HANSA: Mr. Perrott, aren’t you afraid that in view of the general downturn of the cargo shipping industry everybody[ds_preview] will be moving into the offshore business with the result that a huge oversupply in this sector could be experienced like in container shipping e.g., as well?
Ian Perrott: We have often seen the tendency in the past that the shipping community moved to another, apparently more remunerative field when the market they were in was down. I would like to emphasize that offshore looks like being a part of the shipping industry – but it isn’t. The drivers of cargo shipping are linked to commerce and industry etc. Offshore has no link with what’s happening in the commercial world. Its main driver is what’s happening in the oil or gas energy industry. Its employment comes directly from what the oil companies are doing, the price and the world situation of oil. These are the factors that directly drive the offshore business. It may well be that the general shipping industry goes down while the offshore business might be coming up because they are not linked in any way.
The problem is that the offshore industry looks an easy horse to jump on, but in fact it’s not. Everything is different from normal shipping: the skills, the people, the client base, the trade. Thus it is not so easy to understand and to enter into this type of business.
The situation that existed over the five past years has been that the world shipping has had quite a good time until 18 months, two years ago and to be honest so was the offshore industry. Obviously deep sea shipping decided to go down hill while offshore didn’t change and although today’s offshore market has come down from its very high level of thwo years ago it is still an attractive option with strong potential for the future.
Would you agree that owing to the falling oil price also the offshore industry has been affected in some way?
Ian Perrott: The offshore industry has now softened somewhat, but I believe that the falling of the oil price to its current levelprobably in a long term can be seen as a benefit to the economy as a driver. The answer is that shipping companies have made tremendous profits from their normal shipping business and had now to decide how to invest that money again. One of the many options for some ship owners was to enter an engagement in the offshore sector. The illusion was also fed by the comprehensive stuff of information available about this industry. Statistics and market reports have always been published by the clients and the brokers involved in the offshore sector. E. R. Schiffahrt e.g. was one of those companies who decided to enter into this business already quite some time ago. It was their big advantage when they decided to go into a partnership with OSM, who were already an experienced offshore company in Norway. They had realised very early on that offshore is an entirely separate business. A merchant ship has an engine, a propeller and possibly a bow thruster. An offshore vessel is a highly sophisticated unit with a lot of technical devices which require highly educated crews ashore and on board.
How far is E.R. Offshore connected with E. R. Schiffahrt?
Ian Perrott: E. R. Schiffahrt realised at an early stage that the offshore unit cannot be operated like e. g. the container shipping division and consequently they founded the offshore company. Of course we are using synergies between the companies, however E. R. Offshore is an entirely separate company with an own specialized team today of around 18 people ashore who are acting completely independently, i. e. the are negotiating and closing any contracts etc. on their own.
What are the special requirements a seafarer must fulfil on an offshore vessel?
Ian Perrott: The quality of an offshore vessel fully depends on the skills of her crew. Anchor Handlers are equipped with highly sophisticated technical devices on board that must be handled under special conditions by their crews, often in rough seas. It takes quite some time to train and educate people in order to safely operate equipment of such high complexity. For instance a Master has to gain vast experience before he can be entrusted to become a commander on board of an offshore vessel.
E. R. Offshore is due to receive such a highly sophisticated AHTS, the »E.R. Louisa«. What are the most remarkable features of this type of Anchor Handlers?
Ian Perrott: Power and size, it’s the power and the size of this ship. In connection with her Dynamic Positioning system which makes sure to keep the vessel at an exact position even in heavy seas this type of offshore vessel is not only highly valuable equipment which we will offer to the client but she will also always have a good chance to find remunerative employment in the free market.
The type UT 786 CD is representing the latest development of the market leader Rolls Royce Marine, complying with the highest demands and requirements of the oil and gas energy industry. Apart from her highly sophisticated digital bridge equipment the vessel disposes of a total engine power of 18.360 hp providing a continuous bollard pull of 200 t. The vessel’s towing and anchor-handling winches are also of a very special type, enabling the AHTS to tow oil rigs and to set anchors and operate in great water depths – an item increasingly becoming an important demand by the industry.
Do you expect the PSVs and AHTSs will become even more powerful and larger in the future?
Ian Perrott: The size of these vessels is limited by the structural strength of the oil rigs, which they are supporting. These have so far been designed to withstand an impact of supply ships up to about 5.000 tdw. Still the size is very important as these ships are a part of the logistic chain of the very sensitive oil rig supply. In case they can not perform or are not operated properly then this highly sophisticated business is being interrupted or unduly delayed. Ultimately I believe that the modern offshore vessels (PSV and AHTS) built today probably represent the maximum / optimum size to support offshore exploration and production activities. future vessel developments will likely concnetrate more on safety, technology and efficiency rahter than size.
Germany itself doesn’t play a role when it comes to exploiting and harvesting oil and gas resources in the North Sea area – who are the big players there today?
Ian Perrott: There are four countries that have oil and gas interests in the North Sea: the UK, Norway, Denmark and the Netherlands. In terms of installations of fields UK is the largest, in terms of quantity Norway is probably the largest; but much more by its gas which they are exporting especially to other European countries. The UK rather uses its oil and gas resources for domestic purposes. In the Netherlands it is just exclusively gas and in Denmark it is gas with some oil only. Nevertheless these countries are not to be considered as big in world sense, neither as individuals nor even together as they are just registered among the top twenty in the world. The real offshore production areas are in the US Gulf, in Mexico, offshore India, offshore Angola and Brazil, which are much, much bigger. Fortunately during the past eight to ten years, quite to our advantage these areas however have moved much more towards the North European model in terms of the type of ships they use. Historically the oil industry was built up out of inshore and literally just offshore Texas – I am talking about the mid-1950s – it was actually the USGulf that generated the birthplace of the offshore industry. Then this model was exported to West Africa and Brazil and in fact to the North Sea as well. But as we all know the environmental conditions in the US-Gulf are not the same as in the North Sea in winter. Consequently it was obvious very soon after it had started that importing equipment from there wouldn’t work and new designs, new philosophy and concepts had to come out from Europe itself. The Norwegians stepped in early after they had realised all this and used their existing skills, shipyards and equipment manufacturers. In terms of population Norway is a relatively small country with about five million people and around 70 % of their gross national product is generated by shipping or marine related business. This together with their own domestic oil production gave them a good reason to continuously develop and maintain an effectively functioning offshore supply industry.
How do you think the offshore markets will develop in the future?
Ian Perrott: Worldwide exploration, production and enhanced recovery of oil and gas in deep sea regions are continuously growing. Despite of the immense efforts to develop recoverable energies, oil, gas and coal will still remain as the considerable resources of energy also in the future. The realistic options to exploit energy fields in the oceans in depth beyond 3,000 m will not only provide the world with an extended energy supply but on the long run will also ensure the global demand for offshore supply vessels like E. R. Offshore offers to the oil and gas production companies industries.
