Your web browser is out of date. Update your browser for more security,
speed and the best experience on this site.
You have successfully subscribed to the newsletter!
05 27, 2012 by The Times-Picayune
Operators of offshore supply vessels say they are bracing for a shortage of qualified crew members that could drive up costs and hamper the pace of deepwater drilling in the Gulf of Mexico more than two years after the BP oil spill. Covington-based Hornbeck Offshore Services reported earlier this month that its operating expenses for the year could rise to $255 million, up $13 million from earlier forecasts, laying the blame on higher labor costs. The company says competition for offshore mariners is increasing and driving up the wages that are paid.
Hornbeck warned in its most recent quarterly filing with the Securities and Exchange Commission that the shortage, spurred in part by new regulatory requirements and increases in required staffing levels on some vessels, could mean fewer supply vessels are available to support deepwater drilling operations in the Gulf. Last summer, some in the industry speculated that as many as 50 vessels had moved from the region in the 15 months after the spill.
Joseph Bennett, chief of investor relations for Tidewater Inc., a New Orleans company that operates a fleet of supply vessels for the oil and gas industry, said that although it operates primarily in international waters, Tidewater is not immune to workforce pressures, "especially as more equipment is needed."
"Labor is something that when you're a capital-intensive company or an industry like we are, that requires people to run the equipment," Bennett said, adding that "it's always an issue, whether you have too many, too little, as the business goes up or down, that's part of the challenge."
Shane Guidry, chairman and chief executive of Harvey Gulf International Marine in New Orleans, said that as some operators dry-docked their supply vessels or left the Gulf in the months after the Deepwater Horizon disaster, many qualified, local mariners were laid off, and may have since abandoned the field or started work on different types of vessels.
"The Gulf of Mexico is very busy. People are trying to not only pick up where they left off and get that lost production back to the market, but they're trying to increase and in some cases double it, triple it, and to do that it takes a lot of manpower," he said.
"We're having to play catch up a little bit because of that, and then you also have the companies that had a tough time weathering the storm, so they just tied boats up here in the U.S. and they let crew members go for a while," Guidry said.
While he doesn't blame the Macondo blowout outright for the shortage, Guidry said the 2010 incident is still a factor. "Of course, had the spill not occurred, you wouldn't be playing catch up on the drilling side to get production up, and you wouldn't have had 64 vessels leave the Gulf and let go of crew members," he said.
At Harvey Gulf, day rates for mariners went down about 15 percent after the oil spill ended, then evened out and increased another 15 percent at the beginning of this year. "You have to be willing to pay what the market is," he said.
Meanwhile, in a May 3 conference call with analysts, Hornbeck CEO Todd Hornbeck acknowledged that drawing talent would come at a cost.
"As the Gulf of Mexico continues to recover, this need has become more acute and more compensation for the most qualified mariners has, and we believe will continue to intensify," Hornbeck said on the call.
"The bottom line is that intense competition for mariners is part of our business environment and an area in which we believe we can succeed," he said.
Jim Adams, president of the Offshore Marine Services Association in New Orleans, was beginning to see a mariner shortage develop before the spill, when the pace of drilling was picking up. He said the lull in activity during the months-long moratorium and since then has only added to it.
"Pre-Macondo, there was a shortage of qualified mariners," Adams said, "and as the Gulf gets busier, it's ironic but the mariner shortage, it's almost gotten worse because of it, because we dislocated a significant amount of the workforce."
Still, Adams believes that, in time, a solution will emerge, as some mariners transfer from other sectors or new recruits go in for training.
"Higher wages will attract new mariners to enter the profession," he said.
Sep 24, 2020 | LMOGA
Sep 23, 2020 | LMOGA
Sep 09, 2020 | LMOGA + API
Sep 08, 2020 | LMOGA