Page 36: of Marine News Magazine (May 2015)

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OFFSHORE

Delmar shore facility at Port Fourchon.

Courtesy of Delmar

Vessel demand along the Gulf, which was good in 2014, oil-and-gas jobs on the state’s economy is about 3.6, ac- and also during the ? rst half of this year, has slowed. “A quick cording to Loren Scott, Louisiana State University emeri- ride down Bayou Lafourche towards Port Fourchon paints tus economics professor, in his last assessment in 2013.

the current picture of idle vessels and crews fairly quickly,” How have weak oil prices impacted boatyards? “I assume

Barousse said. “We’re seeing vessel operators of all sizes hav- Gulf shipyards are seeing a decline in new construction, ing to stack boats because of a lack of work and the day- new orders for OSVs, and also in repairs as vessel operators rate drop. We’re even seeing deepwater service vessels getting try to get through this slow period,” Barousse said.

stacked, and that’s been a hot market over the past few years.” “Generally, when a boat’s stacked, the majority of the Oil workers, vessel owners all watch crude prices crew is sent home at no pay until work resumes,” he said. Needless to say, workers along the Gulf keep an eye on “Some crew members can ? t into work schedules of ves- oil and gas prices. “Everyone in the offshore industry hopes sels that remain in service. But pay cuts are typically made prices will stabilize and start to recover,” Barousse said. across the board to adjust to the lower day rates.” Gulf “Oil companies quickly tighten their spending when cash inland demand for boats has slowed too. “In addition to ? ow slows. Operators’ budgets are set for 2015 so we know offshore, the inland vessel market has been hit hard by this year will be tough in the offshore Gulf. But once oil capital-expenditure declines and rig layoffs,” Barousse said. prices bottom, some of those budgets could be adjusted.”

Adjustments will certainly occur if crude oil rebounds, he

Slowdown has a ripple effect said. That’s because oil companies have to continually re-

Port Fourchon in Louisiana’s Terrebonne Parish is the invest to maintain production levels.

main terminal serving the Gulf’s offshore oil-and-gas. “Listening to oil market experts can be tough because they

Over 400 vessels operate from the port a day, Port Four- don’t necessarily agree on what the future holds,” Barousse chon executive director Chett Chiasson said in early April. said. Excess oil supplies and the U.S. dollar’s strength have ex- “But because of sustained low oil prices, it’s no secret that erted pressure on crude prices. And then, because of onshore oil-and-gas operators are reducing the number of vessels fracking, U.S. oil production is at a more than 40-year high.

they’re using for offshore service,“ he said. “Along with less “Middle East turmoil can be a market game changer but it’s activity comes less need for services, and that trickles down never predictable,” he said. “Saudi Arabia’s strategy of keeping to affect the entire service sector.” production unchanged has been a major, oil-price driver.” In

Estimates are that 15,000 people or less work in the off- March, however, Saudi output reached a 12-year high.

shore Gulf. But they’re highly paid, and the ripple effect on “Saudi production can affect prices more than, say,

Louisiana from those jobs, combined with spending by oil a nuclear deal with Iran, removing sanctions on Iran, or companies, is signi? cant. The multiplier effect of offshore air attacks on Yemen,” Barousse said. The Saudis are the

May 2015

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