Former OSJ editor David Foxwell reflects on the last 20 years in the OSV industry. What has changed. And what has resolutely remained the same
An oil price that does not support high levels of exploration and production, too many vessels and too much debt. Does that sound familiar? It probably does if you have worked in the offshore support vessel industry for more than a decade or two.
If you have been around a while you will have a seen a number of downturns and a number of booms. Some things never change, but much has in the last couple of decades.
Markets – and potential markets – may have come and gone but OSV technology has continued to evolve. When I first became editor of OSJ, dynamic positioning (DP) was growing in importance but had not become as widespread as it is now. Nowadays every vessel has DP, and it is being adopted on an ever-growing range of vessel types.
In the early part of the last decade, diesel-electric machinery was seen as the way to make vessels more efficient, reducing fuel consumption and emissions. It remains important, but the last 3-4 years have seen even more efficient alternatives come to the fore in the form of hybrid propulsion with batteries at their heart.
In addition to reducing fuel consumption and emissions and enhancing the level of redundancy on board, hybrid power enables gensets to work at their optimum load, reducing wear and tear on them. Batteries also smooth the load by compensating for peaks and troughs and enhance safety and reliability by providing back-up in the event of blackouts.
As I noted in 2017, hybrid propulsion systems with battery energy storage systems have taken off in the offshore vessel sector, and although the industry is only emerging from recession owners have recognised that it provides them with a USP, one that sets them apart in an increasingly environmentally conscious industry.
From a technical point of view perhaps the biggest change is yet to come, but the roots of what will be a game-changing change in the industry can be traced back to the last 2-3 years when it became clear that unmanned vessels were feasible, not just in the OSV industry, but in many parts of the shipping industry.
I said here that the OSV industry was in need of an ‘Uber’ moment and needed to reinvent itself. Perhaps unmanned vessels and autonomous units such as unmanned underwater vehicles and autonomous surface vessels will come to be seen as that moment. The last 12-18 months have seen plans to test drones to deliver equipment offshore coming to fruition. In late 2017/early 2018 an unmanned surface vessel was used for touchdown monitoring on a pipeline project. Unmanned systems undoubtedly have a major role to play in oil spill response. Well-known companies are already working on unmanned vessels for the offshore industry that could do much more and assume some of the roles long carried out by manned ships, but technical advances, that can help reduce costs and drive efficiency raise other challenges in their wake – not least around risk. As digitalisation comes to the offshore industry so the need for cyber security has come into focus.
But what of the ‘tools’ fitted on offshore ships? With the exception of offshore access systems which really are new, they haven’t changed that much, but they have become bigger and more capable. Deck work is probably safer on some vessels than it once was, thanks to the introduction of remote controlled anchor handling gear but how many vessels in the world fleet have it?
Cranes are the main tool on many vessels and the last couple of decades have seen them become larger, able to lift and lower heavier loads. This is partly down to the use of fibre rope, which is neutrally buoyant unlike conventional steel wire. This means the weight of steel wire a crane used to have to handle has been eliminated.
For almost as many years as ships have supplied offshore platforms with men and equipment, the only way to get personnel from the deck of a vessel onto a rig was a swinging basket or a helicopter transfer. Both still have a role, but the last five years have seen a growing number of vessels fitted with motion-compensated offshore access systems that enable personnel to ‘walk-to-work’. Motion-compensation technology is another key advance in the last 4-5 years – with it you can stabilise an access system or a crane. Motion-compensation increases safety and it increases workability.
For many years not much changed with regard to hullforms for offshore ships, but now we have the X-BOW, the X-STERN and others. As I remarked here, there is renewed interest in fast craft, and in fast craft that are also stable enough to transfer personnel using an access system.
What has not changed in the near-18 years since I became editor of OSJ? The average offshore vessel executive or manager is still, usually, a white guy of a certain age. There is not enough diversity in the industry and there are not enough women in senior positions.
Another important thing that hasn’t changed much includes the influence on the market of cabotage. In the last 20 years or so the opening up of Brazil’s sub-salt fields provided major opportunities for owners of offshore support vessels, but in the period running up to the crash in 2014, Brazil became an increasingly problematic market as local contents requirements and seemingly arbitrary restrictions on overseas vessels – even those that were already under contract – drove international owners out.
For the last decade the industry has been talking about opening up the Arctic. A lot of research and development has gone into icebreaking vessels, but the market never quite took off and, as a high cost market, it looks increasingly unlikely to do so in the next decade. The commoditisation of vessels is another major issue that has wreaked havoc. Building on spec, building standard designs in the expectation that the market will continue to boom only works for so long.
And, as is well-known, the offshore support vessel sector is a cyclical one, following the ups and downs of the global offshore oil and gas market as a whole. As an industry, the OSV sector is not good at reining in the urge to invest in new vessels when times are good. They were good for a long time when the oil price was about US$100/barrel and we were told to expect peak oil – and peak prices – as a result.
Speaking at a recent Annual Offshore Support Journal Conference and Awards, industry veteran Larry Rigdon invoked Yogi Berra, when explaining the bottom falling out of the market in 2014, saying it was “déjà vu all over again.”
Or was it? The downturn from which the industry is only now beginning to emerge differs from other cyclical events of this nature to have hit it, in as much as structural change has occurred. There is a new kid on the block in the form of shale oil. That new kid on the block will have a profound influence on the market going forward, as could the rise of renewables, although unlike shale oil, marine renewable energy is providing OSV owners with an avenue to a new market.