Offshore Support Journal January/February 2018

January/February 2018 www.osjonline.com

CELEBRATING OSJ’s 20TH ANNIVERSARY

West Africa

has come through the worst but recovery will be slow Accommodation provider is in good shape as market recovers NOPSEMA highlights dangers of inadvertent operation

“It is important to work with our members and other actors in the maritime cluster to ensure that the industry in Norway overcomes difficult times” Harald Solberg, CEO, Norwegian Shipowners’ Association, see page 9

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contents

January/February 2018 volume 21 issue 1

13 21

Regulars 5 COMMENT 46 IMCA NEWS 52 BEST OF THE WEB

News focus 6 Owners need to reckon with some changes to the North Sea tax regime

Interview 9 Harald Solberg, the new head of the NSA, believes traditional virtues will help bring about gradual improvement in the OSV market

Area reports

28

12 West Africa: broker Peter Döring reflects on a difficult year for the West African market 13 West Africa: as broker Johannes Sjöstrand explains, in 2017 a clear pattern emerged in the number and type of vessels in the region 14 Southeast Asia: Chinese yards have been hit hard by the new reality

Training 17 New simulators are being built at the Swire Marine Training Centre, and greater use is being made in the industry of augmented reality

Oil spill response 21 Wave tracking could enhance oil recovery operations

43

Heavy-lift 22 A high level of flexibility and redundancy characterise a new class of semisubmersible heavy-lift vessels managed by GPO Heavylift in Norway

Propulsion 25 Reduced demand for newbuilds has checked LNG’s advance

Repair & conversion 26 Naval architects suggest that PSVs might be converted into dredgers

Accommodation vessels 28 Prosafe sees a more promising outlook longer term

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Offshore Support Journal | January/February 2018

contents Decommissioning 31 An insight into how the North Sea decommissioning market will develop over the next seven years was provided in two guides launched late last year

LNG/FLNG

January/February 2018 volume 21 issue 1 Editor: David Foxwell t: +44 1252 717 898 e: david.foxwell@rivieramm.com

32 Dreifa Energy is pressing ahead with a plan to convert a platform supply vessel into a floating regasification unit

Deputy Editor: Martyn Wingrove t: +44 20 8370 1736 e: martyn.wingrove@rivieramm.com

Cranes

Brand Manager – Sales: Ian Glen t: +44 7919 263 737 e: ian.glen@rivieramm.com

35 Late 2017 saw some important developments in the market for cranes

Hybrid propulsion 36 More and more offshore vessels are being fitted with batteries

Dive support vessels 38 Jeremy Punnett reflects on recent developments in the dive support vessel market

New designs 40 Marcelo Penna Engineering believes the trimaran vessel it has developed can compete with helicopters in the crew change market

Dynamic positioning 43 Inadvertent deactivation of a vessel’s dynamic positioning system could have been deadly for a diver in an incident offshore Australia

Safety alerts 47 Potential engineroom flooding

Market data 48 Statistics 50 VesselsValue

Next issue • Main area report: Southeast Asia • Simulation and training • The walk-to-work market • Anchor handling • Propulsion: diesel electric • Standby and rescue vessels • Ice-class vessels and technology Front cover photo: Seadrill’s drillship West Saturn, supported by a platform supply vessel offshore Côte d’Ivoire (photo: Ophir Energy)

Sales: Indrit Kruja t: +44 20 8370 7792 e: indrit.kruja@rivieramm.com Sales: Colin Deed t: +44 1239 612384 e: colin.deed@rivieramm.com Head of Sales – Asia: Kym Tan t: +65 9456 3165 e: kym.tan@rivieramm.com Sales – Asia & Middle East: Rigzin Angdu t: +65 6809 3198 e: rigzin.angdu@rivieramm.com Sales – Southeast Asia & Australasia: Kaara Barbour t: +61 414 436 808 e: kaara.barbour@rivieramm.com Production Manager: Sasha Tan t: +44 20 8370 1718 e: sasha.tan@rivieramm.com Subscriptions: Sally Church t: +44 20 8370 7018 e: sally.church@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Operations Director: Graham Harman Head of Content: Edwin Lampert Executive Editor: Paul Gunton Head of Production: Hamish Dickie Business Development Manager: Steve Edwards Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK

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Offshore Support Journal | January/February 2018

ISSN 1463-581X (Print) ISSN 2051-0594 (Online) ©2018 Riviera Maritime Media Ltd 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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COMMENT | 5

Costs could see 1,000 ageing OSVs leave the market

C

larksons Research, the research arm of leading shipbroker Clarksons, said it believes around 1,000 offshore support vessels (OSVs) aged over 15 years could eventually be removed from the market or scrapped in place.

In a recent comment, Clarksons Research highlighted once again the large number of vessels that are in layup, the condition of many vessels in layup, the deferral of special surveys and the potentially high costs involved in bringing older vessels back into service. “It is likely that only some of these units will ever be reactivated,” said Clarksons Research analyst Calum Kennedy. “How significant an impact might this have?”

All vessels, including OSVs, are required by class societies to undergo drydocking and special survey every five years. This process can cost millions, so in the current weak OSV market, the incentives to reclass idle or laid-up ships have been reduced.

Clarksons Research said that, as of the start of December, 27% of the OSV fleet was out of class and therefore would require a survey to work. “The average age of unclassed OSVs is 26.3 years, and reactivating many over-aged units may well not make economic sense,” said Mr Kennedy.

Data from Clarksons Research shows no record of a running class certificate for 1,389 OSVs – 64% of these are in formal layup, which is enough, if reactivated, to increase the active fleet by 25%. There are also 504 idle units with no class recorded. “For some, class might actually have been recently renewed, but clearly, many ships face upfront costs before they could work.

To justify this, term charters would have to be readily available at improved day rates. So far, there seem few signs of this

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occurring,” said Mr Kennedy.

Clarksons said there are 284 laid-up and out-of-class OSVs aged less than 15 years. These youthful units are most likely to be reactivated. However, there are 601 OSVs recorded as out of class and in layup that are over 15 years old and less attractive to oil companies. If all 885 laid-up and unclassed vessels were permanently removed, this would reduce the total fleet size by 17%. Even if only those older than 15 years of age were removed, the fleet would still shrink by 11%.

Mr Kennedy said that, in addition to OSVs that are aged 15 years or older in layup or out of class, there are another 326 idle out-of-class vessels aged over 15 and a further 418 vessels 15 years plus that are within two years of their next survey.

“The owners of all of these OSVs will probably have to make tough decisions on whether reclassification expenditure is justified,” Mr Kennedy said. “If all such

vessels, plus those laid up, of 15 years of age or older were removed, this would equate to a drop of 26% in the size of the OSV fleet.”

He noted that it is unrealistic to expect so many removals to happen swiftly, and there are still areas where older OSVs can find work. “However,” he said, “a scenario can be envisaged where more than 1,000 OSVs aged over 15 years were eventually removed or at least scrapped in place so that vessels degrade to an extent that is prohibitive to repair.

“Such a scenario would affect 26% of the total OSV fleet but also 597 vessels within the notionally active fleet. This would reduce the active fleet by 17%.

So there is a scenario that could have a tangible effect on the supply side, prompted by the costs of reclassing vessels in weak markets.

However, any such supply contraction would still need to be met with substantial demand-side improvement to more fully rebalance the OSV market.” OSJ

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Offshore Offshore Support Support Journal Journal || January/February January/February 2018 2018

6 | NEWS FOCUS

TAXING ISSUES FACE OFFSHORE MARINE COMPANIES IN THE NORTH SEA AS SUE BILL* REPORTS, THERE ARE A NUMBER OF DIFFICULT TAX AREAS FOR OFFSHORE MARINE COMPANIES OPERATING IN THE NORTH SEA AND COMPANIES THAT SUPPORT THEM

The tax regime for vessel companies in the North Sea is complex and subject to change

G

iven the financial difficulties currently faced by the offshore oil and gas and offshore marine sectors, it’s very important to ensure that tax rules are being applied correctly so that companies are complying with their taxation obligations ensuring penalties do not arise but at the same time are not paying too much tax. Some complex areas are discussed below.

The UK tonnage tax rules for ships operating in the

North Sea are complex as they are designed to preserve the tax revenues arising from the natural resources from the UK Continental Shelf.

Depending on the type of vessel being operated, it may be within tonnage tax wherever it operates, it may wholly excluded or it may be excluded from tonnage tax whilst operating in the North Sea. Where an offshore vessel is in tonnage tax, HMRC considers that it is necessary to allocate profits between land-based

Offshore Support Journal | January/February 2018

activities (non-tonnage tax) and services provided at sea (in tonnage tax).

In addition, the rules relating to capital allowances and capital gains are complex.

In the current climate, it may be worth revisiting whether these rules are necessary.

While R&D is critical, it can be costly, not only in itself but also that payback can take months if not years. The UK has some of the most effective reliefs available for this type of expenditure in the form of

R&D tax credits, which are a very generous and important tax relief.

R&D tax credits are unusual as they provide the taxpayer with the opportunity of claiming more in tax relief from HMRC than they have paid in tax. The relief can be of relevance even for companies that do not pay corporation tax as they are loss making.

This relief should be of particular interest for companies supporting the offshore maritime sector. It is

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NEWS FOCUS | 7

not only for companies that are inventing something brand new.

It can be claimed by companies that are improving existing products or internal processes.

Any company that is involved in technological or scientific problem solving is likely to also be eligible for the relief. This can include seismic research, software developers, production, engineering, construction or even demolition companies.

Many companies in the offshore marine sectors could therefore qualify for R&D tax credits. Examples of recent successful claims include the design of gas terminal infrastructure, the development of oil spill recovery systems, software for unmanned vessels and much more.

From 1 April 2016, the Scottish Parliament has been able to set a Scottish rate of income tax (SRIT) to be paid

by Scottish resident taxpayers on certain types of income.

For 2016/17, the SRIT was 10p, the same as the UK equivalent rate, so that Scottish taxpayers paid the same tax as other UK taxpayers. However, for 2017/18, the threshold for paying the 40p income tax rate will start at £43,000 instead of £45,000 as elsewhere in the UK (this threshold broadly applies to income other than savings and dividend income).

This is the only difference, and it means that some Scottish taxpayers will pay up to £400 more than other UK taxpayers for 2017/18. Further changes could of course be made in the future.

A Scottish resident is an individual who is UK resident and has their sole or main residence in Scotland or, if no main residence can be identified, has spent more days in Scotland compared to elsewhere in the UK in the tax year.

An individual’s main residence is the place of residence to which they have the greatest degree of connection,

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for example, the family home, where the majority of their possessions are kept and where they are registered with a dentist or doctor.

The HMRC guidance on the Scottish residence test sets out two examples of how this might affect workers on an oil rig in Scottish waters.

If the oil worker has their family home elsewhere in the UK where they spend all their non-working time, their main residence will be elsewhere in the UK and they will not be a Scottish taxpayer.

However, if a worker on a rig spends their time when not on the rig in work-related accommodation or visiting friends or on holiday, depending on the circumstances, they may not be regarded as having a main residence and their taxpayer status will be decided by a day count.

What this means is that their residence status could change from year to year. An individual based elsewhere in the UK on say a two-year secondment to Scotland who rents out their UK home and moves into rented accommodation in Scotland may become a Scottish resident for any tax year during which they spend more time in Scotland than elsewhere in the UK. The implications regarding the potential difference in tax for 2017/18 of £400 remain to be seen. In future, the differential could increase.

At the time of writing, the UK has announced the higher rate threshold for 2018/19, but the Scottish Parliament is yet to do so. Although the SNP has said that it wishes to raise taxes on the rich, additional rate taxpayers are likely to react to changes in tax rates and some could, for example, relocate to the north of England.

It is also worth noting that the type of earners who are additional rate payers are different in Scotland compared to

the UK as a whole. In Scotland, nearly 13% of additional rate taxpayers are employed in health and social work, compared to 9.5% in the UK. The finance and insurance sector accounts for 22.4% of additional rate taxpayers in the UK but only for 11.5% in Scotland.

These changes mean there is a significant administrative burden for individuals and companies, uncertainty and unfairness. In future, some control over other taxes, such as corporation tax, could also move to Scotland.

Recent VAT changes can result in potential significant VAT savings for holding companies in the offshore maritime sector.

Historically, HMRC has been challenging VAT recovery made by holding companies even where they fully support subsidiaries in the group who are able to recover all of the VAT that they incur. This was on the basis that HMRC had held the view that holding companies were not carrying out ‘business’ or ‘an economic activity’ for VAT purposes.

Sue Bill: “UK tonnage tax rules for ships operating in the North Sea are complex and designed to preserve the tax revenues”

Typical holding company functions such as holding/ acquiring/disposing of shares, receiving dividends, carrying out listing activities and raising finance do not in themselves carry a right to recover VAT incurred on related costs. This is because, for VAT purposes, they are not ‘business’ activities.

However, in reality, many holding companies undertake a much wider function on behalf of the subsidiary companies in the group. For example, the holding company may employ the staff and directors and be responsible for the procurement of all the necessary resources for support and administration of the subsidiaries.

In this instance, the holding company would be providing services and making supplies to its subsidiaries that are ‘business’ for VAT purposes. Even when this is the case or where a holding company is part of a VAT group that is fully taxable for VAT purposes, HMRC had still been expecting some VAT incurred on expenditure to be restricted to reflect the ‘pure’ holding company activities being undertaken. It has become apparent that, as long as the holding company is providing genuine services to its subsidiaries, it should be possible to not make any restriction.

HMRC has therefore changed its policy. Corporate groups should therefore be actively reviewing the arrangements that they have in place for their holding companies and how they treat the VAT incurred. Also, if any restriction has been or is being made, it may now be possible to recover this VAT. OSJ *Sue Bill is a business tax partner at Moore Stephens.

She advises companies and their shareholders in a wide range of sectors and specialises in the energy, mining and shipping sectors and has a number of clients in the UK tonnage tax regime.

Offshore Support Journal | January/February 2018

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INTERVIEW | 9

CORE STRENGTHS

WILL AID RECOVERY SAYS SHIPOWNERS’ CEO

H

arald Solberg became the new chief executive of the Norwegian Shipowners’ Association on 1 January 2018.

He believes it is especially important at the moment that he works with members and all of the other actors in the maritime cluster to ensure that the industry in Norway overcomes what he describes as “difficult times”.

In a wide-ranging interview with OSJ, Mr Solberg noted that shipping represents a very important part of Norwegian business life and creates jobs right along the coast of the country. “Shipping companies make up a strong driving force in the maritime cluster,” he said, “and in years to come, resources in the ocean will be particularly important solutions to some of the major challenges the world faces, not least in terms of energy, food production and transportation of goods in an environmentally friendly way. The framework conditions for the industry will be crucial to ensure a healthy competitive position,” he told OSJ. Asked what offshore vessel members tell him about the market in which they operate and the biggest challenges they face, Mr Solberg noted that, as of January 2018, 130 offshore ships and 19 rigs were still laid up on the Norwegian Continental Shelf. “It is difficult to predict the future, but 2018 will remain challenging for the offshore service segment,” he told OSJ. “In the last few years, owners have laid up ships, reduced costs and downsized their staff, both on land and at sea. Restructuring and refinancing has been a part of this, and it will continue in 2018 and into 2019.”

Mr Solberg told OSJ that, as of early 2018, there were 1,733 vessels under the Norwegian flag. This figure has changed little in recent years. However, the Norwegian International Ship Register (NIS) has seen net growth of more than 50 ships in the same period, with a growth in deadweight tonnage of 10%.

“This development is proof that an active maritime policy works,” said Mr Solberg. He believes that having a significant number

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The new head of the Norwegian Shipowners’ Association doesn’t expect a sudden improvement in the market but believes traditional virtues – such as a focus on innovation and new technology and new markets – will help bring about gradual improvement

HARALD SOLBERG: “innovation has always been an important to Norwegian owners and the maritime cluster as a whole”

of ships flying the Norwegian flag is “vital” to maintaining Norway’s position as one of the leading shipping nations.

Recent years have not been easy ones for Norwegian owners or seamen, however. Statistics from the Norwegian Shipowners’ Association show that 8,300 people in shipowning companies were either laid off or terminated in 2016, compared to 7,300 in 2015. Offshore service companies and contractors are far more pessimistic than shortsea and deepsea shipowners, he notes. “We do not have the figures for 2017 and cannot talk about expectations for 2018 yet,” Mr Solberg said, “but they will be available in our Outlook Report, which will be published in April 2018.”

Financing and managing a shipping company seems to have become more complex in recent years, and many well known Norwegian owners of offshore support vessels have had huge wrangles, sometimes nearly terminal, with bondholders as they have attempted to restructure. Asked whether the way companies are structured and financed nowadays has made life for them easier or harder, Mr Solberg said the downturn had been “challenging” and companies have had to restructure, refinance and find new solutions. “The industry is cyclical and capital intensive, and this will also be the case in the coming years. How this will affect long-term ownership it is too early to conclude, but as we often say, the only constant in shipping is change.”

One of the strengths of Norwegian owners is their willingness to innovate.

Doing so has seen them through bad times and downturns before. Asked if that remains the case, Mr Solberg said innovation has been a driving force for Norwegian shipping for decades. “Today, we have an advanced and high-tech offshore fleet. That is the case thanks to innovation in recent decades and the strength of the maritime cluster. We have also seen development in the shortsea fleet in Norway, adapting and improving technology from other sectors and

Offshore Support Journal | January/February 2018

10 | INTERVIEW

bringing zero emissions and the concept of autonomous transport to sea.”

Turning to technical trends, Mr Solberg noted that a number of Norwegian vessels have or are to be fitted with batteries, which have a number of operational advantages and are more environmentally friendly, and that the NOx fund is helping to assist with this process.

He said the Norwegian Shipowners’ Association’s position is to support this particular low-emission solution as a transitional propulsion method for shortsea shipping “as one step on the path to the future zero-emission society”. He explained that the association is supporting the development of batteries/electric propulsion in ships through the Green Coastal Shipping Programme, the aim of which is to develop a world-leading fleet of low and zero-emission shortsea vessels operating along the Norwegian coast as a part of the country’s national logistic infrastructure. He noted that, as part of its remit, the NOx fund can allocate financial contributions to any initiatives intended to reduce emissions, not just batteries.

“The Norwegian Shipowners’ Association is a proud member of the UN GlobalCompact,” he explained, the principles of which outline businesses’ responsibilities in the areas of human rights, labour, the environment and anti-corruption measures. “We see them, in essence, as a codification of decency, responsibility and common sense,” he told OSJ. “We also consider the 10 principles to serve as a platform and a basis for setting higher goals and ambitions. We are convinced that the maritime industry constitutes an important and indispensable part of the solution for

Norway’s maritime cluster has been hit hard but familiar strengths will help it remain competitive

sustainable global development,” he said, providing some examples.

“The association urges members to adhere to the Hong Kong Convention, although it has not yet entered into force, and to choose recycling facilities that adhere to the convention. We also encourage shipbreaking yards to improve their working environments, in particular yards in Southeast Asia. The focus has been on health, the environment and safety issues such as safe working conditions, child labour, management,

environmentally responsible handling of hazardous and toxic substances and safe dismantling and cutting operations.”

As he explained, the association was also an early advocate for the establishment of the Maritime Anticorruption Network (MACN), providing shipowners with a collective network to counter the practice of holding vessels and crews for the facilitation of payment. MACN and its members promote good corporate practice for combating bribes, facilitation payments and other forms of corruption.

Offshore wind’s ‘huge’ potential December 2017 saw the Norwegian Shipowners’ Association, Zero and Norwea celebrating a decision by the Stortingets to issue a licence for a demonstration project for offshore wind power in Norway.

Mr Solberg said the association was delighted with the development and glad that the Norwegian Government wants to accommodate for the development of offshore wind technology in Norway.

“Norwegian companies are well placed to exploit opportunities in the fast-growing offshore wind market,” Mr Solberg told OSJ. “Many Norwegian shipowners are already playing a role in various segments of that industry.

“The potential is huge,” he said. “In fact, together with Norwegian Energy Partners, the Federation of Norwegian Industries and

Offshore Support Journal | January/February 2018

Export Credit Norway, we have valued the Norwegian supply chain opportunities in offshore wind at just under €3Bn (US$3.7 billion) per GW of installed capacity.

“However, for many small and medium-sized suppliers, it can be challenging to position themselves in a new market internationally without a home market where they can develop their technologies and services. The Norwegian Shipowners’ Association therefore supports the development of a full-scale floating offshore wind demonstration project in Norway.

“At a time when things are difficult in most of our markets, it is necessary that Norwegian politicians not only maintain predictable and competitive policies but that they also support innovation, technology development and growth in new markets.” OSJ

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12 | AREA REPORT West Africa

West Africa has come through the worst

but recovery will be a slow one Peter Döring* reflects on a difficult year for the West African market and on the potential for improvement

T

he year 2017 saw some of the most difficult trading conditions that shipowners in the West Africa market have had to face during the three-year downturn, with class deadlines for special suwrveys often determining whether vessels would face layup.

It is now perhaps widely accepted that quarters one and two of the year represented the low point in offshore support vessel (OSV) rates in the region. As a broker, we are routinely asked when vessel rates might start to increase, and it does appear that this is now, tentatively, starting to happen. Despite recent narrative suggesting that owners taking vessels out of layup would see their vessels prioritised for awards, there has been evidence to the contrary, discussed below.

The experience of the platform supply vessel (PSV) and anchor-handling tug/supply (AHTS) vessel fleets in West Africa have been different, the former dominated by chronic oversupply, which has driven rates below opex levels in many cases, whilst the latter (historically, a more fragmented sector anyway) has of course suffered, but not quite to same extent.

Work opportunities for AHTS vessels have presented themselves more readily in 2017. Rig and barge tows and routine tanker liftings have offered short-term contracts, and the larger segment of the AHTS fleet has seen sporadic, at times consistent, utilisation.

UOS (now GH) vessels were engaged with heading control for Eni’s floating production, storage and offloading (FPSO) unit John Agyekum Kufour in Ghana and are now similarly engaged in Cameroon for the installation of Golar’s floating liquefied natural gas (FLNG) unit, Hilli Episeyo. Term contracts have been forthcoming with jack-up programmes in Gabon and DRC with Perenco, Bourbon being the main beneficiary with their Liberty series AHTS vessels, some of which were reactivated from layup.

PSVs continued to suffer with a dearth of deepwater drilling programmes. With a few exceptions, programmes have been limited to one or two wells. Cairn’s five-well campaign with Stena Drillmax in Senegal, supported by Bourbon Clear, Bourbon Sapphire and Bourbon Topaz, and Exxon’s six-month programme in Nigeria that provided work for Tidewater’s Fanning Tide and Davis Tide represent a couple of term contract bright spots.

Siem Offshore’s PSVs Siem Sasha and Siem Louisa were on the cusp of a six to nine-month job when Anadarko terminated the contract for drillship Bollette Dolphin just a few weeks into the drilling programme in Côte d’Ivoire.

Whilst it was welcome to see the return to deepwater drilling of Africa exploration stalwart Ophir Energy after a three-year absence,

Offshore Support Journal | January/February 2018

FLNG projects such as Hilli Episeyo are helping to buoy up demand for offshore support vessels

its single well in Côte d’Ivoire’s block CI-513 took just 22 days to drill. An economical result for Ophir but limited utilisation for the large Solstad Farstad and Swire Pacific Offshore PSVs allocated to the project (Far Starling, Far Sitella and Pacific Heron). The Repsol project on Gabon’s E-13 block and the Petronas project on adjacent block F-14, both with drillship West Capella, and the Statoil well in Tanzania’s Block 2 with Ocean Rig Poseidon are also underwhelming one-well examples.

The aforementioned FLNG Hilli Episeyo, the first of its kind in West Africa, is a reminder that, despite the downturn, there is a steady demand for a core of OSVs. The FLNG unit will produce from the Sanaga Sud and Ebome fields for Société Nationale des Hydrocarbures and Perenco Cameroon SA. In this case, work has been found for a small armada of boats from towage (Alp Striker) to installation and heading control and the spread to handle the diving for Jumbo Offshore/NSea. Lastly, there were term contracts awarded for supply and crew transfer services.

It is likely that the core of actively trading boats having secured, among others, the charters included in this article will continue to move from charter to charter and will be at the forefront of a gentle recovery in daily hire rates in the year to come. OSJ *Peter Döring is a broker with Mercers Offshore

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West Africa AREA REPORT | 13

SMALLER ANCHOR HANDLERS DEPART FROM WEST AFRICA As Johannes Sjöstrand* explains, in 2017, a clear pattern emerged in the West African market with a reduction in the number of small to mid-sized anchorhandling tug/supply (AHTS) vessels

W

ith demand for anchor handlers low, particularly in the 5,150–6,000 bhp dynamic positioning (DP) class 1 segment, 2017 saw reduced numbers through departures and sales.

RK8 Offshore offloaded a number of such units. The 5,150 bhp units Greta K and Bertie K were early sales in the year, being purchased

by Caspian Mainport and renamed CM Greta and CM Brit, respectively.

In the 6,000 bhp DP1 AHTS segment, the units Mari K, Hilde K and Tricia K were sold en bloc to Caspian Shipping in the early autumn.

Scheduled to drydock in Walvis Bay prior their Caspian Sea mobilisation voyage, Mari K is still in Walvis Bay and has been renamed Nefteqaz III. Tricia K is in Baku, Azerbaijan, and Hilde K is in in Tuzla, Turkey.

Another well known West African AHTS vessel that left the market was Swire Pacific Offshore’s Pacific Supplier. The 1999-built shallow draught vessel received a second life and new industry exposure when Norwegian company Tananger Offshore picked it up to serve a term contract in the Norwegian aquaculture sector.

MMA Offshore’s market

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presence was trimmed significantly with the departure of its last two AHTS units – a third, the AHTS MMA Cavalier, 8,000 bhp, had already departed the region in late 2016 for a job in the Middle East.

2017 saw both Mermaid Vanquish and Jaya Dauphin sold off. Having been stationed for some time in South Africa in the Port Elizabeth and Durban corridor undertaking salvage jobs and Subtech lead projects, the 64-tonne bollard pull AHTS vessel Mermaid Vanquish left the region when sold to Zouros Group in Greece. The somewhat larger Jaya Dauphin was bought by Egyptian Ocean Marine and renamed Ocean Tiba and trades these days in the Egyptian Red Sea. With the departure of MMA’s AHTS fleet from the region, the owner’s presence in West Africa is anchored in MMA Privilege’s term contract with CNR International, supporting MODEC’s project on Baobab in Côte d’Ivoire. The DP2 work and accommodation vessel is set to have its stay in the region extended, having already clocked up two years there in April 2018.

The winding up of the joint venture between Norway’s

Havila and Singaporean POSH saw the sale of two AHTS units – POSH Venture and POSH Vibrant. Prior to the downturn, the two vessels were regulars in Congo and Angola but ultimately ended up long term in the layup hub of Walvis Bay. The 2009-built 126-tonne bollard pull POSH Venture was sold to Vietnam, whereas the 2008-built, 103-tonne bollard pull POSH Vibrant was sold, renamed and retained in West Africa. The latter, now Pioneer Silver, has been integrated into Navig8’s offshore pool and will join the RK8 Offshore fleet in the West African market in earnest in mid-January. Another Navig8 and RK8 Offshore addition is the former 94-tonne AHTS Varada Ipanema, a 2011 ABG Shipyard build, which now trades under the name Kilimanjaro.

For many years, the 2011 Astilleros Armon-built Rigel, a fire-fighting class 2 and 110-tonne bollard pull anchor-handling tug, worked for Sonangol on an offshore terminal contract under the management of Italian

Fratelli Neri. Having ended its five plus year contract and later transiting back to the Mediterranean, the end of 2017 saw the vessel changing hands, having been acquired by Muller Dordrecht in the Netherlands and its name changed to En Avant 30.

Proving that there is rarely an established pattern or rule without an exception, 2017 finished off with the sale of four stalwart West Africa platform supply vessels (PSVs).

Seacor closed the deal on four Hellespont PSVs – the 2009/10-built UT 755 LN Hellespont Daring, Hellespont Dawn, Hellespont Defiance and Hellespont Drive*. With the exception of Hellespont Drive, all of the PSVs are currently under contract in Nigeria and Congo. At the time of writing, the management of the units remains within Hellespont’s Hamburg office with commercial supervision from Seacor’s Dubai office. OSJ *Johannes Sjöstrand is a broker at Mercers Offshore

2017 saw Seacor acquire four UT 755 LN PSVs like this one

Offshore Support Journal | January/February 2018

14 | AREA REPORT Southeast Asia

WHERE NOW FOR CHINA’S As Hong Liang Lee reports, the authorities in Beijing have long espoused the need to boost the capability of offshore shipyards in China, but there is little evidence that they are succeeding

T

wo years have passed since China introduced its first ‘white list’ of offshore shipyards. Issued by the Ministry of Industry and Information Technology, the aim was to enable preferential access to domestic bank loans and policy support. These aids are crucial to the capitalintensive industry that the yards operate in.

The seven offshore yards that made it to the white list are all state-owned.

They are Yantai CIMC Raffles, Shanghai Zhenhua Heavy Industries Company (ZPMC), Cosco (Qidong) Shipyard, Cosco (Nantong) Shipyard, Shanghai Waigaoqiao Shipbuilding (SWS), China Merchants

Heavy Industry (Shenzhen) and Dalian Shipbuilding Industry Offshore.

The brief statement from the Ministry of Industry and Information Technology did not spell out in detail the benefits for the white list offshore yards. It was however mentioned that they met the standards required by a panel put together

by China International Engineering Consulting Corp (CIECC) and China Classification Society (CCS).

The ministry added that the aim of the initiative was to encourage them to develop proprietary products and inhouse designs, make technological and innovative progression, improve on project management and promote industry collaboration.

Beijing also made it clear that the white list offshore yards needed to pump an annual investment of at least 2% of their yearly revenue into technology and R&D, believing as it did that enhanced technology is a key requirement for offshore shipyards to propel them onto the global stage.

A year after the offshore white list was drawn up, the seven listed yards announced in December 2016 the formation of an alliance, the China Offshore (Deepsea) Industry Alliance or CODIA, with the aim of raising competitiveness through shared resources and a keener focus on R&D. China’s deputy minister of the Ministry

of Industry and Information Technology Xing Guobin said at the launch of CODIA that, by 2020, the alliance aimed to be one of the world’s leading players in offshore engineering.

Mr Xing’s statement would now appear to be a rather far-fetched ambition with less than two years to go until 2020. How many of us have heard of CODIA, much less the innovations that they have come up with?

It is a known fact that China’s offshore shipyards continue to lag behind their international counterparts. It is also well known that Chinese offshore yards are able to crunch out the numbers – from delivering only 11 offshore support vessels (OSVs) in 2003 to having a backlog of possibly 400 newbuild OSVs waiting to leave yards amid the sluggish market we are now in. In a way, it is their ability to build vessels quickly that has failed them – they simply do not possess the capability to deliver high-specification OSVs. The previously profitable, privately owned Chinese shipbuilding Yangzijiang only managed to avert disaster by not venturing too deeply into the offshore sphere. Yangzijiang exposed itself to a co-owned jack-up rig back in 2014, just ahead of the offshore sector crash. That year, 5% of Yangzijiang’s revenue was generated from the oil rig.

Yangzijiang’s executive chairman Ren

Shanghai Waigaoqiao Shipyard has not been doing much offshore business despite being on the white list

Offshore Support Journal | January/February 2018

www.osjonline.com

Southeast Asia AREA REPORT | 15

OFFSHORE SHIPYARDS? Yuanlin said that, apart from the poor market that led to the unfavourable outcome of its rig business, Chinese shipyards continue to lack the kind of technological edge needed to take on rig-building powerhouses such as Keppel in Singapore and specialist offshore yards in South Korea.

“The technological barrier between Chinese yards – be they state-owned or private – and the Korean yards is too wide.

I have not foreseen when this barrier can be bridged,” Mr Ren told OSJ. China Association of the National Shipbuilding Industry (CANSI) president Guo Dacheng said during his 2018 new year speech that the Chinese shipbuilding sector needs to internalise the idea that progression means making technological advancements.

The problem is that Mr Guo has made this same point in every one of his new year speeches. What was new in his speech this year, however, is the realisation by some Chinese yards that automation is a proven way to reduce operating costs and raise efficiency.

Mr Guo cited broad examples in 2017, such as Jinhai Heavy Industry lowering operating costs by 40% with increased automation and Jiangnan Shipyard raising output efficiency for its new products by 90.9% based on improved technological R&D. There was mention of three of the white list offshore yards, with Yantai CIMC Raffles having reduced its procurement costs by approximately US$20M after it reformed its global supply chain. Dalian Shipbuilding Industry Co, which Dalian Shipbuilding Industry Offshore falls under, expanded

its automatic welding processes by 76%.

Cosco (Nantong) Shipyard saw a threefold increase in production at its automated production lines.

Cosco (Nantong) Shipyard, however, faces a closure threat as its parent Cosco Shipping Heavy Industry plans to streamline the number of its offshore shipyards from five to two by 2020. If the Nantong yard is to shut down as planned, the offshore white list will be left with six names, leaving the sister firm Cosco (Qidong) Shipyard in the list.

A source close to ZPMC told OSJ that 2017 was a tough year for the yard, and there was no mention of developments in the offshore business.

China Merchants Heavy Industry (CMHI), in collaboration with GTT, Gabadi, Lloyd’s Register (LR) and Shanghai Merchants Ship Design & Research Institute (SDARI), recently launched new membrane technology liquefied natural gas (LNG) carriers.

While this development for CMHI is not directly linked to the offshore sector, it is a breakthrough for the shipyard, as the only other Chinese yard capable of building LNG carriers is Hudong-Zhonghua Shipbuilding (Group) Co. Shanghai Waigaoqiao Shipbuilding (SWS), sister firm to Hudong-Zhonghua, also made a breakthrough as it won contracts to build LNG-fuelled 22,000 TEU containerships.

Although the offshore white list still exists, what the yards on it can achieve in the foreseeable future is unlikely to be revolutionary.

If progression is to be made, one of the major changes needed is for China’s state-

Chinese yards specialising in OSVs have struggled since the oil price fell

owned companies to reform themselves, in particular at the management level.

The offshore equipment market is also driven by core designs and cutting-edge technology, leading to the importance of intellectual property laws, which are not properly enforced in China. The country also lacks an experienced, skilled domestic workforce to produce quality offshore structures to match those of international standards. OSJ

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TRAINING | 17

Swire Pacific upgrades Singapore training centre

as AR comes to the fore

Seafarers are trained on the latest bridge operating systems in a full mission simulator at SMTC

AS HONG LIANG LEE REPORTS, NEW SIMULATORS ARE BEING BUILT AT THE SWIRE MARINE TRAINING CENTRE, AND GREATER USE IS BEING MADE IN THE INDUSTRY OF AUGMENTED REALITY

www.osjonline.com

S

wire Pacific Offshore (SPO) is investing in its training centre in Singapore to ensure its vessel crews can use the latest technology, including augmented reality (AR) and fullmission simulators.

It is upgrading facilities at its Swire Marine Training Centre (SMTC) as it seeks to keep abreast of new technologies and to ensure courses remain relevant to new vessel types entering the market.

SPO operates a fleet of 77 offshore support vessels (OSVs), including anchor handlers, platform supply vessels (PSVs), seismic survey ships, windfarm installation vessels, accommodation and multipurpose offshore vessels. This means SMTC bridge and engineroom simulators need to accurately represent what operating systems and scenarios seafarers will encounter on the vessels.

SMTC houses two hardware-specific full-mission bridge simulators fitted with actual-size consoles and equipment common throughout the SPO fleet. There is a full-sized engine control room, a virtual engineroom that simulates noise from actual vessels and 10 desktop engineroom simulators fitted with real propulsion controls.

The facility’s training manager captain Noel Leith said the core

Offshore Support Journal | January/February 2018

18 | TRAINING

areas of teaching at SMTC are dynamic positioning (DP), safety management, electrical and control systems engineering, engineroom operations, anchor handling and manual ship handling for OSVs. He explained that a near-term development would be to incorporate AR and virtual reality as part of its broader simulator training programme. “We will be able to improve the training experience, as AR can tie in with our desktop simulators for the trainees to be immersed in a 3D environment,” he said.

Another development in the future at SMTC is the possibility of building a diesel-electric engineroom simulator. Captain Leith observed that many new vessels entering the market run on dieselelectric and a lot of them have variable frequency drives.

“Most of our training here is hardware specific, and our fleet has a lot of standardisation, so that makes it easy for us to build our simulators to emulate what we have out in our fleet,” he said.

“We strive to keep up with new technology, so we will need to introduce new simulation facilities,” he added. At present, there are 23 vessels out of SPO’s 77, or approximately 30%, running on diesel-electric power, particularly its PSVs and windfarm installation vessels. “Another step-change would be to introduce LED projection systems, which consume less energy and produce more brilliance,” Captain Leith said.

“We strive to keep up with new technologies, so we will need to introduce new simulation facilities.”

On the technology side, SMTC has been upgrading its operating system over the past 18 months. The new operating system will bring a higher degree of realism especially on anchor handling and towage training, said Captain Leith.

One recent development has been the introduction of jet cone propulsion simulation. It produces a 3D forcefield and is reactive, “so if you thrust up against something, it impacts back on the vessel. That level of detail is actually quite difficult to simulate

properly,” he explained.

On the subject of fleet digitalisation, Captain Leith said that this technology trend was more suited to deepsea operations and for ships on liner trades, rather than contract-based, job-specific OSVs. “But that is not to say that we would not look to fleet digitalisation, especially on larger assets,” he explained. “Otherwise, I do not see ourselves proceeding down that road in the near future.”

During 2017, the SMTC has conducted training courses for around 1,000 officers, a figure that is expected to remain largely unchanged for 2018. The centre has six full-time staff offering 19 different courses and is open for training 45 weeks a year with an average of 20 to 30 trainees on site each week.

Even during the present severe offshore vessel market downturn, SPO has continued to support its crew training. “Hopefully, this will pay dividends on a [market] upswing,” Captain Leith said.

He drew a distinction between SMTC’s role and traditional marine colleges, saying that the centre does not provide Standards of Training, Certification and Watchkeeping (STCW) training for seafarers. He also believes it has a distinct role for the wider industry, beyond SPO’s requirements, saying that the centre is looking to attract more trainees from third parties, who currently constitute only 5% of total students SMTC was first opened for training in June 2007, and the simulator facilities were commissioned in January 2008. “We have spent a considerable amount of money on research and development every year.” This is to expand and extend this simulator facility and open new ones in the future.

Beyond Singapore, SPO has long-standing collaboration with two training centres in the Philippines and will be opening a new DP training centre in Accra, Ghana, in January 2018 as it operates vessels in West Africa. That centre will start by offering DP awareness training and other internal courses.

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TRAINING | 19

What are augmented and virtual realities?

Augmented reality (AR) is an emerging technology for the maritime and offshore sector as it incorporates additional information on screens that augments what operators can already visualise.

Virtual reality is considered for training as it enables trainees to learn skills in a computerbased environment. Users put on a set of goggles to enter a virtual world to simulate scenarios such as conducting repairs and maintenance on equipment via an interactive interface.

Making use of AR, simulation has gone beyond what is needed for training seafarers.

AR and ‘digital twin’ technology can be incorporated into simulation programs to enable oil companies and ship operators to practise advanced operations before attempting them in real life. AR tools can also be used for providing real-time analysis to offshore operations and advice to vessel operators.

The Offshore Simulator Centre (OSC) in Norway has developed software, AR and predictive programs for its simulators, including one that is used in the Norwegian Maritime Competence (NMK) centre in Ålesund.

According to OSC chief executive Joel Mills, augmented simulation takes this technology beyond what is needed for training. “We now have the ability to do real physics calculations in real time,” he explained. “It opens the boundaries between the real world and simulation as we can overlay data that is not otherwise available.”

This means simulators can be used for monitoring live operations remotely, allowing those using the onshore facilities to provide advice to vessel officers.

They could also run simulations on complicated operations before the offshore team attempts them.

Another of the benefits of merging simulation with actual offshore vessel operations is the ability to remove the ocean on a simulator program to visualise

the subsea facilities and seabed.

“We have a realm of augmented tools that take us in new directions and open more doors to give operators advantages over real life,” said Mr Mills.

One of these tools can indicate stresses on lifting lines to a crane operator during simulations of subsea system installations or cargo transfers. Associated with

this, OSC completed a study for an offshore support vessel operator this year on the use of an A-frame for subsea construction projects.

For that study, OSC simulated an A-frame on the stern of an anchor handler and tested various lifting scenarios.

This showed that “modifications to existing vessels mean they could be used in subsea

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Another of NMK’s tenants, Aker Solutions, was able to reduce costs in an offshore project through studies conducted by OSC. It needed to modify a production platform. This would usually require a complete platform shut-down, but “we showed Aker Solutions that they could put the balcony in without the shut-down,” said Mr Mills. OSJ

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OIL SPILL RESPONSE | 21

Technology developed by Aecom and tested at Ohmsett could enable enhance spill response by tracking wave conditions and the location of equipment

Wave tracking could enhance

oil recovery operations

The ability to remotely track wave conditions when skimming oil could enhance understanding of the environment in real time and improve the effectiveness of recovery operations

C

onditions encountered during oil spill response operations can have a significant effect on the rate of recovery and on the overall effectiveness of recovery operations. Bad weather, high winds and waves make recovery more difficult, but what if you could assess conditions in real time and track where equipment is and where and how it might best be deployed?

Scientists at the Ohmsett Oil Spill Response Research & Renewable Energy Test Facility in the US recently described work carried out by Aecom in Gaithersburg, Maryland, that led to the development of a system that combines a geo-referencing identification (GRID) tagging system capable of characterising wave conditions whilst tracking oil spill response equipment.

At the heart of the system is a wave characterisation module (WCM). When mounted on a skimmer, the tagging system characterises the motion of waves, tracks the location of skimmers and transmits the information to operators and to other personnel at remote locations.

An Aecom team recently spent time at Ohmsett evaluating the GRID system, which was mounted on a skimmer in wave conditions in the test basin at the facility. Aecom and its subcontractors, Midstream and Envigia, also developed a free-floating WCM buoy to calculate local wave conditions.

During the evaluation, the WCM/GRID tagging system was

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attached to a commercially available skimmer and two WCM buoys to identify wave height, length and period whilst subjected to varying wave conditions.

In order to collect comparative wave data, the WCM buoys were operated separately in the same area as the skimmer. In addition, the team used a wave height reference pole with indices positioned near the skimmer for visual comparison of wave height for each test. Through a mesh network over wifi, AECOM was able to communicate the skimmer position and wave information to a tablet with a custom-made user interface and via satellite to a web-based GIS interface platform.

“We wanted to determine if the algorithms in the GRID units were accurately measuring wave conditions. Ohmsett has a pretty good sense of the exact wave height, length and period, so we could compare the GRID units to reality,” said Bureau of Safety and Environmental Enforcement (BSEE) oil spill response engineer Karen Stone. “The project has enhanced the latest generation of GRID technology and will allow local oil spill responders to measure wave characteristics to finesse their skimming operations. It will also transmit data to incident commanders during spill operations to allow for real-time operational awareness.”

Funded by the BSEE, the technology that Aecom worked on advanced to a technical readiness level that could lead to it being used in real-world scenarios. OSJ

Offshore Support Journal | January/February 2018

22 | HEAVY-LIFT

New-generation heavy-lifter makes high-profile start with Statoil project A high level of flexibility, redundancy and ballast water-handling capability characterise a new class of semi-submersible heavy-lift vessels managed by GPO Heavylift in Norway

GPO Grace is the first of a quartet of high spec semi-submersible heavy-lift vessels

GPO GRACE Owner/manager

GPO Heavylift

Builder

CSBC Taiwan

Length

225.00 m

Breadth

48.00 m

Free deck space

G

183 m x 48 m

Depth

13.80 m

Draught

10.68 m

Deadweight

64,000 t

Submerging depth

15.00 m

Bow thrusters

2 x 1,750 kW

Stern thrusters

2 x 1,000 kW

Propulsion

2 x 8,000 kW

Class: DNV GL + 1a1 Semi-Submersible Heavy Transport Vessel, E0, Dynpos-AUTR, Clean, DK(+), RPS, PDWK, Coat-PSPC(B), BIS, TMON, Ice-1c, Naut-OC

Offshore Support Journal | January/February 2018

PO Grace, the first of a quartet of high-spec semi-submersible heavy-lift vessels, entered service in 2017 and will be followed into service by a second unit later this year.

Two more examples of the type are due to be delivered to their owner in 2019 and operated by GPO Heavylift, a company formed in 2014 to operate the semisubmersible vessels.

Intended for dry transportation of offshore drilling rigs, modules and other heavy cargo, the four vessels – GPO Grace, GPO Amethyst, GPO Sapphire and GPO Emerald – can transport jack-up drilling rigs, semisubmersible drilling rigs, dredging equipment, cranes, barges, other floating cargo and offshore and onshore modules.

Towards the end of last year, GPO Grace completed a maiden voyage from Thailand to Norway with the module support frame for Statoil’s Johan Sverdrup drilling platform.

Having delivered the module support frame for Johan Sverdrup, GPO Grace has secured a number of other projects since and most recently discharged cargo in Brazil, after which it was due to transport a cargo of barges to Egypt.

As Dagfinn Thorsen, managing director of GPO Heavylift, told OSJ, the design of the heavy lifters draws on around 25 years of experience in the market. The market for semi-submersible heavy-lift vessels may not be enjoying the best right now, he agreed, but the number of enquiries the company is receiving is picking up, and the new vessels have been well received by potential clients.

At 225 m overall and with a breadth of 48 m, the dynamic positioning class 2 vessels have free deck space of 183 m x 48 m and a deadweight of 64,000 tonnes.

Designed to submerge to a depth of 15.00 m, they benefit from a particularly high level of redundancy (and have RPS class notation from DNV GL) and manoeuvrability.

With controllable pitch five-bladed propellers that can be feathered in the event of a problem with one of them, enabling the remaining unit to maintain full thrust, they have four tunnel thrusters (two fore and two aft) and Becker rudders.

Loading/discharge can be undertaken by floating the cargo on board, skidding, rolling or by lifting. Designed with a uniform deck strength of 30 tonnes/m2, the new vessels have a point strength of 1,500 tonnes/m2 and line strength of 300 tonnes/m2.

Mr Thorsen explained that the ballast water system for the vessels is also unique on this kind of vessel in as much as it makes use of pumps rather than compressed air, which makes ballasting when skidding loads onto the deck especially flexible and responsive.

Another interesting if not unique feature of the vessels is the buoyancy towers, which can be moved around the deck by the ship’s crew in order to facilitate loading via the stern. The ships are thus capable of stern or side load-out operation and of discharging their cargo by float-over operation. OSJ

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LNG PROPULSION | 25

LNG FINDS GROWING RANGE OF APPLICATIONS OFFSHORE Reduced demand for newbuilds has checked LNG’s advance in the offshore vessel sector, but interest in it as a fuel is growing nevertheless

T

here have been very few orders for straight supply vessels, anchor handlers and subsea ships of late, hence little additional demand for liquefied natural gas (LNG) machinery to power them, but interest in using LNG is growing in related sectors, as recent orders for heavy-lift vessels have demonstrated.

Since the offshore vessel industry adjusted to reduced demand overall, there has been little change in the number of service and supply vessels in the world LNG-fuelled fleet.

Platform supply vessels (PSVs) figure prominently in the at-sea LNG-powered service and supply fleet, accounting for 20 of the 33-ship complement.

The orderbook, in contrast, shows much more variety, with a portfolio encompassing dredgers, a semi-submersible crane vessel for Heerema and a windfarm installation/ decommissioning ship.

Among the most recent orders that have made use of LNG is one from the Netherlands-based Jumbo, which has signed a letter of intent with China Merchants Industry Holdings for detailed engineering and construction of a dynamic positioning class 2 heavy-lift crane vessel with dual-fuel engines. DEME group’s new installation/ decommissioning vessel will be

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the first of its kind to be fuelled

by LNG. The vessel, Orion, is being built at Cosco in China for delivery in 2019 and is a green design with dual-fuel engines, Green Passport and clean design notation.

DEME of Belgium has been a leading advocate of LNG-fuelled dredgers and has investigated the challenges of using gas to power them. Factors to be weighed up include bunker tank size and location, LNG bunker availability, shipboard bunkering connections, crew training and the step load capability of the various gasburning engine options.

Combined with its cold box encasement, a cylindrical Type C LNG bunker tank occupies about three times as much space as a prism-shaped tank of marine gas oil (MGO) containing the same energy. While Type C pressure vessel tanks offer many advantages, accommodating them has a significant impact on vessel layout. Also, the tank location restrictions imposed by the new International Code of Safety for Ships using Gases or other LowFlashpoint Fuels (IGF Code) add another level of complexity to the design challenge.

Naval architects working on the DEME dredgers found that dual-fuel diesel engines worked best for the vessels as they have a better step load capability than gas engines. The mix of LNG and MGO bunker tank capacities associated with such

propulsion units also offers a measure of redundancy.

The aim is to optimise the use of LNG, assuming that the cost of this fuel is lower than MGO, but to provide sufficient MGO as a backup. The crew can switch to MGO if the dredger has to operate longer than planned before the next LNG bunkering stop.

Harbour tugs are the second most popular type of LNGfuelled service and supply vessel after PSVs, and there are a growing number of gas-powered tugs in service and on order.

Wärtsilä, with its medium-speed dual-fuel engines, and RollsRoyce, with its gas-only units, have both enjoyed success in providing tug propulsion systems.

An integrated hybrid power module developed by Wärtsilä for a hybrid tug design highlights OEM’s ongoing interest in the sector, even if demand in the offshore vessel sector

remains sluggish. The hybrid power module was developed specifically to meet the needs of the Chinese market and secured approval-in-principle recognition by the China Classification Society (CCS). The Wärtsilä HYTug emphasises environmental sustainability, operational efficiency and lower fuel consumption than is possible with conventional tug designs. The hybrid power module combines engines, an energy storage system using batteries and power electronics optimised to work together through a newly developed energy management system (EMS). Since they typically operate in or close to harbours and populated areas, tugs are particularly affected by environmental considerations, and the need for regulatory compliance is an increasing concern for tug owners and operators worldwide. OSJ

Demand for LNG-fuelled supply vessels may be low, but interest is growing in other areas, such as this heavy-lift vessel

Offshore Support Journal | January/February 2018

26 | REPAIR & CONVERSION

SHIP DESIGNERS SEE POTENTIAL TO CONVERT EXCESS PSVS INTO DREDGERS

An artists impression of a IMT978 platform supply vessel after conversion to a dredger

WORKING TOGETHER, NAVAL ARCHITECTS IN EUROPE AND THE US HAVE DEVELOPED A PROPOSAL TO CONVERT EXCESS PLATFORM SUPPLY VESSELS INTO DREDGERS

I

n the wake of the well documented downturn in the oil and gas markets in recent years, an increasing number of platform supply vessels (PSVs) are currently underutilised or languishing in layup, most notably in the Gulf of Mexico.

As Dave Pitt, a naval architect at OSD-IMT noted, various proposals have been made for repurposing redundant PSV tonnage.

Examples range from windfarm support vessels to container feeder vessels and live fish carriers, even a recent proposal to convert ice-capable vessels into polar expedition yachts.

However, OSD-IMT and partner Gibbs & Cox have been investigating a different solution – the potential for converting PSVs into trailing suction hopper dredgers (TSHDs).

The OSD-IMT team, part of

Offshore Support Journal | January/February 2018

Offshore Ship Designers (OSD), has designed and built more than 20 dredgers while working with Appledore Shipbuilders in the UK, and Gibbs & Cox has extensive knowledge of the US commercial and military markets.

OSD-IMT has carried out a preliminary assessment focusing on the practicalities of PSV/TSHD conversions from a shipyard perspective, taking account of the technical implications on lightship, vessel structure and stability. Gibbs & Cox has completed a review of US Coast Guard statutory requirements and other regulations as they apply to the US market, as well as market research into the economic feasibility of such conversions.

The IMT978 PSV design was chosen as the basis for conversion as it best reflects the size and arrangement of the 10–15-year-old candidate

vessels identified during Gibbs & Cox’s research. The IMT978 has conventional shaft propulsion driving controllable pitch propellers via reduction gearboxes with power take-off alternators. The engineroom is situated forward, as is common in North Sea vessels and typical of the newer Gulf Coast vessels.

To accommodate differences between the cargo tank arrangements typically found on North Sea and Gulf Coast PSVs, two variants were considered – the basic IMT978 in its North Sea configuration with cylindrical mud tanks and a typical Gulf Coast variant with square mud tanks formed with corrugated bulkheads.

A conventional 600 mm dredge system was utilised, providing a 20–25 m dredging depth with an electrically driven inboard pump. If electrical power is not available

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REPAIR & CONVERSION | 27

in the donor vessel, the dredge pump can be driven by a diesel engine with the incorporation of appropriate fire-suppression requirements. Removal of a section of the safe-haven/cargo rail facilitates fitting of the deck-mounted equipment. The dry bulk tanks and systems can be removed from the vessel and the dredge pump fitted in the vacated space.

A hopper has been introduced on the main deck with a coaming height based on the deck’s existing safe working load of 5 tonnes/m2.

The repurposed mud tanks are connected to the deck hopper via new deck openings and are fitted with large ventilation trunks. A centreline bulkhead is incorporated in the deck tank to improve static stability.

The hopper is loaded via a single pipe supported on the hopper centreline bulkhead.

In common with most PSVs, the vessel trims by the head in light loaded conditions.

By way of compensation, an aft deck trim tank has been installed, which is rapidly filled by the dredge pump and dumped by gravity as cargo is loaded. Cargo dumping is carried out via a conventional bottom door arrangement that utilises the existing double bottom structure.

Due to US environmental controls on bottom door cargo discharge, a cargo pumpout system has also been incorporated, which enables dredge material to be used for other purposes such as wetland creation/restoration and levee maintenance/ construction. To support this, a cargo fluidisation system has also been introduced utilising two high-pressure jetting pumps. Analysis by Gibbs & Cox shows that the conversion should be economically viable, but this is clearly dependent on the purchase price of the donor vessel. A comparison has been made between the construction costs of a

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newbuild 6,300 m3 TSHD and the 2,000 m3 capacity IMT978 conversion concept.

The analysis indicates a payback period of 7.5 years for a newbuild, against six years for a conversion. This takes account of different spoil capacities using a constant cost per cubic metre of dredged material and a constant number of dredge cycles/day.

The per-cubic-metre cost – and initial capital outlay – of a PSV/TSHD conversion is estimated to be approximately half that of a newbuild, while delivery times associated with a conversion should be approximately onethird those of a newbuild.

The final reported costs of a recent OSD-IMT dredger conversion project support these findings. “The feasibility study on the proposed conversion of redundant OSV tonnage into dredgers indicates that there are no insurmountable technical or statutory issues involved,” said Mr Pitt. “Economic analysis also suggests that it should be a financially viable option, and such vessels should be competitive in the current dredging market. The relative success of any conversion, of course, will depend on the suitability and purchase cost of the donor vessel.”

Energy storage solution is a first for a DP3 vessel Wärtsilä has been awarded a contract to install the first energy storage solution on a subsea vessel and the first on a DP3 unit, a further advance for battery-based hybrid systems.

The vessel, North Sea Giant, will be fitted with an energy storage system that reduces energy consumption, operating costs and exhaust emissions. The refit will also provide increased redundancy and increase the responsiveness of the vessel, which is owned by North Sea Shipping in Norway.

The advantages of hybrid battery-based systems have been highlighted by OSJ on numerous occasions. North Sea Giant is a dynamic positioning class 3 (DP3) vessel, a DP class to which an energy storage solution has not been applied before.

It is a process that requires a redefinition of the applicable classification rules, so Wärtsilä and North Sea Shipping are working closely with class society DNV GL on the project.

Typically, a vessel with dynamic positioning uses two or more engines simultaneously to secure backup power, which means that the engines are forced to run for long periods at part load.

Using a hybrid/battery system to provide backup power means that one engine can be used and can be run closer to its optimal load.

In addition to the hybrid/battery solution, the deal includes transformers, filters, switchboards, shore connection equipment, upgrades of existing components and commissioning.

North Sea Shipping chief executive officer Hallvard Klepsvik said “It is important to reduce emissions and modernise the vessel to make it more competitive. In addition, with a more efficient vessel, we will reduce fuel costs.”

Mr Klepsvik said the estimated reduction in emissions secured by fitting the hybrid system is in the order of 5.5 million kg of CO2, 30 tonnes of NOx and 1,200 kg of SOx per year.

“After Wärtsilä retrofitted our cablelay/seabed mapping vessel Atlantic Guardian in 2014, we really understood how much fuel can be saved by improving the vessel’s efficiency.

Efficiency also saves time, because you only need to refuel on every second or third port visit,” Mr Klepsvik said. OSJ

IMT 978 before conversion

Offshore Support Journal | January/February 2018

28 | ACCOMMODATION VESSELS

Listed accommodation provider in good shape for market recovery The new reality in the offshore oil and gas market has not been kind to many firms – that is as true of the offshore accommodation market as any segment, but Prosafe sees a more promising outlook longer term

P

rosafe remains the only listed pure play offshore accommodation company in the world and has been through a process of restructuring that has seen it streamline operations significantly.

In a recent presentation, it highlighted the fact that key market indicators are positive – the oil price is up (Brent crude was at US$68/barrel as of early January 2018), breakeven levels are down and the oil industry is cash positive. Moreover, as a midto-late cyclical company, Prosafe should benefit from several demand drivers across the value chain in a recovering market. It has achieved a significant reduction in run rate and recognised impairment charges in Q3 2017.

More problematic for the company is that it has several newbuilds under construction, the orders for which date from before the downturn. Negotiations with Cosco regarding Safe Nova, Safe Vega and Safe Eurus are ongoing, and the company extended a standstill agreement with Cosco related to Safe Nova and Safe Vega until December 2017. More recently, the standstill agreement for Safe Nova and Safe Vega was extended until 20 April 2018. It continues to focus on value creation potential from financing terms, price and timing of the delivery of the vessels and retain the right to cancel Safe Nova and Safe Vega newbuild contracts and claim a refund of instalments plus interest equal to approximately US$60M, which is secured by Bank of China. Towards the end of 2017, Prosafe extended a standstill agreement with Cosco for Safe Eurus, which is in a preserved ‘strategic stacking’ mode. Negotiations continue with Cosco to find a workable commercial solution.

In the December 2017 presentation, Prosafe said nine tenders were ongoing for 2017 through 2019 and that its prospect list with three-year look-out remains at a relatively high level. At that time, it had 18 prospects with high probability of going to tender, the majority from 2018 onwards.

Looking at the North Sea market, Prosafe said it sees prospects developing from 2019 onwards. For the time being, tendering activity is low due to low and deferred operator spending. Longer term, it expects increased tendering and contracts related to supporting accumulating maintenance backlog and modification work.

In Brazil, the company also anticipates tender activity in the long term. It noted that Petrobras’s technical specifications

Offshore Support Journal | January/February 2018

Prosafe recently extended a standstill agreement for Safe Eurus, which is in strategic stacking mode

for accommodation units have evolved significantly in the last few years. It now has some of the highest requirements of any operator – a trend that is advantageous to Prosafe given its focus on high-spec semi-submersibles. It also anticipates tender activity in the Brazilian market in response to address vessel shortage.

It expects Mexico to become a strong market longer term and noted that ageing infrastructure will mean an ongoing demand for maintenance. Currently, only five vessels are active there, and in future, like Petrobras in Brazil, Pemex is expected to demand better-quality, high-end vessels. Longer-term demand is also expected from other E&P companies now positioning themselves in the Mexican market in connection with farm-out projects.

Wagenborg bags long-term deal in North Sea Wagenborg Offshore has been awarded a six-year contract to provide walk-to-work services in the southern North Sea. The contract will see Wagenborg Offshore support Nederlandse Aardolie Maatschappij and Shell UK Exploration & Production with walkto-work and emergency response and rescue vessel services.

Under the terms of the deal, the Ulstein-designed PX121 PSV Blue Queen will be operated by Wagenborg Offshore as a standby and support vessel for inspection and maintenance of unmanned platforms in Dutch and British waters.

The vessel is due to be delivered to Wagenborg Offshore in March 2018 and will begin operations in Q1 2018. OSJ

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DECOMMISSIONING | 31

More than 300 fields in North Sea will see

decommissioning activity by 2025 An insight into how the North Sea decommissioning market will develop over the next seven years was provided by one of two key guides launched at a decommissioning conference organised by Oil & Gas UK and Decom North Sea

S

peaking at the two-day conference in December, sponsored by Aberdeen Harbour Board, Oil & Gas UK’s upstream policy director Mike Tholen said “Now in its eighth year, we’ve broadened the scope of the 2017 issue of our popular Decommissioning Insight so that it now includes decommissioning activities off Norway, Denmark and the Netherlands as well as those on the UK Continental Shelf (UKCS). This additional information will help the supply chain better understand the demand for their service and expertise from now until 2025.”

Key findings of the 2017 edition of Decommissioning Insight include the fact that, from 2017 to 2025, decommissioning is forecast to take place on 349 fields across the four regions of the North Sea, including six fields on the Danish Continental Shelf, 23 fields on the Norwegian Continental Shelf (NCS), 106 fields on the Dutch Continental Shelf and 214 fields on the UKCS. Across these regions, the infrastructure scheduled for decommissioning includes more than 200 platforms forecast for complete or partial removal, close to 2,500 wells expected to be plugged and abandoned and nearly 7,800 km of pipeline forecast to be decommissioned.

When set against this wider context, the forecast for the UK reveals it is the largest market with decommissioning, as a proportion of total UKCS expenditure, increasing from 2% in 2010 to 7% in

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In the 2017-2025 period close to 2,500 wells are expected to be plugged and abandoned

2016, when the market was worth £1.2Bn (US$1.6Bn). Operators forecast this figure will rise to 11% (£1.8Bn) this year.

From 2017 to 2025, £17Bn is forecast to be spent on decommissioning on the UKCS. Annual expenditure on the UKCS is forecast to remain consistent over the near term at £1.7–2Bn per year, which compares with £400–800M on the NCS and a forecast of £650–800M on the Dutch Continental Shelf. £7.9Bn (46%) of the total UKCS decommissioning spend from 2017 to 2025 will be concentrated in the central North Sea. The largest category of expenditure on the UKCS in the 2017–2025 timeframe is well plugging and abandonment at 49% (£8.3Bn).

“With industry driving efficiency improvements that have led to a 16% increase in UKCS production following a decade of decline, the sector is successfully controlling the cost of well plugging and abandonment,” Mr Tholen said.

“The insight reveals that the average forecast cost for well P&A has fallen by 5% in the central and northern North Sea and west of Shetland and by 4% in the southern North Sea and Irish Sea, with further cost

reductions predicted as the sector ensures decommissioning is carried out as costeffectively as possible while maintaining high safety and environmental standards.”

Lessons learned from decommissioning projects since 2012 are gathered in Oil & Gas UK’s The Decommissioning of Steel Piled Jackets in the North Sea Region report, which updates industry intelligence for decommissioning this type of offshore platform. The report captures the experience gained from 63 projects that have been decommissioned to date. Advances in health and safety, environment and technology, including cutting and lifting solutions, are among areas highlighted. “These reports demonstrate the UK’s growing expertise in decommissioning, and these capabilities have been developing alongside the industry’s focus on more productive activities in oil and gas production,” Mr Tholen concluded. “They highlight that there is a very real opportunity for the UK’s decommissioning sector to develop competitive capabilities and become a champion of decommissioning excellence in the global arena.” OSJ

Offshore Support Journal | January/February 2018

32 | LNG/FLNG

LNG PROJECTS OFFER ALTERNATIVES FOR OSV OWNERS Dreifa Energy is pressing ahead with a plan to convert a platform supply vessel into a floating regasification unit for liquefied natural gas as another offshore vessel owner seeks to enter the FLNG market

D

reifa Energy’s floating regasification unit (FRU) concept, which is based on a converted platform supply vessel (PSV), has been granted approval in principle by DNV GL. December 2017 also saw the company enter into an agreement with Wärtsilä Oil and Gas Systems to secure delivery of the regasification module for the first Dreifa FRU. Entering into the agreement is a significant step forward for Dreifa Energy in confirming a key part of the overall capital expenditure for the FRU. Moreover, the recent approval in principle granted by DNV GL and the agreement with Wärtsilä enable Dreifa Energy to execute on a fast-track project schedule by securing the long lead items for the company’s first FRU conversion project.

Dreifa’s FRU consists of a regasification plant and associated utility systems located on the deck of a former PSV acquired by the company. The FRU operates in combination with a liquefied natural gas (LNG) carrier acting as a floating storage unit.

Approval in principle by DNV GL was based on an examination of the basic engineering package developed by Dreifa Energy’s efforts to be prepared to enter into contracts for equipment and conversion. Towards the end of 2017, Dreifa Energy acquired the 1983-built Blue Star Line PSV Blue Betria, aiming to convert it into an LNG FRU. The company’s floating regasification concept is aimed at the

market for mid-scale LNG imports. At the time that it acquired the vessel, Dreifa said it was working to secure a firm charter contract, aiming to reach a final investment decision on this first FRU conversion by the end of 2017.

Offshore vessel owner Swiber Holdings, which remains under judicial management, has signed a supplemental term sheet with Australia’s Interlink Power & Energy. In late 2017, the company said it hoped to enter the floating LNG (FLNG) segment.

In December 2017, Swiber said that, notwithstanding the expiry of an exclusivity period on the first term sheet it had signed with Interlink Power & Energy, discussions between the companies in relation to the proposed acquisition remain ongoing. The terms outlined in the supplemental term sheet will expire on 31 March 2018 or such later date as may be mutually agreed by them.

As highlighted in the December 2017 issue of OSJ, describing a deal that it said “could be a step towards reviving the company as a going concern,” Swiber Holdings said it had been considering diversifying into the LNG segment for some time and that it had been working towards entering the FLNG segment for more than a year before it entered into judicial management in October 2016.

JUMBO SIGNS LOI FOR LNGPOWERED CONSTRUCTION VESSEL

Dreifa Energy secured approval in principle for its FRU in late 2017

Offshore Support Journal | January/February 2018

The Netherlands-based Jumbo has signed a letter of intent with China Merchants Industry Holdings for detailed engineering and construction of a dynamic positioning class 2 heavy-lift crane vessel. Due to be delivered in Q1 2020, the new vessel is designed with Ulstein Design and Solutions BV and will work in the offshore oil and gas and offshore wind industries.

It will combine economic operations and efficiency with what Jumbo described as “the highest quality and safety features”.

Environmental considerations and improved fuel efficiency are also key features of the design, which will be powered by dual-fuel engines with the ability to run on LNG. The hull will have the Ulstein X-BOW, which will enhance workability. With a length of 185 m and breadth of 36 m, the ship will be the largest X-BOW vessel in the world. The vessel will be fitted with two offshore mast cranes with a lifting capacity of 2,200 tonnes and 400 tonnes, respectively, each rated for operations to a depth of 3,000 m. OSJ

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CRANES | 35

MANUFACTURERS BRINGING ADVANTAGES OF FIBRE ROPE CRANES TO MARKET LATE 2017 AND EARLY 2018 SAW FURTHER DEVELOPMENTS IN THE MARKET FOR NEW CRANES FOR OFFSHORE VESSELS

N

etherlands-based Huisman has developed a hybrid crane that combines the advantages of a fibre rope and heave compensation using conventional steel wire.

Describing the new crane concept, Huisman’s product manager cranes Cees van Veluw said the company was a firm believer in cranes with fibre rope. However, as he explained, fibre rope requires “some serious active cooling” during active heave compensation (AHC).

“The thermal behaviour of fibre rope in AHC has proved to be hard to predict reliably and hard to measure,” said Mr van Veluw. “On top of that, having an active cooling system for the fibre rope, as an essential part of the crane’s safety system, is not the way we see robust and reliable crane design.”

In Huisman’s new hybrid crane concept, spooling of fibre rope is carried out using Huisman’s established traction winch and storage winch. AHC is carried out on steel wire on another winch.

A 120-tonne and 200-tonne version of the new crane concept is available for knuckleboom cranes. The company’s recently introduced hybrid boom crane can be delivered with larger capacities of 400 tonnes and 600 tonnes.

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“This can provide a significant step-change in subsea deployment capability,” said Huisman. “The full load is available at all depths. In this way, deployment of loads of up to 600 tonnes is possible to depths of 4,000 m and beyond.”

Another well known manufacturer, MacGregor, says it plans to bring its FibreTrac fibre rope crane to market later in 2018. The first unit is currently being built and will be ready for testing early in 2018.

“MacGregor launched its fibre rope crane range in 2016, and we have entered into a programme to build, certify and validate it,” said MacGregor’s director load handling Ingvar Apeland. “I believe that it will be one of the world’s most advanced fibre rope knuckleboom cranes that the

market has yet seen.”

Fibre rope weighs virtually nothing in water, so regardless of the length of rope paid out, it does not add anything to the load experienced by the crane.

“This is in complete contrast to the situation with wire rope, where the ever-increasing weight of wire paid out limits the load permissible in relation to depth,” explained Mr Apeland.

“By employing fibre rope technology, a crane is able to use its full lifting capacity at practically any depth, so a smaller crane and vessel can be used for more assignments, and owners are able to bid on a wider range of contracts.”

The FibreTrac crane will comply with the latest DNV GL regulations, with the first system fully-certified in compliance with DNV GL-

Huisman’s new crane combines the advantages of fibre rope and heave compensation using conventional steel wire

ST-E407. “Compliance with DNV GL’s strict regulations should provide end-users with even greater confidence in the long-term use of this technology,” Mr Apeland noted.

The FibreTrac crane will have a 150-tonne safe working load capacity and will incorporate much innovative technology, including a Parkburn deepwater capstan with a storage winch capable of accommodating 4,000 m of 88 mm rope. It is available with both hydraulic and electric drive options. An advanced rope monitoring and management system maximises rope lifespan and provides constant lift line status for the operator.

“Fitted with MacGregor’s latest control system, it will offer the advantage of realtime data feedback using MacGregor’s OnWatch Scout feature,” said product manager Ole Andreas Sørensen.

For owners wishing to benefit from the technology for their existing cranes or stand-alone winch systems, the MacGregor fibre rope solution can be retrofitted due to its flexible, modular crane design.

VAN AALST ADDS TO 3D EXPERTISE

Van Aalst Group in Dordrecht, the Netherlands, has become a majority stakeholder in Techano AS, an offshore crane specialist in Norway. The deal adds to the company’s expertise in motion compensated cranes and gangways. OSJ

Offshore Support Journal | January/February 2018

36 | HYBRID PROPULSION

ALL NEWBUILD OSVS WILL HAVE BATTERIES, SUPPLIER PREDICTS THE MARKET FOR OFFSHORE SUPPORT VESSELS REMAINS DEPRESSED FOR THE TIME BEING, BUT WHEN IT RECOVERS, ALL NEWBUILDS WILL HAVE BATTERIES, A WELL KNOWN SUPPLIER SUGGESTS

R

ecent years have been challenging ones for the offshore support vessel (OSV) market, but as the market shows signs of recovery, battery and hybrid power is likely to form an integral part of OSV design, said Plan B Energy Storage (PBES) vice president marketing Grant Brown.

Currently, PBES is bidding to supply batteries to several OSVs for a variety of integrators and owners. “As the slow-down in offshore oil is resolved, price per barrel of crude increases and demand for OSVs ramps up, many of the vessels currently in long-term layup will require significant mechanical and electrical upgrades to be recertified,” said Mr Brown.

“This may be cost prohibitive and result in many – if not most – being removed from service.

“Subsequent demand for OSVs will be filled by newbuilds, which will be built to a higher standard of efficiency than in previous eras, often with a multipurpose design, or upgraded vessels. Given hybrid technology’s effectiveness at delivering increased efficiency, we anticipate that new vessels will be built with energy storage as an option.

“We predict that all vessels will have a battery room – or containerised/modular battery pack – with options to have energy storage either

integrated at the newbuild stage or later if the customer is not initially willing,” Mr Brown told OSJ. As he noted, the operational profiles of OSVs present some unique challenges for battery suppliers. They require rapid fluctuations in power response – from almost nothing to extremely high loads, often multiple times in a matter of moments.

This puts a propulsion battery through rapid cycling, often at high discharge rates.

With a 15,000 cycle life and a 3C average charge/discharge rate over 24 hours, Mr Brown said the PBES battery system is ideal for this type of duty and provides twice the cycle life of the next closest available product. This is achieved, he said, thanks to the chemical composition of PBES cells and the fact that they are liquid cooled, which allows high discharge rates without damaging the battery.

Further lifecycle benefits and performance are delivered by what PBES said is a unique solution called CellSwap, which allows users to replace the lithium cells without replacing the entire battery.

Not only does this save on recycling at the end of a battery’s lifespan, but it also means that a new cell can be installed for 60% of the cost of

Offshore Support Journal | January/February 2018

GRANT BROWN: “we predict that all OSVs will have batteries with options to have energy storage integrated at the newbuild stage or later”

buying a new system.

“The advantages of this are twofold,” Mr Brown told OSJ. “Firstly, it means that our battery systems can be built using smaller systems that can be recored after five years, rather than the marine industry standard of 10.

“Batteries built to last for 10 years are necessarily larger, compensating for degradation in usable capacity over time.

The capital cost of installing the smaller battery is far lower and leads to a much faster return on investment and saves on space and weight, which is at a premium for OSVs. The smaller size also allows users to capture advances in battery technology sooner.”

PBES batteries help power the hybrid cablelayer NKT Victoria, one of the world’s most advanced and fuelefficient cablelaying vessels.

The vessel’s onboard grid allows the ship’s engines to work at variable speed, in combination with energy storage for peak shaving and enhanced dynamic performance, optimising energy consumption and reducing engine maintenance.

Energy storage is also used for backup for shore connection during cable loading, a unique advantage that results in a more environmentally friendly emission-free mode for the ship. OSJ

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38 | DIVE SUPPORT VESSELS

End of an era – and beginning of a new one –

in the North Sea DSV sector Jeremy Punnett* reflects on recent developments in the dive support vessel market in the North Sea, where Boskalis has acquired one, possibly two, vessels and dive ship owner Bibby Offshore is being taken over by its noteholders

I

n November 2017, Bibby Offshore Holdings Ltd announced that it had reached a comprehensive agreement on the recapitalisation of its balance sheet with noteholders who hold 80% of the £175M (US$233M) 7.5% senior secured notes due 15 June 2021 issued by its subsidiary Bibby Offshore Services Plc. The terms of the recapitalisation will result in the group having a substantially debt-free balance sheet with an equity injection of £50M

to enable it to consolidate and expand its position within the offshore inspection, repair and maintenance and construction markets. At completion of the transaction, Bibby Line Group Ltd will transfer its entire ownership in Bibby Offshore to the group’s noteholders.

“It is ironic that, after bondholders in Nor and Bibby spent so long seeking a resolution to their problems, both solutions were announced within hours of each other,” said Mr Punnett, reflecting on the news that, at about

Boskalis reached agreement with the bondholders of two former Harkand-owned DSVs, Atlantis and Da Vinci, shown here

Offshore Support Journal | January/February 2018

the same time that the Bibby deal was confirmed, Boskalis reached agreement with the bondholders of two former Harkand-owned dive support vessels (DSVs). Under this deal, it has acquired Atlantis for approximately US$60M and has signed a three-year bareboat charter for sister vessel Da Vinci, along with a right of first refusal in the event of a sale.

“On first pass, I would rather be a Boskalis shareholder than a Bibby bondholder,” said Mr Punnett of the deals.

“Let’s be clear about Bibby Offshore – this was no ordinary refinancing. It was in effect a relatively hostile takeover by the bondholders after the financial situation became untenable, with Bibby Line Group exiting with 0% having clearly been unable and unwilling to put any money in. After taking out £60M since 2014, they may consider this a good deal, but it will be painful for the group accounts next year.”

Under the terms of the deal, Bibby Offshore can keep using the name for another 12 months, and the directors have warranted not to frustrate the handover in any way or pay a December interest payment (amongst other things).

“As of the end of the last quarter Bibby Offshore had just £3.1M cash in the bank, so the last point was academic in a way,” Mr Punnett said, “but it avoids the need for a disruptive

administration process.

“It seems pretty obvious to outside observers that it took the bondholders to make Bibby Line Group aware of the gravity of the situation. Smaller companies in Aberdeen supplying goods on credit were taking an enormous risk here.”

The restructuring values Bibby Offshore at £115M – basically the outstanding £175M bond (valued at 0.37) + £50M in new cash.

Transaction and other expenses need to be taken from the £50M going in.

“What this means is that, for £115M, bondholders are now the proud owners of Bibby Polaris and Bibby Sapphire, a risk-share charter on Bibby Topaz and all the associated IP and master service agreements of the company that make it a business.”

As Mr Punnett noted, the company will now undergo a fundamental operating restructure as the announcement makes clear. Bibby Offshore was expected to appoint an independent consultant on behalf of the noteholders to support management on the ongoing cash flow management and transition of the business to the new shareholders.

That means a group of restructuring consultants (in all likelihood from Alix Partners or Alvarez and Marsal) who will come in and do a restructuring plan that will be loosely based on zero-based budgeting.

“This is a brutal process and will aim to significantly reduce

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DIVE SUPPORT VESSELS | 39

the costs so the business is at least cash flow breakeven by June (or they will be through a significant portion of the £50M on current trading levels).

“Given this hasn’t been the case for well over two years now, you can imagine the scale of what is about to go on here, even accepting that vessel charters have been part of the issue. I’d imagine small pools, business excellence and ex-pat managers in Houston look to be first on the list of costs to be reduced, but there is a real question about what the business model is and what position the company will hold in the market that needs to be addressed.

“For staff, this is still the best outcome, even if it provides huge uncertainty in the short term. With only £3.1M in the bank, without this agreement, there would have been an administration process. The revolver expired in the next couple of days, and that would have brought the nuclear scenario. This was not a deal made in strength but in effect a shareholder being faced with insolvency having a gun held to their head and told to hand over the keys.”

Mr Punnett said the consultants’ budgeting process will highlight the fundamental issue the new owners of the business have, that is, what is the competitive and market position of the business? A high-end North Sea contractor trying to compete in the US market, which is the most price sensitive

in the world?

“Cut the costs back to a ‘Bibby lite 2007’ with 80 people in Waterloo Quay, shut all other offices and trade with two DSVs and Sapphire in layup or sold and you will never recover your £115M. But keep trading as you are with an uncompetitive US and Norwegian office, and you have to burn vast amounts of cash to make it through until the market changes. There are no economies of scale or scope through these regions and therefore no need for an expensive corporate staff and administrative overhead,” Mr Punnett said.

As he also noted, the fleet strategy will also need to be sorted out. Sapphire is in warm stack, and Polaris (built in 1999) cannot keep going forever. Both vessels are too old for mortgages and will be equity funded for the rest of their lives, and there is a valuation implication in that (that is, lower). Topaz is only on a risk-sharing charter, and without that vessel, it is arguable if there is a Bibby Offshore at all.

The Boskalis shareholders got a much more modern DSV for US$60M (£45M at the current exchange rate) and have chartered another one for a rate believed to be around US$7,500 per day bareboat.

The new Bibby will have to compete with a company with a much lower implied asset cost and breakeven level. Boskalis now has sisterships that it can interchange on projects and

tenders and appear to have done this for an implied capex of circa US$40–45M per vessel. Balance sheet strength prevails during consolidation, and this will be no exception.

“Bibby Offshore now looks exactly like Harkand before it folded,” said Mr Punnett.

“Harkand had the two Nor vessels in the UK and Swordfish in Houston for its ex-Veolia acquisition. Oaktree funded Harkand three times, and it only broke even a couple of quarters before finally giving up.

“In the scheme of operating North Sea-class DSVs, £50M is not a lot of money given the direct operating costs and associated infrastructure (tendering, marine and overhead). The new shareholders will need a firm constitution and plan to carry this through for any length of time given that the orderbook is nearly empty and vessel commitments remain until Q2 2018.

One option may be to seek higher-value services such as well intervention with some talented ex-Helix staff floating around, although the barriers to entry are high and it will require further capex.

“Bibby’s investments in renewables capacity cannot compare with the DeepOcean and Boskalis fleet. Simply bashing up against three substantially bigger companies offering DSV days doesn’t strike me as a great strategy and certainly not a sustainable one,”

said Mr Punnett.

“There is no other reasonable expectation now than for Boskalis and the new Bibby to fight it out for utilisation by dropping the day rates they bid at, and Technip and Subsea 7 have shown they play this game as well.

“There is no guarantee the market is big enough for four companies at current activity levels. The ‘new’ Bibby Offshore is a hugely leveraged play (both operationally and financially) on an oil price recovery that will force a declining basin back to higher production levels with small-scale developments and higher maintenance requirements.

It looks like a big ask at this point, but the team leading this investment have the financial firepower and competence to see this through if they choose – but it will not look even remotely close to the current Bibby Offshore.

“Something rare has happened,” Mr Punnett concluded. “The entire picture of how this market will look for the next five to seven years was made public with just two announcements. It is going to be a much better market to be an E&P or renewables company in than a contractor for a good while yet.” OSJ *Jeremy Punnett is founder and managing director at Stamford Maritime, which provides strategic advice to companies in the offshore sector

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Offshore Support Journal | January/February 2018

40 | NEW DESIGNS

Trimaran supply/intervention vessel can take on helicopters

R

ecent months have seen a number of designs brought to market that aim to compete with helicopters for long-range crew transfer.

Doing so requires a platform that is stable and fast and has an offshore access system capable of compensating for sometimes challenging conditions that is also suitable for installation on small/midsize fast units.

As Javier Lopez, technical manager/senior naval architect at Marcelo Penna Engineering, explained, the Spanish company believes that the MP625 is just such a craft. It combines a stable trimaran hullform with dynamic positioning class 2 (DP2) and fire-fighting to FiFi 1 standard. The design can be customised for a wide range of operational profiles such as crew and personnel transfer, fast supply, emergency response and rescue, rig evacuation and oil spill response.

With a length of 60 m, Marcelo Penna Engineering sees the MP625 as a unique, cost-effective alternative to helicopters. Allied to the fast, stable design is the ability to carry a motion-compensated crew transfer gangway and a knuckleboom crane. “The design philosophy was to create a flexible, stable, compact design,” Mr Lopez told OSJ. He noted that the MP625 has a particularly high level of hydrodynamic efficiency combined with the ability to attain transit speeds of up to 35 knots at 100% MCR whilst minimising fuel consumption.

Its range is in excess of 3,500 nm. The trimaran hullform

Barcelona-based independent ship design company Marcelo Penna Engineering believes the trimaran hullform fast supply and intervention vessel it has developed can compete with helicopters in the crew change market

confers excellent seakeeping due to its small waterplane area. This is complemented by a deadweight of 625 tonnes, high level of comfort on board for crew and passengers and seating for up to 200, depending on configration. Mr Lopez also explained that, originally, the company was focusing on a design that could compete with helicopters for long-range personnel transfers but had also developed modified versions of the design for a range of

applications. He highlighted the fact that, whatever the role, the vessel has good intact and damage stability and large usable working deck area (of more than 355 m2) thus enabling it to carry containers (the deck has positions for a total of 11 containers). It can also be used to carry spare parts, project equipment and consumables. Marcelo Penna Engineering says a number of well known offshore access/ walk-to-work systems are

The MP625 combines the advantages of high speed, stability, low fuel consumption, a good size deck and a motion-compensated transfer system

Offshore Support Journal | January/February 2018

suitable for use on the MP625, and the company provided feedback and input into the design of one of the latest evolutions of one of the best known offshore access systems.

The MP625 is a dieseldirect vessel with four fixed pitch propellers or four waterjets, according to the customer’s requirement, and two bow thrusters forward, one of them of retractable type. It is designed to maintain position in a sea state with waves of up to Hs 3.5–4.0 m.

The accommodation is on the lower deck with a personnel transfer room on the main deck and a VIP transfer room on the bridge deck. The wheelhouse is integrated into the forepart of the superstructure, and a DP control room is integrated into the aft side of the superstructure house at the bridge deck. A fast recue craft with its davit-type launch and recovery system can be installed on the main deck to the starboard side, with the compensated crew transfer system amidships to the port or starboard side of the vessel.

More recently, the company has also begun working on technology based on foils to increase the speed of the vessel in pure crew transfer mode and make the MP625 ‘smart’ in terms of fuel consumption/ speed, workability, overall capability and operational flexibility. “Our simulations have helped us develop a design with a maximum speed of 40 knots at 85% MCR with an initial draught of 2.45 m before ‘take-off ’ at a speed at 21 knots,” Mr Lopez concluded. OSJ

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1

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17:22

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DYNAMIC POSITIONING | 43

NOPSEMA highlights dangers of inadvertent operation Inadvertent deactivation of a vessel’s dynamic positioning system is a serious matter and could have been deadly for a diver in an incident offshore Australia

NOPSEMA said it would like to see industry and suppliers work closely together on DP system design

O

SJ has long focused on dynamic positioning (DP) and the ever-growing importance it has assumed in the offshore support vessel industry. We continue to run a dynamic positioning conference – the European Dynamic Positioning Conference takes place on 6 February 2018 in London.

Like most technology, DP has wonderful advantages, but if poorly designed or ill used, serious consequences can arise.

Just such an example of potentially serious consequences was described recently by Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Since 2016, NOPSEMA

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has raised concerns about DP systems in the offshore industry. Its concern is that DP systems’ auto-position modes are susceptible to inadvertent deactivation.

This concern originated from a loss-of-position incident – an event that was not an isolated one.

NOPSEMA is now aware of 16 similar incidents internationally. All of these had the potential to result in a major accident event.

In the Australian incident, the operator of a vessel’s DP system placed a notepad on the console, which pressed down on the surge button twice, unintentionally deactivating the autoposition mode.

With the crew unaware, the vessel drifted off location

while a diver was working on the seabed. The diver alerted vessel personnel as he followed his umbilical and walked with the drifting vessel, avoiding obstacles along the way. Fortunately, the diver was unharmed, but if the umbilical had snagged on subsea infrastructure, he could have died.

A subsequent inspection

by NOPSEMA determined that the incident was the result of human error made possible by a weakness in the design of the DP system.

In the US, a drillship in the Gulf of Mexico unintentionally drifted off position while dealing with a well kick.

The US Coast Guard Outer Continental Shelf National Center of Expertise (OCS NCOE) stated that the DP

operator inadvertently deactivated the auto-position mode by accidentally double pressing the manual button while reaching across the console. On realising the mistake, the operator reengaged the auto-positioning to bring the ship back into position. The US Coast Guard OCS NCOE stated the incident was the result of “human error with a mix of ergonomics”.

In the UK, said NOPSEMA, a semi-submersible drilling rig lost control of its position for several minutes due to an accidental disengagement of the DP system while drilling.

Although the loss of position was immediately noticed by personnel, it took them six minutes to realise that the auto-positioning system had been disengaged. In response to the emergency, the drill pipe was sheared and the lower marine riser package was disconnected. The UK Health and Safety Executive attributed both the loss of position and inadequate crew response to the “poor ergonomic design of the control system”.

If further control measures had failed in either the US or UK incidents, a well blowout could have occurred, potentially resulting in multiple fatalities and a significant environmental incident.

NOPSEMA wants the offshore oil and gas industry to consider a number of points.

Offshore Support Journal | January/February 2018

44 | DYNAMIC POSITIONING

The first is that centralised control systems need to be resilient to human error. A single, inadvertent act by an operator should not lead to an emergency with a high probability of fatalities.

Control systems should also provide adequate feedback to operators to allow them to promptly identify the issue and take appropriate action.

NOPSEMA also reminded facility operators to check their systems to ensure they are not susceptible to this type of design-induced human error.

They should also ensure that suitable controls are in place to prevent, identify and adequately recover from the error.

“Operators should talk to DP manufacturers about having more robust controls in the design of their DP systems,” NOPSEMA said in issue 4/2017 of its bulletin The Regulator.

“For example, tactile differentiation (error prevention) of safety-critical switches, action confirmation dialogue boxes, provision of a high-visibility display (error identification and recovery) and audible alarms or warnings.

Other industries, such as aviation, may have systems that could provide solutions (aircraft auto-pilot controls).”

The authority continues to encourage DP manufacturers to review the built-in safeguards of their systems to ensure they provide sufficient protection, feedback and recovery against this type of design-induced operator error, noting that the three incidents above all had a double-press requirement for deactivating the auto-position mode.

HOW DID THE INCIDENT HAPPEN? NOPSEMA’s investigation identified that the auto DP mode buttons (surge, sway and yaw) were located in the left-hand corner of the console next to desk space commonly used for completing

DP-related checklists and logs.

Consequently, these buttons were susceptible to accidental activation by personnel.

The inspectors found that, although the incident arose by an accidental and unknowing double press of a button by the DP operator, the design of the DP system allowed a human error to escalate this act into a dangerous occurrence because it didn’t require positive confirmation of deactivation of auto position mode or provide an alarm that required acknowledgement that auto position mode had been deactivated. The situation was exacerbated and recovery impeded as deselecting the surge button automatically deactivates the excursion alarms in that axis and the DP display was no longer providing useful feedback in terms of the loss-of-position event as the excursion rings started to track with the vessel’s movement.

If either of the controls identified above were in place, it is unlikely the incident would have escalated to a loss-ofposition event. In order to rectify the issue, the operator, with assistance from the manufacturer, upgraded the control system’s software to provide a separate dialogue box confirmation requirement when deactivating the auto position mode.

Among the key lessons learned from the incident are that control system interfaces should be designed to account for foreseeable human error.

Adequate control measures to prevent and recover from errors should be in place.

For DP vessels, operators need to ensure that suitable controls are in place to prevent a single inadvertent act from leading to a loss of position.

Double-press activation for switches with safetycritical functions may not be an adequate barrier to prevent an inadvertent action.

Offshore Support Journal | January/February 2018

More robust methods need to be considered.

DP systems can prevent inadvertent operator selection in several other ways including operation of two separate selection devices and using screen-based question pop-ups.

Monitoring tasks are not a human strength, hence control panel operators are heavily reliant on control systems to provide alerts of any unsafe operational conditions to allow them to problem solve the issue (which is a human

strength). Good control system design should account for this.

Switches with safety-critical functions should be positioned to avoid accidental activation/ deactivation that could cause an unsafe condition.

Facility operators need to ensure that lessons are learned from previous incidents and any additional controls suitably communicated to the workforce. In this case, the vessel had a similar human error-induced loss-of-position event in 2009.

New thruster will enhance vessels’ DP capability Wärtsilä has launched a new thruster, the Wärtsilä WST-24R, which it describes as the industry’s first tilted steerable thruster with combined electric retraction and steering.

Enabling auxiliary manoeuvring in stationkeeping or DP operations, the WST-24R is designed to provide reliability, easy installation, integration and maintenance.

One of the notable features of the new thruster is the gearbox, which has a propeller shaft configuration tilted at 8°. This significantly reduces thruster/hull interaction and losses, producing up to 20% more effective thrust than conventional non-tilted thrusters and reducing fuel consumption. “This extra effective thrust directly contributes to the advanced DP capability of a vessel,” said the company.

Replacing the existing LMT 1510, the WST-24R thruster offers more than 10% thrust. This, combined with improved hydrodynamics and a dedicated Wärtsilä thruster nozzle design, reduces the environmental impact of the propulsion system. The WST-24R can also be delivered to comply with clean class notation and is compatible with the US EPA’s VGP2013 requirements.

The WST-24R is also designed for enhanced reliability, with fewer components than its predecessor. All systems are easily accessible for maintenance, while the combined steeringretraction seals, designed to have no oil-to-water interface to reduce environmental risk, can be replaced from inboard.

Steering is electric, rather than hydraulic, further enhancing the capabilities of the system, and the new retraction system is lightweight and safe with self-locking electric actuation. The unit is particularly suited to applications in shuttle tankers, offshore support and construction vessels.

“This latest addition to our thruster offering increases operational efficiency. The pre-aligned plug and play installation reduces shipyard time and costs. There are other retractable thrusters of this size on the market, but the WST-24R is the only one with the tilted configuration advantage,” said Wärtsilä Marine Solutions director, thrusters and propulsion controls Michel van Veluw. OSJ

www.osjonline.com

Guidance Marine’s CyScan comes in three variants. The brand new CyScan AS, CyScan Mk4 and CyScan XT. With an optional operating temperature of -40ºC to +70 ºC, the CyScan XT is there meet the Ice and Arctic operations.

Logically structured and carefully designed touchscreen dashbaord The CyScan system is a local position reference sensor for marine Dynamic Positioning (DP) applications. It measures the range and bearing of retro-reflective targets allowing the DP system to maintain the vessel’s position and heading relative to the target structure of another vessel. An enhancement of the CyScan Mk4 sensor, the CyScan AS signature technology allows immediate and definitive elimination of clutter. The synergy between the sensor and the AS target defines laser performance for DP operations.

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46 | IMCA NEWS

IMCA TO DISCUSS DP DEVELOPMENTS AT LONDON CONFERENCE ONE OF IMCA’S TECHNICAL ADVISERS WILL BE PRESENTING AT RIVIERA’S EUROPEAN DYNAMIC POSITIONING CONFERENCE IN FEBRUARY – AND HAS A LOT TO COVER

T

he European Dynamic Positioning Conference in London on 6 February will see the International Marine Contractors Association’s technical advisor Andy Goldsmith undertaking something of a magic act – cramming the proverbial quart into a pint pot.

In the space of 15 minutes, Captain Goldsmith will be looking at operational activity planning coupled with IMCA guidance and IMO requirements, reactivation of a DP vessel – the subject of an imminent IMCA information note – and the proposed accreditation of DP practitioners. He will also be urging all at the conference to report any DP station-keeping events, for it is by sharing such information that we learn from each other’s experience.

Activity-specific operating guidelines (ASOGs) are now featured in the revised IMO DP guidelines. “We can’t stress too highly the importance of operational activity planning, and ASOGs provide key DP personnel with a structured decision support tool,” said Captain Goldsmith. “They should not be put up on a bulkhead and forgotten but should form

part of regular planning as an evolving document.”

Equally, IMCA is eager to highlight the over-reliance being placed on DGNSS as a position reference system. Both IMO and IMCA guidance state that, when two or more systems are required, they

ANDY GOLDSMITH: “there is no reason why a reactivated DP vessel should not re-enter service in a better condition than when laid up”

Offshore Support Journal | January/February 2018

should not all be of the same type but be based on different principles and suitable for the operating conditions.

“In 2017, Joey Fisher, a member of the IMCA Marine DP Committee, and I spoke at four conferences on the reactivation of a DP vessel following a period of layup.

Two were IMCA seminars with interactive workshops on the topic,” Captain Goldsmith explained. “The workshops concluded that, given the right circumstances, there is no reason why a reactivated DP vessel should not re-enter service in a better condition than when it was laid up. There are also safety and efficiency benefits to be gained from rethinking the manning aspect by re-educating, refamiliarising, improving crew skills through to improving vessel and shore management interaction.”

A newly established workgroup will produce a reactivation handbook looking at this topical issue. This will take the form of an information note to members and will be available on the IMCA website.

Accreditation for DP assurance and trials practitioners was first mooted several years ago. In November, IMCA held a lively debate on this topic at its Marine Technical Seminar in Singapore. It explored the pros

and cons of such a scheme and provided suggestions covering required initial qualification, examination and paths for continuous professional development (CPD). “That’s something I will be exploring and asking delegates to consider in London,” said Captain Goldsmith.

“The aims are simple – to improve the consistency and conduct of DP trials and to set a minimum level of knowledge for marine contractor and client DP subject matter experts.”

Such a scheme – which could be based on the IMCA eCMID inspector accreditation scheme developed with the IIMS – would assist DP trials practitioners and DP SMEs to maintain and increase their knowledge base. It would not only provide assurance that DP auditors attending vessels for trials are accredited to a minimum standard, but that personnel conducting DP assurance duties in both vessel operator and client offices are accredited to that minimum standard.

Additionally, it would meet the requirement of the recently published Oil Companies International Marine Forum (OCIMF) white paper on DP assurance, which calls for verification that shore-based DP personnel and DP assurance practitioners are qualified, experienced and competent.

“This is not something to be rushed into,” Captain Goldsmith concluded, “but the Q&A session in London and feedback as a result of this article will be invaluable aids to moving forward a step.”

Did you know that, by contributing to the scheme, members are entitled to display the IMCA Certificate of Participation on the bridge of their DP vessels? This provides instant recognition to clients that the company shares its DP lessons with industry via IMCA’s scheme. OSJ

www.osjonline.com

SAFETY ALERTS | 47

Potential engineroom flooding:

maintenance and equipment failure issues on laid-up vessel The International Marine Contractors Association (IMCA) regularly publishes safety flashes summarising safety matters and incidents, allowing wider dissemination of lessons learned from them, a recent example of which is reproduced here

A

seawater cooling line failed during planned maintenance on a vessel in cold layup.

An engineer and an able seaman were conducting planned maintenance on vessels in cold layup. The engineer opened a sea chest and necessary cooling lines and started an auxiliary generator.

After watching it run for 10 minutes, he left the engineroom and carried out visual checks elsewhere on the vessel. Once these visual checks were complete, he left the vessel and went to another cold laid-up vessel to conduct similar checks. An able seaman was left on the main deck of the vessel with the auxiliary generator running.

After approximately one hour, the engineer returned to the vessel. On reaching the engineroom, he noticed a strong water spray on the engine from the seawater cooling line. He immediately activated the emergency shut-down.

As the shut-down was not enough to reduce the water flow, the engineer attempted to shut off the isolating valve supplying seawater from the main sea chest, but it was seized.

Finally, the valves mounted before and after the sea chest were shut off, and the water flow was stopped. Although there was no damage, this near miss had the potential for major equipment damage or loss of the vessel.

WHAT WENT WRONG? WHAT WERE THE CAUSES?

The failure on the cooling line was traced to a broken hose clamp with signs of corrosion, which allowed a flexible hose to get disconnected from the rigid connecting pipe.

The intermediate valves from the crossover sea chest line were found to be seized.

PROCEDURES

The crew did not have portable radios, so there was no remote communication between the crew members.

The crew on the laid-up vessels did not have access to the company’s document management system and hence no access to the company safety management system and other

www.osjonline.com

important information.

Repair and maintenance conducted were not being recorded in the company planned maintenance system.

The crew were unaware of the documented company emergency response plan and procedures. They were unsure who to contact for daily operational needs.

ACTION TAKEN

46,000 litres of oily water were pumped out of the engineroom bilges. Due to lack of information, it could not be confirmed whether this amount was all due to the incident or possibly could have been there before that.

A new hose clamp was installed, the engine tested and all found to be in good order.

LESSONS LEARNED

Advanced deterioration of parts, equipment and emergency batteries on laid-up vessels suggest that there should be more rigorous inspection and control of conditions on such vessels.

There should be better management of planned maintenance procedures and of safety management systems on laid-up vessels, including the possibility of setting up temporary alarms as appropriate.

It is important to ensure that appropriate communications (such as email) are maintained to and from vessels in layup. OSJ IMCA’s safety flashes summarise key safety matters and incidents, allowing wider dissemination of lessons learned from them. The information above is provided in good faith by members and should be reviewed individually by recipients, who will determine its relevance to their own operations.

The effectiveness of the IMCA safety flash system depends on receiving reports from members in order to pass on information and avoid repeat incidents. Please consider adding the IMCA secretariat (incidentreports@imca-int.com) to your internal distribution list for safety alerts and/or manually submitting information on specific incidents you consider may be relevant.

All information will be anonymised or sanitised, as appropriate.

Offshore Support Journal | January/February 2018

48 | MARKET DATA

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

NORTH SEA DEPARTURES AND ARRIVALS

NORTH SEA AVERAGE RATES: NOVEMBER 2017

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

AVERAGE RATE NOVEMBER 2017

% CHANGE

supply duties PSVs <900 m2

£6,017

£4,870

24%

supply duties PSVs >900 m2

£5,203

£5,520

-6%

supply duties AHTS <22,000 bhp

£17,299

£7,460

132%

supply duties AHTS >22,000 bhp

£9,171

£9,232

-0.7%

CATEGORY

Black Sea

Far Serenade

South America

Maersk Master

Australia

Siem Challenger

Central America

Skandi Hera

Mediterranean

Skandi Iceman

West Africa

Skandi Skansen

Mediterranean

VOS Prime

Mediterranean

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

Ex West Africa

Sayan Princess

Ex Russia

Troms Sirius

Ex West Africa

NORTH SEA SPOT AVERAGE UTILISATION: NOVEMBER 2017 MONTH

AVERAGE RATE NOVEMBER 2017

MED LARGE PSV PSV

MED AHTS

LARGE AHTS

Nov 2017

70%

79%

50%

50%

Oct 2017

67%

70%

41%

42%

Sep 2017

75%

92%

50%

72%

Aug 2017

78%

90%

57%

68%

Jul 2017

83%

86%

63%

71%

Jun 2017

69%

77%

49%

61%

NORTH SEA AVERAGE RATES: NOVEMBER 2017 CATEGORY

MINIMUM

MAXIMUM

supply duties PSVs <900 m2

£3,800

£14,500

supply duties PSVs >900 m2

£4,000

£9,500

supply duties AHTS <22,000 bhp

£4,,000

£50,000

supply duties AHTS >22,000 bhp

£4,090

£25,000

OSVs RECENTLY DELIVERED VESSEL Carmen

DESIGN

OWNER/MANAGER

COMMITMENT

Rolls-Royce UT 755 CDL PSV

Marinsa/Cemza Group

TBC

POSH Impala

64M Shallow draught AHTS/Standby

PACC Offshore Services Holdings

Middle East

POSH Oribi

64M Shallow draught AHTS/Standby

PACC Offshore Services Holdings

Middle East

Offshore Support Journal | January/February 2018

www.osjonline.com

MARKET DATA | 49

LEFT: anchor handler and PSV availability fluctuated significantly in the month

DAILY AVAILABILITY: NOVEMBER 2017 PSV 2017

28

PSV 2016

AHTS 2017

AHTS 2016

26

BELOW LEFT: the oil price has risen above US$60/barrel and continued to climb since

24 22 20 18 16 14 12 10 8 6 4 2 0

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

OIL PRICE VERSUS RIG UTILISATION $70

100%

$65

90% 76.8% 76.0%

80% 70%

$54.07

74.4%

75.6%

$54.89

$55.49

74.9% 74.3% 74.2%

34.8%

52.3% 53.3%

33.1% 32.4% 33.0%

53.0%

31.4%

51.5%

52.7%

33.5%

$50

$48.69

57.9% 51.6%

$60 $55

$57.62

$51.37

$50.87 $46.89

55.0%

40% 30%

$52.98

$46.44

50%

73.4% 72.9% 73.4% $55.16

$51.97

60%

73.2% 73.5%

$62.57

75.8%

59.4%

58.1%

54.5%

$45 56.7% 56.9%

$40

34.3% 34.2%

34.7%

35.8%

37.0%

37.8%

$35

30.3%

Nov16 Dec16 Jan17 Feb17 Mar17 Apr17 May17 Jun17 Jul17 Aug17 Sep17 Nov17 Dec17 average Brent Crude US$/Bbl

Northwest Europe rig utilisation

South America rig utilisation

US Gulf rig utilisation

$30

AVERAGE DAY RATES TO MONTH: NOVEMBER 2017 £25,000 2016 2017

£22,303

£20,000 £19,241 £18,782

£17,880

£15,000

£10,000

£7,809 £5,000

£0

www.osjonline.com

£5,604

PSVs <900m2

£7,171 £5,346

PSVs >900m2

PSVs <22,000m2

PSVs >22,000m2

Offshore Support Journal | January/February 2018

50 | MARKET DATA

Offshore vessel values

December 2017 The table on page 51 shows the monthly percentage change in value for offshore support vessels, by year of build, from 1 December to 31 December 2017.

Values remained stable in the anchor-handling tug/supply (AHTS) and anchor-handling tug (AHT) and platform supply vessel (PSV) sectors.

PSVs

AHTSs & AHTs

Values have remained stable. Six vessels were sold in December.

Values remained stable in December. Two sales took place.

Hellespont Marine sold four PSVs, Daring, Dawn, Defiance and Drive (3,300 dwt, January 2009 – January 2010, Cochin) to Seacor Marine for an undisclosed price, VV value US$23.2M.

The AHTS Stril Power (14,742 bhp, April 1997, Aukra Industries) was sold for an undisclosed price to Sevnor, VV value US$2.16M.

The large PSV Skandi Marstein (4,200 dwt, August 1996, Vard Brattvaag) sold for an undisclosed price to A1 Offshore, VV value US$0.98M.

The AHTS Dela Llana Tide (5,150 bhp, January 2011, Fujian Southeast) was offloaded by Tidewater Marine to an undisclosed buyer, VV value US$1.84M. Source: VesselsValue.com

TOTAL VALUE OF SECONDHAND SALES IN DECEMBER 2017 VS 2016

NUMBER OF SECONDHAND SALES IN DECEMBER 2017 VS 2016

S&P US$M

Number of secondhand sales

1000

50

959

40

800 600

587

548

47

40

31

30

519

27

26

December 2017

December 2017

400

419

December 2016

10

10

200 78

0

December 2016

20

Bulker

Tanker

Container

38

10

Gas

0

29

OSV

Value (US$M)

• Total value for sales is up 8.2% from December 2017 compared to December 2016.

• Bulker transaction values are 29% higher this December compared to last December.

• The most noticeable transaction values are in the container sector where total sales are down significantly this December compared to last December 2016. This is due to a number of Panamax and New Panamax vessels with larger TEU being sold in 2016 whereas more Sub Panamax vessels have been sold this year with a smaller TEU.

Offshore Support Journal | January/February 2018

8 2

0

Bulker

Tanker

Container

8

2

Gas

OSV

No. of Vessels

• Total sales by number count are down 16% for December 2017 compared to December 2016.

• Bulker sales by number are up by 7 this December, also reflected in the graph above with transaction values higher. This reflects the rise in values for December 2017 compared to December 2016 where we saw a more depressed market.

• Number of container sales are down by 17, also reflected in the total transaction price. As mentioned above much larger TEU was sold in December 2016 compared to a lower number of smaller TEU sold this year.

www.osjonline.com

MARKET DATA | 51

OFFSHORE VALUES PERCENTAGE CHANGE/1,000s OF DOLLARS: DECEMBER 2017 BUILT

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

www.osjonline.com

LARGE PSV

MEDIUM PSV

SMALL PSV

SUPER AHTS

MEDIUM AHTS

SMALL AHTS

0.6%

0.5%

0.5%

1.3%

0.6%

0.5%

5.2k

3.6k

1.7k

24k

8.2k

5.5k

0.4%

0.4%

0.3%

0.1%

0.2%

4.0%

5.2k

3.6k

1.7k

24k

8k

5.2k

0.2%

0.3%

0.2%

1.1%

0.4%

-0.4%

5.2k

3.6k

1.7k

24k

8k

5.2k

0.1%

0.1%

0.2%

0.9%

0.8%

0.8%

5.2k

3.4k

1.7k

24k

8k

5.2k

-0.1%

-0.1%

0.0%

0.7%

-1.0%

-1.3%

5.1k

3.3k

1.7k

24k

8k

5.2k

-0.1%

-0.2%

0.0%

0.4%

1.4%

1.4%

4.8k

3.3k

1.7k

24k

8k

5.2k

-0.3%

-0.3%

-0.3%

0.1%

-1.9%

-2.0%

4.8k

3.3k

1.6k

24k

8k

5.2k

-0.4%

-0.3%

-0.4%

-0.3%

-1.6%

-1.4%

4.8k

3.3k

1.6k

24k

8k

5.1k

-0.4%

-0.5%

-0.4%

-0.6%

-2.2%

-1.9%

4.8k

3.3k

1.6k

24k

8k

5.1k

-0.5%

-0.4%

-0.5%

-0.9%

-1.0%

-1.4%

4.8k

3.3k

1.6k

24k

8k

5.1k

-0.5%

-0.8%

-0.6%

-1.3%

-1.5%

-1.9%

4.8k

3.3k

1.6k

24k

8k

5.1k

-0.7%

-0.6%

-0.7%

-1.7%

-2.0%

-2.6%

4.8k

3.3k

1.6k

24k

8k

5.1k

-0.5%

-0.7%

-0.8%

-2.2%

-2.7%

-3.6%

4.8k

3.3k

1.6k

24k

8k

5k

-0.5%

-0.9%

-1.0%

-2.7%

0.0%

0.0%

4.8k

3.3k

1.6k

24k

8k

5k

-0.7%

-0.5%

-1.2%

-3.1%

0.0%

0.0%

4.8k

3.3k

1.6k

24k

8k

5k

-0.4%

-0.6%

-0.0%

-3.6%

0.0%

0.0%

4.7k

3.3k

1.6k

24k

8k

5k

Offshore Support Journal | January/February 2018

52 | BEST OF THE WEB

BEST OF THE WEB

osjonline.com

McDermott makes defensive merger to gain critical mass McDermott International and Chicago Bridge & Iron have announced that they have agreed to combine in an all-stock transaction to create avertically integrated onshoreoffshore company with a broad engineering, procurement, construction and installation service offering.

On completion of the transaction,

McDermott shareholders will own approximately 53% of the combined company on a fully diluted basis, and Chicago Bridge & Iron shareholders will own approximately 47%. The deal is being viewed as essentially a defensive merger.

Long-term subsea contracts could be worth Nkr40Bn

Solstad Farstad said it achieved annualised synergies and cost reductions of approximately Nkr400M (US$48M) in 2017 and has increased its cost-reduction target to Nkr700–800M by the end of 2018.

“Solstad Farstad has and is working hard to meet the commitments we made to our stakeholders following the merger,” said chief

executive Lars Peder Solstad.

The merger that formed Solstad Farstad was completed in June 2017. Based on its experience in the first six months in operation as one company, Solstad Farstad believes much greater cost savings are possible.

Statoil has awarded subsea maintenance framework agreements to Aker Solutions, TechnipFMC and OneSubsea.

The contracts have a total estimated value of more than Nkr8Bn (US$958M) and a duration extending to 2023. In addition, the contracts include options for a total of 20 years.

The estimated value will be approximately Nkr40Bn, should all the options with the assumed scope of work be exercised.

Statoil’s chief procurement officer Pål Eitrheim said “We have entered into long-term agreements lasting for 25 years with all options included. This provides increased predictability and stable framework conditions both for the suppliers and us.

http://bit.ly/2EKrd3l

http://bit.ly/2AY8RdI

Ultra Deep Solutions to build well intervention/ hydrogen saturation diving vessel

Ultra Deep Solutions has signed a letter of intent to build a multipurpose well intervention/construction vessel with a hydrogen saturation diving system at China Merchant Heavy Industries in Shenzhen, China.

The Salt 310 design vessel will be capable of well intervention, flexlay and rigid pipelay operations in 3,000 m of water.

The vessel will be fitted with a first-ofits-kind 3-in-1 tower designed by Huisman

in the Netherlands. It will also be fitted with a Huisman 600–1,000 tonne crane, which can work in depths of up to 3,000 m, and a 650 m hydrogen saturation diving system along with two integrated hydrogen refineries.

Ultra Deep Solution’s new vessel will have two work-class remotely operated vehicles in built-in hangars.

http://bit.ly/2a707J1

Merged OSV major aims for twice original cost savings

www.osjonline.com/s/knowledgebank To view more whitepapers visit the Knowledge Bank at www.osjonline.com To upload a whitepaper to the Knowledge Bank, please email Steve Edwards at steve.edwards@rivieramm.com

Offshore Support Journal | January/February 2018

http://bit.ly/OSJUltraDeepDSV

Editor’s selection:

Editor’s comment:

How mobile transparency is transforming the marine industry

By combining real-time situational awareness with mobile technology, the maritime industry can leverage digitalisation to ensure that the right information is sent to the right people at the right time. As well as increasing transparency with information visible both onboard and onshore, the quality and speed of communications is also increased. This in turn improves the efficacy of data-based tools used to support decision making.

As Eniram notes, in today’s marine industry, more and more data is being collected from vessels. However, the significant potential of this data to add real business value is often wasted due to a lack of intelligent data enrichment and analysis.

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