on companies’ policies, so each vessel requires 30 seafarers, about a third of which will be officers.”

Sindmar, the Brazilian officers’ union, is particularly unhappy – with Petrobras and the Rousseff government – that this has been allowed to happen, partly because of government incompetence and corruption and also because of the oil price. Sindmar is a very powerful lobbyist in Brazil, so it is at least possible that this might persuade the government/Petrobras to think again about the cutbacks.

Oceana Shipyard delivers first newbuildBrazil’s Oceana Shipyard has delivered its first vessel with the christening of CBO Oceana, a PSV 4500 owned by sister company Companhia Brasileira de Offshore (CBO). The vessel is due to go straight into a contract with Petrobras and will work in the Santos Basin on a four-year deal, renewable for a further four years.

CBO Oceana is the first of two PSV 4500s that CBO is having built at the yard. It is a throwback to the ‘good old days’ with Petrobras and was ordered four years ago under the sixth round of the Petrobras Prorefam scheme to bolster the Brazilian-flagged fleet. Under this regime, CBO/Oceana received soft loans from two state-controlled

banks – the Brazilian National Development Bank (BNDES) and Caixa Economica – to pay for the construction.

That was when the price of oil was well over US$100 a barrel, Petrobras and the OSV market in Brazil were expanding on all fronts and Petrobras was a highly regarded company full of competent engineers and

technicians. How times change, but at least CBO is going from strength to strength.

“CBO Oceana is one of the PSVs chartered in by Petrobras in the sixth round of bidding of the Prorefam. In addition to this vessel, another PSV and six anchor handlers are still being built at Oceana,” said the yard’s director Johan Paul Kempers. OSJ

“I THINK WE ARE LOOKING AT A YEAR AT LEAST BEFORE THINGS START TO MOVE AGAIN AND PROBABLY TO 2018 FOR THE OSV MARKET TO START GROWING AGAIN”RONALDO LIMA, PRESIDENT, ABEAM

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In December last year, MMA Offshore was awarded a five-year contract by ConocoPhillips that will see the

company’s platform supply vessel (PSV) Mermaid Inscription modified to provide platform supply and static tow services in support of ConocoPhillips’ operations at its Bayu Undan facility in the Timor Sea.

International Maritime Consultants (IMC) and MMA Offshore developed the conceptual vessel arrangement that would enable the PSV to successfully carry out static tow operations without impacting other operations on the back deck – thereby eliminating the need for a dedicated static tow vessel during offtake operations. Central to the proposed changes was the installation

of an additional deck over the existing forward mooring deck to be fitted with an asymmetric, electrically driven, escort winch.

IMC also leveraged its previous experience working with Maritime Research Institute Netherlands (Marin), which specialises in hydrodynamic and nautical research and development, to support a simulation of the modified PSV. The simulation served to prove the concept would enable Mermaid Inscription to successfully undertake the range of static tow operations required of the ConocoPhillips operation.

Commenting on the contract with ConocoPhillips, MMA’s managing director, Jeff Weber, said, “We are confident that our ability to collaborate with our clients and provide innovative solutions will continue to set us apart in the industry.” IMC managing director Justin McPherson expressed similar sentiment, saying that helping clients unlock value in existing tonnage through innovation was always satisfying.

Given the challenging market conditions currently faced by offshore support vessel operators such as MMA, we were very pleased to be able to engineer a solution that added new operational capability and flexibility to Mermaid Inscription,” he said.

IMC is now completing the design work for the vessel modification.

Mermaid Inscription is an 87m dynamic positioning (DP2) PSV delivered to MMA Offshore in early 2013. The diesel-electric vessel was built to fire-fighting class 1 standards and configured with 1,000m2 of open deck cargo capacity as well as underdeck bulk storage.

Australasia AREA REPORT | 21

Offshore Support Journal | May 2016

AUSTRALIAN DESIGNER HELPS MMA SECURE CONOCOPHILLIPS DEALDESIGN AND ANALYSIS WORK UNDERTAKEN BY IMC HELPED ITS LONG-TERM CLIENT MMA OFFSHORE TO SECURE A NEW CONTRACT WITH CONOCOPHILLIPS

Construction starts on submarine cable

Hawaiki Submarine Cable LP and TE SubCom has confirmed that a contract for the Hawaiki submarine cable system has come into force and the construction phase has commenced. The cable system is a new trans-Pacific cable, which will link Australia and New Zealand to mainland US, as well as Hawaii, with options to expand to several South Pacific islands. Permitting and initial route planning began in June 2015, and the system will be completed by mid-2018.

The 14,000km cable system will deliver more than 30 Tbps of capacity via TE SubCom’s C100U+ submarine line terminating equipment (SLTE) and will allow for optional connectivity to islands along the route utilising TE SubCom’s industry-leading optical add/drop multiplexing (OADM) nodes. The co-developers of the project have entered into a long-term partnership and joined forces with entrepreneur Malcolm Dick to fund and operate the multimillion dollar cable system. Hawaiki will be a privately owned and carrier-neutral cable for the Pacific region.

The Hawaiki cable system will enhance international capacity for New Zealand and Australia directly to the US, providing enhanced communications that the region has been in need of for some time. OSJ

MMA Offshore turned to IMC in Fremantle, Australia, to develop the modifications required to Mermaid Inscription

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Offshore Support Journal 04-14.indd 1 15.04.2016 15:47:51

22 | AREA REPORT Gulf of Mexico


NOIA BEMOANS REMOVAL OF ATLANTIC LEASE SALE

Not long ago, the idea of exploring for oil on the Atlantic coast of the US seemed on the cards, and Atlantic

states stood to benefit hugely from demand for products and services. Now, even Time magazine has waded into the debate about the Obama administration’s controversial decision to reverse its 2015 plan to open up waters off the coasts of Virginia, the Carolinas and Georgia to offshore drilling.

In a story entitled ‘We can’t afford to say ‘no’ to US energy,’ Time magazine said, “Officials claim the new decision to ban oil drilling will protect national security. It will do the opposite.” The magazine claimed that the administration, under what it called “constant pressure from environmentalists”, has long had an ambivalent view of offshore oil exploration. Plans to open up this part of the Atlantic Ocean for drilling have been on the drawing board for years.

“Last year, the administration’s opposition appeared to have softened,” said Time. “In January 2015, the White House released a statement proposing to auction drilling rights in up to 104 million acres of the mid- and

South-Atlantic in 2021. At the time, Interior Secretary Sally Jewell noted: ‘This plan takes a balanced approach to oil and gas development. It protects areas that are just too special to develop.’ … Now, the administration has reversed course.”

In response to the about-turn by the Obama administration, the president of the National Ocean Industries Association (NOIA), Randall Luthi, issued the following statement: “The good news is that there are still offshore lease sales planned in the Gulf of Mexico and Alaskan Arctic. The bad news is the disappointing and mind-boggling removal of Atlantic Lease Sale 260 from the 2017–2022 OCS Oil and Gas Leasing Proposed Program. This is a short-sighted political decision of an administration influenced by the radical and extreme minority devoted to keeping fossil fuels in the ground. The removal is not based upon science or good energy policy, and will certainly inhibit the economic opportunities and energy security of our country.

“It is difficult to put into words how wrong and anti-energy this decision is. By not taking the long-term view, the administration sells US consumers short. Instead, they have determined they are content to let the rest of world lead in Atlantic offshore oil and natural gas development. This is the wrong direction in efforts to continue the US march towards energy independence. Contrary to the alarmist and scientifically inaccurate rhetoric of anti-fossil fuel groups, the fact remains that offshore oil and gas operations are conducted safely around the world on a daily basis, while technology and safety measures continually advance. Moreover, experience has shown that offshore development does not conflict with,

but rather complements, rich tourism and fishing industries. For decades, these industries have coexisted and thrived in the Gulf of Mexico. There was no valid reason to think the Atlantic would be any different.

“The decision also dismisses widespread support for offshore oil and gas development. Several polls have repeatedly indicated that a majority of residents of the Atlantic states favour exploration and drilling off their coasts. Various state and local elected officials and stakeholder groups across a wide array of industries, like manufacturing and agriculture, support the safe exploration and production of offshore oil and natural gas in the Atlantic. In addition, there is longstanding bipartisan and bicameral support in Congress for offshore development. For the President to unilaterally ignore those wishes, and instead cater to a loud minority, is disappointing and is a prime example of ‘Washington knows best’.

“A broad-based energy portfolio is the key to maintaining our nation’s position as the global leader in energy production,” said Mr Luthi. “Oil and natural gas are projected to remain major sources for meeting the world’s growing energy needs for the foreseeable future. The Atlantic sale held the potential to increase our ability to provide affordable and reliable energy to consumers at home and abroad. The administration clearly places politics ahead of sound science and wise energy policy.

“These kinds of decisions forfeit tremendous future economic benefits and risks our nation’s recently earned status as the global energy leader,” said Mr Luthi, claiming that the decision to remove the Atlantic Lease 260 was “contrary to the goals of the Outer Continental Shelf Lands Act, ignores the wishes of the Atlantic states’ governors and their constituents and is premature. We don’t even know the true extent of oil and natural gas resources in the Atlantic. To remove the area from further evaluation keeps American citizens in the dark about what resources might be there. A more prudent decision by the administration would have been to continue a thoughtful conversation with the American public, rather than turning on their heels and walking away,” he concluded. OSJ

The offshore oil and gas industry has reacted with considerable disappointment to a decision by the Obama administration not to allow exploration off the Atlantic coast of the US

Randall Luthi: “removal of Atlantic lease is mind boggling”

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Offshore Support Journal 04-14.indd 1 15.04.2016 15:47:51

24 | AREA REPORT North Sea


OSV PLAYERS VENTURING INTO NEW MARKETS

W hether it be the many Norwegian vessel companies trying desperately to garner support from their shareholders and bondholders for financial restructuring plans, the record low

day rates and utilisation being felt in the market or the constant headache of having to lay up quality tonnage, the current issues are showing little signs of disappearing, and offshore support vessel (OSV) owners are having a torrid time.

With most vessel owners now conceding that they expect no kind of market recovery in the near future, the thoughts of some have turned towards the idea of diversification by vessel companies into other areas as well as with the actual vessels themselves. French giant Bourbon, one of the leading worldwide players in the OSV sector, recently clinched a deal that will see it take more of an interest in a different type of shipping.

As highlighted elsewhere in this issue, Bourbon will pay US$320 million to acquire gas transport activities from Jaccar Holdings as it seeks to take advantage of opportunities away from the “very difficult market facing the offshore services sector”.

Bourbon will buy Singaporean-owned ‘shipping trust’ Greenship Gas, which includes a fleet of 17 vessels, and gas transportation services company Evergas. Greenship Gas Manager Pte Ltd will also be acquired, along with 80 per cent of JHW Engineering and Contracting Ltd. Bourbon said it would benefit from a seller’s credit of US$100 million with no interest for a maximum period of three years and that it expected to have a US$220 million bridge loan, also for up to three years. Once the transaction has been completed, 80 per cent of the ownership of the vessels will be resold, which will then be retained on a bareboat charter for a minimum period of 10 years, enabling it to repay the bridge loan.

Giving information on the deal in a presentation in Paris, chairman of Bourbon Jacques de Chateauvieux said, “We have chosen the mid-stream gas transport and logistics sector. That is why Bourbon decided to buy assets that Jaccar has developed in the sector during the past three years.” Mr de Chateauvieux, who is also the CEO of Jaccar, added, “Bourbon of tomorrow will be made up of Bourbon offshore and Bourbon gas.” He also highlighted the growing market and the need for US gas to be exported, especially

THE CHALLENGES CONTINUE TO COME THICK AND FAST FOR OPERATORS IN THE NORTH SEA OFFSHORE VESSEL MARKET – DIVERSIFICATION IS ONE POTENTIAL SOLUTION

High spec ships continue to be delivered into an already heavily oversupplied North Sea market

North Sea AREA REPORT | 25

ethane used in the production of plastic. “It is in excess in the US and must therefore be exported to Europe and Asia, where it remains in demand by manufacturers.”

The idea of modifying OSVs themselves to allow them to operate in sectors outside of oil and gas has also recently been suggested by Dutch shipbuilder Damen. Recent statistics regarding the issues being faced by OSV operators have been highlighted, with market intelligence experts IHS revealing that anchor-handling tug/supply (AHTS) vessel day rates on the North Sea spot market dropped by more than half in March compared to February, while platform supply vessel (PSV) fixtures were being agreed at near to or below breakeven levels.

With around 120 PSVs and AHTS vessels currently laid up in the North Sea alone and overall term and spot utilisation (at the time of writing) of just 60 per cent in the North Sea, it is clear that current conditions are becoming unsustainable for many OSV operators. Norwegian companies like Island Offshore, Havila, Viking Supply Ships and Atlantic Offshore have all been forced to take action to try and guarantee their financial future in recent months, while several other companies are beginning to show distress signals due to the current state of the market. Damen’s suggestion of modifying laid-up PSVs into vessels capable of operating in other sectors such as aquaculture and defence may seem a little left field. However, with many owners searching for any hint of positivity regarding the prospects for the fleets, it is an idea that will be taken seriously.

With the historically low oil price and associated effect on demand for OSVs and the resultant low day rates being paid for quality tonnage, Damen says that it has come up with a potential solution towards getting idle tonnage active again and back into profit-making territory.

Damen’s sales manager, Remko Hottentot, said, “Our design teams have come up with workable ideas across several industries. For example, we can convert a laid-up PSV into a profitable container feeder or, for naval operations, a logistics support vessel. The possibilities are numerous. It will also be possible to transform a PSV into an accommodation and O&M vessel.”

One example given by the shipbuilder was the Damen Live Fish Carrier 8916, which is used for the aquaculture industry. “Here, the concept of using the existing PSV platform is ideal, yielding many advantages for live fish-carrying situations,” said Mr Hottentot. In addition to permanent conversion concepts, Damen can also create temporary designs. These can be applied to vessels originally built by Damen or other shipbuilding companies.

For those vessel owners not willing to make dramatic modifications to their already expensively acquired fleets, it may be a case of being creative in the meantime when looking for work. The Netherlands-based Vroon is one example of a vessel owner picking up a rather unique job for a vessel, with a fixture recently awarded to 2010-built PSV VOS Precious. The UT 755 LN design vessel was fixed for a ‘bird-watching’ job in March by IMARES. The job, which admittedly lasted only a few days, involved IMARES and Wageningen University counting the concentration of birds in specific areas on behalf of the environmental commissioner of The Netherlands. A somewhat strange job for a PSV one might say, but in today’s challenging market, any job tends to be a welcome one for vessel owners.

The lay-up situation shows little sign of changing, with day rates in the North Sea remaining low despite the 120+ vessels currently out of service. In years gone by, there was some concern that newbuild PSVs would be delivered without a term charter already in place.

Today, the concern is that newbuilds may have to be immediately placed into layup – bypassing the spot market if no term charter is in place – due to poor demand for tonnage in the sector.

US-based GulfMark, an OSV company that also has a significant presence in the North Sea, experienced that situation first hand in March. North Barents – a large PSV being built for GulfMark at the Simek yard in Norway – began sea trials in mid-March. Following completion of the trials, however, the vessel listed as yard number 131 at Simek was to be laid up until such a time that GulfMark was ready to take delivery of the vessel.

When that will be is not completely known but is estimated to be in early 2017. At that point, GulfMark (and every other OSV player) will be hoping that the market has shown some sort of an upturn. In the meantime, it seems as though the challenging conditions are not going to go away, meaning that some sort of market consolidation including mergers and acquisitions cannot be that far away.

IHS figures reveal that, in the first week of April 2016, there was total demand (term and spot market) for 234 PSVs and AHTS vessels in the North Sea. At the same time a year earlier, total demand stood at 292 vessels, representing a drop of 19 per cent year on year. Over the same period of time, the size of the fleet has increased from 356 to 390 vessels (an increase of 10 per cent). Times are tough, and the possibility of making inroads into other markets outside of the sector may become a serious proposition for more OSV players. OSJ

Damen is offering to help OSV owners convert PSVs into a range of other vessels

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26 | AREA REPORT West Africa

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T he westernmost part of Africa could become a significant market

for offshore support vessels if recent exploration successes are converted into commercial oil and gas projects. The latest gas discovery off Mauritania has led to energy companies considering a liquefied natural gas (LNG) project.

Kosmos Energy said it was considering an LNG development for the gas resources it has discovered near the Mauritania and Senegal boundary. The offshore side of this would centre on the Tortue, Ahmeyim and Guembeul gas discoveries. Kosmos estimates it has discovered 15 tcf (trillion cubic feet) of gas, ample for an offshore development with subsea systems connected to a multi-train LNG plant. Kosmos chief executive Andrew Inglis said the location of the resources means it would be a viable development.

“We believe we have proven sufficient gas resource to underpin a world-scale LNG project. The combination of the resource size and quality continue to support our view that Tortue is a

competitive source of LNG, and we are working towards commercialisation,” he said. The company is also looking for oil, with plans to drill three offshore exploration wells in Senegal and Mauritania.

Cairn Energy’s success during the first quarter of this year in Senegal has found more than enough oil resources for a second deepwater oil project in that area. Cairn has continued discovering oil in the Sangomar Offshore block. Its chief executive, Simon Thomson, calculates it has discovered 385 million barrels in the block so far. “The current programme will increase our understanding of existing discoveries as well as evaluate prospects and help to plan the longer-term development of the field,” he said.

The programme involves more exploration drilling and seismic surveys. Cairn submitted a plan to the Senegal Government for a long-term, multi-field and multi-phase exploitation programme. Any development would require installation of subsea systems tied to a floating production system.

These developments are the lifeblood of the offshore support vessel market in West Africa. This has generally held up well to the global recession in oil markets, but a lack of new projects would impact on the long-term prospects. An indication of the present negativity in the market was Chevron subsidiary Cabinda Gulf Oil Co cancelling the contract with the Maersk Deliverer semi-submersible.

In Nigeria, 2008-built light well intervention vessel Island Constructor worked on the Oyo field. Erin Energy Corp will use Island Offshore’s Ulstein SX121 design vessel for essential maintenance on the Oyo-8 well. This was required because of the failure of the well’s subsurface controlled subsurface safety valve to open, following a planned production curtailment on the Oyo field.

This demonstrates the technical issues that can occur on Nigerian offshore projects, but highlighting other dangers of working in the Gulf of Guinea was the abduction of seafarers on 2011-built, 1,432 dwt platform supply vessel Bourbon Liberty 251 on 23 February. Bourbon Offshore was able to negotiate the release of two crew members on 25 March.

Also in Nigeria, Panoro Energy used a fleet of offshore vessels to install an FPSO on the Aje field, following the ship’s voyage from Cape Town. The mooring system and risers were hooked up to the FPSO. The subsea systems, including manifolds and flowlines, for the project were installed during the first quarter.

In Angola, Technip won a three-year engineering services contract with Total. This contract covers services for the existing Girassol, Pazflor, Dalia and CLOV floating production storage and offloading (FPSO) units and associated subsea infrastructure in Block 17.

It involves engineering, technical assistance, management, supervision and co-ordination, as well as procurement-related activities until the end of 2018. OSJ

KOSMOS PLANS LNG PROJECT OFFSHORE MAURITANIACairn Energy’s oil discoveries in Senegal and Kosmos Energy’s gas finds should open new development opportunities that will require offshore support vessels

by Martyn Wingrove

Island Constructor worked on the Oyo-8 well after failure of a downhole valve

We strive to supply Safety Through Education becausewell-educated navigators with in-depth knowledge about

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safety at sea. We have arranged various training courses

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It matters to us all. FURUNO ELECTRIC CO., LTD.www.furuno.com

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Middle East AREA REPORT | 29


Offshore contractors and vessel owners are securing contracts for operations in the United Arab Emirates (UAE),

Qatar and Saudi Arabia. State-run energy companies in these countries continue to invest in offshore infrastructure despite last year’s slump in oil prices.

Investment in subsea infrastructure was highlighted recently by the announcement of contract awards for engineering contractors and vessel owners. Royal Boskalis Westminster announced a contract at the end of March from the National Petroleum Construction Co (NPCC) to support a gas pipeline project in the UAE. This is for dredging and related work for Abu Dhabi National Oil Co (Adnoc).

Boskalis commenced work on dredging a trench for the offshore gas pipeline in the first quarter of this year. The new pipeline will run for at least 50km between Das Island and Ras Al Qila onshore Abu Dhabi. A medium-sized trailing suction hopper dredger and a large cutter suction dredger will be deployed as well as backhoe dredgers for dredging in shallow water. Boskalis is also contracted to backfill the new pipeline once it is installed and the backfilling of an existing offshore pipeline with sand over a total distance of 34km using a trailing suction hopper dredger. This pipeline is located in the vicinity of the new line. The contract will be carried out in phases and completed in the second half of 2017.

McDermott International also won a

contract recently for work in the UAE. The US-based contractor said it had secured work including engineering, procurement, fabrication, transportation and installation of offshore pipelines. McDermott vice president for the Middle East Linh Austin said this would be a fast-track project managed out of the UAE. “This fast-track project was ideally suited to our integrated capabilities involving our engineering, project management and procurement teams based in Dubai as well as our marine assets in the region,” he added. Brokers said it was related to the Abu Dhabi Marine Operating Co (ADMA-OPCO) Umm Shaif pipeline replacement project.

ADMA-OPCO has also awarded a contract to engineering group Penspen to manage improvement projects on Das Island, which is the oil and gas processing, storage and exporting terminals for the Umm Shaif and Zakum fields. The work includes replacement and upgrading of pipeline

networks and creating an oil spill response hub for the island and associated offshore production facilities.

PACC Offshore Services Holdings (POSH) has gained long-term charters totalling US$85 million for five vessels operating in the Middle East. The main element of these contracts involves chartering of four new utility vessels to Saudi Aramco. These vessels will be chartered for five years to perform offshore maintenance work on production facilities in the Arabian Gulf. The charters will commence progressively from the first quarter of 2017, with the first three vessels due to be delivered over the first half of 2017. POSH expects the fourth vessel would be delivered in June 2017. The second contract for POSH was a five-year charter of an anchor handler from the first quarter of this year to an unnamed energy company operating in Qatar.

Mermaid Subsea Services has secured a US$10 million order to provide subsea cable installation, and accommodation services as a subcontract, for a project in Qatar. It will use construction barge Mubarak Supporter along with other chartered-in vessels for the three-month project, which commenced in April 2016. In the Red Sea, Saudi Aramco has ordered a large-scale ocean bottom seismic survey to search for more oil and gas resources. Magseis and BGP will conduct a nine-month survey using survey ship Artemis Athene starting in July 2016. OSJ

Vessel operators and offshore engineering contractors have secured contracts in Abu Dhabi, Saudi Arabia and Qatar

by Martyn Wingrove

CONTRACTS CONTINUE TO FLOW FOR MIDDLE EAST VESSELS

Boskalis will use a large cutter suction dredger to trench a new gas pipeline offshore Abu Dhabi

G as projects in Egypt are sustaining the offshore support vessel market in the Mediterranean. There has

been no let-up in gas developments as energy majors continue to invest in the country to develop large deepwater gas reserves. Subsea 7 was the latest winner from these gas projects. BP awarded a contract to Subsea 7 covering subsea installations on the Giza, Fayoum and Raven fields in the West Nile Delta block offshore Alexandria.

The work scope includes installing subsea infrastructure for 12 wells over the three fields, as well as 220km of pipelines and 80km of umbilicals. The contract also includes installation of the export pipelines from the subsea centres to the Idku terminal. Offshore installation is scheduled to be undertaken in two stages. The first is due to begin in 2017. It will involve installation of pipelines to the terminal in shallow water. The second stage will comprise the deepwater pipelines, flowlines and umbilicals in 2018. Seven Borealis and Seven Antares will be used for the pipelay, while heavy construction vessel Normand Oceanic will be employed

for other construction activities.Eni also made progress with its

Zohr project in Egypt. The Italian group gained government approval for the Zohr development lease, which enables Eni to progress with the project in the Shorouk concession. It plans to commence an early production project, using contractors Petrojet, Enppi and Saipem, to begin in the fourth quarter of 2017 and install more systems in 2018 and 2019. Eni recently drilled a successful appraisal well on the field and began bidding for the offshore contracts. It intends to drill three more wells this year.

To support offshore activities in Italy, Bambini took delivery of new fast support and intervention vessel (FSIV), Blue Brother from Vittoria Shipyard in Adria, Italy. The 52m, €11 million vessel is owned by Adriese di Navigazione and leased to Bambini. The FSIV will also be used for transporting crew to offshore installations as it has capacity for 80 people and a top speed of 28 knots.

Blue Brother has a Kongsberg-supplied class two dynamic positioning system and four Cummins KTA50-M2 engines, which produce 1,342kW of power each at 1,900 rpm. It also has four ZF type 5050 A gearboxes, four 1,370mm propellers and three 175 kVA generator sets. Vittoria Shipyard had previously built PSVs Blue Mommy and Blue Daddy for Bambini.

The Black Sea is also a source of contracts for offshore support vessels. Total is the latest energy company to be drilling for large gas deposits in the area. It is using drillship Noble Globetrotter II, on a sublet from Shell, and three Global Offshore-operated PSVs. Brokers said PSV Olympus was mobilised to Bulgaria from the North Sea to join PSVs Ben Nevis and Makalu, which were sailed from West Africa, along with the drillship.

In the Caspian, Topaz Energy and Marine gained contracts for 14 offshore vessels that support BP’s operations in the Shah Deniz II project and in the Azeri-Chirag-Deepwater Guneshli (ACG) area. The agreement includes five-year charters and two one-year options for these vessels. It extends current contracts for the vessels until 2023 and increased Topaz’s global revenue backlog to almost US$1.4 billion. It includes large anchor handlers, PSVs and emergency response and recovery vessels.

Topaz chief executive René Kofod-Olsen said, “The agreement provides a long-term platform from which to build further scale in the broader Caspian and adds significantly to Topaz’s credit strength through tremendous revenue visibility.” Topaz operates a fleet of 21 vessels in Azerbaijan. OSJ

30 | AREA REPORT Caspian/Mediterranean

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Vessel demand sustained by Egyptian gas projects

BP and Eni are planning subsea projects in Egypt, while Total is drilling for gas off Bulgaria and Vittoria Shipyard has delivered a new FSIV to Bambini

by Martyn Wingrove

The FSIV Blue Brother was delivered from Vittoria Shipyard to Bambini in Italy

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A s David Darling, SVP and chief human resources officer at

GulfMark Offshore, told the 2016 Annual Offshore Support Journal Conference, Awards & Exhibition in a presentation entitled ‘GulfMark’s strategy for surviving the downturn’, from a human resources perspective, reducing costs has taken place in three ways: reducing headcount; reducing wages; and leveraging technology to make the company more efficient. “In light of these,” he told delegates, “it is important to maintain the level of engagement and capability of your workforce.”

He explained that there had been no real change to average age at the officer level as a result of the reductions. Prior to the process getting underway, the average age of the company’s officers was 40 years; now it is 41.4 years, an increase of 1.4 years. “In three of the regions in which we operate, we have reduced offshore wages by an average of 20 per cent in 2015,” he said, noting that the company had continued to eye additional potential wage reductions in 2016, based on market conditions and what its competitors were doing.

Whilst all of this is taking place, however, GulfMark is actively positioning the company for the upturn, when it comes. In broad terms, this has taken the form of

creating what Mr Darling described as shared services and centres of excellence for functions such as payroll administration, competency management and HR data maintenance. The company has also leveraged technology with electronic onboarding, an employee self-service platform and, in future, a manager self-service platform.

Shared services include payroll administration. “We now globally manage payroll,” Mr Darling explained. “We have collapsed five separate payroll functions into one centre of excellence through shared services. We have centralised management of mariner competencies, handling around 1,000 global transactions per month. This has been implemented in the Americas, and Southeast Asia is ramping up. The new concept was due to be implemented in the North Sea starting in the first quarter of 2016.”

Electronic onboarding has seen incoming employees complete an onboarding application, which is reviewed by local HR and then approved and entered into the core HR system. “Employee self-service means employees take ownership of their data,” he explained, so address changes, bank details, emergency contact details and related data are now maintained by employees directly. The company’s

manager self-service concept is similar: an online portal for recommended raises/job changes and so forth. “The drive will be for HR to move from paper pushers/box checkers to more strategic partners by providing managers with the tools directly, with HR taking on a more consultative role,” Mr Darling explained.

“The key points to remember during reductions are to stay true to your company values and treat people with respect,” said Mr Darling. “For GulfMark, that meant clear communication

and compassion, treating people right during the layoffs and maintaining the company’s reputation in the industry for respecting people.”

As he also noted, personnel reductions tend to lower motivation and morale, which could potentially lead to a lack of focus and increase in safety incidents. If managed wrongly, he said, it can lead to reduced trust and feelings of guilt from those left. It was important to stay visible, over-communicate, be open and candid, listen, emphasise company values and share your strategy. “Employees want to know the company is going to make it,” he noted. In order to maintain capability, companies need to have robust internal training and competency assessment and a performance management programme, Mr Darling explained. At GulfMark, having this had enabled the company to quickly quantify weaker performers and release them first. The company continues to train/retrain managers on critical capabilities and skills in partnership with shore-based staff utilising its library of training and assessment tools.

“Over 90 per cent of officers hold DP certificates,” he told delegates, “and we cross-train officers on different classes of vessels. This ensures that remaining personnel are highly skilled, solid performers, and with a solid skillset in core crews, we can complete the crew complement through recalls and partnerships with manning agencies and universities.” OSJ

CREWING | 33


GulfMark reduces headcount whilst maintaining capability

David Darling: “GulfMark’s headcount has been reduced, but the company has actively maintained core skills”

In a downturn, necessary reductions in personnel ashore and at sea need to be handled carefully and considerately

34 | PROPULSION

www.osjonline.com

With crewboats coming in so many different shapes and

sizes, it is not surprising that the number of permutations possible with the available choice of engines from multiple manufacturers and methods of final drive is quite extensive.

At the larger end of the scale, where fast supply boats may have subsidiary roles such as fire-fighting or oil dispersing and carry cargo as well as passengers, it is their speed of up to 30 knots that marks them out from platform supply vessels that average little more than half of that. Smaller vessels may not always be capable of the same secondary roles, but they are rarely compromised in the speed department.

Crewboats are relatively long-lived vessels and, in the offshore oil and gas sectors, they tend to be used more when rigs are closer to shore with longer trips made by helicopter. The fact that so many rigs have

been laid up over the last 18 months has limited the need for new crewboats in the US where there has traditionally been strong demand, although that has not dramatically impacted upon the dominant position that US enginemakers Caterpillar and Cummins have in the sector.

A notable development in US crewboat building has been the growing interest in waterjet propulsion especially in the larger fast supply sector. Waterjet-powered vessels are still in the minority

overall with only about one in six boats built worldwide having that particular form of propulsion. Through its various offices, Hamilton Jet has achieved a dominant position in the market.

While growing in popularity, waterjet propulsion has a long way to go to catch up with the ubiquitous choice of three or four Caterpillar or Cummins engines attached through a gearbox to either fixed-pitch or controllable-pitch propellers. The attraction of waterjets compared to

more conventional forms of propulsion is their ability to allow higher speeds and an increase in manoeuvrability.

Speed and lack of vibration are arguably the main reasons for choosing jets because, typically, a jet propulsion system is significantly more expensive in capital outlay and, according to some specialists, a conventional propeller allows for better performance when vessels are heavily loaded. Offsetting the extra expense involved with installing jets is the fact that rudders and shaftlines are not necessary and maintenance costs can be lower.

Some recent examples of the type are Seacor Marine’s Alya McCall delivered last October and SeaTran Marine’s Mr Steven delivered some months earlier. Alya McCall is the first vessel in a fleet of a new class of Incat Crowther-designed monohull fast support vessels being built by Gulf Craft in Franklin, Louisiana. Sister vessel Najla McCall is due for imminent delivery to be followed by Ava J McCall and Liam J McCall later this year. The series has been built for speed as evidenced by the choice of five main propulsion engines – unmatched by any other vessels afloat or planned beyond a smaller pair from 2010 also owned by Seacor.

All of the vessels feature the same power and propulsion set-up that gives a maximum light ship speed of 38 knots. The main engines are five EPA Tier 3-compliant Cummins QSK60 types each capable of pushing

WATERJETS WINNING IN SPEED STAKES

WATERJET PROPULSION IS GROWING IN POPULARITY IN THE CREWBOAT SECTOR, WHERE THE CHOICE OF ENGINE HAS LONG BEEN DOMINATED BY WELL KNOWN ENGINEBUILDERS

by Malcolm Latarche

Alya McCall was the first vessel in a fleet of Incat Crowther-designed

monohull fast support vessels built by Gulf Craft in Franklin, Louisiana

PROPULSION | 35


out 2,700 bhp (2,013kW) at 1,900 rpm for a total power output of 13,500 bhp. Each engine is fitted with a Twin Disc MGX-61500SC reduction gear with a ratio of 2.56:1 and a Hamilton HT810 waterjet. A cardan shafting system by Driveline Service of Portland connects the gearboxes to the waterjets. A Naiad Dynamics ride control system is also fitted to improve passenger and crew comfort while underway.

The main propulsion system is complemented by a combination of three Thrustmaster 30TT200 electric-mechanical tunnel thrusters working in conjunction with azimuth-like waterjets, all of which are controlled by a Kongsberg DP-2 dynamic positioning system. Electrical power is derived from three Cummins QSM11 gensets, each producing 290 ekW.

By way of comparison, SeaTran Marine’s Mr Steven, also built by Gulf Craft, is, at 32 knots, slightly slower than the Seacor boats but has one fewer main engine. The vessel has the same gears and waterjets but the propulsion choice was for a quartet of Caterpillar 3516C-HD engines. The Caterpillar 3512 and 3516 engines have been popular in many types of offshore vessels in diesel-electric and direct-drive configurations, but as far as crewboats go, the C32 has been the more usual choice. That SeaTrans opted for the new engine as opposed to the Cummins QSK60 it selected for the earlier sistership Captain Elliot is interesting and will allow a good opportunity for comparing the merits of each.

Although Cummins QSK engines are mostly specified, its older KTA38 and KTA50 engines are still popular with some Asian builders and operators, which, combined with the dominance of the newer QSK series and Caterpillar’s offerings, leaves little room for the smaller

makers at the present time. MTU is arguably the largest of the smaller players followed closely by Moteurs Baudouin. Whereas the former’s engines may be matched with almost any form of final drive, the French engines tend to be mostly used in conventional fixed-pitch propeller situations.

Yanmar has been supplying a regular stream of its 12AYM-WET engines, which can produce up to 1,220kW at 1,900 rpm, to yards across Asia including Strategic Marine’s yards in Singapore and Vietnam and also at Mandovi Dry Docks in Goa.

A new market for some vessel builders and propulsion systems is opening up in offshore wind, but needs there are changing as new windfarms are planned further and further offshore. Instead of taking few technicians from an onshore base, the future may well require the crewboats to operate from offshore accommodation platforms and ships. Strategic Marine has also been active in this sector and has developed a

specialist vessel the StratCat26 that has found favour with one operator – UK-based Njord Offshore. The first of the vessels, Njord Odin, was delivered in April 2015, with the sisterships Njord Freyr, Njord Magni and Njord Thor all being delivered by November 2015.

The design name includes references to the class being catamarans with the 26 representing both the length and the service speed although in light ship condition maximum speed is 32kt. The propulsion system of the four vessels features a quartet of Volvo Penta D13C4-AMP engines each attached to a Volvo Inboard Performance System (IPS) podded contra-rotating propeller. The four-system configuration gives the vessels a high degree of redundancy and allows for a DP2 capability.

The IPS is an unusual choice for commercial vessels and represents a first in fast crewboats. Volvo Penta developed the IPS as an alternative to traditional

inboard shafts and claims it gives superior performance to inboard shafts in every aspect – handling, onboard comfort and performance. The engine drives the two contra-rotating propellers placed at the forward end of the azimuthing pod with the exhaust from the engines fed through the pod into the sea.

Wärtsilä is notable by its absence from the fast crewboat sector, but MAN does have a toehold with its D2862 LE, again within the offshore wind sector where several recent vessels have the engine coupled with waterjets. The latest of these is the 27.5 knot Rix Leopard, which is due to become operational in May this year after being launched at the Piriou yard in Vietnam in December. Rix Leopard is a Nigel Gee design 27m catamaran that features two of the D2862 LE engines, each attached to a Hamilton HM651 waterjet through a two-speed Reintjes ZWVS 440/1 gearbox. Total power output is 1,029kW. OSJ

Njord Odin and sister vessels Njord Freyr, Njord Magni and Njord Thor are typical examples of the growing market for windfarm vessels

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Maritime Partner, a well known supplier of FRCs and daughter craft, says it is working on some developments and changes to its daughter craft series that reflect changes in the market, but it isn’t ready to reveal details yet.

However, the company says it has seen a good level of business recently from several refit projects for daughter craft on existing vessels. The company says the refits are enabling daughter craft to respond to new requirements and “extended work tasks”.

Maritime Partner responds to the market

Norsafe in Norway says the MkII version of its well known Magnum 750 fast rescue craft (FRC) benefits from a number of improvements that have quickly turned it into the one of the company’s most popular units. Designed and manufactured according to Solas, classification society and national authority requirements, the rescue boat has excellent reliability and manoeuvrability. Being able to take engines of up to 450hp, the MkII easily fulfils its primary function of providing an effective means of search and rescue for people missing at sea.

“Reliability and low maintenance were the key factors taken into consideration in the design and construction of this unit, in order to make ownership hassle free,” said Norsafe in a statement. “For example, the Mark II version has an improved self-righting frame and a more accessible engine compartment that simplifies service and maintenance work. When installed with an approved davit, the boat fulfils the FRC requirements on offshore installations and standby vessels and is fully compliant with the latest requirements for roro ships. Its layout and performance mean it is versatile enough to perform other roles including diving support, inspection, patrols, surveys and workboat duties.”

The Magnum 750 MkII has waterjet propulsion and a large console. It is 7.70m overall with a beam of 2.90m. It has a maximum capacity of 15 people. With equipment, it weighs 2,462kg, and with equipment and 15 persons (Solas), it weighs 3,700kg. The lifting arrangement is an offload release hook. This latest version of the Magnum 750 has an inboard diesel, which provides a speed of approximately 28 knots with three people onboard.

Late 2015 saw Norsafe introduce a new, tiered service management system for its clients, following an in-depth study of shipowners and operators’ maintenance strategy. It claims that it is the first company to have done this. Called the Norsafe CARE Plan,

the three levels of service agreement have been designed to suit clients with varying maintenance requirements and budgets. CARE

Basic offers a flexible on-demand service solution ensuring equipment meets

all Solas requirements as well as fixed pricing levels for

maintenance checks in major international ports. Service visits are organised at pre-

determined times to fit in with clients’ requirements.

CARE Select is a more long-term approach, where Norsafe

works with the client to determine a structured servicing and maintenance plan. Factors such as the age of the equipment and durability are assessed, and key performance indicators (KPIs) are agreed. This condition monitoring by Norsafe determines exactly when replacement parts are required, so the client can make appropriate budgetary arrangements in advance. CARE Plus is the premium level of servicing and maintenance agreement. With this package, the client not only receives Norsafe’s KPI and condition monitoring service but it also includes OEM and STCW training at Norsafe’s own academies plus OEM onsite training to improve crew competence, which is a key factor in reducing maintenance costs and the safe operation of the equipment. Twice-yearly visits are made by Norsafe personnel to keep a check on agreed key parameter levels. “Long-term agreements like this reduce overall maintenance and servicing costs over time through increased efficiencies and crew confidence,” said the company.

“These service and maintenance agreements have been structured to provide our customers with more than just a price agreement. They were developed to fit our clients’ requirements,” said David Torres, vice president sales at Norsafe.

ABOVE: The MkII version of Norsafe’s Magnum 750 has quickly become one of its most popular FRCs

RESCUE BOATS/DAUGHTER CRAFT | 37

Among the most recent contracts awarded to Mare Safety in Norway was one from Kleven shipbuilding group for the delivery of 14 galleys and four rescue boats for newbuilds at Kleven’s Myklebust yard.

The company also supplied the complete galley and rescue boats for Island Offshore’s massive subsea vessel newbuild Island Venture which recently entered service. Mare Safety says it has now built more than 500 rescue boats, for offshore rigs, supply vessels, fishing vessels, and training centres. OSJ

Mare Safety signs Kleven deal

MkII version of Magnum 750 proves popular – as does new service plan


38 | CREWBOATS

Crewboat designers and builders look to new markets

Triyards, which owns and operates fabrication yards in Ho Chi Minh City and Vung Tau in Vietnam and

Singapore and design and engineering facilities in Houston in the US, has secured a number of contracts recently, including windfarm support vessels. The company said ongoing work on projects in hand in the second quarter of 2016 had resulted in a 15 per cent jump in revenue to US$70.5 million and increase in gross profit by 8 per cent to US$14.8 million.

Triyards’ chief executive Chan Eng Yew said the contracts were the result of “conscientious efforts to diversify our client base and product offering”. He said the windfarm vessel orders “attest to Triyards’ growing standing in the renewable energy market”, a market in which it hopes to establish a greater foothold, as well as seeking opportunities in its traditional markets.

Equipped with the Quad Volvo IPS or Quad Waterjet propulsion engines, each of the windfarm vessels will be able to make a speed of at least 25 knots and carry up to 24 windfarm personnel. The aluminium craft will also be fitted with deck cranes with lifting capacities of up to 10 tonnes.

Triyards has long been established as

a builder of offshore support vessels and liftboats. Its subsidiary Strategic Marine is also established as a builder of windfarm support vessels such as crew transfer vessels. Referring to the extremely difficult market for offshore oil and gas vessels, Mr Chan said he was confident that the company’s versatility would enable it to remain resilient in a difficult operating environment. “Our focus remains on delivering our orderbook and executing our successful diversification strategy,” he concluded.

Late 2015 saw PSA Marine Pte Ltd in Singapore announce that it is partnering with Njord Offshore Ltd in the UK to provide crew transfer services to the offshore wind market in Europe. Through its wholly owned subsidiary Ventus Marine Ltd, PSA Marine will provide a fleet of crew transfer vessels for European offshore wind projects. Njord Offshore is a commercial and technical manager of crew transfer vessels. Peter Chew, managing director of PSA Marine, said he was excited about growth opportunities in Europe’s offshore renewable energy market. “By working alongside Njord Offshore, we will optimise each other’s strengths and capabilities to

create more value for customers,” he said, noting that the deal reflects PSA Marine’s ambition to grow its marine portfolio and establish a presence in Europe’s offshore wind market.

Some well known designers and builders continue to win orders for crewboats for the offshore oil and gas industry, among them Grandweld in the Middle East and Incat Crowther in Australia. Grandweld noted recently that it has secured a leading position in the Middle East market, completing construction of a total of 17 vessels over the space of the last year. The yard said its latest projects include crewboats and diving support vessels.

Among recent deliveries from Grandweld are two modified 42m crewboats (FNSA-3 and FNSA-4) for Fujairah National Shipping Agency. They are capable of speeds in excess of 30 knots and customised to execute operations such as security duties, fast transportation of offshore personal and cargo and the rapid supply of fuel and fresh water. “The Middle East is a unique environment, with unique challenges and opportunities,” stated Jamal Abki, general manager at Grandweld Shipyards. Others include three 34.3m aluminium crewboats for Jana Marine Services and the 42m crewboats Stanford Volga and Stanford Niger, which are capable of carrying 83 people at speeds of 25 knots.

Incat Crowther recently announced delivery of Alya McCall, the first vessel in a fleet of new class monohull fast support vessels (FSVs) for Seacor Marine. Alya McCall is the first vessel in the Seacor Express Plus class and was built at Gulf Craft in Franklin, Louisiana. The vessel has seating capacity for 100 personnel and a maximum speed of 38 knots.

Also recently delivered and of Incat Crowther design are two new UT4000 monohull FSVs built by ETP Engenharia Ltda. Baru Providencia and Baru Antares are the third and fourth in a 12-boat series, following on from Baru Gorgona and Baru Macura. The design complies with the UT4000 FSV specification for Brazil’s state oil company Petrobras. OSJ

Designers and builders of crewboats are finding that demand is being affected by the low oil price, but opportunities exist for companies in closely related markets

Orders for crewboats such as Alya McCall, shown here, are few and far between, but demand is growing in the offshore wind industry

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40 | DECK MACHINERY

O ffshore vessels, particularly offshore construction vessels, present an impressive profile with their massive cranes,

towers and pipelay and cablelay systems and carousels. However, alongside these are less obvious but equally vital deck machinery systems that include winches for mooring and, on certain vessels, for anchor handling and other duties, plus towing gear, small cranes for cargo handling, lifeboat davits and more beside. Recent developments in these less obvious systems – both in terms of technology and innovation and regulation – have seen new equipment being given initial references and some impending changes to Solas that will see recommendations upgraded to mandatory requirements and new regulations on the cards for winches and lifting gear.

A new type of winch that makers Rolls-Royce believes will find applications on anchor-handling tug/supply (AHTS) vessels and other similar vessels has recently found an initial reference on a fishing trawler. In line with modern thinking, the winch is electric rather than hydraulic,

which reduces the risk of any pollution and is claimed to reduce installation and maintenance costs, but it also incorporates permanent magnet technology in the winch motor.

For many winch applications, low pressure hydraulics have been the drive of choice as this provides the precise control and high torque required, which is not easy for an electric motor to replicate. Conventional AC induction motors are an option, but permanent magnet (PM) motors are better suited as gearing, which adds inertia and complexity, is not required, and the performance is comparable to a hydraulic motor.

Rolls-Royce has made use of PM technology in tunnel and azimuth thrusters that have already been used on offshore vessels. The experience gained in their development was useful because, in

New ideas and new rules for offshore deck gear

Technology used in deck equipment such as winches is evolving, with new concepts including permanent magnet motors coming to the fore

by Malcolm Latarche

Permanent magnet motors could be applied in a number of potential deck machinery applications, including on anchor handlers


DECK MACHINERY | 41

deciding on the winch motor, Rolls-Royce found that there was no existing PM motor available that could virtually mirror the performance of a low pressure hydraulic motor. The result is the compact XT140 permanent magnet motor.

When used in the new BRE XT140 trawl winch, developed at the Brattvåg centre of excellence, it delivers an impressive 55-tonne pull on the first layer at 40m/min. The motor has a nominal speed of 75 rpm and a nominal torque of 140 kNm, but it can operate at an overspeed of 225 rpm – three times its nominal rating with a third of the torque. Rolls-Royce says this feature is particularly relevant if a vessel has to release its load quickly or encounters other problems. The motor can also provide regenerative power back to the ship’s switchboard, if the vessel is so equipped.

“The XT140 motor is the result of an in-depth study of fishing and AHTS winch operations that were considered during the design stage, and it can operate at temperatures down to 40°C,” explained Ottar Antonsen, VP deck machinery – anchor handling tug and supply. “It is DNV type approved, and one of the first commercial units will be installed on a shrimping vessel for a Canadian operator next year.”

Because of the applications considered during the design stage, the XT140 motor is also well matched to other types of winches, particularly anchor handling. It has been designed so as to be suitable for retrofitting, replacing existing motors and making electric winches a possibility across a wide range of applications.

Migrating an established deck machinery system developed for AHTS vessels to platform supply vessels (PSVs) is a project that MacGregor has been working on for some time. The Triplex Multi Deck Handler (MDH) is a rail-mounted gantry crane fitted with special tools to perform

all the anchor handling deck operations. According to the latest issue of the inhouse magazine MacGregor News, the project has already resulted in one installation on a PSV with others also agreed for vessels then under construction.

William Storvik, MacGregor’s marketing manager for the Triplex products, explained that the Triplex MDH 22 gantry crane’s breakthrough for PSVs has come after close consultation with the oil industry. “Both the technical system specification and performance requirements were developed in close collaboration with both shipowners and operators”, he said.

The MDH cargo-handling system on the PSVs features a robotic multi-tool that slides along and across the vessel. The system has a total lifting capacity of 22 tonnes and is able to cover the whole deck area. However, the main advantage is its ability to reach far beyond the shipside and execute load handling in port. It is also fitted with camera systems, floodlights and an operator’s cabin, as well as benefiting from two dedicated winches.

The system enables vessels to bypass port bottlenecks and handle ship/shore transfers directly. The need for vessels to wait outside Brazilian ports for an available berth and the shortage of shoreside infrastructure once they get there are two main negative influences on the efficiency of Brazil’s offshore sector.

Installing the MDH means that the vessel can shift and store containers on deck, utilise the whole deck area and increase the backload capacity offshore while also loading and unloading itself in port. In addition, the MDH can work with remotely operated vehicles and oil skimmers and serve as a rescue drop zone for helicopters and is the ideal solution for a multirole supply vessel and for standby duties. It can also load and

unload containers on both sides and at the aft of the vessel and perform tandem lifts of heavy and large items like pipes and subsea templates on deck.

Lifeboat and rescue boat launching and the associated dangers have been a topic of concern across shipping for many years. At the third meeting of the IMO Sub-Committee on Ship Systems and Equipment (SSE) in March 2016, the issue was escalated, and as a consequence, some new mandatory requirements are being initiated. The changes will be submitted to MSC 96 in May this year, and their effect, if approved, will be Annex 1 to circular MSC.1/Circ.1206/Rev.1 (2009) on measures to prevent accidents with lifeboats being made mandatory. The present guidelines on safety during abandon ship drills and simulated launching are intended to remain as recommendatory guidance.

A change to Solas regulation III/20 will introduce requirements for the maintenance, thorough examination, operational testing, overhaul and repair of lifeboats and rescue boats, launching appliances and release gear to be carried out in accordance with the new mandatory requirements.

There had been discussion over whether the ship’s crew could be allowed to carry out the tasks covered, but the meeting decided against this, and the work will therefore need to be done either by the maker of the equipment or an authorised service provider who is qualified in these operations for each make and type of equipment involved. The meeting did agree that a separate service organisation run by a ship operator could be considered as an authorised service provider.

Another agenda item at SSE 3 concerned developing safety measures for onboard lifting appliances and winches. This topic is another that is not aimed specifically at the offshore industry but does have particular relevance to the sector because of the type of machinery normally found on offshore vessels. It was considered necessary because of a number of accidents and incidents involving winches and lifting gear. Although no immediate change to Solas is envisaged, it was decided that more work was needed, and so a correspondence group was established to further develop draft goals and functional requirements suitable for onboard lifting appliances and winches. The group is to draft guidelines taking into account any available industry codes and/or standards that could be contained in a footnote or within the draft guidelines. OSJ

MacGregor’s well known Multi Deck Handler has been

adapted for use on PSVs in addition to anchor handlers


42 | LOAD HANDLING

‘Self-learning’ heave compensation system unveiledMJR Power & Automation in the UK has unveiled what it describes as a new type of motion compensation system for the offshore industry which is 'self-learning'

Designed to speed up installation and commissioning of loads subsea, MJR Power & Automation’s X-Wave active heave compensation system is designed to be integrated with any

crane or winch control system. As the company notes, many vessels now make use of heave compensation systems, and it believes that the X-Wave system fills a gap in the market. The company has patented a series of innovations, including adaptive and predictive control strategies that provide self-learning capabilities for any active heave compensation and platform stabilisation system.

“Quite often, setting up and tuning an active heave compensation system can be time consuming,” said the company. “X-Wave’s self-learning routines bring automatic commissioning and self-optimisation to the application, thereby ensuring the application comes online faster than any other system or solution. This massively reduces set-up costs and means that the system automatically learns the process characteristics.” This dramatically reduces and in some cases eliminates commissioning, it claims.

“For instance,” said the company, “X-Wave can learn a machine’s limitations in acceleration due to power restrictions or high inertia as well as learn fixed actuator delays, such as hydraulic valve or flow response lags caused by pumps and pipework. It can also predict sea motions including pitch, roll or heave. The system adapts immediately should it experience load changes or suffer from ageing, equipment failure, changes in friction, power supply characteristics or poor hydraulic valve response.”

X-Wave automatically modifies and optimises control system behaviour in response to changing vessel dynamics. This means no vessel specific setup is required, and the equipment can be transferred

between vessels offering significant advantages to deployment of portable equipment.

As a standard solution, X-Wave can work with all actuators including rotary (winch), linear (cylinder) and hybrid (nodding donkey) as well as interfacing with hydraulic, pneumatic and electric power systems. The system can control up to six degrees of freedom covering single axis heave compensation of lifting devices such as cranes, winches and linear compensators through to multi-axis platform stabilisation covering pitch, roll, heave, surge, sway and yaw.

“Whilst active heave compensation and platform stabilisation systems are well known, they are proprietary and single application, equipment and/or vessel specific,” said Paul Cairns, managing director of MJR Power & Automation. “They are generally bespoke, designed specifically for a particular application or machine, and therefore require a significant amount of re-engineering or adaptation for a different application. They also require a lengthy, complex and therefore very costly commissioning period.

“The X-Wave motion compensation system can be applied to all types of offshore motion compensation applications, whether building new equipment or retrofitting to existing equipment. It provides a number of novel features to provide a single ‘out of the box’ solution to all marine and offshore motion compensation applications. Unlike other motion compensation systems for marine and offshore use, X-Wave can be deployed with high availability, redundant architecture and can be configured to control more than one machine,” he explained.

The advanced motion compensation system was designed by MJR Power & Automation and has a range of automation, electrical and control equipment from ABB. Further development work is currently underway with ABB to more closely integrate the benefits of the system within the ABB ACS880 advanced drive platform to provide a cost-effective tightly integrated electric-drive AHC solution. The companies exhibited together at Subsea EXPO 2016 and say they received a lot of interest in X-Wave and the ABB HES880 hybrid electric drive.

Developed initially for hybrid diesel-electric heavy earthmoving vehicles, the ABB HES880 platform offers portable, rugged and small form factor modular drive solutions for marine and back-deck equipment applications. It’s size, power, IP rating (IP67) and high temperature water cooling enables modules to be mounted directly on the machine, eliminating the requirement for large air-cooled drive cabinets located in air-conditioned containers on deck or in switchrooms below deck. In addition, greatly reducing the overall deck space and footprint required by mounting drives directly on the machine significantly speeds up mobilisation time. For portable equipment such as winches, wiring from the drives to the motors and field devices remains a fixed installation on the machine and is never disturbed, leading to improved reliability and fewer wiring problems. OSJ

MJR Power & Automation and ABB claim that X-Wave is the world’s first ‘self-learning’ motion compensation system

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DYNAMIC POSITIONING | 45

UPGRADED POSITIONING SERVICES PROVIDE ENHANCED OPERABILITY

K ongsberg Maritime has expanded its established satellite position reference system portfolio with the introduction of a new system that integrates all available global navigation satellite systems (GNSS)

and all possible correction services, and Veripos has extended its Apex service with the introduction of Apex5. The new DPS 432 combines full decimetre accuracy with high integrity and availability of GNSS data, supporting the safety and efficiency of offshore operations that rely on dynamic positioning (DP) systems.

DPS 432 integrates signals from GPS, GLONASS, BeiDou and Galileo and regional correction signals including SBAS (WAAS, EGNOS, MSAS, GAGAN), in addition to the new G4 services from Fugro, to ensure high flexibility for DP operations globally. Because DPS 432 exploits available combinations of GNSS signals, it is ideally suited to complex operations in challenging environments. The system increases satellite availability, improves integrity monitoring and enables more precision under challenging

signal tracking conditions. The DPS 432 will be a part of the well established Kongsberg DPS range of solutions, a portfolio of products that meets all requirements for operations in any geographical region.

“DPS 432 expands our established and field-proven portfolio of position reference systems for DP operations, ensuring that we can offer a highly reliable solution for any DP vessel or operating region,” said Vidar Bjørkedal, VP sales and customer support at Kongsberg Seatex. “The system is based on the same architecture as other DPS products, which means it features a highly intuitive HMI, while the ability to integrate all available GNSS and corrections provides integrity and availability of the position data needed for safe operations.”

The DPS 432 features the DPS NAV Engine used in all DPS solutions, which runs critical computations independent from the DPS HMI (operator interface) to ensure continuous and reliable operation. The DPS NAV Engine runs in a safe mode, protected

LEADING SATELLITE POSITION REFERENCE SYSTEM SPECIALISTS KONGSBERG MARITIME AND VERIPOS HAVE UPGRADED THE POSITIONING SERVICES THEY OFFER

Leading satellite position reference system specialists have upgraded the positioning services they offer to offshore vessels


46 | DYNAMIC POSITIONING

from unintended user operations, while several DPS HMIs can be connected to the same DPS NAV Engine in a networked architecture. Straightforward operation to enhance DP operations safety further was a key design goal during development of DPS 432. The system can integrate multiple layers of information, giving the DP operator unmatched opportunities for a customised visual presentation, including electronic chart, seabed maps, wellhead positions, static targets and AIS target information.

Aberdeen-based Veripos says its extended Apex service, Apex5, is capable of securing observations from five available satellite constellations comprising GPS, GLONASS, BeiDou, Galileo and QZSS. Using precise point positioning (PPP) methods for correction or modelling of all GNSS error sources, the new multi-constellation service with its access to increased civilian signals via interoperable networks ensures increased levels of observation and redundancy. Other advantages include improved satellite count and position availability, particularly in masked and scintillated environments.

Operations are based on Veripos’s own orbit and clock determination system (OCDS), which derives real-time corrections for available satellite constellations using advanced proprietary algorithms. The OCDS in turn uses data from the company’s global network of reference stations with multiple and redundant systems supported by dedicated network control centres in Aberdeen and Singapore.

Apex5 is broadcast alongside existing Veripos Apex and Apex2 Ultra services via seven geostationary satellites to ensure continuous availability and service redundancy. Typical position accuracies are better than 5cm horizontal at the two sigma (95 per cent) confidence level.

Veripos also recently extended its ranges of proprietary software with the introduction of Quantum, an all-purpose suite of visualisation modules providing a state-of-the-art user interface to support next-generation services and features. Designed to operate with all current Veripos positioning options including Apex5, the new software was developed with significant input from a wide range of users by simplifying system configuration while easing methods of interpretation. Other advances include integral diagnostic functions for simple identification of operational problems together with indications of likely solutions.

Visualisation modules can be operated independently without affecting concurrent positioning calculations that might otherwise be feeding critical survey or vessel systems. The Quantum framework comprises a series of modules to meet a variety of specific operational tasks such as those necessary for hydrographic and seismic surveying and dynamic positioning. Its versatility also extends to providing a basic foundation for accommodating new modules or features.

Guidance Marine sensor does not need fixed targets

Guidance Marine has unveiled RangeGuard, the first sensor developed by the company that does not use fixed targets – it uses the surrounding environment and provides an additional level of situational awareness.

Based on radar technology, the system measures the distance to the nearest object. A number of RangeGuard sensors located around a vessel act like a parking sensor or electronic bumper to provide SafeSurround.

RangeGuard can be used in a wide range of applications:• docking: RangeGuard measures the range to the quayside, removing the need for the crew to estimate the distance by eye. Range measurements are displayed through a user interface via a web browser, reducing risk of miscommunication.• windfarms: a cost-effective all-weather solution to enable faster approach times and improved safety. With navigation no longer 100 per cent reliant on DGPS or expensive reflector laser targets, the RangeGuard sensors can be used for close-proximity navigation to and from the turbine. With DP input option.• ship-to-ship transfers: RangeGuard provides a targetless and easy to install solution for ship-to-ship transfers. Using fixed beam radar, a warning is output when user-defined range limits are breached. Upgradeable to a maximum of four sensors with both spot or flood beams, the customisable beam width gives the user flexibility for a variety of operations.

The company said the RangeGuard system and the Dashboard will be demonstrated at various conferences and exhibitions this year.

In March 2016, the company shipped the 2,000th CyScan Mk4 sensor. The CyScan Mk4 built on the success of the CyScan Mk3 sensor, first shipped in 2001, and is now firmly established as a standard laser sensor for DP integrators. The 2,000th unit was acquired by CCC Underwater Engineering.

The company was also recently recognised as a ‘One to Watch’ company in The Sunday Times 2016 list of best companies to work for, one of 188 companies to be awarded the accolade this year. OSJ

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This unique conference brings together many of the most experienced players in both the Asian and the global OSV markets to look at the business critical issues, the opportunities as well as the threats, facing the industry.Key issues:• Charter trends for different vessel types• Forecast demand from the E&P sector• Opportunities for OSVs in West & East Africa, Mexico and the Middle East• Access to finance• Opportunities in subsea projects• Management of maintenance, modifications and operations costs• The latest technologies and the efficiencies and savings they offer.

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This unique conference brings together many of the most experienced players in both the Asian and the global OSV markets to look at the business critical issues, the opportunities as well as the threats, facing the industry.Key issues:• Charter trends for different vessel types• Forecast demand from the E&P sector• Opportunities for OSVs in West & East Africa, Mexico and the Middle East• Access to finance• Opportunities in subsea projects• Management of maintenance, modifications and operations costs• The latest technologies and the efficiencies and savings they offer.

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Asian Dynamic Positioning conference

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ROV/AUV | 49

Hydroid Inc, a subsidiary of Kongsberg Maritime, has unveiled its New Generation Remus 100 autonomous underwater vehicle (AUV). The new AUV combines the reliability of the original Remus 100 AUV with new features and capabilities, such as advanced core electronics, a flexible navigation suite with an exclusive conformal Doppler velocity log (DVL) and an open architecture platform for advanced autonomy. The vehicle was created over a period of two years and is designed based on feedback from the AUV user community. “The New Generation Remus 100 has impressive capabilities not previously seen on a man-portable vehicle,” said Duane Fotheringham, president of Hydroid.

Design upgrades include advanced core electronics designed to replace not only the previous Remus motherboard but also the CPU stack, emergency board and six serial cards. The new

electronics board is smaller and lighter than the components it replaces, and it uses an ARM +FPGA architecture that makes it both potent and versatile while consuming less than 5W of power – about 25 per cent of the power required by the earlier version.

Also part of the upgrade is a flexible navigation suite with a conformal design, phased array transducer 300 kHz DVL in the

rear of the vehicle. This design significantly increases bottom-tracking range to improve overall navigation performance.

A high capacity battery pack with two or three of Hydroid’s 18650 Li-ion based packs gives the AUVs more onboard energy than before, and a redesigned elliptical nose reduces drag by 20 per cent compared to the

previous model. In addition, it is acoustically transparent, so that the acoustic communications transducer can be relocated inside the nose.

Because the new nose uses the same modular interface on the existing Remus 100, it can be easily integrated on both current payload modules and the New Generation Remus 100. The new AUV also expands on the existing capabilities of the Remus by adding an open architecture platform for advanced autonomy, making the vehicle more versatile. The new ‘front seat’ performs control functions using well tested, reliable proprietary control software. The ‘back seat’ undertakes mission tasks, such as side scan sonar data logging and extensibility using Hydroid, customer or third-party applications.

The New Generation Remus 100 is designed so that customers with existing payload modules can have them easily transferred to the new model. Hydroid will continue to support the original Remus 100 vehicle for customers by request.

Soil Machine Dynamics (SMD) and Underwater Mining Solutions (UMS) are teaming up to offer customers the full scope of mining equipment required for underwater mining projects, both offshore and inland and in all territories.

The companies say that their combined expertise and the strength of each of their parent companies enables SMD and UMS to provide customers with proven, de-risked solutions to deepsea, nearshore and inland underwater

exploration, mining and processing.SMD recently delivered the world’s first commercial

deepsea mining vehicles for Nautilus Minerals. UMS has delivered commercial shallow-water mining solutions and has capability to provide a complete system including mining vehicles and corresponding launch and recovery systems, vessel conversion, ore processing, transportation, separation and ancillary ore-handling equipment.

SMD teams with UMS for underwater mining solutions

Hydroid unveils updated Remus AUV

Hydroid has upgraded its Remus AUV with a number of enhancements compared to previous models

Technology from Harris CapRock Communications is enabling Oceaneering International to remotely pilot and automatically control its NEXXUS remotely operated vehicle (ROV).

Harris CapRock is providing satellite bandwidth and service to operate the ROV, which enables the pilot to execute assignments ranging from simple video monitoring to highly

complex vessel inspection tasks. The satellite link enables Oceaneering to pilot the ROV from offshore, from another vessel or from an onshore command centre. Harris CapRock’s data/video communications technology was originally developed to help technical support personnel onshore to help diagnose faults offshore. OSJ

Comms solution enables remote-controlled ROV ops

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COMPANY NEWS | 51

Bonds issued by Harkand, the well known operator of subsea, multipurpose and diving support vessels and remotely operated vehicles and a provider of inspection, diving, survey and project management services, are said to be in default.

In a statement, the trustee of the bonds, Nordic Trustee, said it had notified Harkand that the bonds – Harkand Finance Inc 14/19 7.50 per cent USD C, ticker HARK01 – have been declared to be in default and that the bond trustee has exercised its rights to replace the board of directors of the company and its two subsidiaries, Harkand Atlantis Inc and Harkand Da Vinci Inc.

“Irrespective of the replacement of the current board of directors, the company continues to discuss with the bond trustee (on behalf of bondholders) a consensual solution that would render the company and its subsidiaries solvent,” said Nordic Trustee. The

statement went on to say that, for now, the bond trustee has not declared the bonds to be due for immediate payment, but “all rights and remedies which the bondholders and the bond trustee may have are reserved”.

In 2014, the company completed placement of a US$230 million senior secured bond issue. The bonds had a tenor of five years, maturing in March 2019. At the time they were issued, the company said the proceeds would be used to refinance existing debt on the vessels Harkand Atlantis and Harkand Da Vinci, to fund the pre-delivery instalments of a newbuild diving support vessel. The vessel, Harkand Haldane, was due to be delivered in April 2016.

As recently as July 2015, Harkand confirmed that its main shareholder, Oaktree Capital Management, had reaffirmed its commitment to the company with an additional US$25 million of funding.

Harkand bonds said to be in default

Harkand’s bonds are said to be in default – the company’s newbuild is due to delivered shortly

Swire Pacific says its marine services division, Swire Pacific Offshore (SPO), which specialises in operating offshore support vessels such as platform supply vessels and anchor-handling tug/supply vessels, recorded a loss of HK$1.28 billion (US$165 million) in 2015 compared with a profit of

HK$1.04 billion (US$134 million) in 2014.

The company said SPO’s results were adversely affected by the difficult market conditions caused by the significant decline in the oil price. This put pressure on charter hire rates and utilisation. SPO also recorded impairment charges in

relation to vessels of HK$743 million (US$96 million) and in relation to the cancellation of shipbuilding contracts in Brazil of HK$485 million (US$63 million). SPO’s fleet utilisation decreased by 11.7 percentage points to 74.9 per cent, and its average daily charter hire rates decreased by 10 per cent to US$27,100.

Swire Pacific makes a loss

Saipem, long known as a contractor in the offshore oil and gas industry, has been awarded new contracts cumulatively valued at approximately €430 million, including its first contract in the offshore wind industry.

The contracts awarded to the Italian company include one from Statoil, Norway’s state oil company, which is also investing in renewables, for the lift and mating operations of offshore floating wind turbines for the Hywind Scotland project. The other contracts relate to the installation of multi-phase pipelines in the Caspian Sea, and a recently announced contract for the offshore section of the Trans Adriatic pipeline project.

Saipem highlighted that contracts such as that for Hywind are reducing its dependence on the offshore oil sector, where activity levels have fallen precipitously since the oil price crash.

Saipem enters offshore wind sector

Buckthorn Partners and the Arab Petroleum Investments Corporation (APICORP) have acquired Ashtead Technology. The undisclosed funding package from Buckthorn and APICORP will allow Ashtead to further expand its service offering through both organic and acquisition-led growth. The investment will also enable Ashtead to expand its geographical reach, particularly in the Middle East. OSJ

New owners for Ashtead Technology


52 | IMCA NEWS

Final steps being taken to update IMCA’s subsea metrology guidanceThe International Marine Contractors Association is updating guidance for metrology in order to incorporate new technology and make metrology more accurate

P ut simply, metrology is the ‘science of measurement’, the measurement between two known points. Subsea

metrology is the process of acquiring accurate and traceable dimensional data, primarily for the design and fabrication of rigid spool pieces or flexible jumpers, each of which is used to connect up subsea infrastructure. Commonly, spool pieces or jumpers (as they are known) will be used to link subsea trees or manifolds to flowlines, thus enabling the transportation of hydrocarbons from the reservoir to processing facilities.

The objective of subsea metrology is to accurately determine the horizontal and vertical distance between subsea assets’ connection points, as well as their relative heading and attitude. Metrology data is then used to design and fabricate the interconnections.

In the words of Simon Barrett of DOF Subsea. who has worked with the International Marine Contractors Association (IMCA) to update IMCA’s Guidance on Subsea Metrology (IMCA S 019), the aim of accurate subsea metrology is to ‘measure twice and cut once’ – errors in the fabricated dimensions will be costly. Overall fit, the ability to create pressure-tight joints and the working life of the interconnection all rely on accurate metrology.

Richard Benzie, technical director at IMCA, said S 019 has done “sterling work” since it was launched in 2012 and is now in the final stages of being updated, with the revised version expected to be available online from May 2016.

“New metrology techniques continue to come to the fore,” he explained, “and we are eager that users of the guidance know about them. Techniques set up to take measurements remotely can reduce the time an expensive vessel has to be on station.

“However, S 019 will not be advocating ‘out with the old, in with the new’. Some of the newer methods may not be suitable when working at depth, working in poor visibility or in high currents. There will continue to be times when the earliest of techniques such as diver taut wire metrology, essentially a tape measurement of the direct distance between hubs (the first procedure used), digital taut wire (a more sophisticated version of the diver’s tape measurements) and long baseline (LBL) acoustics (the most commonly used subsea metrology technique) continue to be most suitable.”

When S 019 was originally published, photogrammetric survey provided the most accurate measurements but was limited to good visibility. Inertial

navigation systems (INS) at that time were relatively new to the offshore industry whereas now there are exciting developments offering multiple metrology techniques to offshore survey specialists, thus providing flexibility to suit the task in hand.

The appendices in the revised publication will consider the industry’s desire for standardisation of both the typical Compatt metrology bracket and INS metrology bracket. It also considers new inertial techniques such as iXBlue ComMet and Sonardyne Sprint simultaneous localisation and mapping.

Many will be surprised to hear that light detection and ranging metrology can now be used by the subsea sector. The system is rated to water depths of up to 3,000m, a significant breakthrough. It is being used by several of the major operators, and the data can subsequently be analysed in the same format as onshore dimensional control 3D lasers too.

S 019 also looks at derivation of metrologies from point cloud data and onshore dimensional control 3D lasers. Echoscope provides underwater 3D acoustic movie imagery and delivers point cloud data. Similarly, BlueView can deliver full, interactive 3D from which accurate geometries and range measurements can be taken.

Mr Benzie said the revised publication will describe, compare and contrast the techniques, aiming to provide guidance on them all to help surveyors and surveying organisations, vessel personnel (marine, diving, ROV), project engineers, fabricators and client organisations to make sure the task is done by the most accurate and cost-effective means and – most importantly – is done correctly. S 019 will continue to be updated to take account of new developments in coming years with industry input always welcomed. OSJ

Richard Benzie: “S 019 will use a mix of old and new technology, depending on circumstances and water depth”

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Statistics & trendsCompiled using data and graphs provided by Seabrokers’ monthly market report Seabreeze

NORTH SEA DEPARTURES AND ARRIVALS

DEPARTURES: Vessels that have recently left or are due to leave the North Sea spot market:

Boulder Mediterranean

Fairmount Alpine South America

Olympus Black Sea

Siem Topaz Australia

ARRIVALS: Vessels that have recently arrived or are due to arrive on the North Sea spot market:

Carlo Martello Ex West Africa

Havila Borg Ex West Africa

Stril Mar Newbuild

VOS Partner Newbuild

NORTH SEA AVERAGE RATES: MARCH 2016

CATEGORYAVERAGE

RATE MARCH 2016

AVERAGE RATE

MARCH 2015% CHANGE

supply duties

PSVs <900m2£4,183 £3,687 13%

supply duties

PSVs >900m2£4,104 £4,886 -16%

supply duties

AHTS <18,000 bhp£16,000 £15,578 3%

supply duties

AHTS >18,000 bhp£16,607 £18,184 -9%

NORTH SEA AVERAGE RATES: MARCH 2016

CATEGORY MINIMUM MAXIMUM

supply duties

PSVs <900m2£2,900 £8,000

supply duties

PSVs >900m2£2,916 £6,000

supply duties

AHTS <18,000 bhp£7,750 £50,000

supply duties

AHTS >18,000 bhp£7,750 £40,000

NORTH SEA SPOT AVERAGE UTILISATION: MARCH 2016

MONTHMED PSV

LARGE PSV

MED AHTS

LARGE AHTS

Mar 2016 70% 67% 42% 62%

Feb 2016 72% 80% 29% 55%

Jan 2016 65% 73% 45% 57%

Dec 2015 78% 85% 62% 69%

Nov 2015 77% 78% 33% 67%

Oct 2015 63% 70% 38% 49%

OSVs RECENTLY DELIVERED

VESSEL DESIGN OWNER/MANAGER COMMITMENT

CBO Oceana Ulstein PX 105 PSV Grupo CBO South America

Forties Sentinel 61M KCM Multi Role ERRV Sentinel Marine TBC

Grampian Fortress IMT 958 ERRV North Star Shipping TBC

Pardela 76M Focal Marine PSV Wilson Sons Ultratug Offshore TBC

Stril Mar Rolls Royce UT 776 WP PSV Simon Møkster North Sea

VOS Prince 80M KCM PSV Vroon Offshore TBC


MARKET DATA | 55

EUROPEAN BUILT SUBSEA DELIVERIES (NEXT THREE MONTHS)

SHIPOWNER NAME CHARTERER SHIPYARD TYPE DESIGN MONTH

FTAI IES Pioneer IES Energy - Kleven Verft IMR MT 6015 April

Island Ventures II Island Venture - Ulstein OCV SX165 April

Siem Offshore Siem Helix 1 Petrobras Flensburger Well Int Salt 307 April

Subsea 7 Seven Sun Petrobras Merwede Pipelay 550 April

Technip Skandi Acu Petrobras Vard Soeviknes Pipelay Vard 3 05 April

Volstad Grand Canyon III Helix Kleven Verft OCV ST-259-CD May

Sapurakencana Sapura Esmeralda Petrobras Merwede Pipelay - May

Siem Offshore Siem Helix 2 Petrobras Flensburger Well Int Salt 307 May

LEFT: demand for PSVs and anchor handlers continues to be hit hard by the low oil price

BELOW LEFT: at the time of writing the oil price had stabilised at around US$40-45/barrel

DAILY AVAILABILITY: MARCH 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

PSV 2016 PSV 2015 AHTS 2016 AHTS 2015


36

2826

20181614121086420

2224

343230

31

OIL PRICE VERSUS RIG UTILISATION

$65

$60

$55

$50

$45

$40

$35

$30

$25Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16

US Gulf rig utilisation

Northwest Europe rig utilisation

South America rig utilisation

average Brent Crude US$/Bbl

54.9%

$62.35

80%

70%

60%

50%

40%

30%

100%

90%

93.5% 93.5%90.1%

87.7%85.2% 85.7% 85.0% 85.1% 84.6% 84.0%

74.2%

83.1% 83.4%

69.2%72.9%

83.2%

75.9%75.4%76.9%79.6%

81.9%84.5%84.4%

89.5%91.8%92.2%

$55.79

53.4%

$59.39

51.9%

$64.56

52.0%

$55.87

52.5%

$46.99

47.9%

$47.23

45.5%

$48.12

46.9%

$44.42

44.5%$37.72

44.4%

$30.80

42.4%

$33.20

39.2%$39.76

39.4%

$80

$75

$70

56 | MARKET DATA

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