Offshore Industry Leaders 2014

2014 • A supplement to Offshore Support Journal

industry leaders

The 50 most influential people in the offshore support vessel industry – the trendsetters, dealmakers, innovators and individuals with a commitment to excellence, safety and meeting customer requirements

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David Foxwell

Leaders take a long-term perspective

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his year OSJ’s Industry Leaders supplement has been expanded from 25 leaders to 50 but even allowing for the additional entries I am aware that there are a number of individuals we haven’t included who might have made the cut. It is important to point out that the process of selecting the industry leaders is to a large extent a personal one – it’s not based on criteria such as the size of a company (or the net wealth of the owner!) or the number of vessels operated or their revenues or profit. Rather, it is a reflection on who has done what during the last 12 months and how the industry leaders we have settled on have influenced the development of their companies and the industry as whole in the last year.

One noticeable feature of the supplement this year is the growing number of leaders from southeast Asia and the Asia Pacific region as a whole. That reflects the increasingly international operations of many companies based there. Not many years ago, well-known companies based in Singapore mainly operated vessels in that area – nowadays, southeast Asian industry leaders are operating globally, offshore West Africa and, increasingly, in Mexico. There are also a number of new entrants in northwest Europe such as Herbjørn Hansson, who is best known in the tanker market – which is where he made his reputation – whose venture into offshore support vessels looks like it could be equally successful.

Others include leaders such as Howard Woodcock, who is leading Bibby Offshore from being a mainly UK-based, North Sea oriented company to becoming a global one, and Colin Parker, chief executive at Aberdeen Harbour Board in

industry leaders

the UK. He has already overseen wide-ranging improvements to the UK’s premier oil port, but the next stage of work there could be on an altogether different scale, with additional berthing facilities at Nigg Bay, a project that Scottish government describes as being of national importance.

I have also selected individuals from smaller, less well-known companies, who are have made their mark in 2014, such as Wes Bordelon at Bordelon Marine in the US, and longserving individuals who are not vessel owners but who have made a significant contribution to framing the guidelines and regulations that make everyone in the industry safer, such as the International Marine Contractors Association’s retiring technical advisor, Ian Giddings. Another newcomer is Jeff Weber, at Mermaid Marine Australia. Having acquired one of the best known vessel owner/builders in Southeast Asia, he is leading the company into new markets. Most of the leading shipowners in this supplement have, or are doing, the same thing. Patrick Janssens’ name may not be known around the industry quite in the way that some of the ‘big beasts’ in the sector are, but as highlighted in OSJ’s Guide to OSV Shipbuilders, his company, De Hoop Shipyard, has more offshore vessels on order than any other European yard. Other individuals who have been in the support vessel business for years that have had a ‘big’ year include Jacques de Chateauvieux, Bourbon’s former CEO, whose investment company Jaccar successfully gained control of the Bourbon this summer.

I’m pleased to be able to report that there are more women represented in this year’s

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Industry Leaders supplement, but not many more. Hopefully this will change. A recent workshop found that problems such as cultural and gender discrimination, social bias, bullying in the workplace and a lack of transparency are common in the industry.

A

lmost all of the industry leaders represented here anticipate that 2015 will be a tough year, and 2014 was a mixed one for many of them. The sharp decline in the oil price means that many expect activity to slow down in 2015 and volatility to increase.

There are a number of ways to deal with this.

Cutting costs is an obvious one; refocussing on markets – such as the subsea sector – where growth has been good, is another. However, as several of the industry leaders active in the subsea market note, they are increasingly concerned about the effect that oil companies’ cost reduction measures may have and the number of projects that are being pushed further to the right or cancelled. Evidently some companies – such as Maersk Supply Service – continue to believe that investing when the market is low, in anticipation of better days, can pay dividends, witness Carsten Plougmann Andersen’s company’s decision to order six large anchor handling tug supply vessels (with options for four more). What is clear is that the industry leaders highlighted this year invest for the long term, and they are not dissuaded from doing so even when their share price takes a battering. They will ride out any downturn – however short or long it is – in what has always been a cyclical market. OSJ 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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Offshore Support Journal Industry Leaders I December 2014 I 1

1 Kommer Damen’s concept finds favour offshore A s a journalist attending shipping exhibitions you are often presented with spec sheets and literature about a huge number of new designs. More often than not you never hear about those designs again, and they are rarely ever built. Damen Shipyards is different. In the last few years it has developed a large number of designs for offshore vessels, seismic vessels, cable lay units and versatile designs that can be adapted for a wide range of tasks. It has also introduced a number of unique hullforms – such as the Damen Axe Bow – and vessels for the offshore wind market. All are being built in large numbers, and not just in the Netherlands, the company’s home base. Damen offshore designs are now being built around the world.

That the designs the company develops quickly come to be appreciated by owners and built in series speaks volumes for the kind of

For a company that only entered the offshore vessel sector fairly recently, Kommer Damen’s Damen Shipyard Group is already enjoying significant success there

vessels the company produces. This ability to home-in on new designs that meet owners’ needs, combined with its ability to mass produce them, and work with partners around the world who also build those designs, is surely the key to its success. And the man whose vision is at the heart of its success is Kommer Damen, OSJ’s Industry Leader 2014.

Mr Damen’s company’s figures for 2013 speak for themselves: in that year it had an annual turnover of €1.7 billion and had 32 yards worldwide, of which 17 are outside

the Netherlands. The company had 8,000 workers worldwide, including 5,000 outside the Netherlands and delivered 170 tugs, 70 workboats, 15 offshore vessels, 55 high speed craft and ferries, not forgetting barges, dredging vessels, inland waterways vessels and naval vessels and yachts.

Damen was established in 1927 by two brothers. Nowadays, Damen Shipyards Group has a leading position in shipbuilding worldwide, with a presence in 35 countries. Damen has become a multinational company, but one that has never lost its family values or its respect for its maritime heritage. The two brothers – Jan and Rien Damen – started the company in a shed next to the family home in 1922. Five years later they formalised the company as Damen Brothers. It remained a small but prominent boatbuilder until Kommer Damen joined the company. In 1969 Kommer Damen – who is

Kommer Damen’s approach to shipbuilding has seen the company’s designs adopted worldwide

Kommer Damen

chairman of Damen Shipyards Group nowadays – acquired the company from his father and introduced a modular shipbuilding concept into the building of small boats and launches. This concept of standardisation (now called The Damen Standard) has a number of advantages, such as reduced delivery times, reduced costs and the use of proven designs. The concept was an immediate success and in 1973 the expansion of Damen Shipyards in Gorinchem began.

Damen continued growing and soon the group started exporting. Because Gorinchem was strategically placed for the dredging industry, auxiliary equipment and workboats were among the vessels built by the yard.

Damen’s dredging workboats quickly became the standard in many foreign markets and Mr Damen saw the opportunity to export more of them. Later on Mr Damen took over numerous yards specialising in niche markets where he saw an opportunity to invest. The company also began forming partnerships and cooperating with yards all over the world, a process that it continues to employ today.

Nowadays Mr Damen’s hugely successful business has employees working at 35 companies worldwide. Since the introduction of modular shipbuilding concept Damen has built more than 5,000 vessels. Every year, more than 150 vessels are built by the company and at dedicated shipyards around the world Damen mass produces standard hulls for particularly popular vessel types – including a fast-growing growing number of offshore vessels.

A good example of Damen Shipyards Groups’ export success was a deal it signed earlier this year with Wilson Sons in Brazil for two more Damen PSV 5000s, a contract that further strengthened the already high level of cooperation between Damen and Wilson Sons which has seen Wilson Sons build vessels locally using a Damen design, engineering and material package. In fact, Damen and Wilson Sons have been working together for more than 20 years.

The PSV 5000s, 85m in length with a breadth of 19m, have diesel-electric propulsion with DP2 class dynamic positioning and were designed to comply to with the specifications of Petrobras, Brazil’s state-owned oil company, for whom they will work. Interestingly, they will have a travelling gantry crane fitted for offshore operations. Future upgrades, such as to the bulk handling system on board, have also been taken into account in the design. The vessels will be built at Wilson Sons Guarujá II shipyard for Wilson Sons Ultratug, who will operate the vessel on a six year plus six year charter contract with Petrobras.

Another good example is a contract with Atlantic Towing in Canada, which recently www.osjonline.com

confirmed it had secured a 10-year firm contract (plus a total of 15 years of options at the charterers’ discretion) with ExxonMobil Canada Properties and Hibernia Management and Development Company (HMDC) for four new platform supply vessels (PSVs). Operating from St John’s, Newfoundland, the first ships for the contract will be delivered in 2016 and will join Atlantic Towing’s fleet of eight offshore support vessels in the Atlantic Canada region.

The new ships – to be designed and built by Damen Shipyards Group in the Netherlands – will deliver a number of environmental benefits compared with older, conventional vessels and will have Clean Design class notation, a diesel-electric power plant, the latest environmental control equipment, a wave-piercing bow design and enhanced levels of crew comfort. The ice-strengthened PSV 5000 vessels from Damen are designed specifically to operate in the challenging subArctic waters of the Hibernia and Hebron oil fields, off Newfoundland and Labrador.

One of them will be equipped for inspection, maintenance and repair work in addition to acting as a straight supply vessel. All four will share the same design platform, with the first vessel due in service in the second half of 2016. The combination of the PSV 5000’s flareless bow, slender hull lines and diesel-electric propulsion with azimuth stern drives will help to minimise fuel consumption and emissions, enhance seakeeping and dynamic positioning performance and ensure crew comfort in challenging sea conditions.

Among the latest customers for the Sea Axe hullform developed by Damen is Mexican offshore company Naviera Integral, which signed a contract for four more Damen Fast Crew Suppliers 5009 (FCS 5009) early in 2014.

The first two vessels ordered were delivered from stock and handed over in Vietnam in April 2014. The other two vessels are due to be delivered in July 2015, and all four vessels will operate in the Gulf of Mexico, under a direct contract from PEMEX, Mexico’s state oil company. By maximizing the waterline length, reducing bow flare and increasing the draft of the bow significantly, in the Axe Bow Damen obtained a hull shape with a strikingly low level of vertical accelerations, very much reduced slamming and reduced resistance.

In 2013, Damen Shipyards Group secured the sale of its first ‘Twin Axe’ catamaran, a Damen High Speed Support Vessel (HSSV) 2610 for the offshore wind industry. The contract was placed by Marineco UK. The Twin Axe is a further development of the Sea Axe concept that improves on the conventional catamaran design with enhanced seakeeping behaviour, resistance and much lower fuel consumption. The raised work deck and Sea

Kommer Damen

Among the latest Damen offshore vessels this one, CMM Gravity, was built for CMM Axe bows enable the vessel to keep up its speed in high sea states, which is crucial for the offshore wind industry, and the HSSV 2610 has ample working and storage space on deck making it suitable for a variety of cargoes, including containers. And with a fuel capacity of 12,000 litres, the new vessel can be used to transfer fuel to wind turbines.

Late June 2014 saw another example of a new design from Damen, a DP2 cable lay vessel, Nexus, which is being built for Van Oord, launched at Damen Shipyards Galati.

This multipurpose vessel will install cables on offshore windfarms and is based on the Damen Offshore Carrier 7500 design. Another version of the DOC design, a DOC 8500, forms the basis of a newbuild cable lay vessel that DeepOcean UK will take on a sevenyear charter agreement with Maersk Supply Services. This versatile vessel will install and bury cables using a 7,000 tonne carousel from landfall to deepwater and in remote locations.

Even as these high spec vessels are being built, Mr Damen’s company has taken the decision to embark on the construction of another innovative design, the first example of a new type of ‘walk-to-work’ vessel, examples of which could find applications in the offshore wind and offshore oil and gas sectors.

Significant as his achievements at his own company are, Mr Damen also has a number of other roles in industry in the Netherlands. He is a board member at the Dutch Shipbuilding Association; a board member of Dutch Maritime Network (NML); a member of the supervisory board at Van Oord; he is on the supervisory board of Platform Bèta Techniek; and an Honorary Consul of the Federal States of Mexico. OSJ Offshore Support Journal Industry Leaders I December 2014 I 3

2 Differentiation is key says start-up OSV owner

Herbjorn Hansson Herbjørn

Formed at the end of 2013, Nordic American Offshore has made an excellent start to life, guided by Herbjørn Hansson, the company’s executive chairman

H

erbjørn Hansson’s name is best known in the tanker market – which is where he made his reputation – but his venture into offshore support vessels looks like it could be equally successful. Mr Hansson serves as the executive chairman and president at Nordic American Offshore (NAO) Ltd. He was the founder of Nordic American Tankers Ltd (formerly Nordic American Tanker Shipping Ltd) and has been its president and chief executive officer since July 1995. He has been involved in various aspects of the shipping industry and international finance since 1970 and served as chief economist of Intertanko.

Nordic American Offshore (NAO) Ltd was listed on the New York Stock Exchange earlier this year and made an excellent start to life as a listed company, with its stock trading above US$19, a significant premium to the IPO price in June 2014. In addition, the company paid out US$0.90 per share in dividends in total for the first two quarters of 2014.

As Mr Hansson explained in a recent letter to shareholders, when he and his colleagues set out to create NAO at the end of 2013, “we wanted to differentiate the company from the competition, just as we have done with Nordic American Tankers (NAT).”

As he noted, NAT has paid dividends for 68 consecutive quarters. “We focus on one type of asset, a strong balance sheet, a low cash breakeven level, with all operating cashflow to be paid out to shareholders, a high free float and a liquid stock,” he said of his approach.

“In addition to being able to buy and sell stock when you desire, liquidity is important for shareholders to ensure accurate valuation and to reduce volatility.

“The distribution of NAO shares by way of the dividend-in-kind by our sponsor, Nordic American Tankers, has helped increase the NAO shareholder base to about 35,000 individual investors. This is in contrast to several of our listed peers, who have between 2,000 and 3,000 shareholders. Liquidity in the company’s stock is 4 I Offshore Support Journal Industry Leaders I December 2014

strong with between 1 per cent and 1.5 per cent of the shares changing hands every day. Given the premise that NAO was originally started less than a year ago, it is very satisfactory to observe that we already have such a large following.”

“So far, everything has developed as we planned and communicated to investors,” said Mr Hansson. “Our operational performance has resulted in clients extending and renewing contracts. The company has on order four platform supply vessels (PSVs) to be delivered from Norwegian yards during 2015 at which time NAO will have 10 vessels in operation.

We have received positive feedback from our customers regarding the operational quality of our vessels and we already have inquiries from customers for employment of the first pair of vessels expected to be delivered in January 2015.”

The four newbuildings to be delivered in 2015 are expected to be financed with the proceeds from a recent IPO and with a credit facility. This means that, as the vessels are delivered, the dividend capacity of the company will increase at various day rate levels.

Due to this approach, NAO has already been able to establish itself firmly as a player in the offshore supply vessel industry – in a very short period of time – thanks to the sponsorship by NAT, the manager of NAO. Writing earlier in 2014, before the oil price declined, Mr Hansson said he believed that NAO was in an excellent position “to grow by accretion”. After an acquisition of vessel(s), the company will be able to pay a higher dividend per share and produce higher earnings per share than had such acquisition(s) not taken place, he claimed. “We are actively looking for acquisition opportunities that fit in with our high-specification fleet … and I am hopeful that NAO will grow significantly in the coming years while generating strong total returns.”

In financial statements at the end of October, the company declared a dividend of US$0.45 per share for the third quarter of 2014, as previously announced. This was the same dividend as for the previous two quarters. This meant that, since its establishment in late 2013, the startup company had paid three dividends totalling US$1.35 per share.

As of the end of October 2014, the company had 10 high quality PSVs – six in operation and four being built at Norwegian shipyards. Two

Herbjørn Hansson: “we focus on one type of asset, a strong balance sheet, and low cash breakeven level” of the newbuildings are due to be delivered in January 2015, and the other two are expected to be delivered during the third quarter of 2015. Including a planned expansion of the credit facility, the company will have the financial resources to take delivery of its four newbuildings on order, thereby offsetting the dilutive short-term impact in share count following the June 2014 IPO. As of the end of October 2014, the company had no net debt, and its US$60 million credit facility has not been drawn on. The IPO in June 2014 strengthened the equity of the company by about $100 million, and its vessels were fully utilised during the third quarter.

“We believe that lower oil prices, as we see now, will have limited impact on our operations,” said the company. “PSVs are critical to operating offshore and represent a small part of overall costs. The recent reduction in oil price may affect future offshore exploration activities. It should be noted that PSVs are part of the entire lifecycle of an offshore oil field,” it said, also noting that several of its vessels are suitable for operations in the Arctic, where drilling activities could expand. OSJ www.osjonline.com

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3 Shipowner industrialist adds German yard to portfolio S

Kristian Siem

iem Industries’ early October announcement that it had reached a conditional agreement to acquire Flensburger Schiffbau-Gesellschaft (FSG) came as something of a surprise. Mr Siem is a leading figure in the offshore vessel sector in Norway and in northwest Europe as a whole through Siem Offshore and Subsea 7. Siem Offshore has two well intervention vessels under construction at FSG, which is actually best known for building roll-on/roll-off (roro) vessels (although it has built seismic ships more recently), but his venture into shipbuilding was unexpected.

Located in Flensburg, Germany, with 143 years of history and 800 dedicated employees, FSG is a shipyard that, over time, has built a solid reputation and market position in the roro vessel segment. During the past few years, the shipyard has expanded its product line to include complex offshore vessels such as the seismic vessels it recently built for Schlumberger WesternGeco and the well intervention vessels for Siem Offshore. FSG launched the second of these two seismic ships for Schlumberger WesternGeco, Amazon Conqueror, a sister vessel to Amazon Warrior, in July 2014.

At the time that Mr Siem completed the deal, FSG’s orderbook consisted of a ropax ferry for CMAL in Scotland, the second seismic vessel for Schlumberger WesternGeco, the two well intervention vessels for Siem Offshore and a liquefied natural gas-fuelled roro ferry for SeaRoad in Australia. With the current orderbook, FSG will be operating at full capacity into the third quarter of 2016, which gives it much better forward visibility than some yards.

In a statement issued at the time that the deal was done, Siem Industries said it will continue to build on the solid industrial traditions of FSG and the quality of its workforce in order to maintain and further develop the shipyard’s position as what it called “a strong, long-term player in the German and northern European shipbuilding industry”.

Mr Siem has long been a leading figure in the offshore vessel sector through his involvement with Subsea 7 (see elsewhere in this issue) and Siem Offshore. In addition to involvement in these leading companies in the offshore support vessel sector, Mr Siem’s company, Siem Holdings, also holds shares in Star Reefers and Siem Car Carriers and is active in a range of other sectors in Sweden and Germany.

6 I Offshore Support Journal Industry Leaders I December 2014

Long known as a shipowner, 2014 saw Kristian Siem invest in a shipyard for the first time, when Siem Industries acquired Flensburger in Germany

Kristian Siem was the founder of Siem Industries and has been director and chairman of the company since 1982. He is chairman of Subsea 7 and Siem Capital AB and a director of Siem Offshore, Siem Shipping, North Atlantic Smaller Companies Investment Trust plc and NKT Holding. Prior to that, he held several management positions with the Fred Olsen group in the US and Norway. He is a Norwegian citizen and became chairman of the board of directors of Subsea 7 in January 2011. He has a degree in business economics and has been active in the oil and gas industry since 1972.

Siem Industries is a diversified holding company that operates through its autonomous industrial subsidiaries and affiliates, which are engaged in oil and gas services, ocean transportation and shipping, along with satellite positioning and navigation services, potash mining, ethanol processing and distillers’ grain production and financial investments.

Siem Industries describes its strategy as focusing on long-term growth rather than on short-term results. “We have a history of active participation in the consolidation and restructuring of different industries including the offshore drilling industry (Wilrig, Transocean), subsea construction industry (Subsea 7), reefer shipping business (Star Reefers) and the passenger cruise industry (NCL, Norwegian Cruise Line),” said the company. The company’s main subsidiaries and investments include Subsea 7 (20.9 per cent ownership), Siem Offshore (33.7 per cent), Siem Shipping (doing business as Star Reefers, 73.5 per cent), Siem Car Carriers (100 per cent), Siem Capital (64 per cent), Siem Investments (100 per cent), Deusa International (49 per cent), Veripos (21 per cent), GTL Resources Ltd (beneficial 45 per cent) and Deep Seas Insurance Ltd (51 per cent).

The company was formed in 1980, but the group traces its history back to the 19th century.

It is incorporated in the Cayman Islands and has executive offices in George Town, Cayman Islands.

2014 saw Kristian Siem move from shipowning into shipbuilding A subsidiary, Siem Kapital, has offices in Oslo, Norway, and another subsidiary, Siem Capital UK Ltd, has offices in London, UK. The company has approximately 500–700 shareholders. It was listed on the Oslo Stock Exchange until 1999 and on the American Stock Exchange until 1998.

The Ores Trust is the largest shareholder of the company with 66.1 per cent of the share capital.

The completion of the combination of Subsea 7 and Acergy in January 2011 solidified Subsea 7’s role as one of the world’s leading subsea engineering and construction companies, conducting operations in all of the major offshore oil and gas areas worldwide.

Subsea 7 has more than 12,000 employees, operates a diversified, high specification fleet of 45 vessels, utilises more than 150 remotely operated vehicles (ROVs) and owns a number of fabrication facilities in strategic locations. Siem Industries beneficially owns 69,731,931 shares of Subsea 7 or approximately 20.9 per cent of its issued and outstanding shares.

Siem Offshore holds ownership or management interests in about 45 vessels, which includes newbuilds under construction in Brazil and Norway. The vessels in operation include large-capacity anchor-handling tug/ supply vessels, mid-size and large-size platform supply vessels, multipurpose field and ROV support vessels, supply/crew/standby vessels located in Brazil, a well stimulation vessel and a scientific drilling vessel. OSJ www.osjonline.com

4 Malaysian builder wants to be world’s largest D Datuk Tiong Su Kouk

atuk Tiong Su Kouk has held a majority shareholding in Nam Cheong Dockyard since 1999, when he assumed an active role in the management of the company. He has more than 20 years’ experience in the shipbuilding industry and is responsible for the group’s strategic direction and shipbuilding operations at its yard in Miri, Malaysia, and at contractors’ shipyards in China.

Along with his extensive experience and involvement in the shipbuilding industry, he has built a wide network of Malaysian and foreign business contacts over the years. He also has played a significant role in steering the group from being primarily involved in the construction of barges and fishing vessels in Malaysia to the building of offshore support vessels (OSVs) and has transformed the company into one of the leading builders and suppliers of OSVs in Malaysia. He is also the founder of CCK Consolidated Holdings Berhad (CCK), a company listed on the main market of Bursa Securities Malaysia Bhd. Under his stewardship, CCK and its subsidiaries have progressed from a small family-run business to one of Sarawak’s largest integrated poultry producers and producers of frozen food.

Nam Cheong Ltd’s entry into the shipbuilding industry began with the building of fishing boats in the 1960s. In the mid80s, it first moved into OSVs and was the first Malaysian shipbuilder to deliver a DP2 vessel in 2007. The company has successfully expanded its presence in Singapore, Indonesia, Vietnam, China, The Netherlands, India, the US and the Middle East.

In mid-November, Nam Cheong reported an 81 per cent increase in revenue to RM618.6 million (US$184.9 million) for the three months ended 30 September 2014 from RM341.2 million (US$102.0 million) in the corresponding period in 2013. This robust top line performance boosted net profit by 112 per cent to a record RM125.6 million (US$37.5 million) from RM59.2 million (US$17.7 million) in the third quarter of 2013.

Mr Tiong said the company had achieved what he described as this “outstanding result”, its best quarter since Nam Cheong’s listing on the SGX, as a result of a number of contract wins. In fact, Nam Cheong has secured a www.osjonline.com

In November, Nam Cheong Dockyard reported a record third quarter, but that is nothing compared with Datuk Tiong Su Kouk’s ambitions for the company

record-breaking number of orders – no less than 25 vessels worth approximately US$505 million in the first three quarters of 2014.

“We also secured letters of intent worth US$186 million for our proprietary dieselelectric anchor-handling tug/supply vessels, which we launched in October, despite volatile oil prices and challenging conditions in the wider market. This is a testament to our customers’ faith in the group and represents the strength of Nam Cheong’s position in the industry’s value chain,” he said.

“Along with our record quarter, we also set several significant milestones along the way. We are in a position of strength and are excited by the recent corporate developments that have taken place such as our partnership with Marco Polo Marine Ltd, with whom we have formed a joint venture and a proposed investment in their indirect subsidiary in Indonesia. We believe this will strengthen our position in the cabotage-protected Indonesian market. With these strategies established, we are well placed in our pursuit of being a global player in the offshore and marine industry and our goal of being the largest OSV provider in the world by 2017.”

Nam Cheong’s core shipbuilding segment recorded an 86 per cent surge to RM595.1 million (US$177.9 million) from RM319.7 million (US$95.6 million) in the third quarter of 2013. This was largely contributed by the increase in contracts (16 vessels in the third quarter of 2014) compared with seven

Nam Cheong recently introduced a new anchor handler design, the NCA80E

Datuk Tiong Su Kouk: “partnership with Marco Polo Marine will help Nam Cheong in the Indonesian market” vessels in the same quarter a year ago.

The net increase of one new vessel to Nam Cheong’s fleet during the quarter resulted in the group’s vessel chartering segment seeing a 9 per cent increase in revenue to RM23.5 million (US$7.0 million). Overall, the group’s shipbuilding segment contributed 96 per cent of Nam Cheong’s revenue in the quarter. Gross profit rose 70 per cent to RM148.7 million (US$44.4 million) during the quarter from RM87.3 million (US$26.1 million) in the same period in 2013, in line with Nam Cheong’s revenue growth. Gross profit margins for these two periods were maintained at healthy levels of 24 per cent and 26 per cent respectively. For the nine months ended 30 September 2014, Nam Cheong’s overall revenue rose by 65 per cent.

Despite concerns about the oil price, the company is in confident mood and is used to weathering downturns in the offshore industry. It also continues to operate in the resilient shallow-water segment, which it deems almost as “recession proof ” due to the lower cost of oil production compared to the deepwater segment.

The company continues to be optimistic on Nam Cheong’s long-term growth prospects and sees further demand for modern OSVs, especially those equipped with fuel-efficient features. OSJ Offshore Support Journal Industry Leaders I December 2014 I 7

5 Joint ventures put Pang in position to pursue growth S

Pang Yoke Min

hipping veteran Pang Yoke Min founded Pacific Radiance – in which he holds around a 65 per cent shareholding – in 2006 with Sunny Mok, a former colleague at Jaya Holdings, a marine business that Mr Pang co-founded in1981 and retired from after 25 years. He served as group managing director of Jaya Holdings from 1981 to 2006 and also served as head of business development and management and as executive managing director of the company.

Mr Pang became executive chairman

Mr Pang sees joint ventures in high growth and cabotage-protected markets as a key part of his strategy 8 I Offshore Support Journal Industry Leaders I December 2014

Under the leadership of founder Pang Yoke Min, Pacific Radiance has evolved from a regional player in Southeast Asia into a truly global one

of Pacific Radiance in January 2013, after having served as its principal adviser from January 2012 to December 2012. He was a non-executive director between January 2007 and December 2011 and is currently responsible for the group’s overall strategic direction and growth and has led its swift transformation into a leading player in the provision of offshore vessels. He has a number of other interests including stakes in Swiber Holdings, Global Yellow Pages and Pacific Healthcare on whose board he sits. Since founding Pacific Radiance, he has initiated a major fleet-building programme, diversified into marine equipment, invested in the cabotage-protected Malaysian market (via a joint venture with Alam Maritim Resources), done likewise in Indonesia (another cabotage market) by acquiring a stake in local shipowning companies, entered the inspection, maintenance and repair market and entered into the Brazilian market via Radiance Offshore Navegação.

In 2013, he listed the company on the Singapore Exchange, and its Indonesian joint venture PT Logindo Samudramakmur Tbk achieved a listing on the Indonesian stock exchange. 2013 also saw the company’s fleet continue to expand to more than 130 wholly and jointly owned offshore vessels as of December 2013. The company Mr Pang leads also has a shipbuilding and ship repair yard under construction.

2014 has hardly been a less significant one for Mr Pang and his company, which has moved into the Mexican market, entered into more joint venture agreements to exploit other markets and declared options for two more Ulstein PX121 platform supply vessels at Shanghai Waigaoqiao Shipbuilding and Offshore Co Ltd, having ordered an initial two PX121s in September 2013.

According to the company’s latest results, it is on track for strong earnings in FY14 with earnings supported by existing long-term charters, quick

deployment of newly delivered vessels and an ongoing fleet rejuvenation programme.

Announcing its latest results, Mr Pang said he believes that the company’s tested business model positions it well to ride out any decline in the offshore oil and gas cycle and capture new market opportunities. The company is also cautiously optimistic about delivering steady growth as it continues to enlarge its footprint in high growth and cabotage-protected markets.

The company said it was on track to post strong earnings for the current financial year, after delivering robust results for the first nine months ended 30 September 2014.

The group posted a 57 per cent increase in net attributable profit (PATMI) to US$63.3 million for the first nine months of FY14, after revenue came in at US$135.0 million.

The group’s offshore support services division generated 19 per cent growth in revenue to US$98.4 million. This growth was offset partly by lower sales of US$28.4 million at the subsea division as diving support vessels underwent drydocking for enhancement work, which also affected overall utilisation.

“Our strategy of maintaining a diversified and market-relevant fleet, as well as building our presence in high growth and cabotage markets, has seen us through various oil and gas cycles. As a result, we believe our tested business model positions Pacific Radiance well to ride out the current environment and capture new market opportunities.”

PT Logindo, in which the group has a 35 per cent ownership, continued to perform strongly, contributing US$6.0 million to the share of results at joint ventures in the first nine months of FY14, against US$5.5 million in the previous corresponding period when Pacific Radiance held a 49 per cent stake.

Mr Pang confirmed that the group is looking to build up its presence in other high growth and protected markets and, in addition to the recent joint venture in Mexico, has also set one up in Australia.

“We are cautiously optimistic of delivering steady growth as we focus on executing our strategy over the medium and long term, while staying responsive and aligned to changes in the business environment,” Mr Pang concluded. OSJ www.osjonline.com

FAILURE

IS NOT AN OPTION Heading north towards the frozen Arctic, Chief Officer Sunil and the rest of the Polarcus Naila crew ready themselves for their next seismic survey. But however brutal and unforgiving the environment, mechanical failure and downtime are still unacceptable. The stakes are simply too high.

WATCH THE FILM: youtu.be/xhZnZ3kiwFs

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6 Plougmann Andersen bets big on AHTS and subsea markets O

Carsten Plougmann Andersen

ctober 2014 saw Maersk Supply Service order six large anchorhandling tug/supply (AHTS) vessels from Kleven Maritime in Norway. The order for the vessels also includes options for up to another four units. All will be of Salt Ship Design.

Maersk Supply Service has long been a leading operator of large, high spec AHTS vessels. With the oil price plunging, shortterm demand for offshore vessels could fall, but Maersk Supply Service’s CEO, Carsten Plougmann Andersen and his colleagues are evidently of the opinion that, in the medium to long term, demand for high spec AHTS vessels will grow – a sentiment that leading brokers such as Clarkson Research Services Ltd has also endorsed.

In the introduction to its most recent AHTS vessel register, published earlier in 2014, Clarkson Research said it believed that, despite the boom in orders for anchor handlers in the last decade, the supply/ demand equation could tilt in favour once again of owners of high spec vessels. As Clarkson Research noted, the contracting boom of 2006–2007 generated a large pool of modern tonnage, but newbuilding contract volumes have fallen in each of the past five years, and the orderbook (at 175 vessels) is at its lowest level since 2005.

As highlighted in the November 2014 issue of OSJ, Clarkson Research noted that vessel supply has been an issue in the charter market, but the reduced pace of newbuilding deliveries and growing worldwide employment opportunities for vessels mean that the fundamentals now appear more encouraging.

“There is an increased focus for newer, larger and more technologically advanced vessels. New designs also stress efficiency and address environmental regulations,” said Clarkson Research.

Peak AHTS deliveries saw 282 AHTS vessels entering the market in 2009 and 271 in 2010.

Since then, ordering and deliveries have fallen away annually, and since 2011, ordering levels could be said to be back to pre-boom levels.

The 82 newbuilding orders recorded in 2013 was the lowest annual total since 2003. At the time of writing, figures for 2014 were not yet available, but given the generally low level of ordering of offshore vessels in 2014, relatively

10 I Offshore Support Journal Industry Leaders I December 2014

Maersk Supply Service’s CEO believes that investing when the market is at a low, in anticipation of better days, can pay dividends – as other owners fret about the oil price, Maersk is investing heavily in preparation for when demand recovers

few high spec AHTS vessels are likely to have been ordered. The orderbook, which peaked at 763 vessels in February 2009, has steadily been eroded and now stands at 175 units, its lowest level since 2005.

“In the last 12 months,” said the broker, “just 54 AHTS newbuilding contracts have been recorded, and of these, just 10 have been for units in excess of 12,000 bhp.

“This has left the delivery schedule for high end AHTS units beyond the end of 2014 looking a little limited,” said Clarkson Research. Hence Mr Plougmann Andersen’s decision to invest now, in anticipation of heightened demand a couple of years from now. The first of the new vessels is due to be delivered in the fourth quarter of 2014.

Maersk Supply Service’s contract for the new anchor handlers brings the company’s orderbook to 12 – it already included five recently ordered subsea support vessels and an anchor handler to be delivered from shipyards in Romania, China and Chile.

“With this contract, Maersk Supply Service is once again placing a newbuilding order in Norway,” said Mr Plougmann Andersen. “With this order, we have taken the next step in our extensive newbuilding programme, renewing our fleet with a focus on large AHTS and subsea vessels. The contract now concluded with Kleven is an important part of the realisation of our ambitious growth strategy.”

Describing the reasoning behind the order and the specification of the vessels, Mr Plougmann Andersen said, “The quest for energy is becoming more complicated and raising new challenges for oil companies.

“We want our customers to remain confident that we are prepared to meet their demands and provide premium service in terms of reliability, safety and uptime. In our newbuilding project with Kleven, we have carefully designed the

Carsten Plougmann Andersen: “we want our customers to remain confident that we are prepared to meet their demands” entire vessel with this in mind. An example is the installation of the most fuel-efficient and flexible hybrid propulsion system, with fixed pitch on all side thrusters, providing high reliability and back-up systems, good fuel economy, low emissions and excellent station keeping,” he said.

The new vessels will be 95m in length with a beam of 25m and deadweight of approximately 4,500 tonnes. The dynamic positioning DP2 units will have a bollard pull of a minimum of 230 tonnes. With a total free deck area of 944m2, the 23,000 bhp vessels will have a 500-tonne winch with a three-drum configuration, a hangar for remotely operated vehicles and accommodation for 52 people in single cabins.

Maersk Supply Service’s subsea vessels are of Marin Teknikk design and will be built at Cosco (Dalian) Shipyard in China. The vessels will be rated for operation in up to 3,000m of water. The first is due to delivered in late 2016.The DP3 class vessels will have a deadweight of 8,000 tonnes, a free deck of 1,925m2 and a 500-tonne active heave compensated crane. They will be capable of being fitted with an underdeck carousel for 3,000 tonnes of product (optional) and will be prepared for a 275-tonne vertical lay tower over the moonpool. OSJ www.osjonline.com

7

Raymond Kim Goh

Swiber founder rolls out successful strategy worldwide Since its formation approximately 18 years ago, Swiber Group has successfully transitioned from being a regional player into an international one, under the leadership of Raymond Kim Goh

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aymond Kim Goh is the founder and executive chairman of Swiber Group, a director and non-executive chairman of the board of Vallianz Holdings Ltd and is a nonexecutive chairman of Kreuz Holdings Ltd. A graduate of Murdoch University in Australia with a Bachelor of Commerce in 1993, he founded Swiber 18 years ago and is now a true ‘industry veteran’ with close to two decades of experience in the offshore oil and gas industry.

As founder and executive chairman of the Swiber Group, Mr Goh is the key figure leading Swiber’s overall business, operations and marketing activities. He sets the long-term growth strategy for Swiber Group and spearheads growth initiatives to expand the company’s resources, develop new markets and invest in new vessel designs and technology.

Swiber focuses on providing engineering, procurement, installation and construction (EPIC) services, enhanced with marine support and engineering capability, across the Asia Pacific region, Middle East and Latin America regions.

According to the latest half-year results

presentation from the company, Swiber achieved a net profit of US$63.0 million on sales of US$418.8 million in HY2014. Net profit was up 68.3 per cent. The company had a healthy EBITDA margin increase of 13.2 percentage points to 27.6 per cent and was actively bidding for major projects and anticipated growth in its orderbook over the final two quarters of 2014. At the time of the presentation, its orderbook was approximately US$610 million.

Mr Goh said the company would “remain prudent” in managing its operations, maximising cost efficiencies to provide value-added solutions to its customers. The company also plans to entrench its position as an experienced offshore service provider and explore new opportunities and leverage its existing track record. The company said it plans to focus on winning new contracts from major oil and gas players in the Asia Pacific region, Latin America and the Middle East and replicate its success in Southeast Asia in other geographical regions and focus on penetrating new markets.

In this respect, it is interesting to note that Swiber Holdings Ltd is now flying the Mexican flag on five of its vessels in Mexico as reaffirmation of its long-term commitment to the country’s rapidly growing oil and gas industry.

Swiber Concorde, a derrick pipelay barge, was the first among the Swiber Group’s five vessels in Mexico to raise the Mexican flag at a ceremony on 18 August 2014 at the Port of Seybaplaya, Campeche State. The reflagging was

Yeo positions Vallianz for growth Vallianz Holdings, of which Raymond Kim Goh is a director and non-executive chairman, is led by Darren Yeo, the company’s CEO. The company was transformed in 2010, and is focussing on building itself as a marine support service company in the offshore oil and gas industry.

In the last three years, the company’s geographical presence has also grown rapidly, and the injection of additional equity by Saudi Arabian conglomerate Rawabi Holding, which owns approximately 25 per cent of Vallianz, has strengthened its shareholder base. Vallianz also has more than 20 vessels operating in the Middle East, and entered the Latin America market in May 2014 with the award of a contract that

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further boosted its orderbook.

The group’s financial performance has also grown significantly. In the first quarter of 2014 Vallianz reported a profit of US$5.5 million, a sharp rise from the US$1.3 million a year earlier.

Revenue jumped more than 10-fold over the same period, to US$27.7 million, with 89 per cent of its revenue from charter earnings.

Speaking to OSJ earlier this year, Mr Yeo noted that, in the last three years Vallianz has grown significantly, especially in the Middle East.

“Confident of the enormous growth potential of the offshore industry, Rawabi Holding invested US$35.2 million as equity. This made Rawabi our second strategic investor after Swiber Holdings,” he explained.

The companies in which Mr Goh is involved are rapidly expanding their international footprint an important milestone for Swiber Group – one that demonstrates its commitment to delivering a full suite of services for the ongoing development of Mexico’s oil and gas industry as the country rolls out its energy reforms.

Swiber hoisted the Mexican flag on the derrick pipelay barge Aziz on 26 August and on another three anchor-handling tug/supply vessels. All five vessels were first deployed in Mexico three years ago when Swiber landed its first contract win in Latin America, with the construction of a 77km submarine pipeline project in Mexico for Pemex. Swiber has since undertaken a number of offshore construction projects in the region.

Recent months have seen Vallianz Holdings make a number of important announcements, including the extension of its geographic footprint, the establishment of a marine base in Batam, Indonesia, the expansion and diversification of its fleet with two Ulstein-designed P128 platform supply vessels, the acquisition of OER Holdings Pte Ltd, a leading provider of manpower services to the offshore industry, and the signing of a three-year collaboration agreement with China Offshore Oil Engineering Co Ltd (COOEC), the largest offshore engineering and construction company in China, under which Vallianz will provide offshore support vessels and related equipment to support COOEC’s offshore construction activity and operations. OSJ Offshore Support Journal Industry Leaders I December 2014 I 11

8 2014 sees Swire newbuild programme in full swing

Neil Glenn

Swire Pacific Offshore has seen several vessels added to its fleet, including the first example of its new G-class platform supply vessels – the latest in a stream of newbuilds

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art of the highly diversified Swire group – many of whose core businesses can be found in the Asia-Pacific region where traditionally Swire’s operations have centred on Hong Kong and mainland China – Swire Pacific Offshore (SPO) is led by Neil Glenn, its chief executive officer (CEO). Prior to becoming managing director at SPO, Mr Glenn was the company’s commercial director. A graduate of Stanford University’s graduate school of business, he obtained a Bachelor of Arts in philosophy, politics and economics from Oxford University in the UK. Swire Pacific Offshore’s parent may have its operations broadly centred in the AsiaPacific region, but it has vessels operating in most of the major oil and gas provinces, including the North Sea, the Gulf of Mexico, West Africa and Australasia.

The first example of its G-class platform supply vessels (PSVs), Pacific Gannet, was formally named in Japan in September.

The naming ceremony was held at the Japan Marine United Corporation (JMU) Yokohama shipyard.

“The delivery of Pacific Gannet is another important milestone in SPO’s long-term partnership with JMU. This is the first of 10 G-class PSV vessels that SPO has commissioned JMU to build over the next three years. The addition of the G-class vessels will provide another industry-leading product within our fleet portfolio, helping us provide our global clients with outstanding service,” said Mr Glenn.

The G-class series is the latest addition to SPO’s fleet and was developed to meet the increase in demand for PSV vessels from its clients. Today, SPO operates a diverse fleet of 88 offshore support vessels, including anchorhandling tug/supply vessels, platform supply vessels, ice-breaking supply vessels, anchorhandling tugs, seismic survey vessels, windfarm installation vessels, accommodation barges and multi-purpose offshore vessels. As part of its fleet expansion plans, SPO aims to have a total 12 I Offshore Support Journal Industry Leaders I December 2014

Neil Glenn: “Pacific Gannet is the first of 10 G-class platform supply vessels” of 100 vessels by the end of 2015.

JMU has worked with SPO for a number of years, completing the construction of its fourvessel H-class 4,700 dwt PSV series in addition to the L-class series of 5,200 dwt PSVs. The most recent naming ceremony for one of its L-class vessels, Pacific Legacy, was held on 17 July 2014.

The G-class vessels (4,000 dwt) are suited for a wide range of supply duties in the offshore industry. Powered by a diesel-electric propulsion plant and equipped with contra-rotating azimuth thrusters with variable-frequency drives, they have a tank arrangement that allows for generous liquid capacities, with 969m3 of cargo fuel. The efficient hullform and bulbous bow shape also ensure optimal fuel efficiency. The bulbous bow design takes into consideration various operating speeds, draughts and sea states that offshore vessels typically operate in and is designed to

maximise its effectiveness over a wide range rather than a tuned design point.

The vessels are certified with DP2, SPS and Clean Class notations and have a high environmental regularity number (ERN) of (99, 99, 99, 97). The 810m2 clear deck space is designed to accommodate three lengths of drill pipe or casing with safe access for the deck crew and is able to facilitate a wide range of project-required machinery and equipment. The cabin outfitting is MLC 2006 compliant and can accommodate up to 48 people.

October saw the company welcomes its third L-class PSV, Pacific Legend, in a ceremony at Japan Marine United Corporation’s Maizuru Shipyard.

Well suited for supply duties in deepwater environments, the L-class vessels are designed to deliver reliable, economical and flexible solutions with their fuel-efficient modern design, comprising fuel-efficient propulsion pods, a fourengine diesel-electric power plant, large cargocarrying capacity and bulk cargo system. The hull is designed for a 7.5-year window between class-required mandatory dockings, and propulsion and tunnel thrusters have been selected for their ability to be changed out when the vessel is afloat. The main deck has a clear deck space of 912m2. The Cargomaxx bulk system allows for the carriage of dry and wet bulk cargoes in five separate tanks utilising a pressure vacuum system to load and upload the cargo and has a product-weighing system to accurately measure a product delivered as an individual parcel or as an aggregated amount over a period of time. The first L-class, Pacific Leader, was delivered in April 2014, and the second vessel, Pacific Legacy, was delivered in August 2014. The fourth vessel, Pacific Liberty, will be delivered in early 2015. OSJ

Pacific Leader is one of a number of newbuilds to have joined SPO’s fleet

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9

Jeff Weber

Weber leads MMA into a new, more international era Having acquired one of the best known vessel owner/builders in Southeast Asia, Mermaid Marine Australia is expanding into new markets and vessels that it anticipates will be of interest to charterers worldwide

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n October 2014, following the acquisition of all of the subsidiaries of Jaya Holdings Ltd in June 2014, Mermaid Marine Australia Ltd (MMA) announced plans to consolidate its Australian and international operations under a single new company name: MMA Offshore Ltd. The man leading that change, who led the acquisition of Jaya, is Jeff Weber, the company’s managing director.

Since the acquisition of Jaya, MMA has significantly expanded the scale of its global operations, in particular, in Southeast Asia. The consolidation of Mermaid Marine, Mermaid Marine Asia and Jaya under the single brand MMA Offshore will allow the company to more effectively build brand equity as a global offshore operator and, said Mr Weber, better represent the company’s shared vision and future direction.

The reorganisation was not quite a ‘done deal’ at the time this special supplement to OSJ went to press but was expected to be completed shortly. In order for MMA to change its name, section 157(1) of the Corporations Act 2001 (Cth) requires a special resolution at a general meeting of shareholders to approve the new name (a special resolution is a resolution that has been passed by at least 75 per cent of the votes cast by shareholders entitled to vote on the resolution). MMA was due to seek shareholder approval at its Annual General Meeting on 18 November 2014 to change its name.

Explaining the rationale for the name change, Mr Weber said the company wanted to consolidate the Mermaid Marine and Jaya operations under a single brand representative of the company’s shared vision and future direction. He explained that reference to ‘offshore’ denotes the fact that the company operates in the broader offshore oil and gas services industry and removal of the word ‘Australia’ highlights the fact that MMA is now a company operating in a broad range of geographies. The use of MMA in the name retains a legacy link to the company’s

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heritage, and following extensive research and risk assessment, the company concluded that trading under the name Mermaid Marine was not suitable due to potential brand confusion with another operator in international markets core to their business.

Subject to shareholder approval at the meeting on 18 November 2014, the change of name will take effect on the day that the Australian Securities and Investments Commission approves the change of name.

Notification must also be made to the ASX of the name change, and an announcement confirming this will also be made on that date.

In a recent presentation, Mr Weber highlighted the company’s strategy of moving further into the international support vessel market and into owning and operating higher specification vessels. In the full-year FY2014 results presentation, he noted that the company was seeking exposure to a range of new markets with sufficient scale to drive quality and profitability. The year had seen strong performance from the company’s vessel business offset by lower earnings from its Dampier Supply Base. It had secured a substantial long-term contract with INPEX that will contribute in FY2016 and was well positioned to take advantage of ongoing activity in Australia and establish itself as a significant

Jeff Weber: “MMA Offshore is becoming more international and focusing on high spec vessels”

player in the international market.

Mr Weber said the company’s strategy was one focused on a diverse fleet with the ability to move between key markets and moving to larger, more specialised vessels including anchorhandling tug/supply (AHTS) vessels, platform supply vessels, multipurpose units and subsea/ inspection, maintenance and repair and support vessels for remotely operated vehicles (ROVs).

The process of fleet optimisation is likely to see selected disposals focusing on smaller anchor-handling tugs, AHTS vessels and barges.

At the time the presentation was issued, the company had six new vessels under construction.

The company also recently secured a contract for the operation and management of the accommodation vessel Silja Europa. The contract will generate revenue of approximately A$105 million (US$92 million) over the 12-month term, and there is an option for the client to extend the contract. Silja Europa is a 202m cruise ferry that, until recently, has been operating as a leisure cruiser between Finland and Estonia. The vessel has been modified for the new contract and will accommodate up to 1,400 offshore workers, including locally hired crew. The deal was, Mr Weber said, “an example of the broad and innovative marine solutions that MMA can provide to its clients”.

Mr Weber began his career as a marine engineer with BHP Transport. He went on to complete a degree in this field in 1993, and in 1994, he graduated with a master’s in engineering and technology management from the University of Queensland. During his 19 years with BHP, he gained comprehensive project management experience and helped develop new business for BHP Transport in Australia and Southeast Asia. He also managed a major initiative with BHP’s steel division, reviewing its logistics arrangements and developing processes to improve services and reduce costs.

In 1998, Mr Weber joined Riverside Marine in Queensland and helped expand its operations Australia-wide. This included forming a joint venture company with Wijsmuller International Towage BV, RiverWijs, and negotiating with Woodside Petroleum to take over that company’s harbour towage operation in Dampier, Western Australia. Mr Weber is also a nonexecutive director of Maritime Super Pty Ltd, a superannuation fund dedicated to employees in the maritime industry. OSJ Offshore Support Journal Industry Leaders I December 2014 I 15

10 Bakke takes Havyard brand to the Børs

Geir Johan Bakke

Havyard CEO Geir Johann Bakke believes a wider range of shareholders will be good for the ongoing development of the design, equipment and shipbuilding group

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014 was a notable year for Geir Johan Bakke, president and CEO of Havyard Group in Norway. Havyard Group was listed on the Oslo Børs mid-year, after majority owner Havila Holding announced a plan for an IPO in February. 2014 also saw the first example of Havyard’s new Wave Edition vessels delivered to owner Fafnir Offshore.

Family-owned Havila Holding has a broad range of interests in the offshore supply sector and saw a need to optimise conditions for continued growth for Havyard Group. Its solution was to reduce the level of its ownership in the company, believing that Havyard has significant potential for growth but that the further development of the company required more than the family-owned company could contribute. The company’s decision did not constitute a loss of faith in Havyard Group – quite the opposite – and following the IPO and listing, Havila Holding still held approximately 63.5 per cent of the shares in Havyard Group ASA. Havyard Group president and CEO Geir Johan Bakke explained that Havyard has always had a long-term perspective and had long focused on building an international ship technology group.

“Havila Holding was a great owner that has supported and enabled us to develop from a local, Norwegian shipyard to an international brand supplying ship equipment, ship design and shipbuilding. As majority owner, they will continue to influence us, but we have also got many new stakeholders to relate to,” said Mr Bakke.

The latest vessel built by the company was named in Fosnavåg on 6 November, with the distinction of having Norway’s minister of finance Siv Jensen as sponsor. The vessel was built for Nigerian company Marine Platforms Ltd and is a Havyard 857 subsea vessel, but perhaps the most important vessel delivered this year by the company is Polarsyssel, a Havyard 832 L WE design for Fafnir Offshore 16 I Offshore Support Journal Industry Leaders I December 2014

that went straight into an assignment for the Governor of Svalbard on delivery.

The vessel is important, as the ‘WE’ suffix suggests, because it is the first example of the Havyard 832 L Wave Edition designs – a design concept in which Havyard has invested considerable time and resources.

The Wave Edition design concept is the result of in-depth research into the parameters of modern offshore vessels – research that continues to be conducted in order to refine models used in the design process.

Polarsyssel was the first WE design, but there are others to follow. In fact, a number of WEs have now been ordered. Polarsyssel is an ice-class platform supply vessel, and other examples of vessels that make use of the WE concept include two vessels for Esvagt, which are configured to provide support services for offshore windfarms.

Mr Bakke said Havyard Group took a “different approach” to designing the WE vessels and describes them as the result of a “first principles” approach and “prestudies” honing in on where a vessel will operate and on the conditions it can expect to encounter there. This kind of approach might seem to be a logical one to take, but

Havyard has evolved from a Norwegian shipyard to an international brand

the company believes it is rarely given the attention it deserves.

Havyard Group’s philosophy is to produce designs that are optimised for the conditions they will encounter most of the time but are units that will also work equally well in harsh conditions. For the WE design, the company “went back to basics” and obtained in-depth data about conditions in the North Sea. It regarded the way it went about designing the new-generation vessel as being almost as important as the design itself – it wanted to obtain all of the data it could about conditions in the area in which the vessel would operate in order to use it as a tool to develop the parameters of the new design.

Once it had done that, it ran lots of simulations and a lot of model tests at Marintek in Norway and at Maritime Research Institute Netherlands (Marin) in the Netherlands, comparing the performance of the existing version of the Havyard 832 with the WE version.

The company decided that the most sensible thing to do was to construct a ship that had optimal fuel economy in the conditions it would face most of the time. Not unreasonably, it believes that it is impossible to design a ship that functions at an optimal level in all conditions because there are so many parameters to take into consideration – different combinations of waves, wind, currents, speed and cargo, for example.

The design concept that came out of this process went through several iterations before being exhaustively model tested.

Havyard’s experience with an earlier design, Havila Charisma, also proved invaluable, as has a focus on full-scale tests of newbuildings as they come out of the yard. The Havyard 833 L vessel is currently working in the North Sea, and the feedback from the owner has been extremely positive.

The result of all of this work – the Havyard 832 WE – is a vessel in which fuel consumption, emissions and slamming have been minimised, with softer motions than its predecessor and enhanced comfort for those on board. The innovation doesn’t stop there, however. The next vessel that Havyard is building for Fafnir will also have an innovative battery-augmented propulsion system. OSJ www.osjonline.com

11 Expansion sees subsea firm enter new markets

Howard Woodcock

Led by Howard Woodcock, the company’s chief executive, Bibby Offshore is continuing to expand into new markets in Norway, the US and elsewhere

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014 has been a busy year for UK-based Bibby Offshore, the oil and gas services business, which is a subsidiary of Bibby Line Group. The company has expanded in the UK, Norway and the US and has won awards, and the group has won a number of important contracts and chartered-in new assets. Most recently, the company’s Houston-based division, Bibby Subsea, announced that it was investing in a custom-built office and making key appointments as a result of continued growth in the region.

The new premises, which include a warehouse and workshop area, will allow for further expansion in the US and will be complemented by a recruitment drive that should increase the number of Bibby Subsea staff in the region by more than 70.

The company has experienced significant client demand for its service offering, which

Bibby Offshore is expanding rapidly into new, international markets www.osjonline.com

continues to increase across North America.

Under chief executive Howard Woodcock, Bibby Offshore has grown significantly in the last decade and currently employs more than 1,450 people on shore and offshore worldwide, with offices in Aberdeen, Liverpool, Newcastle, Singapore, Trinidad, Houston and Norway. The company has an international fleet of subsea support vessels and a growing number of remotely operated vehicles (ROVs). In February 2014, Bibby Offshore won the Company of the Year award at the 2014 Subsea Expo Awards, an award that recognises excellence in overall company performance in the subsea sector as well as plans for future growth both within the UK and internationally.

Speaking to OSJ earlier this year, Mr Woodock noted that the subsea industry was going through a particularly busy period at the moment. This has created opportunities for companies such as Bibby Offshore. The ongoing expansion of the company in 2014 follows a highly successful year for Bibby Offshore in 2013.

Mr Woodcock explained that the company had positioned itself in a niche between the leading contractors such as Subsea 7 and Technip and smaller outfits that do not have Bibby Offshore’s international reach or access to equipment, vessels and personnel.

“Nowadays, we actually do most of what the bigger contractors do, with the exception of rigid pipelay,” Mr Woodcock told OSJ. Bibby Offshore has long been active in the dive support market and in inspection, maintenance and repair (IMR) and has added to its growing capability with the delivery of a flexlay system.

“A large part of what we are doing is still based in the North Sea,” Mr Woodcock said, “but increasingly, we are also working outside the North Sea – for instance, in Asia, where we have been established since 2009.”

The company opened an office in Houston in October of 2013, offering ROV services in the Gulf of Mexico market. As highlighted above, this division of Bibby Offshore has gone from strength to strength since its launch. As Mr Woodcock noted, the US-based division of the company can provide all of the services that you would expect of a high quality, fully integrated service provider.

Howard Woodcock has led the development of Bibby Offshore from a UK contractor to an international one Back in the UK, another division of the company, Bibby Remote Intervention Ltd (BRIL), is also in growth mode. At the end of 2013, it expanded its fleet by signing a charter agreement for the vessel Olympic Ares.

As also highlighted above, Bibby Offshore opened an office in Stavanger, Norway, earlier in 2014. The office is headed by Arne Lier, who is leading the recruitment of further key positions in order to increase the total headcount to approximately 30 during 2015. Mr Woodcock said the office in Norway was recognition of the size and opportunity of the offshore market in the North Sea and specifically in the Norwegian Continental Shelf. “Norway is a very important marketplace for us to operate in as the company looks to grow and expand our international presence,” he said.

In September 2014, Bibby Offshore was recognised at the 2014 Northern Star Business Awards, winning in the categories ‘Commitment to People Development’ and ‘Outstanding Contribution to the Energy Sector’. At the time of writing, the company had an international fleet of seven subsea support vessels and 16 ROVs, with another vessel due to join its fleet in 2015. OSJ Offshore Support Journal Industry Leaders I December 2014 I 17

12 Seow sees good margins in offshore vessel business A

Gerald Seow

s of 30 June 2014, PACC Offshore Services (Posh, which is owned by Malaysian billionaire Robert Kuok) operated a combined fleet of 110 vessels with another 19 vessels on order, comprising anchor-handling tug/supply vessels, anchorhandling tugs, platform supply vessels, accommodation vessels, harbour tugs and crane and deck barges.

Posh’s chief executive officer and executive director Kang Hoe Seow, also known as Gerald, has been its executive director since March 2006 and is responsible for leading the development and execution of Posh’s overall business strategy. He is also responsible for day-to-day management decisions and implementation of Posh’s long-term and short-term plans. Mr Seow also serves as CEO of DDW-PaxOcean Asia Pte Ltd, managing director of Posh Semco Pte Ltd and executive director of PACC Container Line Pte Ltd. Mr Seow has more than 40 years of experience in the shipping industry (including 15 years of sea-going experience and more than 20 years

Gerald Seow: “Posh will continue to optimise the mix of vessels in its fleet” 18 I Offshore Support Journal Industry Leaders I December 2014

Singapore-based Posh operates a range of vessels including harbour tugs and salvage vessels, but its CEO and executive director Gerald Seow sees OSVs as offering most potential going forward

of senior management experience).

For the first six months of 2014 ending 30 June, Posh had a net attributable profit of US$48.5 million, up about 1 per cent from US$48.2 million in the previous corresponding period.

Group revenue in the first half of the year fell 5 per cent to US$111.2 million due mainly to the injection of deepwater transportation and installation (T&I) operations into a joint venture in the second quarter of 2013. Consequently, revenue that was recorded as part of group revenue in the first half of 2013 was accounted as share of profit in the joint venture in the current financial year.

Gross profit was unchanged at US$33.4 million, while other operating income rose 52 per cent to US$42.4 million. The latter was due to higher gains on disposal of assets. Net attributable profit would have been higher if not for the negative impact from the group’s joint ventures in Mexico. The group’s share of profit from joint ventures (JVs) decreased from a profit of US$5.9 million to a loss of US$2.9 million, due mainly to a negative contribution of US$7.5 million from its Mexican JVs. All of the company’s business segments recorded higher gross profit margins in the first six months except for harbour services and emergency response (HSER), which saw a decline in gross profit margin from 47.6 per cent to 16.6 per cent. This is due mainly to the group establishing market share with its new harbour towage licence and lower salvage income.

Offshore supply vessels (OSVs) continued to be the group’s largest contributing segment.

Revenue from OSVs was up 25.7 per cent to US$62.1 million, while revenue for offshore accommodation rose 3.5 per cent to US$13.6 million. The T&I and HSER segments recorded lower revenue, down 41.3 per cent to US$24.5 million and down 14.0 per cent to US$11.0 million respectively.

Mr Seow said the first-half results showed

that the company’s earnings remained sound and the business remained resilient. “The double-digit growth in our OSV segment is encouraging and affirms our strategy of growing this business. We will continue to focus on maximising the utilisation of our vessels even as we optimise their mix and number within our fleet,” he explained.

Mr Seow said the outlook for the industry remained bright with overall growth in offshore capex expected to be driven by key markets, namely Africa, the Middle East and the Caspian region, and Australasia. Market analysts Infield has projected that the compound annual growth rate for these regions will be 27.2 per cent, 15.0 per cent and 14.9 per cent respectively, although those figures were produced some time before the recent steep decline in oil prices. “Our ability to generate earnings will allow us to expand and upgrade our fleet with more sophisticated technology and equipment,” Mr Seow said.

For the second quarter ended 30 June 2014, group net attributable profit was US$11.9 million, down 57 per cent from US$27.4 million in the previous corresponding quarter. The decline was due to lower operating income, higher expenses and a drop in share of joint ventures results. Revenue was US$58.3 million, down 4 per cent from US$60.6 million in the second quarter of 2013.

Commenting on the factors that will potentially affect the group, Posh noted that the deepwater expenditure sector is set to grow, driven primarily by Africa and the Americas.

Although rising costs have delayed some projects earlier this year, the company said it is expected that spending in deepwater activities will continue to grow but with a more targeted focus. Shallow-water activities remain robust with 80 per cent of offshore oil fields to be developed being in shallow waters.

Mr Seow said the group will continue to optimise the mix and number of vessels within its fleet by disposing of older and lower specification vessels and building new vessels with more sophisticated technology and equipment. As at 30 June 2014, the group’s construction in progress amounted to US$443.0 million, representing 19 vessels on order to be delivered over the next two years.

In April, the company undertook what was understood to be one of the largest initial public offerings in the region. OSJ www.osjonline.com

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13 Order intake proves Kleven’s strategy was the right one A Kjersti Kleven

s highlighted in the 2013 edition of OSJ Industry Leaders, compared with other Norwegian yards, Kleven Group has a very different approach to its future as a shipbuilder, and its results would seem to indicate the company is making the right decisions. Instead of complete vessel hulls, it only imports blocks, an approach that the company’s chairman, Kjersti Kleven, believes improves quality and allows quicker and easier installation of machinery.

However, the company has recently taken its strategy a step further and has ‘repatriated’ even more construction work, and at its Kleven Verft yard in Ulsteinvik, work is progressing on a major expansion of the building hall and the installation of robotised, automated welding lines. Ms Kleven and her management believe that this will permit even more steel work to be done there at lower cost and without the need to transport blocks from abroad.

As she once put it in a presentation, Norwegian shipyards’ strategy of outsourcing hulls to Eastern European countries 15–20 years ago was a high risk strategy – her preferred strategy has been “back-sourcing” construction of complex blocks for the hulls of the vessels it builds, and to do this, it needed to invest in automated production technology. This is a strategy, she said, that echoes the approach adopted by one of her forebears, Marius Kleven, who said, “We shall maintain the highest possible standards in our work, and we shall always be reliable.” Apart from quality, she said, the company’s approach has a number of other advantages, such as shorter delivery times, reduced costs, “greener” production and a “greener” end product.

Kleven’s two shipyards (it also owns the Myklebust Yard in Gursken) produced seven vessels in 2012 and kept up this kind of pace of construction in 2013. It has secured orders for a good number of vessels in 2014 and continues to benefit from Ms Kleven’s policy of investing for future competitiveness. The firm remains a family-owned, public company.

Ms Kleven trained as a sociologist and specialised in organisational studies. She worked as a researcher for the Norwegian Institute for Labour and Social Research, as a human resources manager at Rolls-Royce and as a project manager at the Nordvest Forum.

She grew up in shipbuilding and is the third www.osjonline.com

Kleven Verft has always had a very close working relationship with some of the best known Norwegian shipowners, and its strategy of building in house, rather than subcontracting hulls, has certainly paid off

generation of Klevens at the shipbuilding group.

She has been chairman of the board since 2002, and in 2005, she left her role as a project manager at the Nordvest Forum to devote more time to Kleven and the family’s investment company, John Kleven AS. Since 2002, she has also taken on more board positions at Telenor and Ekornes, and since May 2013, she has been chairman of the board of the Federation of Norwegian Industries, of which 2,550 Norwegian companies are members. The Kleven family still owns around 90 per cent of the shares in the company.

The company’s order intake in 2014 has been very impressive. The highlight was an order for six anchor-handling tug/supply (AHTS) vessels for Maersk Supply Service – a deal that includes options for up to four additional vessels. The 95m long vessels are of SALT 200 AHTS design and will be built at Kleven Verft and Myklebust Verft. The first six vessels are due to be delivered between the first quarter of 2016 and third quarter of 2017. If all options are declared, the last vessel in the series will be delivered early in 2018, giving the company a tremendous backlog and forward visibility. Apart from the two Kleven yards, a number of Norwegian equipment manufacturers and suppliers will be involved with the project, creating value widely in the Norwegian maritime community.

Kleven also recently signed a contract with diamond company De Beers Marine Namibia, part of De Beers Group, for the construction of a highly specialised vessel for deepwater mineral exploration. The first-of-its-kind vessel will be of MT 6022 design from Marin Teknikk, a design that is well proven in the offshore construction segment. The newbuild for De Beers will be tailored to a rather different role, with purpose-built equipment and features. Including this latest order, Kleven’s orderbook as of the end of October stood at 18 vessels and had a total value of

around NKr12 billion (US$1.7 billion).

Such is the group’s reputation that it is also winning orders from overseas, including a recent shipbuilding contract with Malaysiabased joint venture company IES Pioneer Ltd for a Marin Teknikk MT 6015 multipurpose platform supply vessel. The contract was Kleven’s first from a client in Southeast Asia, a fact that Ms Kleven and her colleagues believe shows that the yards are competitive worldwide “based on our quality, punctuality and price”. Other newbuild contracts were secured during 2014 from leading owners such as Olympic Shipping, Rem Offshore and Volstad Maritime.

The Kleven Group’s most recent order is not a newbuild but an extensive upgrade package for a vessel and will see Myklebust Verft undertake extensive modifications to the vessel Aker Wayfarer to turn the ship into a deepwater subsea support vessel. The contract was placed by Ocean Yield, and the vessel is on a long-term charter with AKOFS Offshore. The modifications that Myklebust Verft undertakes will allow the vessel to install and retrieve subsea trees and modules, including subsea structures and manifolds. OSJ

Kjersti Kleven’s back-sourcing strategy and investment in new technology continues to pay off Offshore Support Journal Industry Leaders I December 2014 I 21

14 Chouest invests in Brazilian base G ary Chouest hardly needs an introduction to OSJ’s readers or anyone in the offshore vessel industry. As president and chief executive officer of the Edison Chouest Offshore family of companies in Galliano, Louisiana, Gary Chouest runs a conglomerate that builds, owns and operates offshore vessels and employs many thousands of people worldwide.

Edison Chouest Offshore evolved from a two-vessel shrimping operation founded by Edison Chouest Sr (Gary Chouest’s father) in the 1950s to one of the premier owners and operators of offshore vessels in the world.

Mr Chouest joined the company full-time at age 19 and has since worked in all capacities, starting out as a deckhand and working his way up to captain.

He was also instrumental in the formation of North American Shipbuilding in 1974. The shipyard was founded in response to clients’ demands for higher quality and more specialised vessels. Located in Larose, Louisiana, the facility builds only for Chouest-affiliated companies.

Following the success of North American Shipbuilding, Mr Chouest opened up five more shipyards: North American Fabricators (Houma, Louisiana), Gulf Ship (Gulfport, Mississippi), NavShip (Brazil), Tampa Ship (Tampa, Florida) and, most recently, LA Ship in Houma, Louisiana.

In 1996, Mr Chouest entered into a new business with the formation of C-Port. C-Port stands as the hub of Port Fourchon, the Gulf of Mexico’s premier deepwater port. Purposedesigned to reduce port turnaround time, the two C-Port terminals comprise 18 specialised slips

B-Port will be able to support 15 vessels simultaneously

Gary Chouest

2015 will see companies owned by offshore vessel billionaire Gary Chouest open a new logistics facility in Brazil that is modelled on a similar facility in Port Fourchon

configured to safely and efficiently transfer cargo and provide a wide range of support services to accommodate the largest of deepwater offshore vessels. Mr Chouest was also instrumental in the formation of Marine Technologies, which provides customers with a wide range of dynamic positioning products and complete vessel control systems. In 2007, he founded C-Innovation, which provides a wide range of remotely operated vehicle services, including subsea construction, field development, engineering and project management.

In September 2014, Mr Chouest’s company provided an update on its plans for B-Port in Brazil, which is modelled after innovative Gulf of Mexico terminal C-Port. The company confirmed that construction had begun on the massive logistics support base and repair yard for its own vessels at the Port of Açu in São João da Barra in northern Rio de Janeiro, Brazil.

Earlier in 2014, Mr Chouest’s company signed an agreement with Prumo Logistica for the lease for the port property, amending their agreement to include a total area of 574,200m2 of land if all future contract options are exercised. Construction work had been underway for several months at the time that the announcement was made, with the expected start of operations due to take

Gary Chouest’s latest venture sees his company building a large supply base for offshore vessels in Brazil place during the first half of 2015. The facility is located near the growing Campos Basin.

Inside and out, B-Port can support a total of 15 vessels simultaneously.

The new facility will have a total of 10 covered slips, nine of which will be 25.2m wide, each with two 25-tonne overhead cranes, and one – a heavy-lift slip – will be 38.4m wide with two 100-tonne overhead cranes. In addition to the covered slips, the straight docks provide more than 525m, which can easily accommodate five large platform supply vessels (PSVs).

Located in the south breakwater of Açu Port’s Terminal 2, B-Port will also have a floating drydock with a lifting capacity of 13,700 tonnes.

2014 also saw Edison Chouest Offshore acquire the remaining assets of Bee Mar LLC, an acquisition that is understood to consist of seven vessels: three 270 class and four 300 class PSVs. The vessels are currently being built at Bollinger Marine Fabricators and are in different stages of construction.

This last year also saw members of the Chouest family acquire Westport Shipyard, the largest yacht builder in North America.

Celebrating 50 years of business in 2014, Westport maintains three locations in Washington state as well as a marina and sales office in Fort Lauderdale, Florida, and employs more than 400 people. Westport has completed more than 120 yachts since 2000. One of those customers was Gary Chouest. OSJ www.osjonline.com

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Offshore Support Journal Industry Leaders I December 2014 I 23

15 Well intervention specialist moves into top-hole drilling O

Håvard Ulstein

ne of the best known Norwegian companies owning and operating offshore support vessels, Island Offshore group has 27 vessels ranging from platform supply vessels (PSVs) to anchor handlers to well stimulation, subsea and light well intervention units and has a leading position in a number of market segments. It has a newbuilding programme that includes an additional seven vessels to be delivered in 2014, 2015 and 2016. In addition to this programme, the company also has a top-hole drilling vessel on order at Kawasaki Heavy Industries in Japan for delivery in March 2017.

The company’s net working capital was strengthened in April 2014 following completion of an NKr200 million (US$29.4 million) tap bond issue, the proceeds of which will be used to finance the company’s investment programme and strengthen the over¬all financial position of the group.

Details of the company’s third quarter were not available at the time of writing, but in the second quarter, it secured additional term contracts for its PSV fleet, adding to an already high level of contract coverage and order backlog. The company said it expected the spot market for PSVs and anchor-handling tug/supply (AHTS) vessels to remain volatile

Håvard Ulstein’s company Island Offshore has specialised in light well intervention and is moving into top-hole drilling 24 I Offshore Support Journal Industry Leaders I December 2014

Håvard Ulstein took his company Island Offshore into the light well intervention market soon after it was founded – now it is moving into another new market segment

in coming quarters (a statement issued before the recent steep fall in the oil price). At the time that the second-quarter results were published, it was focusing on securing longterm commitments for vessels to be delivered and vessels completing contracts in 2014.

At the beginning of the year, Island Offshore and partner Baker Hughes entered a back-toback agreement with VTT Maritime, which had been awarded a contract for core sampling for what is to be the world’s longest and deepest submerged road tunnel, Rogfast. Together with end client Statens Vegvesen, it was decided that Island Offshore’s new coiled tubing drilling method should be applied on the project, and Island Offshore subsequently began using the technology in Boknafjorden, north of Stavanger, utilising a monohull vessel.

The coiled tubing drilling method is expected to have a range of applications in the offshore oil and gas industry and can be used to construct high angles in a well over a very short distance (up to 15 degrees over a 30m drilled hole). In order to avoid needing a full marine riser spread, Island Offshore has developed a subsea injector. A second injector is also installed on board the vessel in order to keep the coiled tubing between the subsea injector and the vessel in tension. The work was undertaken by Island Performer, with a total of approximately 440m of core samples due to be taken in order to obtain detailed information about the geological conditions on the tunnel route, with water depths ranging from 200– 300m. The project provided Island Offshore with a unique opportunity to qualify and test the technology, which it believes can play a major role in the kind of light well intervention services it first offered from its vessel Island Frontier and in which it has specialised for a number of years. Other potential applications include pumping/acidising, plugging and abandonment and advanced core sampling.

Towards the end of 2014, the company confirmed that it had ordered an offshore

support vessel to be built at Vard Brevik. The vessel is due for delivery in early 2016.

In May 2014, Island Offshore signed a contract with the same yard for a large installation vessel designed by Rolls-Royce. This will be a multipurpose vessel with a wide range of applications. The new vessel will be named Island Victory and will be equipped with a 250tonne offshore crane, two remotely operated vehicles and a large moonpool, enabling it to undertake subsea installation work. With a bollard pull in excess of 400 tonnes, the vessel can also be used for heavy anchor handling. A breadth of about 25m and a length of about 123m give Island Victory a deck area of 1,100m2.

The vessel will thus be able to load whole anchor sets on deck, which will make it ideal for pre-laying anchors.

The company is led by a scion of the famous Ulstein family, Håvard Ulstein, who formed Island Offshore following the sale of the family’s ship equipment business, Ulstein Group, to Vickers (which was itself soon acquired by Rolls-Royce Marine). Ulstein, established in 1917, manufactured a variety of marine products including propellers, azimuth units, tunnel thrusters, rudders, steering gear, deck machinery, engines and automation systems.

Mr Ulstein quickly used his experience in shipbuilding and shipowning to good effect and built up what is today one of the most sophisticated offshore vessel operations anywhere. As highlighted above, the company operates PSVs and AHTS vessels, as do many other companies, but Island Offshore has distinguished itself from its competitors by developing a niche in the evolving market for monohull well intervention vessels and, more recently, top-hole drilling units such as the massive UT 777 CD vessel it has on order in Japan.

In addition to top-hole drilling the UT 777 CD will be able to undertake a variety of subsea tasks, including construction and inspection, maintenance and repair work in deep waters. It can also be adapted to undertake light well intervention. The design was developed

by Rolls-Royce Marine and will be classed as a mobile offshore unit. It will have an enclosed module-handling tower to ensure a safe and comfortable working environment for the crew while operating in harsh and cold conditions. OSJ www.osjonline.com

16 Wong looks to EPIC projects and Mexico for future growth Francis Wong

Francis Wong, Swiber Holding’s CEO, anticipates growth from EPIC and shallow-water projects and is taking the company further into the Mexican market

M

r Wong joined Swiber in 2005 and was appointed to the company’s board in November 2005. As Swiber’s group CEO and president, Mr Wong is responsible for Swiber’s corporate and strategic direction and for steering its operations. With a strong financial background, Mr Wong has put in place financial controls for the group to support its rapid expansion regionally and globally and into new business operations. Active in his professional field, Mr Wong is a fellow member of the Institute of Chartered Secretaries and Administrators and a fellow certified practising accountant of CPA Australia. He is also a chartered accountant certified by the Malaysian Institute of Accountants and the New Zealand Institute of Chartered Accountants. Mr Wong gained a Bachelor of Commerce degree from Australia’s Deakin University in 1988 and a Master of Commerce in Accounting from the University of Auckland in 1990.

In a statement issued in mid-November, Swiber Holdings Ltd reported a net profit of US$40.1 million for the nine months ended 30 September 2014. This was a decline of 22.8 per cent from US$51.9 million in the same period in 2013.

Group revenue in the first nine months of 2014 contracted by 36.3 per cent to US$526.2 million compared to US$826.0 million in 2013, mainly due to lower revenue recognition from ongoing projects, a number of which were substantially completed in FY13. In addition, the activity for the company’s new engineering, procurement, installation and construction (EPIC) projects had not commenced in the three months ended 30 September 2014.

As a result of lower revenue, the group’s gross profit margin narrowed to 5.1 per cent, from 15.3 per cent previously, due to underabsorption of fixed costs. However, other operating income surged to US$114.6 million, from US$13.6 million in the same period in 2013, driven mainly by the gain from the disposal of a group of subsidiaries. In line with the streamlining of its operations, the group’s administrative expenses were also pared to US$45.0 www.osjonline.com

million in 2014 from US$49.9 million previously.

Other operating expenses and finance expenses increased to US$27.4 million and US$47.2 million respectively in the first nine months of 2014, due to higher net fair value loss on financial instruments and higher borrowings and issuance of debt securities. On the other hand, the group recognised a larger share of profit of associates and joint ventures amounting to US$29.1 million during the period under review.

The impact of lower revenue, coupled with higher other operating and finance expenses, was partially buffered by stronger other operating income, reduced administrative expenses and higher share of profit of associates and joint ventures. As a result, Swiber’s earnings per share eased to US$0.05 in the nine-month period from US$0.052 in the same period in 2013.

For the third quarter of 2014, the group reported a net loss of US$22.9 million compared to a net profit of US$14.5 million in the same quarter in 2013. This was attributable primarily to a 60.9 per cent reduction in revenue to US$107.3 million, which caused gross profit to fall to US$847,000 from US$39.0 million the third quarter of 2013. The top line in the third quarter of 2014 was lower as revenue from ongoing projects was substantially recognised during FY13.

Mr Wong explained that new projects that Swiber clinched earlier this year were due to start from the final quarter of the year. “At the same time, we have been actively bidding for new orders in our target markets, particularly in Southeast Asia, which is our primary revenue driver, as well as in South Asia, Latin America and West Africa,” he explained.

“As an affirmation of our commitment to the development of Mexico’s oil and gas industry, Swiber is flying the Mexican flag on five vessels.

This further establishes Swiber as a local key player as we continue to step up our level of local support to our clients and potential customers operating in Mexico.”

Addressing the market as a whole, Mr Wong added, “Whilst global oil prices have experienced a decline recently, we believe shallow-water field development work will continue to take place and generate demand for EPIC services.

Swiber’s business model focuses mainly on the execution of EPIC projects for shallow-water exploration and production (E&P) activities.

Having built a sound reputation in this domain,

Francis Wong: “as part of our commitment to Mexico’s oil and gas industry, Swiber is flying the Mexican flag on five vessels” we will continue to seize opportunities in growth markets across the Asia Pacific, Latin America and West Africa.”

As at 12 November 2014, the group’s orderbook stood at approximately US$535 million. Barring unforeseen circumstances, it anticipates that the orderbook will grow as the group continues to actively bid for new projects in its target markets.

Going forward, Mr Wong said Swiber will also continue to place a strong emphasis on enhancing its operational performance and maximising cost efficiencies. As part of its reorganisation efforts to streamline the group’s business operations, Swiber recently announced the proposed sale of its 100 per cent interest in Newcruz International Pte Ltd (NIPL) and its 49 per cent stake in PTSB Holdings Pte Ltd for US$36.1 million to Vallianz Holdings Ltd. The group presently holds a 23.36 per cent stake in Vallianz, which is a fast-growing provider of offshore support vessels and integrated marine solutions to the oil and gas industry. Although NIPL and PTSB are complementary to Swiber’s EPIC business, their businesses do not form part of the group’s core activities. As such, the proposed sale is expected to help to lower the group’s overall cost structure and sharpen its operational focus. As a major shareholder of Vallianz, the group will also continue to benefit from the potential synergies that could be derived from this reorganisation. OSJ Offshore Support Journal Industry Leaders I December 2014 I 25

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Jeff Platt

Tidewater can weather the downturn says Platt Jeff Platt, Tidewater’s president and CEO, says the sharp fall in the oil price could affect the company but believes it is well placed to deal with the fallout from a downturn

T

idewater effectively created what is known in the US as the ‘workboat industry’ with the 1956 launch of Ebb Tide, the world’s first offshore vessel tailor-made to support the offshore oil and gas industry.

Today, Tidewater has the largest fleet of offshore support vessels in the industry and is the oldest and most experienced provider of the marine support services for this vital industry.

Nowadays, the company has a global footprint, with over 90 per cent of its fleet working internationally in more than 60 countries.

Jeff Platt became president, chief executive officer and a director at Tidewater in 2012 and is a graduate of the University of Pittsburgh with a Bachelor of Science degree in electrical engineering. He also completed the Harvard advanced management programme in 2006.

Following a 15-year career with Schlumberger Well Services and Rollins Environmental Services, Mr Platt joined Tidewater in 1996 as general manager for its activities in Brazil.

In September 2001, he assumed responsibility for Tidewater’s joint ventures and business in Mexico, and in November 2001, he was promoted to vice president with responsibility for all of the company’s business activities in South America, Mexico and the Caribbean. In March 2004, he was promoted to senior vice president with responsibility for operations in the Americas, along with the Middle East and India.

In July 2006, he was promoted to executive vice president responsible for overseeing the dayto-day marine operations of the company, both domestically and internationally, and in March 2010, he was promoted to chief operating officer.

In our 2013 Industry Leaders supplement, Mr Platt noted that Tidewater had a “solid balance sheet” allowing it to continue to act on available opportunities, such as the acquisition of Troms Offshore in Norway and the formation of the company’s new subsea business. Its top 10 customers in the 2013 fiscal year included four ‘super majors’, two national oil companies and three independent oil companies and accounted

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for 58 per cent of the company’s revenues. In the latest quarter for which results are available, the company said that only around 9 per cent of vessel revenue was generated in US waters; however, 15 other US-flagged vessels were working in the international market.

Writing in the company’s latest annual report, published in August 2014, Mr Platt said the fiscal 2014 offshore market had exhibited steadily improving activity that contributed to a 15 per cent increase in vessel revenues. He explained that Tidewater’s more than a decadelong strategy of replacing and enhancing its ageing fleet was reaping rewards and that the company’s ‘new’ fleet of vessels had grown to 245 vessels by the end of that fiscal year, with 30 additional units under construction. Utilisation of these vessels averaged over 83 per cent during the year, and the average day rate of this ‘new’ vessel fleet was approximately US$18,275 – an 11 per cent improvement from the prior fiscal year.

Describing the company’s second-quarter results for the 2015 fiscal year (for the period ended 30 September 2014), he said the company had earnings of US$60.9 million, or US$1.22 per common share, on revenues of US$397.5 million.

For the same quarter last year, net earnings were US$54.2 million, or US$1.09 per common share, on revenues of US$367.9 million. The immediately preceding quarter ended 30 June 2014 had net earnings of US$43.7 million, or US$0.88 per common share, on revenues of US$385.7 million.

In a conference call, Mr Platt said the results reflected what he described as a “solid” operating quarter. The company generated revenues at the high end of its prior guidance and operating expenses at the lower end. “As usual, there were a mix of positives and negatives during the quarter that impacted our bottom line, but on balance, our revenue gain was driven principally by a roughly US$700 a day increase in the global fleet average day rate from the rate earned in the June quarter. That increase came without significant help from vessel mobilisation and demobilisation revenues.

“Overall,” he explained, “our fleet utilisation rate declined marginally, although our global deepwater fleet enjoyed a strong 87 per cent utilisation rate, partially offset by a small drop on our towing-supply/supply fleet to around 76 per cent.

“Our operational earnings performance was

Jeff Platt: “offshore industry is entering a period of uncertainty” driven primarily by the day rate gain, coupled with reduced expenses sequentially, including reduction in repair and maintenance expense and G&A costs.

“In light of the turbulent conditions in the oil market today and the uncertain outlook for the offshore business due to possible reductions and expiration of production activity in certain geographic markets, we are pleased with this quarter’s results,” he concluded. “They reflect the hard work and dedication of our 9,000-plus employees worldwide. Equally as important, these results confirm the strength of the Tidewater franchise, something which shouldn't be overlooked as we enter a period of business uncertainty.”

Mr Platt agreed that profit margins could be squeezed in the near term because of what he described as “timing issues” with new vessel construction but not because Tidewater’s clients are scaling back investment in reaction to the sharp fall in the oil price. Currently, he said, Tidewater plans to add around 30 vessels to its fleet by 2016.

Mr Platt said that, in keeping with other offshore vessel operators, Tidewater would not be immune to the effects of the oil price decline or projects being pushed to the right or cancelled, but he believed that the company was in a strong position to weather a downturn if one occurs. OSJ Offshore Support Journal Industry Leaders I December 2014 I 27

18 Kneen invests in own stock as market stalls

Quintin Kneen

With the oil price falling, Quintin Kneen, GulfMark’s president and CEO, says he believes the company’s share price is significantly undervalued, and he expects it to rebound when the market improves

W

hen Quintin Kneen became president and CEO of GulfMark Offshore in June 2013, the oil price was high and had been for some time, and companies such as GulfMark confidently anticipated an excellent year in 2014 as rigs arrived in the Gulf of Mexico. The oil price remained high until its recent steep decline earlier this year, but the market in the Gulf of Mexico never really took off as expected. With GulfMark’s existing newbuild programme approaching completion, Mr Kneen has restated his focus on long-term value creation for the company’s stockholders and, rather than another newbuild programme, has turned his attention to acquiring the company’s own stock, believing it to be one of the best investments it can make in the current climate.

Mr Kneen joined GulfMark in June 2008 as vice president finance and was named senior vice president finance and administration in December 2008. He was subsequently appointed as the company’s executive vice president and chief financial officer in June 2009 where he worked until his appointment as CEO. Previously, he was vice president finance and investor relations for Grant Prideco, having served in executive finance positions at Grant Prideco since June 2003.

Prior to joining Grant Prideco, Mr Kneen held executive finance positions at Azurix Corp and was an audit manager with the Houston office of Price Waterhouse LLP. He holds an MBA from Rice University and a BBA in accounting from Texas A&M University and is a certified public accountant and a chartered financial analyst.

Mr Kneen took over the reins at one of the world’s leading offshore vessel companies, with operations in the Gulf of Mexico, the North Sea and elsewhere – one that has invested significantly in high specification 28 I Offshore Support Journal Industry Leaders I December 2014

newbuilding and in upgrades to existing vessels. Its rationale for doing so is that there are a significant number of new-generation rigs on order and a need for more activity for support vessels, along with regulatory changes that are driving demand for higher specification vessels and for vessels capable of operating in deeper waters and harsher environments. A new generation of vessels is also required with increased cargo-carrying capacity and flexibility and reduced impact on the environment.

Announcing results for the three-month and nine-month periods that ended on 30 September 2014, Mr Kneen said revenue for the quarter was US$128.7 million and net income was US$24.3 million, or US$0.92 per diluted share. Included in the quarterly results were three special items that totalled US$0.17 per diluted share. Earnings before these special items were US$0.75 per diluted share.

Mr Kneen said the global offshore vessel market had flattened in the third quarter as fewer drilling rigs were utilised than anticipated and as oil-producing companies continued their focus on reducing costs.

These factors resulted in what he described as generally favourable but slower than anticipated markets in the Gulf of Mexico and the North Sea. In contrast, he said, the Southeast Asia market “remained challenged” as national oil companies in the region were slow to award new contracts and too many offshore vessels were being introduced into the region.

Mr Kneen said GulfMark had taken steps to improve its financial flexibility, upgrade its fleet and enhance the return for its stockholders and had taken advantage of a favourable bank market to renegotiate its main revolving credit facility. As a result, GulfMark doubled its domestic borrowing capacity whilst reducing overall borrowing costs.

“Our total vessel count has remained stable, but by the end of this year, we will have delivered three new vessels, purchased one 2012-built vessel and had four of our existing vessels enhanced through our vessel stretch programme,” he explained. “So far this year, we have sold two older vessels, and we have contracts to sell two more vessels before year end. As a result, even though our total vessel count is not increasing, the quality of

Quintin Kneen sees repurchasing GulfMark’s stock as a good option in the current offshore market the vessels in our fleet is rising, as confirmed by our increasing average day rate.

“As of today, we have less than US$90 million of payments remaining on the four vessels in our newbuild programme. We continue to seek opportunities to further highgrade the fleet, but believe that one of the best investments for us today is the repurchase of our own stock. Although we pride ourselves on our excellence in operating vessels, the cyclical nature of our industry presents us opportunities to maximise stockholder value through the repurchase of our own stock. We have been making open market purchases of our stock and continue to do so.”

Since 30 June, GulfMark has repurchased 758,686 shares at an average price of US$32.16 per share. In addition, it is committed to its current dividend policy, and the current market sentiment and outlook does not change this commitment.

The company has revised its annual revenue guidance to US$490–495 million for the full 2014 year and to be between US$110 and US$115 million for the fourth quarter.

“Although momentum in the market seems to be slowing, we remain committed to our stockholders, customers and employees,” Mr Kneen concluded. OSJ www.osjonline.com

19 Ceona CEO sees Surf vision coming to fruition 2

Steve Preston

014 has seen Ceona Offshore reach a number of important milestones as the company transitions from life as a start-up to an established player in the subsea umbilicals, risers and flowlines (Surf) segment.

With an extensive capex programme, the foremost milestone was the completion earlier this year of a US$290 million secured debt facility to finance its two newbuild projects – Ceona Amazon and the vertical pipelay system (VLS) for Polar Onyx. The new debt facility will be used for the completion of Ceona Amazon, a specialist pipelay and subsea construction vessel, and the VLS, which is now installed on Polar Onyx, a vessel that Ceona has chartered on a long-term basis. Performance bonds available under the facility will provide more flexibility for Ceona to execute on its comprehensive growth strategy in the coming years.

The facility is underwritten by ABN Amro Bank and KfW IPEX-Bank and is backed by Atradius Dutch State Business, Euler Hermes and Kuke as export credit insurers. The transaction is in addition to existing term loan facilities Ceona has in place for its owned vessels Blue Giant and Ceona Giant II. Speaking at the time that the facility was agreed, Ceona CEO Steve Preston said the debt facility perfectly complemented the company’s existing debt arrangements and the strong equity commitment from Ceona’s main shareholder, Goldman Sachs Capital Partners, and brought Ceona’s capital commitment to over US$900 million to support future growth and vessel development strategies.

Mr Preston joined Ceona in March 2012 from Heerema Marine Contractors where he was executive vice president, commercial and technology, for 12 years – a role that saw him responsible for the group’s worldwide commercial and business development activities. He brought to the start-up company more than 35 years of experience, with a strong background in commercial negotiations, engineering and project management. When joining Ceona, he drew up the strategy that would guide development of the company and launched the project to design and build Ceona Amazon.

In September, the company announced that Ceona Amazon – which will be Ceona Offshore’s first fully owned field development vessel – had been floated out at Bremerhaven, Germany.

30 I Offshore Support Journal Industry Leaders I December 2014

Ceona Offshore CEO Steve Preston drafted the strategy that guided the development of the company from a start-up to a fullyfledged Surf contractor

The vessel had been towed out from Crist yard, Poland, last April and reached its latest major construction milestone at the Lloyd Werft yard in Bremerhaven, where it was set for completion at the end of November.

For Ceona, Ceona Amazon represents the next step in pipelay and heavy subsea construction.

The 199m deepwater field development asset has a product-carrying capacity of 5,000 tonnes of flexible or 8,500 tonnes of rigid pipe stored on and below her 4,600m2 deck.

This is complemented by twin 400-tonne active heave compensated (AHC) cranes capable of working in tandem lifting mode and innovative on-vessel pipeline fabrication capabilities. Once work in Germany has been completed, Ceona Amazon will move to the Huisman yard in Schiedam, The Netherlands for installation of a 570-tonne pipelay tower and the two 400-tonne cranes before entering into operation early in 2015.

The company said that progress at Huisman had also been very satisfactory, with both 400-tonne cranes having completed factory acceptance trials and the 570-tonne pipelay tower near completion some three months ahead of schedule.

In May of this year, the growing Surf contractor was awarded a contract for work in the Oyo oilfield offshore Nigeria. The contract was awarded by Camac Energy Inc. The Oyo phase one expansion project consists of the installation and recovery of umbilical and flexible pipe as well as light subsea construction in a water depth of up to 500m. Project management will be performed by Ceona, while local offshore support and engineering work will be delivered in partnership with their local partner, Marine Platforms Ltd in Lagos, Nigeria.

Offshore work got underway this summer using a chartered-in vessel, Normand Pacific. Ceona has chartered the vessel from Solstad Offshore since April 2014 for one year with an option of extension. Ceona mobilised Normand Pacific with a new, high specification 75-tonne vertical lay

Steve Preston has seen Ceona grow rapidly to the point that it is ready to take delivery of its purpose-built vessel system, a reel drive system of 400-tonne reels and two work-class remotely operated vehicles.

The vessel’s first contract as part of the Ceona fleet was working on the Clipper contingency umbilical installation project for Bennu Oil and Gas in the Gulf of Mexico.

May also saw Ceona complete final outfitting of Polar Onyx and Normand Pacific to begin projects in Brazil and the Gulf of Mexico respectively.

Mr Preston noted that the successful delivery of the two flexlay and subsea construction vessels marks the conclusion of the first phase of Ceona’s fleet development programme.

Polar Onyx was designed for operations in harsh conditions and deep water and is built to the highest standard in dynamic positioning, DP3 (Operations +) with a 250-tonne AHC offshore crane. Following on-schedule completion, Polar Onyx sailed for Brazil where it mobilised and entered service as a pipelay support vessel (PLSV) for Petrobras. Ceona is managing the PLSV on the vessel’s maiden contract, in partnership with Odebrecht Oil & Gas (OOG), having chartered the vessel from GC Rieber Shipping for a fixed period of five years, with options for up to five additional years.

With work underway in both Brazil and the Gulf of Mexico, the company plans to continue to build up its subsea capability with the ongoing construction of Ceona Amazon. OSJ www.osjonline.com

20

Diederik de Boer

Cautious expansion pays off for de Boer L

ead by CEO Diederik de Boer, Singaporebased Miclyn Express Offshore’s latest financial presentation painted a picture of continued growth in the company’s core segments, including offshore support vessels (OSVs) and crewboats that continues to justify the company’s capex strategy.

According to that presentation, the company’s OSVs enjoyed a utilisation level of around 87 per cent in the first half of FY14 and its fleet continued to grow in size, with four externally constructed 7,150 bhp anchorhandling tug/supply (AHTS) vessels due to be delivered in FY15, two of which will be deployed in the company’s joint venture in Thailand.

A market leader in the crewboat segment, the first half of the company’s FY14 saw a high level of utilisation and margin improvement on the back of what the company described as “significant demand in all core markets” – a trend that is driving significant investment in additional units as part of its fleet renewal strategy.

Addressing regional developments, Mr de Boer’s company said activity in Australia was picking up and the Middle East business was expanding, with Saudi Arabia, Qatar and Abu Dhabi continuing to be a focus. Southeast Asia remains an important market for Miclyn Express Offshore, particularly Malaysia, as do Brunei, Thailand, Indonesia, Vietnam and Myanmar.

Mr de Boer is responsible for the overall execution of Miclyn Express Offshore’s corporate plans and business strategies. He has 30 years’ experience in the maritime industry and has worked for Miclyn Express Offshore group and its predecessor companies since 1991, when he was appointed general manager of CW Marine Services (Singapore) and regional director of SvitzerWijsmuller Group. From 1979 to 1990, he worked for SMIT, his last position there being marketing manager for the Far East offshore vessel fleet. He has a bachelor’s degree in law from Erasmus University Rotterdam and an MBA from the Graduate Institute of Management in Delft.

Writing in the latest issue of the company’s in-house journal, Mr de Boer said Miclyn Express Offshore had recently completed a strategic review, the result of which is a plan for the company’s development for the next three years with what he called “regional, www.osjonline.com

With a strong cash position, the ability to service a new debt package and fund growth, Miclyn Express Offshore is well placed to continue to expand

fleet and organisational focus within the parameters of an acceptable risk profile”.

Mr de Boer said this has resulted in a capex spending plan across various segments, which includes crewboats, selected OSV types and mid-sized barges. Some of these are against firm contracts or potential strategic opportunities. The total spend will amount to some US$200 million over three years, which, he said, would drive growth of the company in terms of financial performance.

“We are at the same time disposing of less strategically relevant assets, such as some of the straight towing tugs, older crewboats and notably recently the Batam shipyard,” he explained. “We have sold the facility to neighbours, ASL Marine, but will continue to use it as tenants for our fleet warehouse, training centre as well as repair and conversion requirements for our ASEAN-based fleet.”

As part of the strategy exercise, the company has also embarked on an HR review that will examine the company’s current practices and tune these to enable it to attract and retain what Mr de Boer described as “the best talent”.

Mr de Boer explained that new operating entities in Malaysia and Brunei are being built to support the substantial volume of business growth the company has attained in these regions following multivessel, longterm contract wins.

“We continue to take delivery of new crewboats from shipbuilders such as the Penguin yard in Singapore/Batam, and these boats generally go straight into new contracts won in a robust market,” said Mr de Boer.

“Our four 90-tonne bollard pull AHTS vessels are being bid on various opportunities.

“All our business units across all our operating regions continue to perform well.

The Middle East is experiencing an expansion in new contract wins, particularly in Qatar and Saudi. In ASEAN, we hope to see further growth in Thailand, Malaysia, Brunei and Indonesia.”

More recently, the company announced that it had been awarded three contracts, each of four years plus three one-year extension options, to provide AHTS services to Chevron in the Gulf of Thailand through its joint venture Uniwise Offshore. The contracted vessels include two of the 7,150 bhp, 90-tonne bollard pull AHTS newbuilds that were delivered to the company by Chinese yards in the third quarter of 2014.

The contract is the latest in a run of success for the company, which recently secured a number of long-term extensions on key assets as well as multivessel tender wins with Saudi Aramco and Brunei Shell Petroleum, the latter providing entry into a new market with a new customer. On the back of this success, Miclyn Express Offshore’s orderbook is now around US$750 million, which is an all-time high for the company. Mr de Boer said this growth is expected to increase as the company continues to execute its growth strategy and seeks opportunities to invest in new assets backed by long-term contracts with core customers. OSJ

Diederik de Boer: “company is expanding and investing in assets with an acceptable risk profile” Offshore Support Journal Industry Leaders I December 2014 I 31

21 Third quarter was a record breaker for Sævik H

Njål Sævik

avila Shipping is one of the best known of Norway’s numerous family-run offshore support vessel owners and was founded by the father of the current chief executive officer, Njål Sævik. In fact, when Havila Shipping was established in 2003, it was the third offshore supply company Mr Sævik’s father Per had founded (Sævik Supply and Havila Supply, the first two, having been sold).

Havila Shipping was founded with a total of 10 ships and is now a modern offshore company with operations across the globe with a fleet of 14 platform supply vessels (PSVs), nine anchor-handling tug/supply (AHTS) vessels and three subsea vessels, plus one safety/rescue unit. Its growth has been rapid, and today, it operates a large fleet of modern offshore vessels with a commitment to high standards and a focus on long-term contracts with leading offshore companies.

When Sævik Supply was founded in 1981, the offshore supply industry in Norway was in its infancy. Today, it is one of Norway’s most important industries, and the company that Njål Sævik leads is one of its foremost practitioners, with a head office in Fosnavåg, Norway; offices in Rio, Labuan and Aberdeen; a partnership with Posh in Singapore; a fleet of 27 vessels; 800 offshore staff and 46 onshore; and a strong track record that culminated in Mr Sævik describing the company’s third quarter of 2014 as its “best ever”.

In a recent presentation, Mr Sævik said the North Sea spot market for AHTS vessels had been better than expected in the third quarter, particularly from August, with some contracts

Havila’s anchor handlers did especially well in the third quarter

32 I Offshore Support Journal Industry Leaders I December 2014

Havila Shipping had an especially good third quarter, with its anchorhandling tug/supply vessels doing particularly well

beating the market average. The AHTS spot market quarterly average was the best since early 2009, he said, and the company had achieved total income of NKr519 million (US$76 million) and adjusted EBITDA of NKr273 million (US$40 million).

That made the company’s year to the end of October better than last year, and the bottom line doubled. Havila’s contract coverage increased, and Petrobras declared a four-year option on one of the company’s vessels in Brazil. Overall, he said, the company’s contract coverage was good.

The group had 27 vessels in operation as of 30 September 2014, with four of the vessels operated by the 50 per cent owned company in Singapore, Posh Havila Pte Ltd. One vessel was leased through a bareboat contract.

In a statement, the company said the spot market for offshore vessels in August and September was good for AHTS vessels but weaker for PSVs. “Utilisation for AHTS has been high, resulting in very satisfactory rates,” said Mr Sævik, noting that he anticipated that Havila’s trio of anchor handlers had exceeded the average rate achieved in the market during the third quarter.

Summing up the situation in the markets in which Havila operates, Mr Sævik said the subsea vessels were fully covered for 2015. The spot market for AHTS vessels remained volatile, but the spot market for PSVs had started out well with

Njål Sævik: “third quarter of 2014 was a record for Havila Shipping” continuing tender activity.

The market value of the company as of 30 September 2014 was approximately NKr 866.2 million based on a share price of NKr 28.70. A total of 652 shareholders own the company, of whom 50 shareholders are from outside Norway. Havila Holding AS owns 50.5 per cent of the company.

The company’s share capital amounts to NKr 377.2 million, comprising 30,179,599 shares at a par value of NKr 12.50. Havila Shipping has one class of shares, where each share secures one vote at the company’s general meeting Based on the estimates of brokers as of 30 June 2014, the company’s fleet had a market value of NKr 8,136.2 million at the end of September. This is equivalent to a value per share of NKr 92. The book value of the fleet is NKr 7.507.0 million. Book equity per share is NKr 71.

Total current assets amounted to NKr 869.1 million on 30 September 2014, of which bank deposits were NKr 340.2 million (of this NKr 2.0 million was restricted). On 30 September 2013, total current assets amounted to NKr 840.8 million, of which bank deposits amounted to NKr 389.5 million.

Net cash flow from operations year to 30 September 2014 was NKr 173.4 million (NKr 145.0 million). Cashflow from investing activities was NKr -193.2 million (NKr -9.1 million). Payment of instalments, repayment of loans, and loan drawn, constituted a net change from financing activities of NKr - 45.3 million (NKr -243.5 million). OSJ www.osjonline.com

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Offshore Support Journal Industry Leaders I December 2014 I 33

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22

Shane Guidry

LNG leader looks to Mexican market I n October 2014, fast-growing Harvey Gulf International Marine, whose CEO Shane Guidry was OSJ’s Industry Leader in 2013, confirmed that it has established an entity in Mexico, Harvey Gulf International Marine de Mexico SAPI de CV. With a presence in Mexico, Harvey Gulf will be able to fully service the needs of its clients operating in the offshore oil and gas segment offshore Mexico and position itself to meet the needs of future clients that will enter the market. As highlighted in OSJ on a number of occasions, recently approved changes in Mexican law are opening up much greater opportunities for owners of offshore vessels from outside the country.

Mr Guidry said, “We recognise the growth potential in the Mexican market. The establishment of Harvey Gulf International Marine de Mexico will allow us to fully deliver our services direct to our clients in Mexico.

Harvey Gulf’s new generation of assets, performance and safe operations will provide our customers with value and address their needs in Mexico.”

He explained that the initial area of operation will primarily be in Ciudad del Carmen, Mexico.

However, the company will be able to operate in any other port facility locations along the Mexican coast to support offshore operations.

At the beginning of 2014, Gulf Coast Shipyard Group launched the first of six dualfuel platform supply vessels for Harvey Gulf International Marine.

Speaking at the time that the vessel was launched, Mr Guidry said the vessels would be certified by the American Bureau of Shipping to achieve ENVIRO+, Green Passport status.

To meet the criteria, he explained, the yard met requirements that the vessel be constructed with environmentally friendly materials and be fitted with advanced alarm systems. “Ultimately, the vessel will also be continuously manned by a certified environmental officer,” he said.

The first of the Gulf Coast-built Harvey Gulf vessels was moved to the yard’s newly commissioned space at the Port of Gulfport in mid-March for final completion and testing and was due to be commissioned by the end of 2014.

Early 2014 also saw New Orleans-based Harvey Gulf announce the ground-breaking for construction on its US$25 million Phase 1, Slip B, liquefied natural gas (LNG) fuelling facility at

www.osjonline.com

Harvey Gulf International Marine has become well known for its commitment to LNG-fuelled vessels, and now it is targeting the Mexican market

its terminal in Port Fourchon, Louisiana. When operational, the LNG facility will be the first of its kind in the US. The technologically advanced, environmentally safe, clean energy facility will be an important addition to the growing LNG supply infrastructure in the area and in the US as a whole, supporting operations of the oil and gas industry’s offshore fleet as well as over-theroad vehicles operating on clean LNG. Mr Guidry said the ground-breaking represented “another significant step in the path for Harvey Gulf to establish itself as the nation’s leader in utilising LNG as a marine fuel”.

The company is investing US$350 million in the construction of its LNG-operated fleet. “The dual-fuel vessels and our LNG facility further expand Harvey Gulf’s commitment to develop and utilise the safest, most environmentally friendly vessels and fuel technology available today,” Mr Guidry said. “This fleet and facility signify a strong partnership between the state of Louisiana, US Department of Energy, US Coast Guard and Harvey Gulf with a common goal of clean energy use and strengthening America’s future energy independence.”

Harvey Gulf selected Lockheed Martin for the construction of the facility’s LNG storage tanks.

The company is also playing an important role in the dual-fuel vessel construction programme.

Harvey Gulf contracted CH-IV International of Houston, Texas, as the front-end engineering design and engineering, procurement and construction contractor and Matrix PDM Engineering of Pittsburgh for detailed design and engineering. Civil engineering services are being provided by Carubba Engineering of Metairie, Louisiana.

The LNG facility will consist of two sites each having 270,000 gallons (1 million litres) of LNG storage capacity. The LNG tanks will be of stainless steel type C construction. Each facility will be able to transfer 500 gallons (1,900 litres) of LNG per minute. In addition to bringing energy-saving and environmentally friendly maritime fuel to Louisiana, Harvey Gulf will be

Shane Guidry: “we recognise the growth potential in the Mexican market” bringing significant economic impact. Harvey Gulf’s LNG facility will generate 70 new fulltime jobs and another 120 jobs to handle its Port Fourchon operations and fleet of LNG vessels.

2014 also saw Harvey Gulf sell eight offshore towing vessels (OTVs) to Signet Maritime.

The vessels ranged in size from 75 tonnes to 153 tonnes bollard pull. The sale included all of Harvey Gulf’s OTVs, spares, business and supplies. Signet committed to retention of all crew members and plans for Tier-3 compliant generation of power on all eight tugs, with conversions starting immediately.

Mr Guidry explained that the companies shared what he described as “a strong culture of entrepreneurship and a focus on quality and service to the customer”.

2014 also saw Harvey Gulf and Eastern Shipbuilding sign a contract for the construction of a Robert Allan-designed RAmpage 6400 multipurpose field support vessel. The vessel will be built at Eastern’s facility in Panama City, Florida. The RAmpage 6400 will begin a 10-year charter when delivered in April 2016. OSJ Offshore Support Journal Industry Leaders I December 2014 I 35

23 Hornbeck sees company’s shares as undervalued

Todd Hornbeck

Like a number of offshore vessel owners in the Gulf of Mexico, Todd Hornbeck believes that the company’s stock is undervalued and has recently launched a repurchasing programme

W

hen it announced its latest results in November it was clear that Hornbeck Offshore had exceeded analysts’ forecasts, despite the fact that the market in the Gulf of Mexico is beset with issues and that 2014 has been a disappointing year for many owners. Hornbeck Offshore’s share price has declined significantly over the course of 2014 – as have the share prices of other offshore vessel owners – a number of whom have launched share repurchase programmes, believing that their stock is undervalued.

Todd Hornbeck, who is chairman of the board, president, and chief executive officer of Hornbeck Offshore, has served as president and as a director of the company since its formation in June 1997, and evidently feels the same way, and has also launched a stock repurchase programme.

Until February 2002, Mr Hornbeck served as chief operating officer. In May 2005, he was elected to the position of chairman of the board, having worked for the original Hornbeck Offshore Services, a publicly traded offshore service vessel company, from 1991 to 1996, serving in various positions relating to business strategy and development.

Following the merger of Hornbeck Offshore Services with Tidewater in March 1996, he remained with Tidewater until the current company was formed.

When Mr Hornbeck unveiled the company’s third quarter 2014 results he said he planned to acquire around US$150 million of its own shares. This after the company recorded income from continuing operations for the third quarter of 2014 of US$26.6 million, or US$0.72 per diluted share, compared to US$17.8 million, or US$0.49 per diluted share, for the same quarter a year ago, and US$31.2 million, or US$0.85 per diluted share, for the second quarter of 2014.

Mr Hornbeck said EBITDA from continuing operations for the third quarter of 2014 36 I Offshore Support Journal Industry Leaders I December 2014

increased 33.3 per cent to US$79.3 million compared to US$59.5 million for the third quarter of 2013 and decreased 5.9 per cent compared to US$84.3 million for the second quarter of 2014.

The company’s revenues were US$166.9 million for the third quarter of 2014, an increase of US$34.0 million, or 25.6 per cent, from US$132.9 million for the third quarter of 2013; and a decrease of US$4.2 million, or 2.5 per cent, from US$171.1 million for the second quarter of 2014. The year-over-year increase in upstream revenues was primarily due to the full or partial-period contribution of 14 vessels that were placed in service under the company’s fifth newbuild programme or redelivered under the 200-class OSV retrofit programme since September 2013, as well as improved spot market conditions for the company’s multipurpose platform supply vessels (MPSVs).

The newly constructed and recently retrofitted vessels accounted for a US$35.1 million year-over-year increase in revenues and higher spot day rates earned by the MPSVs accounted for an US$11.0 million year-over-year increase in revenues. This was partially offset by a decline in day rates from the company’s OSVs that were in-service during each of the quarters ended 30 September 2014 and 2013, due to soft market conditions in the spot market.

Operating income was US$50.2 million, or 30.1 per cent of revenues, for the third quarter of 2014 compared to US$37.2 million, or 28.0 per cent of revenues, for the prior-year quarter; and US$56.8 million, or 33.2 per cent of revenues, for the second quarter of 2014.

Average new generation OSV day rates for the third quarter of 2014 were US$28,049 compared to US$27,545 for the same period in 2013 and US$27,565 for the second quarter of 2014.

New generation OSV utilization was 81.7 per cent for the third quarter of 2014 compared to 80.7 per cent for the year-ago quarter and 85.7 per cent for the sequential quarter. The year-over-year increase in utilization is primarily due to 111 fewer days of regulatory drydocking during the third quarter of 2014 compared to the prioryear period. The company’s high-spec OSVs achieved an average utilization of 78.6 per

Todd Hornbeck’s company has the biggest newbuilding programme in the US cent for the third quarter of 2014.

The company also recently announced that it had finalized plans to convert one of its newbuild HOSMAX 300 class OSVs, HOS Riverbend, into a 300-class MPSV flotel vessel. This new, US-flagged, Jones Actqualified MPSV will require 140 days of out-of-service time and will be fitted with a 35 ton knuckleboom crane, a motioncompensated gangway and accommodation for 194 personnel.

As of 30 September 2014, excluding two inactive non-core vessels, the company fleet consisted of 60 new generation OSVs and four MPSVs. Hornbeck has since delivered one additional HOSMAX newbuild OSV in late October 2014. The company’s forward contract coverage for its current and projected fleet of active new generation OSVs for the fourth quarter of 2014 and for fiscal 2015 is currently 62 per cent and 27 per cent, respectively. Forward contract coverage for its current and projected fleet of MPSVs for the fourth quarter of 2014 and for fiscal 2015 is currently 63 per cent and 18 per cent, respectively.

Hornbeck’s fifth newbuild programme consists of four 300-class OSVs (one of which will be converted into the flotel), five 310class OSVs, 10 320-class OSVs and five 310class MPSVs. OSJ www.osjonline.com

24

Lionel Lee

Lee looks to Constellation for economies of scale A

company that has grown rapidly from being a regional player based in Singapore to an international one active in most sectors of the offshore vessel market, Ezra Holdings is led by group CEO and managing director Lionel Lee, son of the company’s founder, Lee Kian Soo. Mr Lee is responsible for the overall management and operations of the group and has been the driving force behind its growth, listing on the Singapore Exchange in 2003 and entry into the subsea vessel market via the acquisition of AMC in 2011. Also recognised for his work in corporate social responsibility, he was awarded Singapore’s Public Service Medal in 2011 for his work with underprivileged children in Singapore.

He holds a graduate diploma in business administration from the Western Sydney International College.

Ezra Holdings had record revenue of US$1.5 billion in the full year ending 31 August 2014, driven mainly by the group’s subsea services division’s sustained operational profitability.

Revenue increased 18 per cent, setting a new record for the company and beating the US$1.3 billion achieved in FY13. Revenue for the three months ended 31 August 2014 edged up by 6 per cent from US$419.2 million at the end of 31 August 2013 to US$446.0 million. Gross profit grew 34 per cent to US$226.9 million in FY14, and gross profit margin increased from 13 per cent in FY13 to 15 per cent in FY14. Adjusted EBITDA for the group grew 68 per cent to US$176.7 million in FY14, and adjusted PAT rebounded from a loss of US$26.6 million in FY13 to a profit of US$41.2 million in FY14.

EMAS AMC, the company’s subsea services division, continues to deliver sustained growth, with five recurring quarters of operational profitability.

Revenue increased by 32 per cent to US$1.0 billion as a result of the group’s strategy to improve operational efficiency and economies of scale by increasing fleet capacity and optimising deployment to undertake more projects.

EMAS AMC also secured orders valued at almost US$1.0 billion in total from the start of FY14 despite worsening market sentiment, building a healthy backlog of projects up to 2016. Just prior to the results www.osjonline.com

Lionel Lee-led Ezra Holdings has come to rely on the subsea market for much of its growth and is looking to its newbuild heavylift/installation/pipelay unit Lewek Constellation to help drive profit from that sector

announcement, EMAS AMC announced that it had secured a number of contracts for subsea tie-back projects with Noble Energy, valued at more than US$300 million, following its successful partnership on the Tamar project. EMAS AMC also recently announced awards for multiple contract wins from various energy companies in the US Gulf of Mexico and Asia Pacific valued at over US$70 million.

Operationally, EMAS AMC’s projectenabling asset and flagship vessel Lewek Constellation, an ice-classed multilay offshore construction vessel with ultra-deepwater pipelaying and heavy-lift capabilities, is expected to become fully operational in the first quarter of 2015 and will be employed for its maiden deepwater pipelay project in 2015.

It has already undertaken heavy projects offshore West Africa, including a US$120 million project for Vaalco Gabon (Etame) Inc offshore Gabon in West Africa. The work scope for the transportation and installation project includes two jackets, topsides, flare booms and living quarters for the Etame and Southeast Etame/North Tchibala (SEENT) platforms along with the installation of new living quarters and a gas lift package onto the floating production, storage and offloading vessel Nautipa.

Mr Lee said Ezra Holdings had achieved healthy revenue growth of 23 per cent compound annual growth rate over the last three years, driven by strong performance of EMAS AMC. “With Lewek Constellation soon to be fully operational, we remain optimistic and confident that the vessel will be leading the group’s future and we will be able to achieve our desired levels of economies of scale in the next three to five years by driving operational efficiency to optimise profitability.”

In addition, EMAS Offshore Ltd,

Lionel Lee: “Lewek Constellation will help drive economies of scale” a consolidation of EOC Ltd and EMAS Marine, was successfully dual listed on the mainboard of the Singapore Exchange Securities Trading Ltd on 8 October 2014.

With this move, said Ezra, the company has created a platform for investors to tap the Asia Pacific and European markets and enable the group to focus on its subsea services business while continuing to participate in the growth of the offshore support services business. Mr Lee said he anticipated that EMAS Offshore Ltd would capture greater market share and expand into the growing deepwater offshore accommodation segment in future.

For FY14, the group saw lower revenue contribution from its offshore support services division, EMAS Marine, with a decrease of US$25.4 million.

Triyards, Ezra’s marine services division, recently secured a new liftboat contract worth US$50.5 million, bringing its total liftboat contracts won since 2005 to date to 14. Triyards also announced the acquisition of Strategic Marine’s yards in Singapore and Vietnam, which adds yard capacity as well as aluminium craft fabrication capabilities.

Overall, the group maintains a healthy backlog of approximately US$2.4 billion, with most contracts expected to be executed over the next 12–18 months. OSJ Offshore Support Journal Industry Leaders I December 2014 I 37

25 Solstad sees revenues hit an all-time high

Lars Peder Solstad

Focusing on long-term contracts for its construction support vessels continues to pay dividends for Lars Peder Solstad’s offshore vessel company

A

glance at Solstad Offshore’s results for the third quarter of 2014 confirms once again the key role that its construction support vessels (CSVs) play.

Speaking at the time that the company announced its latest set of results, Lars Peder Solstad, Solstad Offshore’s owner and chief executive officer, said net revenues had reached an all-time high in the quarter of NKr1,127 million (US$165.6 million).

Adjusted EBITDA was NKr583 million (US$85.7 million) and adjusted EBITDA margin was 50 per cent.

Mr Solstad said strong operational performance in the CSV segment (including DLB Norce Endeavour) combined with a favourable North Sea spot market for the anchor-handling tug/supply (AHTS) vessels segment primarily accounted for the recordbreaking performance. Net revenues in the year to date were NKr2,846 million (US$418.3 million) with adjusted EBITDA of NKr1,320 million (US$194 million). A new share buy-back programme of up to 385,000 shares, corresponding to 1 per cent of issued shares, has also recently been approved by Mr Solstad and his board.

Recent months have seen the delivery of another high spec CSV in the form of Normand Vision, which commenced an eightyear charter with Ocean Installer shortly after delivery.

Mr Solstad said that financing of newbuild and refinancing of the current part of Solstad’s long-term debt was proceeding according to plan.

He noted that the subsea market continued to be driven by solid fundamentals and that the large subsea players have a substantial backlog. “Worldwide subsea activity was still at a high level,” he noted, but some projects are being postponed. Even so, he believes, there are still long-term opportunities for vessel owners such as Solstad that have invested in high spec vessels.

38 I Offshore Support Journal Industry Leaders I December 2014

Solstad’s CSVs are almost all on long-term contracts Solstad continues to have a strong position in the subsea sector and favourable market exposure with a total of 19 CSVs working for almost all of the main players. The company has one more CSV on order with a long-term charter from delivery. At the time of writing, it had some availability in the fourth quarter of 2014 and first quarter of 2015 but overall had solid contract coverage for the entire CSV fleet, which enjoyed a 96 per cent utilisation level in the third quarter of 2014.

The company has taken delivery of two new CSVs recently, in June and July, and both started on long-term contracts, further

Lars Peder Solstad: “focusing on CSVs has paid off and helps to secure EBITDA”

strengthening Solstad’s position in the subsea segment.

As Mr Solstad also highlighted, the company benefited from strong activity and healthy rates in the North Sea anchor handler spot market from August onwards.

He described the outlook in this segment as positive in the medium to long term but drew attention to the growing number of rigs that have been laid up and the large number of deepwater rigs due to be delivered in the coming years that could adversely affect the supply/demand balance. “In addition,” he said, “the number of larger anchor handlers under construction has increased, but that having been said, the short-term market is good, with increased international bidding activity.” Solstad has a substantial AHTS operation with 19 vessels trading worldwide so could, potentially, be exposed to any decline in demand.

Echoing comments from other leading players, Mr Solstad said the PSV segment in the North Sea had been slower than expected.

New companies and the total number of vessels have put pressure on day rates, and there are still many new vessels that are under construction.

Looking ahead, he said, long-term demand for CSVs is expected to continue to be strong, and the company’s focus on long-term contracts for this type of vessel will help his company to secure predictable EBITDA. OSJ www.osjonline.com

26

Jean Cahuzac

Cahuzac homes in on technology as a differentiator J ean Cahuzac has been chief executive officer of Subsea 7 since April 2008 and an executive member of the board of directors since May 2008, during which time the company has invested hugely in new vessels.

Mr Cahuzac has more than 30 years’ experience in the offshore oil and gas industry, having held various technical and senior management positions around the world. From 2000 until April 2008, he worked at Transocean in Houston, US, where he held the positions of chief operating officer and then president, prior to the merger with Global SantaFe. Prior to this, he worked at Schlumberger from 1979 to 2000 where he served in various positions.

Writing in a recent in-house publication, Mr Cahuzac noted that his aim for Subsea 7 was that it should continually build upon and sustain its competitive edge in what he described as “an increasingly complex and competitive market”.

“We have an excellent track record in bringing key technical innovations to market,” he said, “but it is clear we need to keep pushing the boundaries. Technology is playing an increasingly important role in the solutions we offer our clients and is becoming a more important differentiator than ever before. Not only does technology allow us to help our clients lower their costs in difficult environments but it is also a critical success factor in improving operational efficiency.

He explained that Subsea 7 is “shifting up a gear” in its offering to clients around the world.

“Technology is not our only area of focus,” he said. “Sharpening our competitive edge also means continuing our focus on how we work and how to simplify our processes, ensuring we are managing our costs carefully as well as improving efficiency in our project delivery.

Moreover, through close collaboration with our clients, partners and supply chain, I look forward to seeing Subsea 7 lead the industry in terms of efficiency, innovation, project excellence and above all safety. Whatever we do, we have to put safety first.”

Mr Cahuzac and his colleagues at Subsea 7 have spoken of the need to be “number one or number two in everything that we do in the subsea engineering and construction sector, and to maintain that position, we need to evaluate our service offering at every level”.

He agreed that the market is changing and

www.osjonline.com

Subsea 7 CEO Jean Cahuzac says he wants to use technology development to help Subsea 7 distinguish itself from its competitors in what is an increasingly competitive environment

that, after approximately three years of postmerger growth, an early sense that things were softening necessitated the shift in how the company approaches the market and evaluates how best to win projects and maintain or grow its share of the business available.

Until recently, with the oil price at around US$106 per barrel, Subsea 7’s clients were still free cash flow negative. Since then, of course, the oil price has fallen steeply. The market had been growing at 6–7 per cent in the three years since the merger, but there have been an unprecedented number of projects being cancelled or deferred, and Subsea 7 has seen clients recycling projects to try and reduce costs, which means that contractors such as Subsea 7 can end up bidding the same project a number of times over an extended period. “This is quite new to us. It has never happened with the oil price so healthy,” said Subsea 7, so it will be interesting to see how it reacts to the recent oil price decline. “The industry has a history of overrunning on schedule and on budget,” said a colleague of Mr Cahuzac’s, referring to a recent study that revealed that more than 70 per cent of operators’ projects are not completed on time and more than 50 per cent are not on budget. “No other industry would tolerate that. It’s just not sustainable. We have to be more cost-effective,” he said.

Mr Cahuzac and his colleagues at Subsea 7 say they are also seeing increased competition with a number of new entrants in certain sectors of the market. It is, they say, a complicated backdrop – a cyclical and evolving market, which is becoming more crowded with changing client requirements, cost constraints and deeper and more challenging operating environments. Technology development and commercialisation will therefore be front and centre of the new approach from Subsea 7, and by identifying and creating strategic technology development programmes with

Jean Cahuzac says technology is playing an increasingly important role in the solutions Subsea 7 offers clients detailed timelines and deliverables and someone in charge of each programme, the company hopes to ensure the focus of the entire group is on developing the capabilities of the company as a whole.

The emphasis on technology investment focuses on several key areas that Subsea 7, under its long-term strategic plan, believes are set to become leading differentiators in its service proposition – riser systems, pipelines and bundles, subsea compression, life-of-field and remote intervention and composites.

Announcing Subsea 7’s third quarter 2014 results, Mr Cahuzac said the company had continued to deliver strong operational performance, which supported the solid financial results. “As we have indicated consistently throughout 2014, uncertainty remains over the timing of market awards for most large SURF projects. This trend was particularly evident in the third quarter when a number of potential market awards were postponed to 2015 and beyond. The decline in crude oil prices, which began at the start of the third quarter, is adding to the uncertainty over our clients’ timing to proceed with field development projects.” However, as he also noted, the company’s order backlog and execution plans for projects underway provide a sound basis for 2015, despite the deferral of awards that the industry is currently experiencing. OSJ Offshore Support Journal Industry Leaders I December 2014 I 39

27 Subsea ships give Aase best returns compared to value

Mons Aase

Anticipating a slowdown in the offshore vessel market as a whole, DOF’s CEO Mons Aase plans to concentrate activity on markets that are less likely to be affected by the falling oil price and invest in more profitable segments, primarily the subsea sector

D

OF ASA is an international group of companies involved in the ownership and operation of a fleet of platform supply vessels (PSVs), anchor-handling tug/ supply (AHTS) vessels and subsea vessels and service companies offering services to the subsea market. The group has a modern fleet of vessels, with an average age of less than seven years.

Mr Aase’s experience in finance and shipbroking will have been invaluable to him and the company since he became CEO. He holds an MSc from the Norwegian Institute of Technology, and a Cand Merc from the Norwegian School of Economics and Business Administration in Bergen.

Mr Aase said DOF group’s operating income for the third quarter was NKr 2,772 million (NKr 2,634 million) with an operating profit before depreciation (EBITDA) of NKr 914 million (NKr 909 million), which was an all-time high. Operating profit was NKr 600 million (NKr 17 million). Year-to-date the group reported operating income and EBITDA of NKr 7,803 million (NKr 7,121 million) and NKr 2,740 million (NKr 2,288 million) respectively. Net profit was NKr 109 million compared with NKr 164 million, partly as a result of currency losses.

The average utilisation for the group’s fleet during the third quarter was 92 per cent.

The subsea fleet had an utilisation of 93 per cent, the AHTS fleet 91 per cent and the PSV fleet 92 per cent. The group had one AHTS and five PSVs in the North Sea spot market and experienced higher revenues compared to the second quarter. DOF Subsea had in the period 11 vessels in the subsea project market, with an utilisation of 86 per cent. Four of the vessels are chartered from external owners. On 1 October a subsidiary of DOF Subsea signed an agreement to sell the vessel Skandi Skolten.

40 I Offshore Support Journal Industry Leaders I December 2014

Mons Aase: “offshore market could be volatile in next 12 months” The vessel is to be delivered to the new owners in the fourth quarter. The sale of the vessel including subsea equipment is expected to release cash in the amount of NKr 650 million, after repayment of debt.

In a presentation released to coincide with publication of the third quarter results, Mr Aase said that in the subsea market, utilisation in the Asia Pacific was variable utilisation, but project execution was good; in the North Sea the company’s subsea vessels saw a high level of utilisation and good project execution. Contrastingly, in the Gulf of Mexico, utilisation was relatively low but there was increased activity due to more vessels being in operation. In the anchor handler (AHTS)/platform supply vessel (PSV) segment the North Sea saw reasonable utilization and earnings from the spot market. In Brazil utilisation levels improved and in the Asia Pacific utilisation was stable, but the company had one vessel idle in September.

Analysing the returns compared to book value of its vessels, Mr Aase said the figure was 7.1 per cent for PSVs, 6.5 per cent for

AHTS, and 12.8 per cent for subsea vessels.

DOF’s fleet is 55 per cent subsea vessels, 27 per cent AHTS and 18 per cent PSV, and its remaining newbuilding programme is 80 per cent subsea and 20 per cent AHTS with no PSV newbuildings.

Returning to the subsea market he said that in the APAC region construction in Australia is slowing down, but being replaced by inspection, maintenance and repair work. “Operator spend is slowing,” he said. The nature of the competition is changing, although there is a high level of tendering activity, and several long term opportunities. He said he expects demand growth and higher vessel utilisation offshore Brazil and steady/increased demand in the Gulf of Mexico, where DOF is a relatively new player. “We expect gradually increased market share and higher vessel utilisation,” he said.

“We expect Norway to slow down significantly in 2015 due to less activity, mainly from Statoil.

We expect also the UK to slow down in 2015, but because there are more independent companies in the UK market it will slow down less than Norway.” He expects a high level of subsea activity offshore West Africa.

Turning to the supply vessel market, Mr Aase expects increased demand for DOF’s vessels in Brazil but in the North Sea he expects the AHTS market to continue to be volatile, with lower utilisation and rates than in the third quarter of 2014. “We expect a challenging market for PSVs in the North Sea in the next 6-9 months,” he said.

Mr Aase said that overall, DOF expects operational EBITDA in the fourth quarter to be slightly weaker than in the third quarter.

Based on oil companies’ increased focus on cost reduction and an oil price below US$ 100/barrel, the board of directors expects the market to be volatile and unsteady for the coming 12 months.

DOF also recently announced that it had won a lawsuit against the Norwegian Central Tax Office (Sentralskattekontoret) regarding ‘extra correction tax’ for 2008, which has been found to be in contravention of legislation for the current tax year. The lawsuit is related to an earlier case related to the Norwegian Tonnage tax regime. As a result of the ruling, the company will be reimbursed approximately NKr 40 million in taxes and legal costs related to the proceedings. OSJ www.osjonline.com

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To order your personal copy today, just visit www.osjonline.com and click on subscribe or contact sally.church@rivieramm.com t: +44 20 8370 7018 Free supplements 2013 • A supplement to Offshore Support Journal

industry leaders

2014 • A supplement to Offshore Support Journal

2014 • A supplement to Offshore Support Journal

guide to

guide to

osv shipbuilders

dynamic positioning

Chinese yards building ever more offshore vessels

Norwegian design expertise exported around the world European shipyards find roles as niche builders

Fast-moving DP sector

at a crossroads BP concerned by assurance, certification and inappropriate use

The 25 most influential people in the offshore support vessel industry – the trendsetters, dealmakers, innovators and individuals with a commitment to excellence, safety and meeting customer requirements

Evolving sector influenced by many changes “OCIMF is very concerned at the fragmentation in the control and issue of DP certification.

Formation of several issuing bodies with different standards is not an ideal situation.”

John Flynn, offshore assurance superintendent, BP Shipping

“Customising proven concepts, ‘keeping it simple’ and being competitive in terms of costs are what we do best and are big part of our success.”

Patrick Janssens, director, De Hoop Shipyard

28 Norbye says acquisitions will restart dividend payments F

Finn Amund Norbye

inn Amund Norbye, CEO at Deep Sea Supply, has a long, international career in shipping and finance. Prior to becoming CEO at the company, he was CFO at Deep Sea Supply and before that was CFO of Bergshav Management. From 1999 to 2001, he was director and head of Fortis Bank’s shipping division in Rotterdam, and prior to that, he worked 12 years with Christiania Bank’s shipping department. From 1996 to 1999, he was head of the bank’s shipping department in Singapore, and from 1993 to 1996, he was head of the bank’s shipping department in London. Prior to joining Christiania Bank, Mr Norbye worked with Storebrand Finans, Norges Eksportråd (in Stockholm, Sweden) and Electrolux (in Bangkok, Thailand). He holds a master’s degree from the Norwegian School of Economics and Business Administration and Stockholm School of Economics.

Deep Sea Supply, the company he leads, is quoted on the Oslo bourse and backed by billionaire shipping magnate John Fredriksen.

As highlighted in the 2013 OSJ Industry Leaders supplement, given that the company was set up as recently as 2005, its progress has been remarkable, not least the rate at which it has entered key markets such as Brazil.

The most important development at the company in 2014 saw the acquisition of 10 new vessels and newbuildings and a US$200 million private placement, which pretty much doubled its market capitalisation. On 2 June 2014, the company announced the acquisition of 10 newbuild platform supply vessels (PSVs)

Finn Amund Norbye, Deep Sea Supply’s CEO, doesn’t focus exclusively on the North Sea market – the company is active around the world, and the acquisition earlier this year of new vessels has enabled it to make dividend payments that others couldn’t contemplate

from PSV Holding Inc, a company affiliated with Hemen Holding. Six of the 10 newbuilds were delivered in 2013/14 and the remaining units in 2014. The total price paid for the vessels, including remaining capex, was US$366 million.

Deep Sea Supply raised US$200 million through the private placement to partly finance the acquisition of the vessels. Financing for six vessels was secured at the time, with bank financing for the remaining four vessels following shortly afterwards. Demand for a piece of the company was high, and the share issue was completed very quickly.

As Mr Norbye noted at the time, the acquisition of 10 new vessels with attractive breakeven rates was expected to improve the company’s ability to pay competitive dividends over time, and the company decided to reintroduce quarterly dividend payments and started doing so by distributing US$0.02 per share for the second quarter of 2014.

In October 2014, Deep Sea Supply’s fleet of 23 PSVs had an average gross income of approximately

Finn Amund Norbye: “vessel acquisition should enable dividend payments to be made” 42 I Offshore Support Journal Industry Leaders I December 2014

US$19,200 per ship per day, which was the same average gross income as in September 2014. The company’s fleet of 14 anchor-handling tug/supply (AHTS) vessels had an average gross income of approximately US$18,600 per ship per day compared to US$21,400 in September 2014. Nine of the AHTS vessels and 12 of the PSVs are owned 50 per cent by Deep Sea Supply through DESS BTG in Brazil. Three PSVs and one AHTS mobilising during the month negatively affected the average rate. The newly delivered PSVs Sea Swift and Sea Triumph were not included in these figures. (The company took delivery of Sea Swift on 23 October, following which it had 15 AHTS vessels and 25 PSVs in operation.)

Recent weeks have seen the company secure a flurry of contracts and contract extensions.

Petrobras in Brazil agreed to extend the charter contracts for the PSVs Sea Halibut and Sea Bass by one year plus three one-year extension options. The new firm period of the contract ends in July 2015. September 2014 saw the company announce multiple contract awards with an international subsea contractor for a total duration of approximately 1,000 vessel days.

Three PSVs of PX105 design – Sea Spider, Sea Springer and Sea Spark – were awarded contracts for 10, 10 and four months respectively. The AHTS Sea Lynx was awarded a contract to be performed in two phases: the first phase of 40 days and second phase of 250 days.

Commencement was expected in November 2014 for the three PSVs and phase 1 for Sea Lynx and May 2015 for phase 2 for Sea Lynx. In addition to the firm periods, the contracts also contain option periods.

The company’s third-quarter results were due to be published as this supplement went to press, but for the six-month period ended 30 June 2014, the company reported consolidated revenues of US$75.0 million, EBITDA of US$38.8 million and a pre-tax result of US$8.1 million.

Comparing second-quarter 2014 financial figures with the first quarter of 2014, revenues increased by US$4.3 million or 12 per cent. The company said the main reasons for the increase were the commencement of term contracts for PSVs and improved utilisation of large AHTS vessels. The vessels’ operating expenses increased by US$2.3 million between the first and second quarters, which was mainly due to the new vessels coming into operation and higher maintenance costs. OSJ www.osjonline.com

29

Johannes Østensjø

Østensjø newbuilds due to be delivered in 2015/16 A leading provider of offshore marine services to the global oil and gas industry, Østensjø Rederi was established in 1974 by Johannes Østensjø. Based in Haugesund, Norway, the company has around 600 employees (including approximately 50 onshore), and had revenues in 2012 of NKr1,250 million (US$184 million) and EBITDA of NKr365 million (US$54 million).

Mr Østensjø is chairman of Østensjø Rederi and remains the sole shareholder in the company. He is well known for his commitment to innovation and to working with the supply chain to develop advanced, fuel-efficient, safe and environmentally friendly ships.

Mr Østensjø was one of two leading industry figures who formed DeepOcean, which is also represented in this special supplement to OSJ. (The company was later spun off, but remains one of Østensjø’s biggest customers.)

In addition, few individuals or companies can claim to have taken delivery of what was, at the time, the world’s largest platform supply vessel (Edda Fjord), commissioned what was the largest escort tug in the world at the time that it entered service (Ajax, 2000) and, in 2011, taken delivery of what was the first of a totally new class of accommodation vessels.

Mr Østensjø’s companies have done all of the above and much more, but in Edda Ferd, the latest addition to its fleet, it can lay claim to yet another potential first – what it believes to be the world’s most environmentally friendly supply vessel. Østensjø has always focused on delivering high quality marine services in the offshore and towage sectors worldwide. Apart from its focus on advanced vessels, it has also always focused on recruiting and training quality staff to deliver a quality service, turning Østensjø into one of the most highly regarded marine services companies in the world. And the management at Mr Østensjø’s company has never been afraid of investing in its fleet or pioneering new technologies to make its ships safer, greener and more efficient. Most marine services firms claim to have the most advanced ships, but Østensjø never purchases vessels off the shelf, instead working with shipbuilders and its own specialists to produce what are, effectively, bespoke vessels – a technique that has seen

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Known for its commitment to advanced, environmentally friendly designs, Østensjø Rederi has a large offshore construction vessel and another accommodation vessel on order

the company pioneer dozens of innovations that have become ‘best in breed’ across the rest of the industry and the world. It was, for instance, the first company to install the Voith Schneider propeller on its offshore vessels, making them more efficient, more manoeuvrable and much more responsive than conventional vessels.

Towards the end of 2013, Østensjø Rederi signed a contract with Kleven shipyard in Norway for construction of a 150m offshore construction vessel (OCV) intended for the subsea umbilicals, risers and flowlines market.

The total value of the contract is NKr1.4 billion (US$206 million), which, at that time, was the largest contract ever awarded to Kleven.

The advanced Salt 304 OCV design will be equipped with a 400-tonne crane, 70-tonne crane, vertical lay system and carousel. The vessel is due to be delivered by Kleven Verft in Ulsteinvik, Norway, in the first quarter of 2016 and will enter into a long-term charter with DeepOcean.

2015 will see Edda Accommodation, which is part of Østensjø Rederi, take delivery of a second monohull offshore accommodation vessel. The vessel, Edda TBN, is being built at Hyundai Heavy Industries Co Ltd. The company said that, by placing this order, Edda Accommodation is expanding the commercial and technical success of its existing accommodation vessel, Edda Fides.

“This next-generation offshore accommodation vessel, designed by Salt Ship Design, is 155m long and will have a total accommodation capacity of 800 persons in one or two-men cabins,” said the company at the time that the vessel was ordered.

“The interior of the vessel is of executive standard and will include 850m2 office space as well as recreation areas, such as a modern gym, sauna, two swimming pools, conference rooms and an auditorium.” The newbuild will be equipped with a heave compensated

Johannes Østensjø’s company will take delivery of its new offshore construction vessel in 2016 telescopic gangway with a length of 55.5m.

In addition, a cargo deck area of 2,000m 2, a 120-tonne rig support crane and two supply cranes will make the vessel highly suitable for cargo handling and construction support. When finished, the vessel will provide construction support and additional living quarters for support personnel during commissioning, maintenance and decommissioning of offshore installations worldwide. The vessel is also designed for operating in Arctic areas.

Early in 2014, HitecVision announced a growth capital investment in DeepWell AS, a well intervention company serving oil companies with wireline and other well intervention services on the Norwegian Continental Shelf.

Established in 2006, DeepWell is based in Haugesund, Norway, and its main shareholders are Østensjø Rederi and Solstad, who have supported the company as industrial investors since its inception. OSJ Offshore Support Journal Industry Leaders I December 2014 I 43

30 CEO sees design enjoy ever wider currency

Gunvor Ulstein

Not many offshore vessel designers or naval architects of any type can say that their vessels are featured on the bank notes in their country, but Gunvor Ulstein, CEO of Ulstein Group and managing director of Ulstein Shipping, has that singular honour

T

owards the end of 2014, Norway’s Ulstein Group confirmed that its innovative X-BOW hullform design had been selected as an illustration on a Norwegian bank note. The company explained that eight artists were invited to participate in a contest arranged by the Bank of Norway to design artwork for a new banknote.

The topic was ‘the ocean’. No fewer than three of the artists were inspired by the X-BOW, and the winner, The Metric System/Terje Tønnesen, have used the X-BOW hull profile on their design for a new 100 kroner note.

Few companies can also claim to have invented something that completely changed the way vessels are designed and built, but Gunvor Ulstein and her colleagues at Ulstein Group can with the X-BOW. Mrs Ulstein was born in 1969 and is a graduate of the Norwegian School of Economics and Business Administration in Bergen. Earlier in her career, she was a sales manager at Ulstein Bergen and managing director of Ulstein Verft. She is deputy chairman of the Norwegian Broadcasting Corporation’s Board (NRK) and on

the advisory board at DNB. She is also on the board of several companies in the Ulstein Group and was a member of the executive committee of the Federation of Norwegian Industries and the council at classification society DNV (where she was also vice president of the council). She has also been a board member at Eksportfinans, a member of the Norwegian Minister of Trade and Industry’s council for maritime development and member of the executive committee at Norges Bank. She was awarded Business Woman of the Year in 2006 and WISTA’s Shipping Name of the Year award in 2008. In 2011, she was awarded the Seatrade Young Person in Shipping Award.

In 2013, she received a gold medal from Tekna and HR-Norway’s prize for leadership ‘Kunsten å lede’ (The art of management).

2014 seems to have been another sucessful one for Mrs Ulstein, with a number of important milestones and the unveiling of the X-STERN (see page 47), which is derived from work on the X-BOW. 2014 saw the number of vessels ordered based on the company’ s PX121 platform supply vessel (PSV) design reach 30, with contracts for Wuchang Shipbuilding and Otto Offshore. The first PX121 vessels entered service in 2012.

The PX121 is a medium-sized PSV that has received excellent feedback due to a favourable combination of fuel efficiency and load capacity. According to one shipowner, “The PX121 is part of the new generation of PSVs and offers, especially in harsher environments, a unique combination of world-class client service delivery, high

Ulstein’s iconic X-BOW design is being used on a new banknote 44 I Offshore Support Journal Industry Leaders I December 2014

Gunvor Ulstein: “having our own yard helps” efficiency and impressive crew comfort.”

Mrs Ulstein and her colleagues believe that the company’s design success can in some ways be explained by having their own shipyard at which the prototypes, such as the PX121s, are constructed. Here, the group can bring customers in, demonstrating a design from concept drawings to completed offshore vessels.

The company is continuously developing designs and solutions for the future in close dialogue and co-operation with shipowners, suppliers and classification societies.

A new type of vessel based on the X-BOW design is a rock installation vessel ordered by Van Oord in the Netherlands. To be built by Sinopacific in China, the vessel will be delivered in 2016.

Vessels of this type are used to provide protection and stabilisation of offshore structures and pipelines, which is one of Van Oord’s main activities for its clients in the oil and gas industry. The vessel, which will have a DP3 dynamic positioning system, will be suitable for installation of a wide range of rock sizes.

With a deadweight of 14,000 tonnes, a length of 154m and a beam of 28m, the vessel can operate in water depths of more than 6,000m and will have accommodation on board for 60 people. Working in close co-operation with the owner, Ulstein Group paid special attention during the design phase to the energy efficiency of the bow and hull as a whole. The vessel will have a Green Passport, Cleanship notation and ice class 1A – PC7. OSJ www.osjonline.com

We can safely say we go the extra mile, or however many are needed.

Topaz’s award-winning service can be credited to an unwavering focus on safety and quality. In addition, our modern fleet of more than 95 vessels is, on average, only 7 years old, which enables us to remain a cost-effective, reliable and safe solution to our clients.

For a comprehensive range of offshore support vessel services, please contact Topaz Energy and Marine.

www.topazworld.com

/ marketing.topaz@topaz-marine.com

/ +971 4 440 47 00

31 Norwegian innovator unveils another ‘X’ hullform Tore Ulstein

Tore Ulstein’s company is already known around the world for its innovative X-BOW hullform – 2014 saw it unveil another, similar concept that could make offshore vessels more effective

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s deputy CEO and chief market and innovation officer at Ulstein Group in Norway, Tore Ulstein is, as his job title suggests, responsible for innovation in the company, and 2014 has certainly seen more of that from the Norwegian firm. A new hullform – the X-STERN – has been added to its now well known X-BOW design concept.

In addition to innovation, Mr Ulstein’s other main focus area is internationalisation, and the success that his company has achieved on the international stage in the last year is testimony to the way that Ulstein Group has transitioned from a shipbuilder to being a leading offshore ship designer with its designs built around the world.

Mr Ulstein has long managerial experience at Ulstein Group, both as managing director of Ulstein Verft and for Ulstein Design & Solutions. He has a PhD in engineering from the Norwegian University of Science and Technology (NTNU) with hydrodynamics his focus area. He has been chairman of the board of Ulstein Group since 2011, having served as deputy chairman since 2007.

Mr Ulstein is also president of the Confederation of Norwegian Enterprise, a member of the Federation of Norwegian Industries’ Innovation Committee, a member of the corporate assembly of Statoil, Norway’s state-owned oil company, and a board member of the division for innovation at the Research Council of Norway.

Following the success of the X-BOW design for offshore support vessels (OSVs), 2014 saw Ulstein Group unveil a new concept for the aft section of vessels. The new design was unveiled at the Offshore Northern Seas exhibition and conference in Norway in September.

The new design concept draws on Ulstein’s experience with the X-BOW and will, says the company, enhance the operability of vessels using dynamic positioning (DP) and improve station keeping and comfort on board. www.osjonline.com

As highlighted in the November 2014 issue of OSJ, the X-STERN could be adapted for the design of well intervention vessels, pipelay ships and heavy-duty subsea construction vessels, claims the company. The concept could also be employed on designs for floating production, storage and offloading vessels and drillships, all of which need highly reliable station-keeping capabilities in poor weather and sea conditions.

Last but by no means least, the X-STERN could also be applied to smaller OSVs, such as platform supply vessels that operate on DP mode when close to rigs and production platforms.

Computer modelling has shown that the X-STERN improves the response of the vessel to wave action, reducing slamming and waves striking the main deck, even in harsh conditions.

It means that a vessel with the X-STERN could remain in position in harsh weather with the stern positioned towards the waves, wind and currents instead of positioning the bow towards the weather, which would otherwise be the master’s natural choice.

As the company points out, in some cases, vessels cannot choose which heading to operate on. Usually the stern is exposed to waves coming in, which adversely affects the main deck, so Ulstein created a rounded stern in order to reduce wave reflection and reduce the energy needed for DP operations by around 20–25 per cent. With X-STERN, there is a higher tapered covered main deck, reducing wave impacts.

On a vessel with the X-STERN, the preferred direction would be to operate with the stern facing the weather, reducing forces at the aft end. This allows operations to be maintained in worse conditions and provide greater vessel control as the propellers will be facing the weather. This is a major advantage for increasing the DP capabilities. Operators could weathervane to stabilise the vessel. With the stern facing the weather, the vessel would be less influenced by the weather, and wave drift would be reduced.

The X-STERN design is a sloping, higher stern, allowing for a sharp stern shape in which the transom plate is replaced by a pointed aft form. It is what the company describes as “a gentle displacer”, resulting in lower pitch and reduced wave drift forces as well as lower slamming forces on the hull. It would also have good ice operation capability. The positive effects are reduced power and fuel consumption while the vessel is in DP mode or the possibility of

Tore Ulstein: “we discuss operational challenges with our customers and work out technical solutions” operating in a wider weather window with the same power consumption. The working deck aft is enclosed, with no sea on deck or ice buildup, increasing safety for the crew, cargo and equipment on a vessel. This would result in a loss of deck area, but Ulstein believes that an OSV design could be adapted to minimise any loss of space.

Ulstein is waiting for patents on the design, said Mr Ulstein. “An innovation process is a long one in which we work strategically in order to come up with safer, smarter and greener solutions,” he said. “We discuss operational challenges with our customers and work on how to transfer these challenges into technical solutions, which can be turned into commercial products. The X-STERN is patentpending in several countries, including the US and in the EU.” OSJ Offshore Support Journal Industry Leaders I December 2014 I 47

32 Battery trials highlight commitment to R&D

Jan Fredrik Meling

Not many shipowners have their vessels described as “a floating laboratory”, but Eidesvik Offshore’s Viking Lady is just such a vessel

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t is part of Eidesvik Offshore’s ethos to innovate, and Viking Lady, an offshore supply vessel (OSV) in daily operation in the North Sea, is a prime example of that approach as was highlighted at the Greener Shipping Summit – Ships of the Future conference, which took place in Athens in November.

As a presentation from classification society DNV GL highlighted, the vessel could lead the way to a significant improvement in the safety and efficiency of high risk offshore operations. The subject of the presentation was a battery hybrid propulsion system that is being tested on Viking Lady as part of an ongoing research programme that started life as the FellowSHIP research and development project between DNV GL, Eidesvik Offshore and Wärtsilä with funding from the Research Council of Norway.

DNV GL Research & Innovation is working together with shipping companies and manufacturers to realise projects like FellowSHIP that advance the industry’s ‘state of the art.’ Eidesvik is an ideal partner for such an initiative, enabling researchers to progress from the generation of an idea through a fusion of innovative scientific approaches to technology development and full-scale testing in a structured and effective way.

Viking Lady uses a conventional diesel-electric

propulsion system comprising four dual-fuel engines driving five thrusters for propulsion and manoeuvring/dynamic positioning (DP). In the latest stage of the project, a lithium-ion battery with a capacity of 450 kWh was added, enabling the vessel to use hybrid-electric propulsion. The battery acts as an ‘energy buffer’ that is able to cover the intense load variations that can occur, especially in DP and standby operations. This effectively increases the propulsion system’s available power and redundancy, thereby increasing the level of safety in high risk operations. This means that the gensets can operate with a relatively constant load and in an optimal way – making operations safer and more energy efficient.

The battery hybrid installation has been tested at sea, and trials show that a 15 per cent reduction in fuel consumption, 25 per cent reduction in NOx emissions and 30 per cent reduction in greenhouse gas emissions can be realised in practice, especially for DP operations.

Considering that the global fleet of offshore supply vessels of relevant sizes is over 4,000, this kind of technology has the potential to make an impact when it comes to improving the sustainability of the sector.

For Jan Fredrik Meling, Eidesvik Offshore’s managing director and chief executive officer, this kind of forward-thinking commitment to R&D has long been a cornerstone of the way the company operates. He leads a familyowned company that has played a unique role not just in the development of the battery power system highlighted above but in the growing acceptance of liquefied natural gas (LNG) as a fuel.

Jan Fredrik Meling and his colleagues have a longstanding commitment to innovation and to assisting with R&D projects A growing number of OSV owners are adopting LNG-fuelled vessels, as are owners of several other different vessel types, but it was Eidesvik that led the way in the adoption of LNG. In 2003, the company launched the world’s first LNG-powered offshore vessel, opening a new era of reduced NOx and CO2 emissions. The company still has the largest fleet of offshore vessels running on natural gas, having taken delivery of its first, Viking Energy – the world’s first LNG-fuelled vessel – more than a decade ago.

Viking Lady has also been used to test the potential of fuel cells as a power source – an initiative that also took place under the auspices of the FellowSHIP project. OSJ

Viking Lady is being used to test the potential of battery-augmented power on offshore vessels

48 I Offshore Support Journal Industry Leaders I December 2014

www.osjonline.com

33

Wes Bordelon

Family firm likes to build its own vessels Bordelon Marine is not one of the largest or best known offshore vessel companies in the US – or as well known outside the US as some – but it has a long track record, and its owner is steadily establishing it in new markets

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ordelon Marine is celebrating its 35th anniversary this year. Throughout its history, the company has maintained a family-oriented culture and established a positive presence in the local community and a longstanding trust with its vendors and employees alike.

The company is a leading provider of marine transportation services to the oil and gas industry in the Gulf of Mexico and elsewhere and offers a range of offshore vessels supporting activity such as construction support, exploration, production, remotely operated vehicle (ROV) and dive support, oceanographic research and survey, well stimulation as well as military and special operations support.

Wes Bordelon took the helm at Bordelon Marine in 1999 at the end of a cycle of the family business that had seen several periods of growth and decline. Beginning in 2000, he implemented a programme that ultimately rebuilt the company’s fleet though newbuilds and acquisitions while simultaneously

diversifying and solidifying its customer base.

Bordelon Marine now operates a fleet of mini-supply vessels along with 260ft dynamic positioning (DP2) vessels. The company also started a shipyard in 2011, specifically to build its deepwater Stingray 260 DP2 vessels.

Bordelon Marine currently has one Stingrayclass vessel in operation, which is working as a well stimulation vessel for Baker Hughes, along with two more Stingray vessels in production with expected delivery dates in the first quarter and third quarter of 2015. Mr Bordelon says he plans to maintain a presence on the shelf whilst building its DP2 vessels to support the deepwater market in the Gulf of Mexico and elsewhere.

“I feel a great sense of pride, as a secondgeneration owner, to be a part of this great history and look forward to many more years of growth and success. The company began an exciting new chapter in its evolution three years ago, with the construction of Bordelon Marine Shipbuilders and the design and creation of our Stingray 260 DP2 series vessels.

“Since then, we’ve delivered and placed under contract the first of what will eventually be a class of six vessels. We are confident that the Stingray 260 DP2 series will support and foster the continued success of Bordelon Marine well into the future.”

The Stingray series vessels are 257ft x 52ft x 18ft vessels with a clear deck of 185ft x 44ft (8,272 ft2) and a maximum speed of 14 knots.

Bordelon Marine’s deepwater vessels are tailored to work in niches such as well stimulation and light intervention

www.osjonline.com

Wes Bordelon: “we plan to continue building vessels organically” They are fitted with Cummins QSK 60-M Tier 3 main propulsion engines with Schottel 1215 Z-Drives and STT2 bow thrusters. They are designed to transport 158,000 gallons of fuel oil cargo, 4,000 ft3 of bulk mud, 10,400 barrels of liquid mud in three separate tanks and 123,000 gallons of potable water cargo.

All of the cargo systems are fully automated and controlled from the bridge. The vessels can accommodate up to 40 people and have an internal ROV office and control room. The Stingray series are Solas classed, FiFi 1, ACCU, EEP 175 and Tier 3.

The next vessel in the series, Shelia Bordelon, is now due to be delivered in February 2015 and will be fitted out as what Bordelon Marine describes as an “ultra-light intervention vessel” and will have a 50-tonne active heave compensated (AHC) crane from National Oilwell Varco, a mezzanine launch and recovery system (LARS) deck designed to support two work-class ROVs, 6,000 ft2 of clear deck and accommodation for 56.

The third vessel in the series, Brandon Bordelon, also to be configured as an ultra-light intervention vessel, will have a 60-tonne AHC SMST crane, LARS deck and the same deck area and accommodation as Shelia Bordelon.

“We plan to continue building organically, approximately one vessel per year,” said Mr Bordelon. “We are currently in the planning stages for the vessels that will be delivered in 2016 and 2017.” OSJ Offshore Support Journal Industry Leaders I December 2014 I 49

34 Founder sees yards transition to in-house designs 2

Simon Liang

014 was another standout year from Sinopacific Shipbuilding Group, which is led by company founder, chairman and CEO Simon Liang. The company won its first order from a Mexican customer, delivered its 200th vessel, won an order to build a rock installation vessel for Van Oord, secured an order to build four examples of an in-house design for Singaporean client Vallianz Holdings and secured its first order for offshore vessels for a Chinese client – and that just covers the period from August to mid-October 2014.

The Mexican order came from Naviera Petrolera Integral SA de CV, who ordered

Simon Liang’s shipbuilding group is building more and more offshore vessels of its own design 50 I Offshore Support Journal Industry Leaders I December 2014

Sinopacific Shipbuilding Group started out building designs developed in northwest Europe and the US, but its desire to build more vessels from its own SP portfolio is coming to fruition

three Sinopacific-designed SPP17A vessels, all of which will be built at Sinopacific’s Zhejiang Shipyard and delivered by the end of 2015, after which they will work for Pemex, Mexico’s largest government-owned oil company, on oil and gas development projects in the Gulf of Mexico.

The deal with the Mexican client came hard on the heels of another with Vallianz Holdings and sees Sinopacific building more examples of vessels that it has itself designed, in this case, the SP brand of platform supply vessel (PSV).

Since its foundation, Sinopacific has attached great importance to developing its own offshore vessel designs. It started out by building larger numbers of European designs and series production of designs from industry leaders such as Guido Perla & Associates, but what it really wanted to do was build its own designs, which it is now doing in increasingly large numbers.

The SPP17A for Naviera Petrolera Integral is a small PSV design with an overall length of 61.8m, moulded breadth of 14.0m, moulded depth of 5.8m, deadweight of 1,700 tonnes, design draught of 4.3m and accommodation for 24 people. It employs fuel-efficient dieselelectric propulsion and will provide excellent performance in terms of ease of operation, comfort and deadweight.

Vallianz Holdings has ordered four SPA60 vessels that will also be built at Sinopacific’s Zhejiang yard. They are due to be delivered from the end of 2014 through the beginning of 2015. The deal is another noteworthy one because it is the first that the Chinese company has secured from the Southeast Asian market from its SP design portfolio.

Sinopacific is one of a very few Chinese yards that have independent design capability from conceptual design through to production, and its ability to provide design and on-site technical support for Vallianz undoubtedly

played a part in securing the order. The SPA60 is an anchor-handling tug/supply (AHTS) vessel with a 60-tonne bollard pull.

It is 64m in length overall, has a breadth of 16.00m and 5.00m draught. It has a service speed of 13 knots and can accommodate 28 people. Fully functional and balanced, the vessel is designed to be highly practical and robust in operation.

In July, the shipbuilder signed a contract with Huawei Offshore, a subsidiary of Shanghai Salvage Company, for the construction of five offshore vessels. All of the vessels are designs from the SP brand: three are of the SPA85L AHTS design and two of the SPP35ML PSV design. The vessels will also be built at Zhejiang Shipyard.

Sinopacific’s landmark 200th vessel was delivered by its Dayang shipyard and is a Guido Perla & Associates-designed GPA 696 inspection, maintenance and repair vessel for Bourbon. Dayang is also to build the fallpipe/rock-dumping vessel that Van Oord recently ordered.

October saw another milestone, with the final vessel in a 12-ship series of PX105 PSVs it has built. Zhejiang delivered the vessel, Sea Swift, to Deep Sea Supply.

Since he decided to enter the shipbuilding business, Simon Liang has become a giant in the Chinese shipbuilding industry and one of the best known figures in the industry as a whole.

Highly educated, he studied international trade and received his graduate degree in France, and his first fortune was made producing not ships but Christmas decorations. Nowadays, he is on the Forbes list of the wealthiest people in China but is said to keep a low profile outside the shipbuilding industry.

On becoming involved in shipbuilding, Mr Liang decided to follow a very specific strategy: Sinopacific would not go head to head with other Chinese yards and compete on price, as many Chinese yards do, but instead would be a “technically driven” company and focus on a specific part of the shipbuilding industry – offshore vessels. It would aim to build more advanced examples of the type and, eventually, build vessels it had also designed itself. The strategy has certainly been effective, and Sinopacific now lays claim to being the world’s largest builder of offshore support vessels. OSJ www.osjonline.com

TO BE IS TO DO IN HAVILA WE DO – IN ALL KINDS OF WEATHER

www.havilashipping.no

35 Remøy continues to build position in the subsea market

Stig Remøy

Profits at Stig Remøy’s Olympic Shipping rose again in the first half of 2014, buoyed by the addition of new vessels. More are due to enter service in 2015 and enhance Mr Remøy’s subsea vessel offering

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he Olympic group of companies owns and operates offshore and fishing vessels and is based in Fosnavåg on the west coast of Norway. Olympic Shipping was founded in 1996 by Stig Remøy and Bjørn Kvalsund. Mr Remøy remains the main shareholder in the company with more than 80 per cent of the shares.

The company began operations with two offshore vessels, Olympic Commander and Olympic Supplier, and the deepsea trawler Olympic Prawn. The group remains privately owned with Mr Remøy as its main shareholder.

The administrative staff at the company are employed by Olympic Shipping and the sea-going personnel by Olympic Crewing, a subsidiary of Olympic Shipping.

The company now has approximately 800 employees and owns and operates a diversified fleet of high end offshore vessels including platform supply vessels (PSVs), multipurpose PSVs, anchor handlers and subsea vessels and construction vessels. The average valueadjusted age of its fleet is around five years, making it one of the most modern fleets in the market, and Olympic is the sixth largest owner of subsea vessels in the world, with a global presence in key markets.

The company had a solid financial position at the end of the first half of 2014 with value-adjusted equity of NKr4.7 billion (US$690 million) and NKr562 million (US$83 million) in liquidity. As of the end of May 2014, its contract backlog amounted to around NKr4.9 billion (US$719 million) including options.

The Olympic group has been an active bond issuer since 2011 and is a key part of the offshore cluster in northwestern Norway.

Mr Remøy’s strategy for fleet development is by new technology, a focus on environmental issues and achieving better operational solutions. He has a policy of maintaining a significant cash buffer in order to ensure 52 I Offshore Support Journal Industry Leaders I December 2014

financial and operational flexibility, and the company’s management team and owner have significant experience and a strong track record from both the offshore support vessel industry and financial markets.

Olympic continues to invest in newbuilds when it feels that the timing is right, and the addition of new vessels to its fleet helped boost the company’s profits in the first half of 2014 (the latest period for which financial statements were available at the time of writing). The company’s net profit rose to NKr192 million (US$28 million), compared with NKr39 million (US$6 million) in the same period in 2013. Revenue increased by 23.6 per cent to NKr689 million (US$101 million), and total assets rose by NKr1.6 billion (US$235 million) to NKr9 billion (US$1.3 billion).

The company put fleet utilisation for the period at 85 per cent and said that a total of seven newbuildings were delivered in the period. The company noted that increased rig activity towards the end of 2014 ought to be good news for its anchor handlers. At the time that the report was issued in August 2014, the company had a fleet of 23 vessels with an average age of five years.

In May, the company confirmed that it had completed a senior unsecured bond issue of NKr500 million (US$73 million) with a borrowing limit of NKr750 million (US$110 million) and maturity date in June 2019. In April 2014, it took delivery of Olympic Boa – a multifunction subsea support and construction vessel designed for low fuel consumption and excellent sea keeping and station keeping.

This is in addition to low noise and vibration in hull and superstructure, which ensures high comfort and safety for the crew. The vessel is designed according to class and the requirements of the authorities, with a focus on reduced fuel consumption, which also means reduced emissions to the environment.

In addition to construction work, the vessel is also arranged for a pair of work-class remotely operated vehicles (ROVs) with launch and recovery systems in the hangar and the option of an observation-class ROV on the shelter deck. The vessel can also perform normal field support duties and is arranged with a construction moonpool.

Due to be delivered to the company in 2015 are an MT 6021 MkII multifunction subsea

support and construction vessel designed to meet the needs of the offshore market, with diesel-electric, frequency-controlled propulsion, highly efficient azimuth thrusters and dynamic positioning, and another very similar vessel. The first of the MT 6021 design, which is currently due to be delivered in March 2015, will be chartered to Bibby Offshore for three years with options for an additional three years. OSJ

Stig Remøy has invested cautiously, but steadily, in new subsea vessels – a strategy that continues to pay off www.osjonline.com

36

Bart Heijermans

Heijermans adds geotechnical to portfolio A

s readers will remember from the OSJ Industry Leaders 2013 supplement, it is only recently that Mr Heijermans took DeepOcean into the subsea umbilicals, risers and flowlines (Surf) market, when it entered into a five-and-a-half-year charter agreement starting in March 2016 for a newbuild installation vessel that will enhance DeepOcean’s current service offerings in the Surf segment in the Greater North Sea area. As the company noted, the expansion into the Surf segment as a lead contractor is something that it did “with great confidence”, noting that the dedicated Surf vessel will provide the company with the opportunity to serve customers as a lead contractor and offer commercial benefits resulting from the bundling of its services.

Now, the geotechnical market beckons, following the acquisition of a geotechnical drilling rig and a strategic alliance with Geoquip Marine for the provision of geotechnical services in the Greater North Sea area and collaboration worldwide.

Speaking at the time that the deal was announced, Bart Heijermans, the company’s CEO, said he believed that the geotechnical services market was undersupplied and that DeepOcean, through its strategic alliance with Geoquip and its relationships with key customers worldwide, was well positioned to become a preferred geotechnical service provider and a viable alternative to the current segment leader in the Greater North Sea. Mr Heijermans noted that the company has several vessels it owns and others it has chartered that can deploy a geotechnical drilling rig. “We are targeting a number of opportunities in the offshore renewables and oil and gas sectors to get this important initiative started,” he explained. For its part, Geoquip Marine described DeepOcean as “an ideal partner”. The new rig is a heave compensated, offshore geotechnical deepwater drilling rig built and commissioned in 2011. It is capable of operating in water depths over 600m and drilling with a combined water and borehole depth of 850m.

In a particularly busy start to 2014, March saw DeepOcean UK, a subsidiary of DeepOcean Group Holding BV, announce that the company has entered into a sevenyear charter agreement with Maersk Supply Service for a newbuild cablelay vessel. The www.osjonline.com

Led by Bart Heijermans, DeepOcean continued to secure long-term contracts with a number of leading clients in 2014 and announced that it would charter a newbuild cablelay vessel and enter the offshore geotechnical market

vessel is the DOC 8500, a Damen Offshore Carrier that has been designed specifically to suit DeepOcean’s requirements. The DOC 8500 will extend DeepOcean’s capabilities in the larger cablelaying end of the market, representing a new focus on interconnector projects, in addition to oil and gas sector and renewables work. The specially equipped vessel will be delivered from the Damen Galati yard in Romania. Owned and operated

by Maersk Supply Service, the vessel will become the latest addition to the 60-plus strong Maersk offshore support vessel fleet. It was designed to meet the high standards demanded by North Sea oil and gas customers and has a bow form and slender hull optimised for seakeeping in rough seas and to suppress slamming. The ship will run on either MGO or HFO and has DP2 dynamic positioning capability in line with offshore market preferences. Its high on-deck cable-carrying capacity makes it particularly competitive as a cablelayer, while the vessel has also been optimised for shallow-water operations, coming complete with a sevenpoint mooring system.

Mr Heijermans leads a company that is an integrated provider of services and technology for the subsea industry, including survey and seabed mapping, subsea installation, seabed intervention, inspection, maintenance and repair (IMR) and decommissioning. The DeepOcean company is privately owned with its main shareholders being US institutional investors. In 2012, the company had revenues of US$513 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of US$54 million.

Mr Heijermans became DeepOcean Group Holding’s CEO in February 2012. He is well known as a global energy executive with more than 20 years of experience in the

Bart Heijermans has taken DeepOcean deeper into the Surf market and more recently the geotechnical market development, execution and operations of deepwater oil and gas projects. Prior to joining DeepOcean as a member of the board in July 2011, Mr Heijermans was executive vice president and chief operating officer of Helix Energy Solutions Group. He has held several senior positions with energy companies such as Enterprise Products Partners, El Paso Corporation and Royal Dutch Shell plc and holds a master’s degree in civil and structural engineering from the University of Delft in the Netherlands. He is also a graduate of the Harvard Business School advanced management programme.

Mr Heijermans says DeepOcean’s competitive strength lies in its ability to provide a suitable spread for solving clients’ subsea challenges.

The company has access to owned and chartered dynamic positioning vessels that serve as platforms for mobilising equipment to fit each work scope. OSJ Offshore Support Journal Industry Leaders I December 2014 I 53

37 Long-time investor takes controlling share in Bourbon M

Jacques de Chateauvieux

r de Chateauvieux’s investment company Jaccar Holdings now owns 55.8 per cent of the capital and 58.1 per cent of effective voting rights in Bourbon, in concert with Mach-Invest International.

Jaccar Holdings has a longstanding involvement with Bourbon that stretches back over several decades. Based in Luxembourg, the private investment company has a number of interests, but Bourbon is comfortably its most important, representing 45 per cent of its portfolio, which also includes other assets, all in the maritime sector, such as Greenship Bulk, Greenship Gas and SAPMER Holdings.

After a period of intense investment in newbuildings, Bourbon has been pursuing a deleveraging strategy more recently and is looking to reduce its debt through a combination of the proceeds from saleand-charter-back transactions (in the order of US$2.5 billion) and strong free cash flow generation from growing operations and lower capex and cash interest expense. Back in 2013, under its ‘Transforming for beyond’ plan, which it said was designed to prepare it for future growth, the company announced its intention to sell supply vessels it owned but

Jacques de Chateauvieux is optimising Bourbon’s capital structure and solidifying its financial position 54 I Offshore Support Journal Industry Leaders I December 2014

Jacques de Chateauvieux, who used to be CEO at Bourbon, the well known offshore vessel operator, is back in the picture in a big way, having succeeded with a tender offer for shares in the company earlier this year

continue to operate them for 10 years under bareboat chartering contracts.

Announcing its third-quarter 2014 result, Bourbon said third-quarter revenues were up 5.7 per cent year on year thanks to fleet growth and higher average daily rates, although these were partially offset by lower utilisation rates. The company said average daily rates increased in almost all segments and regions, owing in part to newer, larger vessels having higher day rates and improved rates on some contract renewals and extensions. Utilisation was mixed across most of the regions in which the company operates, with Asia and West Africa being adversely affected by an increased supply of vessels and reduced activity. The company said that cost-reduction programmes by oil companies had an impact on all of the segments in which it operates.

In the short term, said the company, it was entering a period in which the market will be more complex, taking into account cost reductions by clients and the decline in the oil price. Significant deliveries of vessels compared with the same period in 2013 helped to increase revenues by more than 6 per cent despite a generally softening market as oil companies continued to be selective in their investments. The increase in revenues in the company’s deepwater segment during the third quarter of 2013 was in line with the increase in the size of the company’s fleet. Revenues for this segment in the period increased by almost 19 per cent, largely due to an increase in the fleet size.

Bourbon noted that, after several years of stability, the price of oil has dropped significantly and had fallen to around US$80– 85 per barrel (Brent crude). In this context, it said, oil and gas companies have been engaged in cost-reduction efforts throughout the year, and that trend is expected to continue in the near term.

“This has meant more selective investment choices and a focus on existing well production,” said Bourbon. “However, both the medium-term and long-term view provide a much more positive outlook. The time horizon for field development and production is often over 20 years and takes places over several business cycles. Whilst short-term factors may influence decisions temporarily, there is still a need for companies to maintain and increase overall production.

“Demand for energy is still strong and with depletion rates of existing fields continuing, and there is still a need for further exploration and production investment by the oil and gas companies. In addition, the rig count is expected to continue to increase.

Looking at this increase in rigs, the company said, “Only a portion of the approximately 200 rigs under construction will be replacing older rigs, which is favourable for future demand for offshore support vessels (OSVs). A high contractor backlog through 2016 could also have a positive impact on demand for OSVs. On average, we anticipate a stable demand for offshore support vessels.

“On the supply side, the high number of large PSVs coming out of shipyards could negatively affect the spot market,” the company said, noting that that this should have only a small impact on Bourbon.

In late October 2014, the company completed a 100 million bond issue. As of then, Bourbon had completed the transfer of 45 vessels to ICBCL, with whom it has an agreement for the transfer of a total of 51 vessels. This provided total proceeds of US$1.4 billion. To date, the vessels transferred to ICBCL include eight deepwater vessels, 31 shallow-water vessels and six subsea vessels.

A $US150 million agreement with Standard Chartered Bank for the sale of six vessels remains on track, and the remaining three vessels were due to be transferred before the end of 2014.

“Having consolidated the group’s shareholders with the successful tender offer launched by Jaccar Holdings in July, with this new hybrid bond issue, we are pursuing the optimisation of Bourbon’s capital structure and solidifying our financial position,” said Mr de Chateauvieux, who is also chairman of the board at Bourbon. OSJ www.osjonline.com

38

John Reed

Veteran drives revenues towards US$1 billion mark H

arkand, the inspection, maintenance and repair (IMR) company, has operations in three distinct regions across the globe – North America/Africa, Asia Pacific and Europe – and specialises in IMR as well as light construction, construction support and survey services. Mr Reed, an industry veteran with more than 30 years’ experience in the offshore engineering and construction sector, will lead the development of the company as it drives forward with its target of growing turnover to US$1 billion in the next five years.

He replaced Nicolas Mouté, who steered the group’s formation since inception and through the merger of Iremis, Integrated Subsea Services (ISS) and Andrews Survey following investment

by Oaktree Capital Management and the acquisition of Veolia Marine Services.

Speaking at the time that Mr Reed’s appointment was announced, the company’s chairman, Tom Ehret, said he was pleased to welcome Mr Reed to Harkand and noted that he brought with him extensive experience of developing and delivering large-scale, capital-intensive projects and management of major complex organisations.

Mr Reed most recently served on the Cal Dive International board of directors from May 2012 to August 2013. Prior to that, he was CEO of Global Industries Ltd from March 2010 until its acquisition by Technip and is a former CEO of Heerema Marine Contractors. He holds a bachelor’s degree in engineering from the University of Mississippi and an MBA from Delta State University and previously served as a member of the board of directors of the National Ocean Industries Association. He is a past president of the International Pipeline and Marine Contractors Association and past chairman of the International Marine Contractors Association, America’s deepwater division.

Harkand aims to become a leading name in the subsea sector and employs 750 people at bases in Aberdeen in the UK, Dubai in the Middle East, Singapore and Perth in Australia. It aims to grow turnover to US$1 billion in the next five years. In August 2014, Harkand completed the acquisition of Veolia Marine Services.

More recently, the company completed placement of a new US$230 million senior secured bond issue in the Norwegian bond market. The bonds will have a tenor of five years, maturing in March 2019. The net proceeds will be used to refinance existing debt on the vessels Harkand www.osjonline.com

Towards the end of 2013, Harkand appointed John Reed as chief executive officer as it embarked on the next stage of its ambitious growth strategy

Atlantis and Harkand Da Vinci, to fund the predelivery instalments of the newbuild dive support vessel scheduled for delivery in the second quarter of 2016 and to further expand the company.

Writing earlier this year, Mr Reed said Harkand was “making clear movement towards our goal to become the leading subsea IMR and light construction provider in the oil and gas industry.

“In order to meet our financial goal of US$1 billion revenue in the next few years and to continue to develop as a company, we are staying focused on three key areas: safety, people and growth. During the past few months, we have grown our fleet, broadened our client base, expanded our workforce, further developed our HSEQ policies and procedures,” he said, noting that the company had earlier taken delivery of Siem Spearfish in the Gulf of Mexico, taking its vessel fleet to nine units as of mid-2014. As he noted, the above-mentioned share issue was substantially oversubscribed, allowing Harkand to achieve the lowest interest rate it had hoped for. “This is important because it means we are recognised as having the people, the assets and the means to accomplish what we say we can,” he said.

Earlier this year, the company also secured a long-term lease for a storage facility in Montrose, Scotland, giving the company its first permanent work base in the town to support ongoing operations. The site is located on Rossie Island close to the harbour in Montrose, which serves as an important port for Harkand’s ongoing business.

Based on a 10-year lease, the facility consists of 12,000 ft2 (1,100 m2) of warehouse space, 33,000 ft2 (3,000 m2) of external storage as well as a small area of internal offices. The facility will provide the company with a new office and storage facility in Montrose and the extra space it needs as the business continues to grow in the North Sea. Harkand will use the facility for equipment storage as well as mobilisations and demobilisations in Montrose. The new premises add to an existing base it has at the Nord Centre in Aberdeen.

In the Gulf of Mexico, Harkand recently completed the transportation and installation of

John Reed is driving IMR and light construction specialist Harkand’s revenues towards a long-term goal of US$1 billion two large jumpers in the Gulf of Mexico utilising HOS Mystique, a vessel it has chartered in. The company provided the vessel for light subsea construction in 610m of water approximately 160 miles (260 kilometres) southwest of New Orleans.

The contract delivery was supported by Harkand’s onshore team of project managers and engineering services based in the Houston office and highlighted the company’s ability to engineer cost-effective solutions for clients. The jumpers were originally designed to be installed with a larger vessel and were installed using HOS Mystique without any incident, on schedule and within budget.

Another recent deal saw Harkand awarded a contract to support Apache with IMR and light construction across their assets in the North Sea, following completion of a competitive tender exercise. The award includes the provision of vessels, remotely operated vehicle (ROV) and diving services for a three-year period plus two one-year options. Also recently won by the company was a contract from Nexen Petroleum UK Ltd for its 2014 ROV survey inspection services work along with a longer-term frame agreement. The inspection scope covered the Buzzard, Scott, Telford, Ettrick and Rochelle assets in the central North Sea. It saw the deployment of Surf Ranger, which joined the Harkand fleet in May 2014. OSJ Offshore Support Journal Industry Leaders I December 2014 I 55

39 GC Rieber CEO maintains a long-term perspective O

Irene Waage Basili

ne of only a few women to lead an offshore vessel-owning company, Irene Waage Basili, GC Rieber Shipping’s CEO, has more than 20 years of experience in the shipping sector in segments of the market as diverse as dry bulk, tankers, roro vessels and, of course, oil field servicerelated shipping, both in the US and Norway.

During her career, she has held senior positions in companies including Petroleum Geo Services (PGS), Arrow Seismic and Wilh Wilhelmsen and is also a board member of Odfjell and Kongsberg Gruppen. Ms Basili also served on Norway’s committee to assess the impact of increased maritime activity in the High North.

Ms Basili was appointed CEO of GC Rieber Shipping in March 2011 having worked for three years at PGS following its acquisition of Arrow Seismic, where Ms Basili was CEO. She gained a degree in business administration from Boston University School of Management, specialising in international management.

2013 saw Ms Basili awarded a WISTA LeaderShip Award by WISTA Norway in recognition of her achievements in the Norwegian maritime industry. Speaking at the time that the award was made, the president of WISTA described her as “professional, open and dedicated” with what she described as “competence that the Norwegian shipping industry can benefit from”. At the time that the award was made, Ms Basili led a company where 40 per cent of the management team were women.

GC Rieber Shipping has a fleet of 11 vessels in the subsea, marine seismic and ice/support segments. The company also operates another two vessels. Its contract portfolio mainly consists of medium-term contracts, which can be expected to contribute to stable earnings going forward.

The company maintained what Ms Basili described as “stable, good operations” throughout the third quarter. In fact, the quarter saw the second-highest EBITDA in the company’s history. Total fleet utilisation was 99 per cent, compared to 96 per cent in the same period in 2013.

The group’s operating revenue for the third quarter of 2014 was NKr240.7 million (US$35.2 million), compared to NKr215.0 million (US$31.5 million) in the third quarter of 2013.

56 I Offshore Support Journal Industry Leaders I December 2014

Focusing on the long-term and maintaining a mix of seismic, subsea and ice-class assets has helped GC Rieber Shipping’s CEO maintain profitability

The increase was primarily due to the fact that, compared with 2013, the company had one vessel more in operation, the newbuild Polar Onyx, which started operations at the end of the first quarter of 2014. EBITDA was NKr124.8 million (US$18.3 million), corresponding to an EBITDA margin of 52 per cent. EBITDA for the third quarter of 2013 was NKr126.5 million (US$18.5 million), corresponding to an EBITDA margin of 59 per cent.

GC Rieber Shipping had a profit of NKr47.0 million (US$6.9 million) for the third quarter, compared to NKr439.0 million (US$64.3 million) in the same period in 2013. (The especially solid result in the third quarter of 2013 was due to an accounting gain related to the sale of HMS Protector in September 2013.)

“We are very pleased to again present a solid quarterly result and see this as a confirmation that we are well positioned in the market. A solid financial platform and operational robustness in the operation of our vessels allows us to deliver solid results,” said Ms Basili. “We are optimistic about the future. In a more challenging market, modern vessels delivering services at competitive terms and solid operations will be decisive for us and our customers.”

At the end of September 2014, GC Rieber Shipping had a contract backlog of NKr3.2 billion (US$468.5 million), with an average contract duration of 2.4 years. Contract coverage for the fourth quarter of 2014, 2015 and 2016 is 100 per cent, 67 per cent and 57 per cent respectively.

During the third quarter of 2014, GC Rieber secured a three-year charter contract with Boa Marine Services for the subsea vessel Polar Queen and a one-year extension of a charter contract for RRS Ernest Shackleton until August 2016. The agreement with Boa Marine Services was an extension of an existing contract and will take effect as at April 2015. The agreement includes an option on the part of the charterer for a three-year

Irene Waage Basili: “seismic market has been turbulent but longer-term outlook for GC Rieber remains good” extension. The first quarter of 2015 will see the company take delivery of a seismic vessel newbuilding from Kleven Verft. On delivery, the vessel will embark on a five-year contract with Dolphin Geophysical.

Ms Basili said she takes a positive longterm view of the markets in which the company operates, based on expectations of long-term growth in global energy demand.

In the short term, she said the offshore market is characterised by “uncertainty and cutbacks” in investment due to an increased focus on cost and the recent fall in the oil price. “The effect of this is becoming apparent in terms of reduced levels of activity in the seismic industry, with a relatively turbulent autumn where major seismic companies have reported weaker accounting figures and reduced contract backlogs,” she explained.

“The uncertain market outlook is expected to continue into 2015,” she concluded, noting that the company has full contract backlog for the seismic fleet up until the second quarter of 2016 and that GC Rieber’s subsea vessels – of which three are in the inspection, maintenance and repair segment – is less exposed to reduced investment compared with that part of the subsea industry that focuses on new projects. OSJ www.osjonline.com

40

René Kofod-Olsen

Private equity gives KofodOlsen scope for expansion Topaz Energy and Marine plans to use funds secured from a private equity company to continue to invest and is expanding into markets such as West Africa

I

n August 2014, Topaz Energy and Marine concluded a US$75 million equity investment in the business from Standard Chartered Private Equity (SCPE). Under the terms of the investment, SCPE will inject US$75 million of equity in return for a 9.8 per cent stake in the business. The funds will be deployed in support of Topaz’s long-term fleet expansion ambition in its core operational regions and strategic entry to key growth opportunities.

“Joining forces with a private equity powerhouse like SCPE will enable Topaz to truly accelerate the realisation of our strategic plan,” said René KofodOlsen, CEO of Topaz. “We have now enhanced the foundation from which we can deliver our ambition for further geographical diversification and growth through both organic expansion and acquisitions.

“SCPE is investing because of its firm belief in the Topaz story, the team and our strategy, and we look forward to working together in close partnership,” he said, noting that the transaction is expected to close in the fourth quarter of 2014.

Mr Kofod-Olsen has been the chief executive officer of the company since 2012. He has 18 years of experience in the marine industry with the AP Moller-Maersk Group and previously served as CEO of Svitzer Asia, Middle East & Africa. Mr Kofod-Olsen has significant leadership experience in several multicultural organisations and countries and pursued an advanced management programme at Harvard Business School. Bringing in institutional funds is a key part of his strategy.

The company recently reported results for the first six months of 2014, showing core utilisation of 89.8 per cent and earnings of just over US$91 million on revenues of US$185 million. Revenues were flat compared to the same period last year, primarily because some vessels in the Caspian and global regions were between charters or in drydock, resulting in lower utilisation.

“In order for us to deliver full-year results as strong as in 2013, improvements are required.

Keeping all of our vessels utilised must be our focus, and everyone must be vigilant to unnecessary cost creeping into our operations,” said the company. Four vessels were added in the www.osjonline.com

René Kofod-Olsen: “SCPE is investing because of its firm belief in the Topaz story” first half of 2014 – the platform supply vessels (PSVs) Topaz Seema, Topaz Xara, Topaz Faye and Caspian Voyager.

The first six months of 2014 saw broadly stable performance for the company with significant expansion in its operations in West Africa.

Reviewing the company’s operations, Mr KofodOlsen said that, in the Caspian region, negotiations continue in Azerbaijan with the client for their vessel requirements for the Shah Deniz 2 project, one of the world’s biggest natural gas fields, which is expected to kick off in late 2014. “Shah Deniz 2 is a strategic and long-term project for Azerbaijan and our client, in support of which we aim to achieve deployment of our vessels on a long-term sustainable basis,” he said.

“Demand for our OSV services is increasing from the Russian Filanovsky development where

Mr Kofod-Olsen is focusing on keeping vessels fully utilised and on controlling costs

we now have 15 assets deployed,” he explained.

“Two anchor-handling tug/supply vessels have commenced work under a medium-term contract in Turkmenistan, and we will be pursuing further asset deployments in the country throughout 2014.

“The MENA business has delivered a solid performance both in Qatar and in Saudi Arabia. A number of the vessels are now contracted for most of the year. We have seen increased demand for our vessels in the UAE with charter commencement from the third quarter of 2014.

“Our global business has made significant inroads into West Africa with 11 vessels now operating there. The new PSVs added to the fleet in 2014 are in high demand, and we expect to see them work through the year with little commercial downtime. The local office in Nigeria is now fully staffed and functional, providing operational support to our assets and clients.”

Mr Kofod-Olsen said progress has been made on identifying potential strategic partnerships in target markets. “West Africa is a key growth market for Topaz, and we expect to build on our rapid growth in the region to fully consolidate our position in several of the West African markets during the second half of the year,” he said.

Topaz is also pushing ahead with the addition of new strategic assets in line with its commercial strategy. During the second quarter, the company committed to acquiring three new DP2 PSVs, which are expected to positively contribute to earnings from the beginning of 2015 or earlier.

“The investments we have made in the business over the course of 2013 and during 2014 in terms of vessels, technology and, most importantly, our people allow us to remain confident of achieving our performance targets for the full year,” Mr Kofod-Olsen concluded. OSJ

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41 Pilenko sees subsea revenues continue to improve 2 Thierry Pilenko

014 has, as always, been a busy one for Technip, with numerous subsea campaigns undertaken, work commencing on high profile projects such as the Åsgard subsea compression project in Norway, the pipelay support vessel Coral do Atlantico starting operations in Brazil and the company’s Açu manufacturing plant in Brazil progressively ramping up to full-scale production. With revenues of €4.6– 4.9 billion from subsea work and an operating margin of at least 12 per cent, Technip has a solid backlog and continues to improve cash flow and returns in the subsea sector.

With a workforce of 22,000 people, Technip ranks among the top five corporations in offshore oil and gas, petrochemical engineering, and construction and services. Based in Paris, the group is listed in New York and Paris and has operations and engineering centres in France, Italy, Germany, the UK, Norway, Finland, The Netherlands, the US, Brazil, Abu-Dhabi, China, India, Malaysia and Australia. In support of its activities, the group also manufactures flexible pipes and umbilicals and builds offshore platforms. It has a fleet of specialised vessels for pipeline installation and subsea construction, to which new units have recently been added, and has particularly broad execution capabilities in the subsea sector, including ultra-deepwater infield lines, deepwater infield lines and a deepwater-to-shore capability.

Thierry Pilenko has been the chairman of the board and CEO at Technip since April 2007, having been executive vice president and deputy general manager before that. He served as the chairman of the board and CEO at Veritas DGC from March 2004 to January 2007, and from 2001 to March 2004, he served as managing director of SchlumbergerSema, a Schlumberger company. Prior to that, Mr Pilenko was president of Geoquest, another Schlumberger company.

He holds degrees from France’s Nancy School of Geology (1981) and the IFP School (1982) and is a graduate of the École Nationale Supérieure de Géologie as well as the École du Pétrole et des Moteurs.

2014 has also seen the company secure numerous subsea contracts and continue to optimise its subsea assets. Among the most recent contracts is one that will see Technip provide support to EnQuest from project concept to execution and manage a design, fabrication and installation contract on the Kraken development

www.osjonline.com

The subsea sector continues to be a key one for Paris-based Technip, which expects cash flow and returns from the sector to continue to grow in 2015

in the North Sea. The deal will also see Technip utilise its spoolbase, steel tube umbilical plant and a number of vessels.

Under the terms of the deal, Technip has been awarded an engineering, procurement, installation and construction (EPIC) contract for the Kraken development, which is approximately 400km northeast of Aberdeen and 130km east of Shetland in a water depth of approximately 120m.

The contract covers various project management engineering and installation works, which include: fabrication and pipelay of approximately 50km of rigid pipe, including 25km of metal clad pipe and 25km that will be HDPE lined; installation of umbilicals; installation of 7km of flexible risers and jumpers; template and manifold installation at three drill centres; diver-less tie-ins to pipelines and manifolds; and pipeline flooding, hydro testing and leak testing. Technip’s operating centre in Aberdeen will execute the contract, and the group’s spoolbase in Evanton, UK, will weld and load out the rigid pipe. Technip Umbilicals, Technip’s wholly owned subsidiary in Newcastle in the UK, will manufacture the umbilicals. All construction work on the project will be undertaken via diverless construction methods, and a number of vessels from the Technip fleet will be utilised for the offshore campaign, including Deep Energy.

Technip also recently secured a substantial subsea contract for the Bangka development in Indonesia. The contract was awarded by Chevron Indonesia and will take place in the Rapak PSC area, approximately 70km offshore the province of East Kalimantan, Indonesia.

The contract covers engineering, procurement, construction, installation, commissioning and precommissioning of flexibles, umbilicals and subsea structures. Yet another recent deal saw Total E&P UK award Technip a contract for the Edradour subsea development, which is approximately 75km northwest of the Shetland Islands in approximately 300m of water. Here, Technip’s scope of work covers fabrication and installation of 12in (300mm) production pipelines and a 6in (150mm) MEG pipeline complete with 2in

(50mm) piggy-backed service line; supply and installation of steel tube umbilicals; fabrication and installation of pipeline end manifold, flowline end termination, flexible tails and rigid well tiein spools as well as the installation of templates and manifolds provided by the client; and rock dumping and pre-commissioning.

In July 2014, the latest subsea construction vessel to join Technip’s fleet, North Sea Atlantic, was taken on a long-term charter from North Sea Shipping. Designed to Technip’s specifications, the multipurpose vessel is capable of undertaking pipelay, subsea construction and inspection, maintenance and repair projects.

Earlier this year, Technip agreed to divest all of its North American diving assets to Ranger Offshore in order to focus on high technology and ultradeepwater products and services. Proceeds from the sale will be partially reinvested directly into Technip’s subsea business, specifically focusing on improvements to the rigid pipe fabrication facility in Mobile, Alabama, in the US. As part of the transaction, Technip and Ranger Offshore have entered into a multiyear diving services agreement covering Technip’s North America region. The agreement will see Ranger Offshore take control of vessels Global Orion and Normand Commander. Global Orion is fully owned, while Normand Commander is on a long-term charter, which will be assumed

by Ranger from Technip USA. Closure of the sale was due to take place during the fourth quarter. OSJ

Led by Thierry Pilenko, Technip has continued to improve cash flow and returns from the subsea sector Offshore Support Journal Industry Leaders I December 2014 I 59

42 Ice-class and high spec units pay dividends for Remøy Å

Åge Remøy

ge Remøy is the founder and majority owner of Rem Offshore and the company’s chief executive. He has about 30 years’ experience in the offshore sector. Since 1983, he has managed the companies in the Rem Group. He was educated as an engineer at Ålesund University College.

Speaking to OSJ earlier this year, Mr Remøy said he rated anchor handlers as the next potential opportunity for the company, which has taken delivery of a steady stream of high spec vessels in the last few years. Although light construction vessels have been the primary focus of its attention for some time, opportunities to invest in anchor handlers could be opening up, said the company’s owner.

True to his word, 2014 saw Rem Offshore recently place a contract with Vard Brattvaag in Norway for design and construction of a high spec construction/anchor-handling vessel, a deal that was valued at NKr800 million (US$117.6 million). The vessel will be of VARD 2 06 design, developed by Vard Design in Ålesund. Delivery is scheduled from Vard Brattvaag in Norway in the first quarter of 2016. The hull of the vessel will be delivered from Vard Tulcea in Romania.

The new vessel is designed to perform operations with the use of an A-frame and winch system in parallel with an active heave compensated offshore crane capable of working at a depth of more than 3,000m. The crane will have a capacity of 150 tonnes. With a bollard pull of approximately 400 tonnes, the vessel will be able to undertake demanding operations in the deepwater segment. The construction/ anchor-handling tug/supply (AHTS) vessel will have accommodation for 90 plus several offices and workstations for managing complex projects. With ICE-1B and the winterisation notation, the vessel is arranged for operations in northern waters and will be fitted with a launch and recovery system for ROVs. Mr Remøy evidently also sees opportunities for other types of ice-class vessels and placed a contract early in 2014 with another well known Norwegian yard, Kleven, for a platform supply vessel (PSV) designed to operate in Arctic conditions. The VS485 Mk III Arctic design includes a number of features for ice prevention and de-icing. The hull and propulsion systems will have ICE-1B class.

Mr Remøy has a longstanding relationship

60 I Offshore Support Journal Industry Leaders I December 2014

Unlike some owners, Rem Offshore prefers to hone in carefully on segments of the market where opportunities can be expected to arise for high spec units, most of which it builds locally, in Norwegian yards

with Kleven. In fact, when the PSV is delivered in the second quarter of 2015, it will be the 18th ship that Kleven has delivered to the company since 2006. The vessel is a Wärtsila Ship Design design.

As highlighted above, Åge Remøy has invested heavily in light construction vessels in the last two to three years. Speaking exclusively to OSJ earlier this year, Mr Remøy said that, as long as the oil price remained high, he was optimistic about the offshore support vessel sector.

Things have changed in the last three to four months of course – and the oil price has plunged – but in the high spec AHTS market, Mr Remøy has undoubtedly identified a market where, since a bout of overordering in the run-up to the global financial crisis, there has been relatively little activity.

“I can foresee a situation in which there might be undersupply of larger anchor handlers with remotely operated vehicles,” Mr Remøy told OSJ, a situation that remains true today, despite the fall in the oil prices.

Another high spec delivery for Rem Offshore, the MT 6022 Rem Ocean, was chartered

by DeepOcean, which has a long-term contract with Statoil for inspection, maintenance and repair (IMR) work.

The vessel, which is also winterised, was delivered early in 2014 and was due to work in the North Sea and in the Barents.

The second vessel of this type, Rem Pioneer, was delivered in mid-2014 and also secured a charter. This unit is also an MT 6022, but the design has been lengthened

to 117m, which will provide potential charterers with more deck space. Mr Remøy noted that additional deck space is one of the features that potential clients are asking for in vessels of this type, as well as larger, more capable cranes.

The vessel about to go to work with Statoil has a 150-tonne crane, whereas Rem Pioneer has a 250-tonne crane fitted. More accommodation on board is the other obvious requirement.

Another area to have attracted the attention of Mr Remøy and his colleagues is the fast-growing ‘walk-to-work’ market for vessels with offshore access systems. Rem Offshore probably has as much experience with these personnel transfer systems as anybody in the market. OSJ

Åge Remøy’s focus on light construction, ice-class and more recently AHTS vessels has paid dividends

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43 Solid order backlog will see Farstad through downturn S

Sverre Farstad

verre (Andy) Farstad, Farstad Shipping’s chairman, has been a board member since 1988. He earned a degree from Heriot Watt University in Edinburgh in the UK and is also chairman of the board of Tyrholm & Farstad and holds various board appointments and other positions in banking, insurance and at the Norwegian Shipowners Association.

Although the day-to-day running of Farstad is in the hands of CEO Karl-Johan Bakken, Mr Farstad has an office in the same building as the company’s head office in Ålesund and regularly drops in to Mr Bakken’s office to be updated about the business, and he remains very much a part of the decision-making process there. The Farstad family controls approximately 48 per cent of Farstad Shipping via a number of different companies and private shareholdings, with the rest of the shares listed on the Oslo stock exchange.

Mr Farstad’s company is a leader in the offshore support vessel market and focuses primarily on more advanced types of offshore vessels. The company describes itself as “a value driven company with a focus on safety, quality and efficiency”. At the time of writing, Farstad had more than 60 vessels, including 27 platform supply vessels (PSVs), 32 anchorhandling tug/supply (AHTS) vessels and a trio of subsea vessels. It also had two subsea newbuilds under construction for delivery in March and July 2015 having recently decided to invest further in this particularly sector of the market. The company’s operations are managed from Ålesund, Aberdeen, Melbourne, Perth, Singapore, Macaé and Rio de Janeiro with approximately 2,250 employees engaged on shore and off shore. Around 18 vessels are stationed in Brazil, 15 vessels in northwest Europe, 27 vessels in the Indian Pacific region and two vessels in Africa.

Farstad Shipping achieved an operating income of NKr1,050.6 million (US$154.6 million) for the second quarter of 2014, the latest quarter for which results had been published at the time of writing. Operating profit (EBIT) was NKr178.6 million (US$26.3 million). Profit after taxes was NKr46.7 million (US$6.9 million). The increase in operating income and operating costs were mainly due to an increased number of vessels in the fleet compared to the same period in 2013.

Far Sigma (a UT731 CD AHTS vessel) was

62 I Offshore Support Journal Industry Leaders I December 2014

Farstad Shipping’s chairman has regularly warned about overcapacity in the market. The decline in the oil price will make matters worse, but his company already has the cushion of a decent order backlog

delivered from Vard Langsten shipyard in February. Another vessel of the same type, Far Sirius, was delivered by the same yard in early April. The anchor handlers were followed into service in July by Far Sun (a PSV of VARD 1 07 design) from Vard Langsten and Far Sygna (another VARD 1 07), which was delivered from Vard Vung Tau, Vietnam, in August.

The company secured a number of new charter commitments during the first half of the year. Statoil declared an option to extend the contract for PSV Far Serenade by one year from April. Saipem declared their option to extend the contract for construction support vessel Far Samson for one year, and the vessel now has secured employment to the end of April 2015.

Peterson Den Helder declared an option to extend a contract for the PSV Far Splendour by a year from the beginning of May. ConocoPhillips extended a contract for the PSV Lady Melinda for another two years, and the vessel now has secured employment until December 2015. Woodside awarded the PSV Far Starling an 18-month firm contract with a further three six-month options.

Woodside also declared their option to extend the contract for PSV Lady Grace by 12 months from May. Chevron Australia exercised an option to extend the contracts for the AHTS vessels Far Saracen and Far Shogun for a period of 38 months.

Both vessels are secured until May 2017. Inpex awarded the AHTS vessels Far Sword and Far Stream 40-month firm contracts, which were due to commence in November 2014. Inpex can extend both contracts by up to 24 months. Inpex also awarded the PSV Far Seeker an 18-month firm contract with further options of up to 24 months.

Woodside Energy awarded the AHTS vessel Far Sirius a 16-month contract with further options of up to 18 months. This contract got underway in October 2014. Esso Australia awarded the PSV Far Supplier a two-year contract with further options of up to three years. Esso also awarded the PSV Far Scandia a 10-month contract with further

Sverre Farstad’s company has had a decent year, with new contracts awarded and options exercised for its vessels options of up to six months. Both contracts were in direct continuation of existing contracts.

Statoil awarded the PSV Far Scotsman a contract to support the company’s drilling operations off Tanzania. The contract was in direct continuation of the existing contract with duration of eight months, with further six six-month options.

Karoon Petroleo & Gas Ltda awarded the AHTS vessel Far Senator a five-month contract with a further four 30-day options. The vessel is supporting the company’s drilling programme in Brazil. Commencement of the contract was in the middle of July. Petrobras extended the contract for AHTS vessel Far Santana by another four years from July.

All of the above meant that, as of the issuing of the report, Farstad’s contract coverage was approximately 79 per cent for the remaining part of 2014 and approximately 59 per cent for 2015 (including options).

At the time that the report was issued, before the recent steep fall in the oil price, the company noted that development in the activity level offshore was being adversely affected by a strong focus on costs and the overall upward cost trend in the industry.

In addition, said the company, the market was characterised by “too much tonnage as a consequence of newbuild contracting activity,” and the orderbook indicated that an improvement in the market balance should not be expected any time soon.” OSJ www.osjonline.com

44

Patrick Janssens

Janssens’ strategy pays dividends as orders grow When he took over the yards now known as Shipyard De Hoop, Patrick Janssens implemented a strategy that focused on designing and building practical, economic ships – it worked, and the company now has more OSVs on order than any other yard in Europe

T

hat Shipyard De Hoop in the Netherlands currently has a larger orderbook (in terms of the number of vessels on order) than any other European yard is testament to the strategy adopted and implemented so successfully

by Patrick Janssens, the company’s chief executive officer.

In a sector increasingly dominated by low cost construction at Chinese yards, European yards have tended to focus on larger, more sophisticated offshore vessels for harsher environments, such as the North Sea. Doing so has secured good business for well known players such as Ulstein, Vard and Hayvard – all Norwegian – who also sell their designs to non-European yards to boost revenue streams.

However, as highlighted in OSJ’s newly published Guide to OSV Shipbuilders, it is small and medium-size platform supply vessels (PSVs) and smaller, less highly specified designs that have secured top spot for Dutch yard De Hoop in the table of European offshore support vessel (OSV) builders.

As highlighted in the Guide to OSV Shipbuilders, De Hoop develops most of the offshore vessel designs it builds in house and focuses on vessels intended for relatively benign conditions. It has longstanding relationships with clients in Mexico and in the Middle East, such as ADNOC, from whom it recently won a 10-ship order.

Among recent deliveries by the De Hoop group (which operates two yards in the Netherlands) is Deep Helder, a specialised subsea vessel built for Seamar Subsea and chartered to DeepOcean on a long-term contract. Seamar first announced the order in late March 2013, and construction of the vessel was completed in a remarkably quick time. Steel cutting did not begin until mid-

www.osjonline.com

Patrick Janssens positioned De Hoop to concentrate on the market for low cost vessels – doing so has certainly paid off September 2013, with the keel laying taking place two months later. At the end of April this year, Deep Helder was launched from Shipyard De Hoop in Foxhol. Sea trials took place in June, and the vessel is now at work, demonstrating the yard’s ability to bring a design to fruition quickly.

An even more recent delivery by De Hoop is Karina, the first example of a new class of seven fast supply intervention vessels (FSIVs). The vessels were ordered in late 2012, and the first two in the series were launched in March 2014. Karina undertook sea trials in July 2014 and is now in service.

The FSIVs have a conventional displacement hull – albeit a very slender one with very fine entry angle – and a stern shape designed not only for maximum speed but for good seakeeping and no slamming. The vessels also have a bulbous bow to reduce the bow wave and improve seakeeping. The vessels, which also have a novel hybrid propulsion system, are described in detail in the December issue of OSJ. Among other recent deliveries from the yard is a hull for a 68.23m OSV for Awaritse Nigeria Ltd. This vessel is designed to operate in Chevron’s oil fields offshore Nigeria and

is due to be launched in November 2014.

Construction of a 70m PSV, Delta Admiral, for Delta Logistics is also in full swing at the yard. This vessel is intended for the oil fields offshore Trinidad and Tobago. It was due to be delivered in October. West Africa is another area where De Hoop’s strategy of designing and building vessels for relatively benign environments has paid off.

Mr Janssens joined Shipyard De Hoop in 2004. He holds a master’s degree in international business administration and a bachelor’s degree in industrial engineering.

He has a wealth of experience in managing international shipyards and took over De Hoop in a management buy-out in 2007.

Having earlier joined the board at De Hoop, Mr Janssens adjusted the company’s strategy to keep pace with changing requirements and the evolving economic situation at the time. The shipyard in Heusden was sold in 2005 (along with a yard that the company owned in the US) in order to focus more on innovative shipbuilding.

This enhanced the yard’s financial position, making it stronger, more independent and ready for the future. In 2007, when the economy seemed healthy and the market was picking up, De Hoop acquired the Volharding shipyard in Foxhol in the north of the Netherlands. De Hoop Foxhol was born and started operations with 60 employees.

In October 2007, Mr Janssens took over the existing De Hoop Lobith yard and the operation at Foxhol and, since that time, has developed a number of innovative but low cost designs typified by the name given to one of them – the ‘keep it simple ship’ or KISS. OSJ

Deep Helder is one of the latest deliveries

by Shipyard De Hoop Offshore Support Journal Industry Leaders I December 2014 I 63

45 Roelse takes charge in significant year for Royal IHC

Bram Roelse

2014 was a significant year for Royal IHC in the Netherlands, the former IHC Merwede, which can trace its roots as a shipbuilder back hundreds of years

I

n April 2014, Royal IHC announced that it had appointed Bram Roelse as the company’s new chief executive officer. Mr Roelse took on this role in the company from his predecessor, Dirk Philips, who stepped back in November 2013.

Mr Roelse (56) has worked at Royal IHC for the past 13 years. He was originally appointed as managing director of the company’s business unit IHC Systems. At the end of 2004, he moved to the company’s shipyard at Kinderdijk, where he became director of the dredging division.

As a member of Royal IHC’s board of management since 2002, Mr Roelse began work in his previous post as chief operating officer in September 2013, when he also became a member of the board of directors. Prior to his time at Royal IHC, he had gained invaluable experience in the naval shipbuilding and oil and gas industries.

IHC Merwede changed its name to Royal IHC earlier in 2014, when His Majesty the King awarded the honorary title of Koninklijk (Royal) to IHC Merwede. In light of this honour, the company has decided to change its name to Royal IHC and included the royal crown in its

Bram Roelse became CEO at Royal IHC in April 2014 revised corporate identity.

The royal title is an award granted to companies or organisations that meet certain conditions. To qualify, the nominated company must have been in existence for at least 100 years and be of a certain size and quality. It must be of national importance to and have prominence in the Netherlands – preferably with an international outlook – and the size of the company, the number of employees and its annual turnover are also taken into account.

In 2013, IHC Merwede had been in existence for 325 years. Its predecessors,

Royal IHC is particularly well known in the offshore industry for its expertise in pipelayers

64 I Offshore Support Journal Industry Leaders I December 2014

Kinderdijk shipyards, L Smit & Zoon and J & K Smit, were already active in the 17th century, and the other four IHC shipyards were active from the late 19th century (Gusto in Schiedam and Conrad in Haarlem) and beginning of the 20th century (Verschure in Amsterdam and De Klop in Sliedrecht). In 1943, the six shipyards – specialising at the time in the construction of dredging equipment and tin mills – decided to collaborate and took the name Industrieele Handels Combinatie (IHC) Holland. Nowadays, IHC Merwede is renowned as the world’s leading supplier of dredging equipment and plays a major role in the offshore oil and gas industry, designing and building a range of offshore vessels.

Pipelay vessels are a particular speciality.

Speaking at the time that the decision was announced, Mr Roelse said the company was extremely proud to have received the title. “In changing our name to Royal IHC and adding the royal crown to the revised logo, we have reverted the name back to the roots of the company, which now has more than 3,000 employees.

Merwede was added to IHC in 2005 after the merger between the two companies, but we feel that the new name matches the current need for projecting one company to the outside world.

The title and name symbolise the character of this company, in which keywords such as internationalisation, innovation, pride, passion and dedication have played an important role over the centuries.”

In 2013, Royal IHC had revenues of €985 million (2012: €895 million) and a net profit of €56 million (2012: €37 million). The company noted that, in the dredging market, new investments continue to be made selectively, and these are dependent on the latest regulations and the addition of new products. “The offshore market continues to evolve,” said the company, noting that Royal IHC profited from the sale of various vessels and equipment, including six pipelaying vessels to SapuraKencana and Subsea 7 – the company’s largest ever order.

Mr Roelse said the increase in the company’s orderbook was due to the successful implementation of the group’s long-term business strategy, especially in the dredging and offshore markets. “We are in a strong position moving forward with a stable platform for ongoing development on a global basis,” he concluded. OSJ www.osjonline.com

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46

Ian Giddings

DP expert played major role developing industry guidance IMCA’s retiring technical advisor Ian Giddings has devoted decades to training, competence, safety and efficiency on offshore vessels – something owners everywhere can thank him for

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ompiling a publication like OSJ Industry Leaders, it would be easy to focus almost exclusively on leading shipowners, designers and builders and neglect other people who don’t run companies or yards but who have played a really important role in the industry.

One such person is Ian Giddings, who retires in January 2015 from his longstanding role as a technical adviser at the International Marine Contractors Association (IMCA).

As is obvious to anyone in the offshore support vessel industry, dynamic positioning (DP) is playing an ever more important role in it, and Mr Giddings has long been acknowledged worldwide as an expert in this increasingly important area. As such, he has played a pivotal role in framing guidance issued by IMCA on DP and related subjects and – as highlighted earlier this year in OSJ when we first highlighted Mr Gidding’s retirement plans – for many years, he has been the industry’s ‘go-to’ man for expertise on DP. He joined the merchant navy at 16 and had intended to go to university but ended up serving 14 years aboard a variety of vessel types, gaining his certificate of competency as a master mariner. His first awareness of DP was when he was at sea on a vessel trading general cargo around the Mediterranean. The lookout was chatting about the last vessel he’d been on “that stayed where it was by putting a wire over the side”. “I have to admit that my reaction was ‘OK, it doesn’t sound as if that’s true, but I’ll believe you’,” Mr Giddings said.

Having come ashore, he took a job at Aberdeen College as a lecturer, the first-ever centre in the UK to install a DP simulator. He had been at the college for a couple of years when a lecturer on DP was needed, so he stepped in. A few years later, the team leader for marine operations left, and Mr Giddings took on the role with responsibility for DP and for getting new equipment commissioned and a new DP simulator installed. www.osjonline.com

“DP is expensive and all about reputation and credibility,” he said. “If you are going to stand up and try to teach mature students eager to learn in order to earn their living, you must know what you are talking about, and I believe there is no better way of knowing what you are talking about than saying ‘I’ve been there, seen it, done it and got the tee-shirt.’

“I’ve been involved (with DP) for 28 years.

Indeed, I celebrated 25 years when Howard Shatto was celebrating the half century of DP,” he explained, noting that there have been a huge number of changes in that quarter century or so.

In 1998, Mr Giddings left Aberdeen College to join the Nautical Institute, the professional body for qualified mariners, as their education and training manager, becoming director of education and training in 2004. His role encompassed DP certification and distance learning courses and the education of members to ensure their career development and growth by means of CPD. “It was an interesting job,” he explained, “with new centres to be validated around the world. We developed systems and improved them for centres. We started the annual DP instructors’ meeting where problems, challenges and solutions could be shared and discussed.”

In those days, the number of centres had hardly reached double figures – now, there are 70 around the world. “I worry about that,” he said. “It is understandable that every country wants their own DP training centre, but in the past, we had fewer centres but they were quality centres with people dedicated to DP and attracting students from around the globe. Yes, local centres are more economic, but they take time to build up. Fragmentation is a problem, DPO training is OK, DPO experience is OK, DP certification is OK, but what you want is competence.” Mr Giddings shared his concerns on the growth of certification schemes in the OSJ Guide to Dynamic Positioning a few months ago.

He left the institute in 2006 to join IMCA as technical adviser, where his wealth of experience in the maritime field has underpinned his work, especially with IMCA’s marine division, but also in related areas and alongside the other members of the technical team.

Working with members on the preparation of vital guidance aimed at increasing safety and efficiency has been the core of his activity along with dealing with incident reports. “In

Ian Giddings has played a vitally important role at IMCA, preparing guidance that increases safety and efficiency the early days, a lot of incidents were down to human error and equipment failure. Now, you are starting to see things in areas I would call the un-understandable such as computers and software. At IMCA, we are planning DP safety flashes if an incident has a clear message. DPOs need to learn the lessons and not do it again but always keep one eye over their shoulder for the next major incident that’s not going to go the way you want it to go.”

Looking ahead, Mr Giddings says he foresees greater integration of systems and the ability to display the DP system widely so those on board can select the information they need, and he says he can foresee the DP system controlled by the equivalent of an iPad. Unmanned vessels could be possible, he says, but he is doubtful about unmanned offshore vessels.

With retirement approaching, Mr Giddings plans to spend more time on genealogy and on astronomy (he has a maths and astronomy Open University degree), reading, writing, enjoying listening to the Blues and indulging his passion for learning. He has been a regular speaker at the OSJ Annual Conference and Exhibition and at RMM’s European Dynamic Positioning conference, and we wish him a long, happy and healthy retirement. OSJ Offshore Support Journal Industry Leaders I December 2014 I 67

47 Maritime CEO celebrates past but is looking to the future D

Tor Svensen

et Norske Veritas (DNV), one part of what recently became DNV GL, was formed 150 years ago, and Germanischer Lloyd (GL), the other half of the classification society, is of a similar age. They merged in 2014, combining their history of knowledge and experience to provide solutions to the future challenges faced by the shipping industry, of which offshore support vessels (OSVs) and the OSV industry are a part.

DNV GL classes more offshore vessels than any other classification society. Of course, it doesn’t only focus on offshore vessels, but it is a leader in that field. Its remit is to address the challenges facing the shipping industry as a whole, but in doing so, it inevitably addresses issues facing OSV owners everywhere. Many maritime administrations put their trust in DNV GL and have delegated tasks to them in relation to the certification of ships according to IMO

Tor Svensen: “we have been able to adapt to changing customer expectations, market trends and new regulations” 68 I Offshore Support Journal Industry Leaders I December 2014

Not many shipping organisations can trace their roots back 150 years as classification society DNV GL can, but as a future-oriented business, DNV GL is hardly sitting on its laurels, as Tor Svensen, CEO of DNV GL Maritime, has made clear

Conventions and Codes. DNV GL is authorised by more than 80 administrations to issue certificates on their behalf and attends most IMO committee and subcommittee meetings, either as representatives of the International Association of Classification Societies (IACS) or as advisors to national administrations. DNV GL also advises shipowners on how best to comply with the globally applicable IMO regulations.

The shipping industry – and offshore vessels – will face many significant challenges in the years to come, and the application of new technology and innovation will be crucial in addressing them. The shipping industry as a whole places a great deal of trust in DNV GL and its ability to continue to provide new tools to improve safety and enhance performance throughout the maritime industry. As a pioneer in so many aspects of the shipping and offshore business, not to mention renewable energy and business assurance, DNV GL’s technical expertise and vision is relied on not just in the maritime industry but by many others, too.

As Mr Svensen noted recently, 2014 was a milestone year for DNV GL. It celebrated its 150th anniversary and the first year of the new, combined organisation. “Even though our focus has remained true over this span, to safeguard life, property and the environment, we have been able to adapt to changing customer expectations, market trends, new regulatory requirements and many new technologies,” said Mr Svensen. “At the heart of all of this is the question of whether a class society can create value for customers in the shipping industry. And at DNV GL, both our history and our future are focused on offering services that enable our customers to advance.”

Prior to becoming CEO of DNV GL Maritime, Mr Svensen was the president of DNV Maritime and Oil & Gas. He graduated from the University of Newcastle upon Tyne

in 1978 with a degree in naval architecture and shipbuilding, subsequently receiving a PhD from the same university in 1983. He joined DNV in 1993 as head of section for environmental loads. In 1996, he became a regional manager, based in Singapore and responsible for all DNV activities in Southeast Asia. In 2000, he was appointed technical director, and over the period 2003–2010, he was chief operating officer of DNV Maritime with responsibility for classification and all other DNV maritime activities worldwide. In the period 2007–2008, he was also chairman of IACS. From 2010–2012, he was president and deputy CEO of DNV. From April 2012, following the reorganisation of DNV into three separate operational companies, he became president of DNV Maritime and Oil & Gas. “Moving into 2015, one of our most important ongoing tasks is to develop a common rule set – one that combines the best of the existing rule sets of the two classification societies with modern risk-based principles,” he said. “This is a massive task, but we see it as essential for the future of DNV GL. The rule set is the signature of a classification society and forms the foundation of our organisation.”

As he noted, the maritime industry has undergone a watershed over the last few years, with owners increasingly focused on bringing ships to market that are innovative in design, maintain high value, have low operating costs and are energy efficient. Offshore vessel owners have been particularly forward-looking in this respect, and several of them and their commitment to innovation are also highlighted in this special supplement to OSJ. Mr Svensen says he believes that the merger of DNV GL means that it can bring greater technological expertise, experience and enhanced innovation capabilities to bear on these projects with its partners, particularly in the form of solutions to operational challenges, design changes, maximising efficiency, easing regulatory compliance and improving safety for ships and crews alike.

Mr Svensen said 2014 had seen DNV GL celebrating its past but focusing on the future – on developing initiatives alongside its ongoing research and innovation so that its customers can continue to benefit from its long-term commitment to safety, quality, technology and the environment. OSJ www.osjonline.com

48 Baars building big fleet of vessels in China

Jan-Piet Baars

Vroon Offshore’s faith in the offshore vessel market is demonstrated by the extensive newbuilding programme it has underway at yards in China

J

an-Piet Baars has been director, offshore, at Vroon BV since July 2014, prior to which he was managing director of Vroon Offshore Services and before that managing director of Maersk Ship Management, Rotterdam. Prior to that, he worked as managing director of Reederei Blue Star in Hamburg and was a board member on the Nedlloyd Pension Fund. From 2004–2005, he was director network planning at P&O Nedlloyd and director chartering and fleet capacity from 2000–2004.

He was general manager, Europe – Latin American trades at P&O Nedlloyd from 1997– 2000 and was educated at Erasmus University Rotterdam, where he obtained an MSc in Business Economics, Finance & Marketing. He attended INSEAD between 1985 and 1992.

In his current positon, Mr Baars oversees one of the largest newbuilding programmes of any offshore vessel owner. Vroon Offshore has on order emergency response and rescue vessels (ERRVs), field support vessels (FSVs), platform supply vessels (PSVs), subsea support vessels and anchor-handling tug/supply vessels, all of which are being built at Chinese yards, with Fujian Southeast Shipyard, Nanjing East Star and COSCO Guangdong being the main beneficiaries of the company’s largesse.

Four FSVs are being built at Fujian for the company, with delivery dates starting in 2014 and extending into 2015. The first example of the 60m FSVs, VOS Glamour, was launched in mid-2014. The vessels are noteworthy for having an innovative wave-piercing bow shape that was specially designed for Vroon.

Also being built for the company at Nanjing, with deliveries extending into 2015, is a total of six 50m Group B ERRVs, which will be capable of handling up to 300 survivors. The first two vessels in the series have already been delivered.

Fujian is building two subsea vessels for Vroon, which are due to be delivered in 2015.

The first is VOS Sugar, the second is VOS Star.

The 69.40m vessels will have DP2 dynamic positioning systems, accommodation for 49,

70 I Offshore Support Journal Industry Leaders I December 2014

Jan-Piet Baars is overseeing construction of a large numbers of vessels for Vroon a 4.8m x 3m moonpool and an active heave compensated crane.

The PSVs that are being built for Vroon Offshore are off two types. COSCO Guangdong is building a number of 4,200 dwt Ulsteindesign PX121s, and Fujian is building a number of 3,980-tonne Khiam Chuan Marine (KCM)designed units. The PX121s are 83.40m long with a clear deck area of 850m2. The first, VOS Pace, was launched in June 2014. The KCMdesigned units are 79.48m in length with a deck area of 720m2.

Last, but no means least, Mr Baars’ company

recently took delivery of VOS Champagne, the first of a number of DP2 anchor handlers with oil recovery capability built at Fujian Funing Shipyard in China. A sister vessel, VOS Chablis, was scheduled for delivery in December 2014.

Vroon also recently announced that the launch had taken place at Fujian Southeast Shipyard of the first two of the KCM-designed PSVs, VOS Pride and VOS Prime. The company said VOS Pride and VOS Prime are the first two of what will be a series of 10 sister vessels ordered during 2012 and 2013. All 10 of the multipurpose PSVs have full underdeck supply capabilities that include stainless steel tanks for the carriage of methanol and also provide accommodation and work space for up to 40 client staff. The innovative vessels can also be equipped with a walk-to-work system or active heave compensated crane, leaving what the company described as “ample space for a variety of extra services”.

Vroon said its newbuilding engineering department had worked closely with KCM and the renowned yacht designer KER Yacht Design & Engineering and Force Technology in Copenhagen to optimise the design of the vessels in order to ensure favourable motions and seakeeping capability and efficient fuel consumption (both in DP mode and during transit). To further enhance onboard comfort for client personnel and crew members, the designers also made extensive use of noise and vibration analysis. VOS Pride and VOS Prime are due to be delivered in the spring of 2015, followed by four sister vessels later in 2015 and an additional four in 2016. OSJ

Vroon is building two types of PSVs, including a number of PX121s www.osjonline.com

49 Experienced chief exec leads oil port’s development P Colin Parker

lans by Aberdeen Harbour Board to create additional berthing facilities at Nigg Bay received a significant boost earlier this year when an independent report estimated the economic benefit of the development to the local and national economies to be nearly £1 billion per annum.

The report was published in the same month that the Scottish Government, in its National Planning Process, named the Nigg Bay Development as one of only 14 projects that they consider to be of national importance to Scotland.

The independent report, Economic Impact of Aberdeen Harbour Nigg Bay Development, commissioned by Scottish Enterprise and produced by Midlothian-based BiGGAR Economics, studied the impacts of a potential second harbour being constructed within Nigg Bay. It estimated that a full development scenario, which includes upgrading the road infrastructure around Nigg Bay and, in particular, an improved coastal road linking through to the Aberdeen Western Peripheral Route (AWPR), would result in Aberdeen Harbour – which is already the UK’s leading oil port – contributing £2 billion annually to the Scottish economy and supporting 15,000 jobs. This is an increase of 30 per cent on the port’s current impact. Of this figure, the port would contribute an additional £500 million directly to Aberdeen City and Shire. Apart from its importance to the UK, the harbour is one of Europe’s leading marine support centres for offshore energy and plays a critical role in supporting the oil and gas sector in the North Sea region as a whole.

According to findings, failure to expand the harbour would lead to a decrease of £500 million per annum to the Scottish economy by 2034 – an outcome largely attributed to likely increased competition from abroad. The findings of the report came as the potential development at Nigg Bay was shortlisted in the Scottish Government’s proposed third National Planning Framework (NPF3), with the document identifying the project as one of national significance due to its major contribution to the oil and gas industry.

Welcoming the publication, Aberdeen Harbour Board’s chief executive, Colin Parker, said he was “delighted” that the project was being recognised for its full worth, both

www.osjonline.com

Colin Parker, chief executive at Aberdeen Harbour Board, has overseen wide-ranging improvements to the port, but the next stage of work there could be on an altogether different scale

independently and by the Scottish Government.

“This report, and the support of the government, reinforces our belief that the development would provide significant economic rewards, not only for our customers, local communities, Aberdeen City and Shire, but for Scotland as a whole,” said Mr Parker. He said the initial studies indicate that the £320 million development at Nigg Bay could create up to 1,500m of deepwater quays.

He said this increase in capacity is vital in order to accommodate the demands that the harbour is currently facing whilst also positioning it to attract future traffic flows associated with the subsea and renewables sectors. “The results of this research show that any additional capacity at the port would further support the oil and gas industry supply chain ensuring there is a longterm vibrant sector anchored in Scotland,” said Mr Parker, noting that the harbour at present is operating at near capacity.

Mr Parker joined Aberdeen Harbour Board in 1987 as a navigation control officer, becoming assistant harbour master in 1990. He became harbour master in 1994 and was promoted to operations director in 2003 before being appointed chief executive in 2006, and he has already overseen a number of important developments at the port. A former merchant navy officer, he is chairman of the British Ports Association and a member of the management committee of port skills and safety. He was a board member of Aberdeen and Grampian Chamber of Commerce from 2006 to 2011 and is chairman of the northeast committee of the Scottish Council for Development and Industry, having joined in 2009.

The harbour board’s Directions for Growth document, published in December 2012, identified Nigg Bay as its preferred location for harbour expansion. It is believed a new deepwater facility at this location would provide much needed additional capacity. Designed, to further support oil and gas – in particular, subsea maintenance and decommissioning – it

would also support additional freight traffic and provide transport links to the Northern Isles and attract more cruise ships to the region.

In October 2014, Aberdeen Harbour welcomed the largest vessel to have docked in the city, as its latest plans for the proposed expansion at Nigg Bay continued on public display. The vessel, Pacific Adventure, a general cargo and container vessel 160m in length, now holds the record at the port, beating previous record holder diving support vessel Skandi Arctic. The Hartmann Project Lines vessel, under the agency of Euroline Shipping, recently arrived with a cargo of oil field materials from Mauritania.

Mr Parker noted that the harbour’s ability to accommodate vessels of this size was thanks to an earlier programme of strategic engineering work, completed in 2012, which widened and deepened the navigation channel. He said it also illustrated a trend towards bigger, more efficient vessels requiring access to Aberdeen and further reinforced the need for the development of a second, deeper port facility at Nigg Bay. In addition to increased economic activity, the development project – which the harbour board hopes will commence in 2017 – could create as many as 7,000 jobs. OSJ

Colin Parker: “Nigg Bay development is vital for subsea work” Offshore Support Journal Industry Leaders I December 2014 I 71

50 Berdowski bets on further growth offshore B

Peter Berdowski

oskalis’s fast growth into the offshore market has come since Peter Berdowski became CEO, having been a member of the board of management since 1997 and chairman since 2006. Before joining Boskalis, Mr Berdowski has had a number of management positions at Shell and served as managing partner of Krekel Van der Woerd Wouterse. He also serves as the chairman of the board at Amega Holding B and has a number of other board roles. He studied chemistry at the University of Utrecht.

In late 2012, Boskalis made an offer for semi-submersible heavy-lift operator Dockwise, an offer that ultimately was successful. As Mr Berdowksi noted at the time that the deal was first posited, the combination of the two companies provides new strategic opportunities for accelerated growth in offshore services, and the addition of Dockwise to the Boskalis group has created a service provider with an extensive package of services for clients in the oil and gas

Peter Berdowski has taken Boskalis into the offshore oil and gas market and could make further moves 72 I Offshore Support Journal Industry Leaders I December 2014

Royal Boskalis Westminster is probably best known as a dredging company, but that is changing quickly – nowadays, Boskalis looks to the offshore oil and gas sector for a fair slice of its revenues and could be eyeing another acquisition

sector. Boskalis had already acquired another company that would create value for Boskalis in the form of Smit, whose interests at the time lay in marine salvage and harbour towage.

Then, in November 2014, it began acquiring a stake in Fugro, which has an extensive portfolio of offshore activities. Boskalis has acquired a 14.8 per cent stake in the survey well known Dutch specialist company in what could well be the first step in a full takeover of the company, although for the time being, Boskalis insists that it does not intend to attempt a take-over. On 10 November, Boskalis confirmed that it had fractionally increased its stake in Fugro to 15.0 per cent but again said that it had no intention to make an offer for Fugro.

In a statement, Mr Berdowski said Boskalis viewed Fugro “as an interesting company” with activities that fit very well with its own activities. He said Boskalis wanted to enter into a dialogue with Fugro to explore possible options for co-operation.

He highlighted the fact that – as was the case with the Dockwise acquisition – Boskalis’s strategy is focused on offshore and maritime infrastructure, making use of the combination of knowhow and maritime assets. “This fits very well with the activities of Fugro,” he said. “The two companies have a lot in common in the area of assets, knowledge, capital intensity, global coverage, client base and are both global leaders in niche markets.

“Fugro is an attractive company with activities that fit together well with those of Boskalis. For many years, we have worked together on numerous projects throughout the world and there are strong similarities in the working environment and culture. We would like to speak and explore with the management of Fugro possibilities for cooperation.”

For its part, Fugro says it wants to

continue as an independent company, but that hasn’t stopped analysts assuming that eventually Boskalis will make a bid for the whole company. Fugro has also said that it is open to talks on a partnership for its subsea business unit.

Fugro has been having a tough time in the last few months – its shares nosedived in October when the company said it might not pay a dividend this year because of deterioration in oil and gas markets. The recent steep decline in the oil price isn’t going to help it and could make a bid from Boskalis more attractive. That said, Fugro is said to be one of the best-protected companies on the Amsterdam stock exchange and has several possible lines of defence it could use to rebuff a bid from Boskalis or another suitor.

Boskalis realised a net profit of €253 million in the first half of 2014 (compared with €123 million in the same period in 2013). Revenue rose 21 per cent in the first half of the year to €1.5 billion (€1.3 billion in the first half of 2013). Organic revenue growth was 13.4 per cent. EBITDA amounted to €466 million in the first six months, and the operating result (EBIT) was €338 million. (EBITDA was €280 million and EBIT was €162 million in the same period a year earlier.)

The company’s offshore energy segment had a good first half of the year with a high fleet utilisation rate and good project margins. Furthermore, Dockwise contributed an extra quarter to earnings compared to 2013 in addition to a sizable contribution from cancellation and rescheduling fees.

Mr Berdowski said the company had posted a historically high result in the first half of 2014, and performance across the board had been very good. “This result is partly thanks to the strategic choice we made to broaden our focus on offshore,” he said. “Offshore activity is becoming increasingly important and the contribution of Dockwise forms a key part of this. But the traditional core dredging activities also made an excellent contribution to the results.”

Despite growing reluctance in the offshore sector to make investment decisions when it comes to large projects, Mr Berdowski said he was “cautiously positive” about its own prospects in this part of the market. OSJ www.osjonline.com

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