DEEPWATER In a recent study entitled “The Gulf of Mexico Supply Vessel Industry: A return to the Crossroads,” Simmons predicts that, “due to the enhanced capacity and relative ‘youth’ of the equipment compared to the 180 ft vessel market, newbuild deepwater equipment will maintain full utilization and relatively robust dayrates.”
If any overcapacity does develop in the deepwater market, says Simmons, some of the smaller boats (200 ft to 220 ft) will be forced to work in shallower water in competition with standard 180 ft vessels. These deepwater boats “will experience high utilization, but will be forced to accept lower dayrates than will be generated in deepwater work.”
Simmons says the emergence of deepwater drilling has become the most important factor going forward in the Gulf of Mexico supply boat industry, where the number of rigs capable of drilling in over 3,000 ft of water has quadrupled since 1996.
Deepwater support requires a significantly enhanced boat, says Simmons.
In deepwater, the well extends from the ocean surface to the ocean floor and then into the earth. The wells also have risers with much larger diameters. All this adds up to a requirement for more drilling mud—usually 3,000 to 4,000 barrels and as much as 6,000 barrels in water depths over 5,000 ft. Thus deepwater boats need a liquid mud capacity significantly better than the 1,000-1,600 barrel capacity of a standard 180 ft supply boat.
Deepwater rigs generally operate further from shore than conventional shallow water units. Weather can be violent and seas rough. That creates a need for deepwater supply boats to be dynamically positioned so as to safely stay on station near the rig. Because deepwater rigs are generally further from the shore, it can take 10-15 hours (one way) for a support vessel to get to them. “Given crew costs and fuel consumption,” says Simmons, “it is preferable to have one larger boat making the long trip, rather than two to three smaller vessels. What’s the demand outlook for deepwater boats?
Another source of demand for deepwater supply vessels identified by Simmons is development related to floating and fixed platforms. However, Simmons cautions that it believes most offshore construction projects currently being contemplated are “a late 2002 or 2003 event before any noticeable impact on the boat industry will be felt. Simmons also identifies well stimulation and intervention as continuing to require Gulf of Mexico boat capacity. “Recently,” reports Simmons, “Shell Oil and Edison Chouest Offshore conducted a logistics pilot program. Early indications are that the program generated higher boat utilization and lower costs for Shell. Chouest has discussed logistics as a product line that may be developed to help increase its boat utilization. Asco Group and Baker Energy are other GOM participants that are seeking to introduce logistics products to what has historically been a one-boat, one-rig, one-trip market. In our opinion, the opportunity for productivity gains is too substantial to ignore. We believe that it is only a matter of time before logistics becomes an ingrained characteristic of the GOM boat market.” Simmons sees the effects of boat pooling and logistics as being to increase the utilization of the existing boat fleet and reduce the absolute number of boats required to support drilling activities. . The industry faces an increasing push for unionization. Recent moves included ITF-backed protests at the recent Workboat Show (see picture). Should unionization succeed, Simmons says that “higher operating costs are sure to follow. Perhaps as much as a 10% to 15% increase in the first year.” ML |
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