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Crew/supply boats

Nov 3, 2016 03:29 PM

Gulf yards cast wider net as oil slump drags on

The dual-fuel OSV Harvey Freedom takes shape at Gulf Coast Shipyard Group in Mississippi.

Brian Gauvin photo

The dual-fuel OSV Harvey Freedom takes shape at Gulf Coast Shipyard Group in Mississippi.

A deafening silence has descended on shipyards along the Gulf Coast in the wake of the titanic sinking of the global oil market. A mere handful of crew boats and OSVs are edging toward completion — the remnants of existing contracts.

And when the price of oil rises, overcapacity will show its face, further dampening the prospects for new contracts in what is another reality: a world of Tier 4 emissions requirements. When things turn, the market for high-spec OSVs may be the only bright spot.

In Louisiana’s Atchafalaya Basin, at the shipyards between New Iberia and Morgan City, a stretch where crew boats once ruled, there is space and value for anyone looking to build an aluminum craft of any kind.

At Breaux Brothers near Loreauville, there were three 201-by-32-foot fast supply vessels (FSV) under construction in August, the remains of contracts for long-term customers Edison Chouest Offshore and C&G Boats. The C&G boat was scheduled to deliver in September and the first of the Chouest boats in January.

“It started slowing down last year, but we had a backlog and we have great customers and they want us to finish their boats,” said yard superintendent Joe Louviere. “We’re bidding on a couple of things but there is not a lot out there.”

Breaux Brothers welder Erick Elizondro works on an Edison Chouest FSV.

Brian Gauvin photo

Breaux Brothers is seeking contracts for any type of vessel: crew boat, passenger vessel, fish boat, anything. “We also want to get in front of people for overseas work. We have a reputation for quality and right now we can do a great delivery at a great price. It’s important to keep enough going so we can keep our employees working until things pick up again and our longtime customers are back,” Louviere said.

Just down the road, the Neuville brothers Kerry and Errol at Neuville Boat Works were finishing up a 180-foot FSV for SEACOR Marine, the remnant of a two-boat order.

“I’ve got nothing but time,” said Kerry. “Nowadays I’m a salesman. Life is good but business is bad and it doesn’t look good for the shipyard business. We have work until October when we deliver the SEACOR boat.”

The SEACOR vessel comes in several million dollars less than the 200-plus-footers that have become the norm over the past few years, according to Kerry.

“The 180 is a good boat for the future,” he said. “And you get better fuel efficiency and a better operating cost with the lower day rates. We can build all kinds of boats and we can start tomorrow. It’s a buyer’s market and I’d like to do another 18 years. We have a good work force and good engineers.”

Errol chimed in that he isn’t so worried about the oil situation. “It will come back in a few years,” he said. “It’s Tier 4 that worries me. That Tier 4 is a devil.”

Not all was quiet on the crew and FSV front last year. Deliveries included Big P., above, from Breaux’s Bay Craft for Crewboats Inc.

Brian Gauvin photo

Thirty miles down the highway in Franklin, Gulf Craft has four FSVs under construction for its long-term customer, SEACOR Marine. They are 194-by-32-foot vessels, designed at Incat Crowther’s office in Lafayette, La.

The FSVs, labeled the Express Plus Plus class, travel at 36 knots and have a passenger capacity of 125 oil field personnel. The passenger deck extends out to the shear of each vessel to accommodate 25 more people than the 206-by-32-foot Express Plus class.

The shorter speedsters travel at the same speed as the longer version. “This is achieved by having a lot of horsepower and an efficient hull design,” said Joe McCall, senior project manager for SEACOR. The high horsepower is provided by five Cummins QSK60 engines rated at 2,680 hp each (13,400 hp total) at 1,900 rpm, with HamiltonJet HT810 waterjets.

“We are so fortunate to have SEACOR,” said Scotty Tibbs, Gulf Craft’s vice president and chief financial officer. “They are telling us to keep going. Without that we’d be in dire straits.”

The SEACOR boats will see Gulf Craft through until the spring of 2018. Tibbs surmises that the only activity right now is in government work: Coast Guard, Army Corps, research vessels, etc. 

Alya McCall from Gulf Craft for SEACOR Marine.

Courtesy SEACOR Marine

“We’ve chosen not to chase that work,” he said. “It’s going to take longer for the crew boat market to come back than other sectors because of the difficulties of injecting Tier 4. It might be 2020 before our sector sees a positive turnaround. This downturn is different from the ’80s. Then the companies were able to go international. This downturn is global.”

At the beginning of the year, Gulf Island Fabrication Inc. (GIF) acquired Leevac Shipyards LLC and formed Gulf Island Shipyards LLC. The new company combined Leevac’s three shipyards in Jennings, Lake Charles and Houma with GIF’s oil field fabrication and repair facility, Gulf Island Marine Fab LLC, also located in Houma.

Gulf Island currently has five vessels under construction: two platform support vessels for Tidewater Marine, two multipurpose supply vessels for Hornbeck Offshore Service and a 180-foot towboat — the third of a three-boat order — for Marquette Transportation.

At the Jennings shipyard, the 300-foot diesel-electric Tidewater boats are high-spec vessels designed by GIF. They are scheduled to be delivered in 2017.

At the Jennings shipyard as well are the two high-spec, 364-foot diesel-electric MPSVs designed by Vard for Hornbeck. They are scheduled for delivery in 2018.

According to Dan Gaiennie, Gulf Island Shipyards’ manager of business development, the Tidewater and Hornbeck boats are an attractive economic choice for oil drilling, construction and sub-sea companies.

Bow thruster tunnels wait to be cut flush to the hull on a fast supply vessel being built last summer at Gulf Craft in Franklin, La. The yard was working on four 194-foot Express Plus Plus-class boats for SEACOR.

Brian Gauvin photo

“The advent of deep-water drilling and production requiring vessels to travel fairly long distances to get to the rigs has necessitated these larger vessels with higher deadweight and cargo capacities,” Gaiennie said. “When the oil patch comes back, these boats should be in high demand.”

Gaiennie explained that historically, oil drilling and subsea companies have been able to bring foreign-flagged offshore supply vessels with large cranes into the country because there are few U.S.-flagged vessels suitably equipped for the scope of work.

“The hope is that, when oil comes back, the U.S. vessels will have the capability to compare with foreign-flagged vessels, and be the first ones to get the work ahead of the foreign-flagged ships,” he said.

In Morgan City, Halimar Shipyard has delivered 26 lift boats and many crew boats to oil field customers. Last July it delivered the 205-by-32-foot FSV Glenn Autry to its longtime customer Barry Graham Oil Service. With the lift boat and crew boat market flat, Halimar is staying active by building a 214-foot dredge for Manson Construction.

“The short term is slow, but in the long term we are bidding and I’m optimistic but cautious,” said Halimar owner Bill Hidalgo. “I think we’ll see some vessels leave the Gulf, or the country, and some are going to be scrapped.”

Kerry and Errol Neuville, above, of Neuville Boat Works in Loreauville, La., have a 180-foot FSV underway for SEACOR.

Brian Gauvin photo

At Thoma-Sea Marine Constructors in Lockport, Walter Thomassie, managing director, reports that the yard is building two significant vessels for an undisclosed party.

“Obviously, the outlook for the OSV market is grim, and I suspect will remain so for an extended period of time,” Thomassie said. “My opinion is that any further vessels built in the next few years for the oil and gas market will be few and of a specialized nature, something not easily retrofitted to the existing latent capacity.”

Thomassie, while acknowledging that there will be a recovery in the oil and gas sector, is convinced it will be a vastly different market. “To base one’s business plan on expectation of a robust recovery of that sector is not a sound approach,” he said. “The key will be to continue pursuing a diverse portfolio, as there are pockets of work available to compete for, but no single sector is truly booming — particularly in an amount to make up for the volume lost in oil and gas.”

In Gulfport, Miss., Gulf Coast Shipyard Group has three dual-fuel OSVs under construction for the shipyard’s parent company, Harvey Gulf International. The first three in the order are on charter to Shell Oil’s deepwater operations in the Gulf of Mexico. Two of the vessels under construction, Harvey Freedom and Harvey America, are expected to deliver next March and October, respectively. They are also chartered to Shell. The third being built, Harvey Patriot, is not yet assigned.

“Generally things are going smoothly at the yard. We’re finishing up the dual-fuel boats and conducting some modifications and repairs on boats requiring upgrades for the new Subchapter M regulations,” said Marvin Serna Jr., chief operating officer at Gulf Coast Shipyard Group. “Like everyone else, we’re looking at the market and it’s not a good time right now.”

The 221-foot OSV SEACOR Tolteca was slated for fall delivery from Master Boat Builders in Bayou La Batre, Ala.

Brian Gauvin photo

Stacked along the shipyard frontage on Bayou Bernard are 20 OSVs from Harvey Gulf’s fleet, an exclamation mark for the oil economy’s woes.

On the loop road between Coden and Bayou La Batre, Ala., Master Boat Builders, noteworthy as a downturn-resilient shipyard, now has more space between modules than usual. The 221-foot OSV Tolteca is nearing completion and delivery to SEACOR, and there are modules being fabricated for two more SEACOR OSVs and two tugs for an undisclosed client.

“The supply boat market is not looking too good right now, and we are a supply boat builder,” said Andre Dubroc, the company’s general manager. “In the early ’80s we moved to fish boats to get through. Now it looks like we’ll look at tugs. It’s going to get dirty before it gets better.”

In Panama City, Fla., Eastern Shipbuilding Group was working on two MPSVs in August for Harvey Gulf International at Eastern’s Nelson Street shipyard. The 340-by-73-foot Harvey Sub-Sea (see profile) and Harvey Blue-Sea were scheduled for delivery in September and early next year, respectively.

Although Eastern has no new OSV orders, there is still a lot of steel being welded into modules at the company’s Nelson Street and Allanton yards.

“Diversity is Eastern Shipbuilding’s historical legacy,” said Stephen Berthold, Eastern’s vice president of sales and marketing.

In January, BAE Systems delivered Squall to Jackson Offshore Operators. The 252-foot PSV, designed by Guido Perla & Associates, completed a four-vessel series from the Florida yard.

Courtesy BAE Systems

On Sept. 1, Eastern announced the delivery of the specialized ocean tugboat Harvey Stone, one of the first Tier 4 vessels at work in the U.S., to Harvey Gulf. Also in the tugboat pipeline are a 96-foot z-drive tug for McAllister Transportation; the last of eight z-drive tugs for G&H Towing of Galveston, Texas; four triple-screw inland river boats destined for IWL River in Latin America, and the last two of a 65-boat run for Florida Marine Transportation.

The yard is also building a 356-foot, twin-screw trailing suction hopper dredge for Weeks Marine; a 158-foot ATB tug and 433-foot hopper dredge for Great Lakes Dredge & Dock Co.; a second 141-foot schooner from the yard modeled after the racing yacht Columbia; and a 194-foot stern trawler for O’Hara Corp.’s Alaska fleet.

With Eastern winning the Coast Guard’s offshore patrol cutter contract, Berthold’s comment from last year’s American Ship Review still holds: “If you diversify your shipyard, you stand a very good chance of surviving.”

A drive around the Houma area revealed that the major marine operators supporting the Gulf of Mexico oil industry — Chouest, Hornbeck, Harvey Gulf and others — have significant numbers of their fleets stacked wherever they can obtain moorage.

Port Fourchon, usually a frenetic oil support hub with trucks and helicopters coming and going, and OSVs and crew boats jostling for moorage, is as quiet as an industrial museum. On that particular day in August, a few Chouest and Harvey Gulf OSVs showed signs of life, taking on supplies and equipment for what remains of deepwater rig activity.

With diversity and consolidation as a recipe for survival, building high-spec vessels — rather than feeding the OSV fleet’s oversupply of what are essentially sea trucks — may be the path forward in the future.

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