Page 18: of Marine News Magazine (March 2015)

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COLUMN FINANCE

Could Sub-$50 Crude Oil Sink Marine Financing in the GOM?

By Richard J. Paine, Sr.

The Gulf of Mexico basin is com- some are in transit, down for maintenance or otherwise prised of areas of various depths. Ap- not actively producing.

proximately 38% is shallow (about

EAL ONDITIONS EAL AIN 65’ deep); the continental shelf and R C , R P slope account for another 44% (down With the decline of rig utilization from a year ago of to about 6800’); the balance is deeper 94.1% to the current 78.6% (some experts have put the than 6,800’ and is, in some areas over number closer to 66%) it is not just the rig owners and per- 10,000’ deep. It covers an area of over sonnel that are hurting. All suppliers to GOM energy explo- 579,000 square miles running 994 miles east to west and ration and production (E&P) industry are feeling the pain.

559 miles north to south. The supply boat and crew boat sectors are seeing utili-

If the Midwest is the breadbasket of America, then the zation dropping in most categories. Most noticeable are

Gulf State’s region and offshore areas are America’s gas sta- crewboats under 170’ declining year over year from 85% tion. According to the U.S. Energy Information Admin- to 76% and those larger from 100% to 79%. Utilization istration, offshore oil production in the Gulf accounts for of various sized supply boats is generally holding its own. 17% of total U.S. crude oil production, 5% of the natural While most dayrates are fairly stable, lower usage equals gas, and 45% of U.S. oil re