The refrain of Gulf Coast shipyards, lining the bayous close to the offshore oil, has morphed from location, location, location to uncertainty, uncertainty, uncertainty.
A recent tour elicited a strong consensus: The creeping rate of permitting for drilling in the Gulf is driving the oil companies to foreign waters. At best, that's frustrating the shipyards. At worst, it is strangling them.
"It's all about permitting," said Robert Socha, executive vice president of sales and marketing at Bollinger Shipyards in Lockport, La.
CAT 3512s installed in a 194-footer under construction for Edison Chouest Offshore at Breaux Brothers Enterprises in Loreauville, La. The hulls are actually 184 feet with a 10-foot fantail.
"No permitting, no new vessels. There are permits filed, but not many have been awarded. The DP-2 vessels are leaving the Gulf and those are the vessels that will be needed whenever the Gulf opens up again. Even in West Africa I saw an ad stating DP-1 required, DP-2 preferred."
Walter Thomassie, general manager of Thoma-Sea Marine, another Lockport yard, describes the permits issued so far as "teases." Other descriptions were more graphic.
The bright shiny booms of new cranes, paid for under the Maritime Administration's (MarAd) grants to small shipyards, tower above the flat landscape from many of the yards, beckoning potential customers. The builders are ready for the Gulf to come back.
In Jennings, La., Leevac Industries is building four lightering support vessels for AET Lightering Services. Historically, however, the yard has built platform supply vessels.
Welding scenes from Breaux Brothers: preparing to install a bow thruster (top), and working on the hull of a newer 194-footer in a series of four for Edison Chouest Offshore. “All our boats are finished out to yacht quality,” said Joe Louviere, a yard supervisor who has been with the company 26 years. “We don’t just look at the money.”
"We want to focus on PSVs because that"s really our wheelhouse," said Tom Church, vice president of sales and marketing for Leevac. "We're seeing a lot of quoting activity right now, but nobody's signed yet. Right now the market is taking advantage of the shipyards."
Moving east, a number of yards specializing in high-quality aluminum crew boats are located on Bayou Teche, a serpentine waterway lined with live oaks draped in Spanish moss south of Lafayette, in the heart of Cajun country.
Breaux Brothers Enterprises in Loreauville is holding steady with four 194-foot, 7,240-hp crew/supply boats under construction for Edison Chouest, a longtime customer. The boats are powered by four Caterpillar 3512s and have ZF 4650 gears and ZF propellers. The yard expects to deliver the first boat in November.
"They can handle people but they're really fast supply boats," said Vic Breaux. "We haven't built a true crew boat for probably 10 years.
"We're negotiating with Gulf Logistics for a couple of crew/supply boats. They have the next slot in the yard. By 2013 it should be OK, but you never know. The future is uncertain, for sure."
Farther south, in Patterson, Gulf Craft continues to supply Seacor Marine's seemingly unquenchable thirst for crew/supply boats. Two 190-by-34-foot speedsters — Aaron S McCall, delivered earlier this year, and RJ Coco McCall, in the final stages of construction — are going to West Africa. A power train of four MTU 16V4000M73 engines, Twin Disc gears and Hamilton water jets drive the 13,740-hp vessels. Seacor refers to the boats as crew/fast supply vessels, and at 35 knots it would seem they're onto something.
In mid-August Gulf Craft's workforce was also busy on a four-boat order for Gulf Offshore Logistics. The first, the 225-by-36-foot Ms Netty, was ready for launch. The next three hulls were upside down in various stages of completion. Scotty Tibbs II, Gulf Craft's comptroller and one of three sons working in the company that their father founded in 1965, believes these are the largest monohull crew boats yet built.
"Seacor keeps us busy and we have Gulf Offshore Logistics. They are our primary customers," said Tibbs. "I'm glad they're diversified internationally. We are fortunate because we can keep our labor force. They work with us, and we work with them — they are highly skilled and we don't want to lose them."
Despite apprehension concerning the future, Gulf Craft is moving ahead with a new facility in nearby Franklin, a shipyard with a much more direct transit to the Gulf of Mexico. The move is planned for late fall.
"We'd have died on the vine because of waterway restrictions," said Tibbs. "Everything is getting bigger and we need deeper water and bigger canals."
Tibbs expressed a widely held frustration over the administration's approach to the future of deepwater oil.
"What Washington doesn't understand is that they can make a decision in a second, but it has consequences," he said. "It will take several years to get it (deepwater drilling) going to what it was. We're one of the fortunate yards, because it's scary out there. I wouldn't use the word optimistic, I'd use the word blessed."
Bayou Teche joins the Atchafalaya River and the Gulf Intracoastal Waterway at Morgan City. Halimar Shipyard sits on the Intracoastal south of town, with good proximity to the Gulf. The company has built 10 workboats for Barry Graham Oil Service and is close to finishing the last of a five-boat series of 170-foot crew boats.
Halimar also delivered a 215-foot lift boat to Marine Industrial Fabrication (MIF), the 18th lift boat on which the two companies have collaborated, this one for an undisclosed customer.
RJ Coco McCall, a 190-foot crew boat, shown at Gulf Craft in Patterson, La., as it was about to leave to join the Seacor fleet. Gulf Craft is now building a 225-footer it says is the world’s largest monohull crew boat.
"We do all of the hull structure and then deliver it to MIF in New Iberia and they do the house and legs," said Halimar's managing director, Bill Hidalgo.
"I think the Gulf oil industry is wary and guarded right now," said Hidalgo. "People are being careful. It's political, and the atmosphere does not support people being more aggressive. The situation makes it difficult for people to make a decision."
In Houma, La., normally a hotbed of shipbuilding for the Gulf, things are relatively quiet. Quality Shipyards is delivering another offshore supply vessel (OSV), the 265-foot Cindy Brown Tide, later this year to the yard's parent company, Tidewater. Candies Shipbuilding is building two 285-foot dive support vessels for its parent company, Otto Candies. Underway at Gulf Island Marine Fabricators are a 185-foot lift boat for Montco Offshore and a 150-foot one for CS Liftboats. And Thoma-Sea's Houma yard is building OSVs on spec.
Thoma-Sea Marine, which recently changed its name from Thoma-Sea Ship Builders, has delivered a 220-foot DP-2 PSV to JG Marine from its Lockport yard and is beginning construction on two 295-foot diesel-electric OSVs for Gulf Offshore Logistics (GOL). Even so, said, Walter Thomassie, "We're not as busy as we'd like to be."
The GOL boats are the largest the company has built at Lockport, where water and air restrictions limit newbuilds to about 315 feet. "That's one of the reasons we started developing the yard in Houma," said Thomassie. "We've invested $20 million in that facility."
The two boats Thoma-Sea has underway in Houma are a 180-footer and a 265-foot diesel-electric DP-2 OSV. Building on spec doesn't faze the Thomassie family.
"We started this yard with three spec boats and it wasn't a great time," said Thomassie. "We also started our first DP-2 on spec. We've taken some risks but we try to take mitigated risks." Thomassie said the company is prepared to operate the boats in the short term if it has to.
Thomassie's observation is that some of the bigger boats have left the Gulf, and some will have to be replaced when the Gulf comes back, but there won't be a big boom. "If Congress decides to require stand-by vessels, it will create demand for some of the mid- to smaller-size vessels," he said. "The future is tentatively hopeful."
Down Bayou Lafourche in Larose, North American Shipbuilding is, as usual, busy building PSVs for its parent company, Edison Chouest Offshore. According to printed updates from Chouest, it has a series of 280-foot and 300-foot PSVs underway, as well as two 361-foot Arctic ice-class anchor handling and tug supply vessels under construction at two South Louisiana yards that are due for delivery in early 2012 to Shell in Alaska.
Harvey Supporter is scheduled for delivery to Harvey Gulf in November from Eastern Shipbuilding Group. It’s the first of three 300-foot OSVs to be constructed to ABS Enviro+ Green Passport standards. Harvey Gulf said the building materials can be recycled or broken down without harm to the environment.
A blanket of quiet has settled on the once frenzied boatbuilding community at Bayou La Batre, Ala. Andre Dubroc, general manager at Master Boat Builders, describes the level of activity in one word: "slow."
However, the company recently delivered the 200-foot dive supply vessel Ocean Project to Oceaneering and completed a four-boat contract for Abdon Callais Offshore, bringing to 55 the number of boats built for the Golden Meadow, La., company.
That number will rise to 60 when Master completes another five-boat order. The first, a 185-foot DP-2 OSV named ACO Dodie Lorraine, is nearing completion and the modules for the first of four 200-foot DP-2 OSVs are being assembled. All have Caterpillar 3512C propulsion.
"Just about all the 200-footers and 185s we deliver are DP-2," said Dubroc. "There's always been a market for that size of boat."
Nevertheless, Dubroc said the order book and workforce at Master is hovering at 50 percent of normal. For the Gulf to come back, Dubroc said, there has to be a national energy policy sympathetic to drilling. "The administration we've got right now, they're totally against fossil fuels," he said.
In Panama City, Fla., Eastern Shipbuilding Group is bucking the downturn. Fresh from a three-boat delivery to Harvey Gulf International Marine, Eastern has a contract for three more 300-foot PSVs. The first, Harvey Supporter, is due for delivery this fall. These are the first OSVs in the U.S. to be classified with an ABS Enviro+ Green Passport certification.
Harvey Gulf and Eastern have had a close association for some years. As Provider was being launched in May, Harvey Gulf announced that construction would begin on a 310-foot multi-purpose light construction vessel built to the same ABS Green Passport standards. The vessel, Harvey Deep-Sea, will also carry a 165-ton active heave-compensation knuckle boom crane capable of lifting and setting 100 tons at depths up to 10,000 feet. Delivery is expected in April 2013.
Eastern also has a new contract to build five diesel-electric PSVs, for Brazil-based Boldini, a project backed by a MarAd loan guarantee for $241 million. The Boldini boats are a similar design to the two Aries Marine boats, Dwight S. Ramsay and Betty Pfankuch, which Eastern delivered this spring.
Located in Sturgeon Bay, Wisc., Bay Shipbuilding is far from a Gulf shipyard, but it is getting into the PSV market with two 303-foot diesel-electric DP-2 vessels due for delivery to Tidewater in late 2012 and early 2013. Siemens is providing a multi-drive low-voltage propulsion system, with two Thrustmaster z-drives and two thrusters.
All the gloom on the Gulf is punctuated by the odd note of optimism from a company that, for the first time in a long time, is without a PSV under construction.
"We've always had an offshore vessel under construction, it seems like," said Bill Skinner, CEO of VT Halter Marine in Pascagoula, Miss. "We've certainly seen, since our last delivery, a slowdown in the requests for proposals in that area."
But with new regulations and more oversight of drilling, Skinner is optimistic that the deepwater thirst for 280- to 290-foot vessels will enjoy a resurgence. "That fits our facility very nicely," he said.
The shipyards on the Gulf Coast are hoping he's right. Many have new cranes, new cutting machines and new Travelifts, and all have experienced workers. Perhaps its time for location, location, location to kick in again.