The active offshore helicopter fleet has 81% utilisation, but is flying 27% fewer flights year-on-year, while offshore wind brings new opportunities for both rotorcraft and crew boats
When it comes to offshore oil transportation, S-92 helicopters are workhorses, providing personnel transfer, critical medical support and search and rescue operations. Much like OSV owners, however, offshore helicopter owners are being hit by market headwinds, with the active fleet flying 27% fewer flights than the same period in 2019, according to UK-based consultancy Air & Sea Analytics.
Key findings in Air & Sea Analytics’ research, S-92 Fleet Census Report, show 81% of the fleet were active in June 2020, with 39 aircraft currently inactive. Of the inactive units, a number have been returned to lessors in the last six months, reflecting current sentiment in the market.
In discussing the findings of the report, Air & Sea Analytics director Steve Robertson said: “It has been a difficult period of time for the offshore rotorcraft industry, but it is important to not lose perspective – these are some of the most critical assets in the oilfield services (OFS) supply chain.” Continued Mr Robertson: “Since 2015 there have been two retired units and today utilisation stands at 81%. Compare that to the mobile offshore rig business, where more than a quarter of the fleet (>250 rigs) have been scrapped over the same period of time yet fleet utilisation is still only at 67%.”
Mr Robertson contended that while owners and operators are having a tough time of it now, offshore rotorcraft are not a ‘bad’ asset class. “Relative to other OFS segments, we’d argue it’s one of the best performing over the last 12 months. The challenge for the rotorcraft business in oil and gas, just like any other OFS business, is how to ensure continuity and profitability in the supply chain,” he said.
A major disruptor of the offshore oil and gas supply chain has been the Covid-19 pandemic, posing unprecedented challenges to offshore operations and crew changes.
Bristow Helicopters refit three former search and rescue (SAR) aircraft to repatriate offshore workers with suspected infections of the novel coronavirus.
Each of the Sikorsky S-92 helicopters was modified to provide separation between the flight crew, an on-board medic and passengers with suspected Covid-19. Among the modifications were protective curtains installed separating the cockpit from the passenger area and airflow systems, with specific entrance and exit points for each of the flight crew, paramedic and passengers.
Covid-19-caused energy demand destruction, in combination with the low oil price environment, have also pushed oil companies to impose strict cost control measures. This has resulted in oil companies looking to renegotiate contracts with OFS companies, injecting fierce competition in the helicopter sector.
With Equinor moving forward on several projects, owners and operators have shifted additional assets to the Norwegian offshore sector. Air & Sea Analytics reported that there are 38 active units in Norway, compared to 29 in the UK as of June 2020. These are changes since its last report, when there were 36 helicopters active in both regions.
“The challenge for the rotorcraft business is how to ensure continuity and profitability in the supply chain”
While the number of active aircraft has actually increased slightly, operators Babcock, Bristol, CHC and Lider have reduced their fleets, returning inactive aircraft to lessors.
Overall, flights and flying hours are materially lower since early April 2020 (down 27% year-on-year) and these hours are being spread over the active fleet of aircraft, said Air & Sea Analytics.
Super-medium units, such as Leonardo AW189 and Airbus H175, continue to be delivered and find work in the market. Others, such as Thai Aviation Services Ltd (TAS), continue to deploy Sikorsky helicopters. TAS received five S-76D helicopters between late 2016 and early 2017 to support oil and gas customers in the Gulf of Thailand. It recently marked a milestone, accumulating 20,000 flight hours on its Sikorsky S-76D helicopter fleet. Its fleet of eight rotorcraft also includes S-92 and S-76C+ aircraft.
Overall, Air & Sea Analytics reports that the number of heavy and super-medium units working has increased in the last six months from 214 to 224 units.
Among recent notable contracts, CHC Helicopter reported it had secured an extension of contract in June from Equinor for its rotorcraft for the Tampen/Oseberg and Heidrun developments in the Northern North Sea and Norwegian Sea. From September 2020 to August 2021, CHC will have three Sikorsky S-92 SAR aircraft and three Super Puma A332L/L1 located at the Johan Sverdrup, Oseberg, Statfjord B and Heidrun rigs.
Fresh opportunities from offshore wind
Offshore wind has provided new opportunities for helicopter owners and operators. In the UK North Sea sector, Danish energy company Ørsted awarded a contract in July to CHC to provide transportation services during the construction and operation phases of its 1.4 GW Hornsea Two windfarm, 89 km off of the Yorkshire coast in the UK North Sea.
The contract follows CHC’s work with UniFly, delivering flight operations for Hornsea One, covering the construction phase as well as the first five years of operations and maintenance of the windfarm.
To support Hornsea Two, CHC will use a combination of Leonardo AW139 and AW169 helicopters based at Humberside Airport in Lincolnshire for crew transfers and cargo flights to both the offshore accommodation jack-up barge and installation vessels throughout the 18-month offshore construction phase.
CHC and Ørsted will also expand their current contract for helicopter transport and technician hoisting at the Hornsea One windfarm during the site’s operational phase, including the neighbouring Hornsea Two site, once it is in operation.
Crew boats make headway
Offshore helicopters will never be fully replaced by crew boats, but new technology developments are opening the door to increased vessel usage for crew transfer operations.
Offshore wind developers such as Ørsted, are increasingly looking at cutting CO2 emissions from their supply chain, focusing on chartering CTVs incorporating lower and zero-emission propulsion technologies. In the case of Hornsea Two, two 35-m newbuild CTVs will have Danfoss’ Editron hybrid propulsion, consisting of permanently magnetised electric motors, saving weight and space while lowering fuel consumption and providing higher efficiency.
A collaboration between naval architectural firm Incat Crowther and Danish shipping company MHO-Co, the hybrid CTVs are ‘future-proof’ in that they are designed to incorporate greener power generation technology such as hydrogen. Both CTVs are under construction at China’s AFAI Southern Shipyard, with delivery set for mid-2021.
One technology rapidly evolving is offshore motion compensated access systems. “We see the principle of walk-to-work (W2W) gaining more and more interest in the market,” said Safeway general manager Remko de Boer.
“Crew boats and crew transfer vessels typically use ‘bump and jump’ or swing roping techniques,” said Mr de Boer. “With W2W becoming a proven methodology and rules and regulations being put in place, crewboats and crew transfer vessels will adopt these safer means of transferring.”
Mr de Boer said adopting W2W technology to light displacement crew boats and CTVs does present some technical challenges. He explained: “A light displacement vessel will react on the compensating mass of a gangway system. We have seen that this requires the use of additional gyro stabilisers to make it work. The supply chain is working hard to come up with good solutions.”