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“It
was the best of times. It was the worst of times.” Who knew Charles Dickens was such an expert on the offshore oil and gas business? Looking at Gulf of Mexico activities, it is easy to see both the best and worst of times ahead. OMSA members got a clear indication of this at the General Membership Meeting last month in Houston. On the “worst of times” side of the equation, Mike Arellano, Offshore/Marine Industry Manager for ImpactWeather, Inc., gave a very sobering presentation on the impact of the recent hurricanes and the outlook for the future. The savage power of Katrina and Rita on the offshore sector was beyond the scope of imagination for even experienced meteorologists. According to Mr. Arellano, wave surges from Katrina reached up to 90 feet and maintained a frightening force as it hit land. Worse, the Atlantic is settling into a new cycle of hurricane activity and next year may promise more of the same. According to the Minerals Management Service, the hurricanes destroyed more than a hundred offshore facilities that were not built to MMS’s upgraded design standards. More than 50 other facilities were damaged. Additionally, the Port of Fourchon was impacted and every other port between Port Arthur and Mobile was damaged or destroyed. No one is looking forward to another year of storms that can cause that level of damage. On the positive front, Terry Childs, Rig Data Manager for ODS-Petrodata, gave a very upbeat presentation on future rig activity. Some 18 jack-up rigs were damaged or destroyed by Hurricanes Katrina and Rita, causing some to worry that, once the first wave of restoration activity was completed, the shortage of rigs would mean that the current level Gulf activity could not be sustained. However, Mr. Childs told OMSA members that rigs are returning to the Gulf from other countries and that a number of out-of-service rigs are coming out of stack in order to meet the increased demand. He predicted that Gulf of Mexico rig demand would increase over the next six months. He concedes that, down the road, the lack of suitable rigs may constrain utilization. However, two factors should help sustain the up market. First, contracts for new construction indicate a supply of new rigs for the next two years at least. Second, the new push for deep gas drilling from shallow shelf leases will allow drillers to use smaller existing rigs that are not suitable for deep-water projects. The clear message is that the current cycle in the Gulf should not dry up as soon as the hurricane damage has been repaired. The next move is up to the leaseholders. The oil and gas business has always been about managing risk. At this point, the offshore operators are giving every indication that they want to rebuild the Gulf and take steps to reduce their risk from future storms. After Hurricane Ivan last year, the industry has been looking at revised mooring standards. At the highest levels of MMS and the industry, executives are meeting to discuss lessons learned and preventive measures. But the greatest impact of this hurricane season may be yet to come. The high cost of energy has focused national attention on our reliance on foreign oil and re-opened the public debate over allowing offshore drilling in additional areas. Of course that more than anything else would drive demand for offshore vessels for the foreseeable future. All of these factors
– availability, cost, risk and reward - will play a role in determining
how long the current activity cycle lasts in the Gulf of Mexico. Whether
we face the best or worse of times it promises to be an interesting ride.
The U.S. Senate has passed a new Coast Guard Authorization Bill including four provisions that OMSA has supported. The Senate action came during the last week of November. The House had passed the bill on September 15th. Now it will be up to a committee of House and Senate conferees to work out any differences between the bills. The specific provisions that OMSA had worked for are:
There is no word when the House and Senate will agree on a final bill, but action is expected before Christmas.
Congress has approved
a new funding bill for the Army Corps of Engineers that includes money
to dredge waterways that are used to access offshore oil and gas facilities.
The initial budget plan did not include any funds to maintain Bayou Lafourche,
which serves Port Fourchon or the channels off the Mississippi River at
Tiger Pass and Baptiste Collette. Congress frequently adds money to Corps
projects, but given the tight budget in Washington this year, it was possible
that there would not be money available for these projects.
Under Homeland Security Regulations, offshore vessels will be required to report crewmember and passenger information for some voyages. The regulations are known as the Advanced Passenger Information System (APIS) and are administered by the Customs and Border Protection Agency (CBP). Under APIS, vessels must report passenger and crew information electronically every time they travel to and from a foreign location. In the offshore oil and gas sector, sites that are not attached to the seabed and are not engaged in exploration, production or development are considered to be foreign locations and APIS reports are required. For example, a work barge, MODU that is stacked, dive vessel or seismic vessel is considered foreign locations, requiring APIS reporting. The APIS requirements were to go into effect last June, but OMSA and a coalition of offshore oil and gas interests raised concerns with Customs officials. As a result enforcement of the new regulations was delayed until the end of October. OMSA and other groups have met with Customs twice concerning the new regulations and continue to argue that they are unnecessary in the offshore energy sector. However, the regulations are now in force and vessel operators are expected to comply. The penalties for non compliance are one thousand dollars per person per instance. For details on the APIS requirements and how to comply go to the CBP website at www.CPB.gov.
The Department of Homeland Security is considering new regulations that may force offshore workers to carry passports when going to some offshore facilities and vessels. Currently passports are not required for Americans traveling to foreign locations within the Western Hemisphere, such as Mexico and Canada. However, The Department of Homeland Security is seeking to require passports for voyages within the Western Hemisphere by the end of 2006. In a recent rulemaking, the Customs and Border Protection Agency, which is a part of homeland Security, sought comments on implementing the passport requirement. OMSA and other offshore associations are concerned that the requirement could force personnel to have passports to go to and from work at certain offshore locations. As with the passenger reporting requirements, certain offshore locations that are not attached to the seabed or are not engaged in exploration, development or production, are not considered U.S. locations by law. OMSA has formed a coalition with four other associations and together they are asking Homeland Security to not require passports inside the 200- mile limit of U.S. waters. The group wrote public comments to the docket on October 30 seeking an exemption from the passport rules. The letter noted that there are already provisions in place requiring foreign workers to provide documentation when they travel from offshore sites to the mainland U.S. The group said:
It is not known when the Department of Homeland Security will finalize the passport rules. For a copy of the offshore coalition’s comments, contact the OMSA offices.
America’s offshore oil and gas industry was devastated by the twin impacts of Hurricane Katrina and Hurricane Rita. The support vessel fleet is fully engaged at this time trying to repair the damage that had virtually shut down nearly a third of the country’s oil and gas production. Based upon member concerns, OMSA has been working to ensure that the offshore sector was not hurt by delays in vessel inspections or mariner licensing. Within days of the passage of Katrina, OMSA met with the Coast Guard to lay out important actions necessary for the recovery of the industry. Requests to the Coast Guard for immediate action were presented in two primary areas, vessel inspection and marine personnel. Congress acted on the industry request for relief for vessel inspections and marine personnel licensing and documents extension (see earlier story). In addition to those requests OMSA has been working outside the legislative area with the Coast Guard. Going forward, the industry identified personnel shortages as one of the most significant obstacles to meeting the substantial challenges ahead. This problem must be addressed if the industry is going to continue to be the lifeline for America’s offshore energy production. The destruction of the New Orleans REC resulted in the loss of hundreds of mariner documents and applications. As a practical matter, it also disrupted the licensing program in such a way as to create further delays in processing new applications throughout the country. However, this is only a part of the problem for the offshore sector. The hurricanes have left thousands of workers over a four state area in extremely stressful and even dire situations. It is difficult to retain existing mariners who are already concerned over homes and families, if they are unable to address license renewals or upgrades necessary to do their jobs. In the case of new workers entering the industry, the people left homeless or unemployed by the hurricanes cannot afford the several week delay in acquiring the entry-level merchant mariner documents (MMDs) which allow them to work in the industry. OMSA requested the Coast Guard to address this in three steps:
The Coast Guard has received OMSA’s requested and letters of support from member companies and Congress. We will keep the membership informed of any Coast Guard action in this area.
The mariner licensing and documentation process has become so complicated that the average mariner has difficulty managing their own career. The Coast Guard Regional Exam Centers do not have the staff to allow them to spend time counseling and assisting mariners, but simply process the paperwork as efficiently as possible, while falling further behind each day. The process of providing documentation for mariners has become a more complex and frustrating process, both for individual mariner and for the companies that employ them. The addition of STCW and security requirements has made it more difficult to hire new employees, meet renewal deadlines and guide mariners as they renew or upgrade their licenses. A number of OMSSA members have indicated the days when a mariner could adequately manage their own career are gone and that it now takes company resources to ensure that mariners stay on track. OMSA was approached by a member to consider developing a new program through which OMSA would, for a fee, help with the documentation of individual mariners. This program could take a number of different forms from simply ensuring that the applications are in the proper order and contain the correct information to actually interceding with the Regional Examination Centers to avoid delays. After discussing the proposal OMSA’s Board of Directors asked the staff to form a member working group to work out the details of a proposal that the Board can consider in January. Members wishing to participate on the working group or to have input into the process should contact Ken Parris at the OMSA offices.
Twice each year the government publishes a document called the Unified Agenda. In this document each of the government agencies publish their semi-annual regulatory goals for the upcoming year. While none of the tentative action dates in the agenda are cast in stone, it does give the regulated community a head’s up on the various agencies plans. Of particular interest to OMSA members are the agenda items for the Coast Guard and Customs. The Coast Guard has indicated that it plans to expand the carriage requirements for Automatic Identifications Systems to all commercial vessels of greater than 65 feet in length and passenger vessels certificated to carry more than 50 persons. This will include a number of small passenger vessels that were previously excluded from the carriage requirements. This could mean most crewboats and utility vessels would need to install AIS units. In a related rulemaking the Coast Guard may expand the requirements for Advance Notice of Departure and Advance Notice of Arrival (ANOA/D) reporting requirements for voyages to offshore locations. The Coast Guard has also indicated that they will issue new regulations requiring commercial vessels to carry on board devices to measure a mariners blood alcohol in the event of a serious marine casualty. The alcohol testing may be accomplished by breath or saliva testing. OMSA is monitoring these developments and will keep members informed.
As previously reported, the Coast Guard is in the process of developing regulations to create a new inspection regime for vessel operators. By the direction of Congress, this inspection regime may include a safety management system component. In addressing this process, OMSA has had three primary objectives:
The Coast Guard turned to the Towing Safety Advisory Committee (TSAC) to gain public input into the new regulations. Unfortunately, OMSA members grew increasingly concerned that the TSAC process did not represent consensus and did not meet OMSA’s three requirements. As a result OMSA was forced to remove its name from the TSAC report. OMSA members are currently developing an inspection standards proposal to present to the Coast Guard. The Coast Guard is expected to produce a draft inspection plan within the next year.
Several years ago Australia had made a proposal to IMO to modify the damage stability criteria for OSVs from one-compartment to two-compartment subdivision. OMSA members became immediately concerned. This evolution was a good demonstration of how the Association must sometimes keep track of potentially damaging changes to rules and regulations and then work as a team with members and with the Coast Guard to take action. To build vessels in America requires compliance with U.S. standards. If one then wants to build a U.S. flag vessel to comply with an international standard it would require complying with the most stringent standard. Coast Guard damage stability standards for domestic OSV’s have set demanding requirement for the longitudinal extent of damage. While the international standard proposed by Australia would have required two-compartment subdivision as opposed to the U.S one-compartment, the international standard was more realistic in regard to the longitudinal extent of damage. If the Australian proposal was approved U.S. vessels could have been required to meet the most stringent of each standard, in effect the worst of both worlds. In addition, Norway proposed to IMO that all watertight doors below decks on OSV’s be required to be remotely operated sliding watertight doors, a position that was more stringent than standards for other vessel types. This year IMO moved the Australian proposal onto the agenda for consideration. OMSA members were concerned that these proposals were unwarranted and well beyond the current stability requirements of Subchapter L. OMSA staff along with Gary Rook of North American Shipyard, Robert Rivere of Bollinger Shipyard, Dan Ganienne fo Hornbeck and Jim Clendenon of SEACOR prepared for the Coast Guard a proposed alternative to present to IMO. Working with Paul Cojeen and LCDR Bill Peters of Coast Guard headquarters the OMSA team developed a report for IMO supporting the U.S. position through casualty and fleet analysis of the U.S. and Australia. Jim Clendenon of SEACOR represented the OMSA team and attended the IMO meetings as a member of the U.S. delegation. The U.S. position was presented to IMO and was successful in convincing IMO to adopt a longitudinal extent of damage in line with the U.S. requirement and retain both the one-compartment subdivision standard for OSV’s and continue to use existing SOLAS standards on sliding watertight doors. The end product arguably raises the bar in regards to damage stability for OSV’s worldwide without putting OMSA members at a disadvantage. It is an example of OMSA members meeting the challenge and the increasing importance of the International Maritime Organization.
OMSA Rescheduling Exercise - OMSA had planned to hold its annual security exercise for plan participants on September 14th. The exercise was canceled due to hurricane Katrina. OMSA sent a request to the Coast Guard to postpone and reschedule the exercise during January 2006. The Coast Guard granted that request in November. The annual security exercise for OMSA plan participants has been rescheduled for January 5, 2006. The exercise will be held at the Petroleum Club of Morgan City. Registration forms will be sent out in December. The CSO for each company participating in the OMSA security programs should plan on participating. Committee To Revise Plan - On a related note OMSA is beginning the process of updating our security plans. A small group has been formed to take the first cut at plan improvements. After that OMSA will host a meeting for Company Security Officers to finalize improvements and resubmit the plan to the Coast Guard for reapproval. Plan users will be notified when the revised plan has been approved by the Coast Guard. Plan users will then need to download and print two copies of each plan replacing the original vessel plan and office copy with the new plan. Annual Security Audit Documentation - Earlier this year users of the OMSA security plans were provided with a spreadsheet to use for conducting your annual vessel security audit that is due by July 1 of each year. During a recent vessel inspection the Coast Guard inspector requested to see a copy of the annual audit letter. Company security officers are reminded to attach a letter to each vessel plan documenting the annual vessel security audit. The letter only needs to be a couple of sentences long stating the date of the audit, who conducted the audit and that no changes have been made to the security plan.
SafeGulf organizers have informed OMSA that January 1, 2006 is still the implementation date for compliance with the new program, but that due to delays caused by the hurricanes the four major operators requiring SafeGulf training may not begin checking for and requiring compliance until May 1, 2006. The program organizers have stated that all contractors should make every effort to comply with the original January date for conducting training. In the meantime, the OMSA Safety Training program is fully accepted by SafeGulf as an equivalent program. OMSA has trained 82 instructors to date. A train-the-trainer class will be held at the OMSA offices November 30th. To attend, contact the OMSA office. After this last OMSA conducted Train-the-Trainer class is held, subsequent instructor qualification will be conducted by OMSA member Acadian Integrated Solutions. Classes taught by AIS will be subject to an AIS instruction fee in addition to the published OMSA fees. The OMSA SafeGulf cards are now being distributed. To date OMSA has provided over 3000 cards to member companies. The SafeGulf database successfully completed its testing in August. OMSA qualified instructors may now submit training rosters and pictures to OMSA for inclusion in the SafeGulf database. OMSA will keep its members posted on any future developments. The SafeGulf organizers have formed a curriculum committee to examine potential future changes to the program. Participation on the curriculum committee is open to all. Most of the participants are training organizations. Vessel operators are strongly urged to participate in the SafeGulf curriculum process. Contact the OMSA staff for information on being added to the curriculum committee email notices.
Board Meetings January 11,
2006 (Wednesday – OMSA offices) General Business Meetings January 19,
2006 (Thursday – Hilton New Orleans Riverside) Special Events April 11-12,
2006 (Tuesday/Wednesday) – OMSA/IADC Offshore Lifting and
Materials Handling Conference
The National Offshore Safety Advisory Committee (NOSAC) will meet December 7th and 8th at the Hilton Westchase in Houston, Texas. NOSAC is the advisory committee officially chartered to advise the Coast Guard on offshore activities and as such is of primary interest to OMSA and its members. This year two major tasks of NOSAC have been the examination of the OMSA liftboat training program and examination of the application of SOLAS to offshore support vessels working overseas. OMSA anticipates that at this meeting the examination of the liftboat training program will be approved and forwarded to the Coast Guard for action. With the implementation of this program, mariners seeking licenses to operate liftboats should again receive the one-for-one sea service credit they deserve. The issue of SOLAS application to offshore support vessels overseas is complicated by the many differing functions performed. The subcommittee assigned this task has been working on the issue since early this year. The most important recommendations from the workgroup to be voted on will be the recommendation that the Coast Guard formalize its acceptance of the concept of foreign domestic operations of oilfield support vessels. In addition to the foreign domestic operations concept the group is recommending to the Coast Guard that it move forward with the classification of oilfield support vessels as offshore supply vessels (nothwithstanding the inspection subchapter they are inspected under) and the definition of all persons carried aboard such vessels as offshore workers. Each year approximately 25% of the members of NOSAC rotate off and are replaced by new members. Consequently the Coast Guard is continuously seeking qualified applicants for appointment to the committee. Please contact the OMSA staff for information on submitting an application to for appointment to this advisory committee of such importance to the offshore industry.
OMSA held its 4th Annual Lone Star Golf Tournament October 25, 2005 at Wildcat Golf Club in Houston, Texas. The weather was great and the turnout wonderful. After the devastation of Hurricane Katrina OMSA wondered whether or not to hold the tournament at all. But you the members said go for it. Immediately upon sending out notices for the tournament, Hurricane Rita hit the Gulf with Houston in its bullseye. We had to again wonder whether or not it would go on. However, Houston was spared the wrath of Rita, and the 4th Annual Lone Star Golf Tournament was a great success. We want to thank the participants, sponsors and volunteers. It was a great event and we hope to see you in Houston again next year. Golf Cart Sponsor - Bender Shipbuilding & Repair Co., Inc. Awards Sponsor - AMT Marine, Inc. Hole Sponsors #1 – Sea Mar,
Inc. Drawing Prizes OMSA
- $500 (Winner – Garland Greer, Laborde Marine) We want to give a “Big Thanks” to our volunteers. Chuck Freeman
– International Marine Systems
The OMSA Cajun Tropics Fishing Rodeo was held at Pirate’s Cove Marina on June 3–4 in Grand Isle. The weather was hot, the drinks cold, the barbeque tasty and the fishing great. This year we had the honor of Miss Grand Isle handing out the trophies to the winners. We want to the sponsors, volunteers and of course your fisherpersons. We look forward to seeing you there again next year. And yes, we will be back. SPONSORS MARINA SPONSORS GOLD SPONSOR SPONSOR Drawing Prizes OMSA
- $1,000 Check We want to thank our fishing tournament committee and volunteers. Committee: Volunteers:
During Hurricane Katrina, the Coast Guard performed a courageous and critical function, rescuing hundreds of people from flooded homes. After the hurricane, the Coast Guard managed the process of reopening the waterways of Louisiana and clearing the area of underwater obstructions. What is not well known is that many Coast Guard members and their families were also victims of the storm. Many lost their homes in Louisiana, Mississippi and Alabama and families were uprooted. A special fund was set up to help these hurricane victims through the Coast Guard Mutual Assistance (CGMA) fund. Tax-deductible contributions can be made by check, credit card or money order. Checks can be made out payable to Coast Guard Mutual Assistance or CGMA may be sent to: Coast Guard Mutual Assistance, 4200 Wilson Blvd., Suite 610, Arlington, VA 22203-1804. Make sure to write “Katrina” in the memo area of the check. CGMA also has a website, www.cgmahq.org, for credit card contributions. For additional information, contact Tom Omri (202) 493-6622 or Barry Boisvere (202) 493-6685 at CGMA.
Crewboats,
Inc. Romeo Papa
LLC Cameron Offshore
Boats Jambon Boat
Rental J. Ray McDermott,
Inc. TETRA Applied
Technologies Central Dispatch,
Inc. Delmar
BHP Billiton
Petroleum ES&H Consulting
& Training Group O’Rourke
Marine Service Occupational
Safety Training, Inc. Harris &
Rufty Gulf Ship
Design National Response
Corporation
Bender Shipbuilding & Repair Co., Inc. Founded in 1919 and
incorporated in 1923, Bender is located on prime riverfront property in
Mobile, Alabama. Covering more than a mile of Mobile's waterfront, Bender
provides more than 7,000 feet of deep water frontage with depths to 42
feet. Three steel floating dry docks have lifting capacities of 4,000,
15,000 and 25,000 tons. The fully equipped yards can handle any size and
type repair or conversion to any classification society. In 1992, Bender
expanded south along the river with the construction of its Yard 8. The
same year, Bender made major improvements at Yard 9 including the construction
of a concrete wet Dock, suitable for Panamax size vessels and large drill-rigs.
Bender is one of the leading ship repair facilities on the Gulf of Mexico,
and repair work continues to be one of the company's major components.
From its beginning 86 years ago as a machine and blacksmith shop, Bender Shipbuilding & Repair Co., Inc. has grown to become one of the world's leading builders of mid size steel vessels. Its central Gulf Coast location, open shop, multiple shipyards and long standing reputation for quality have made Bender a global factor in vessel construction. In 1952, Bender began to concentrate on top side and dry dock repairs for small vessels and on the construction of tugs and barges. In the late 1970s, Bender expanded its sales of offshore utility, mini supply, supply and tug supply vessels. Bender's 86 years of success is tied to its response to constant changes in the shipbuilding market. Bender was quick to apply its resources and experience to new markets. New ventures for the 1990s include casino riverboats, oil spill recovery vessels, drill rigs, double hull oil barges, research vessels, offshore/platform supply vessels, anchor handling tug supply and shrimp boats for export. Bender has built Quarter Modules with Helo decks on top for Pool Company. Bender has further diversified into the construction of 202’ to 240‘ Offshore Supply Vessels, 150’ Anchor Handling Tug Supply Vessels, and Anchor Handling Tugs/Ship Docking Tugs. Currently under construction is a 280’ IMR vessel for Otto Candies, LLC. Bender's history is one of flexibility, change and -- above all -- people. Through 86 years of growth, people from all walks of life have worked faithfully to accomplish Bender's goals -- all of them motivated by a common intent: quality shipbuilding. Visit Bender’s
website at www.bendership.com |
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