FEATURES

DEEPWATER HORIZON

Deepwater Horizon - What Have we Done to Deserve This
Deepwater Horizon - After the BP Report
Deepwater Horizon - The Investigation
The Deepwater Horizon and the Late MMS.
The Deepwater Horizon - PR and Politics
The Deepwater Horizon - Forces at Work
The Deepwater Horizon - Where Are We Now?
ROVs, Risers and Mud
The Deepwater Horizon - Later
Something about the Deepwater Horizon Accident
Channelling the Oil Leak
Preventing Fires and Explosions on Offshore Installations

OTHER ACCIDENTS
The Loss of the Normand Rough
The Bourbon Dolphin Accident
The Loss of the Stevns Power
Another Marine Disaster
Something About the P36
The Cormorant Alpha Accident
The Loss of the Ocean Express

OPERATIONS
The Life of the Oil Mariner
Offshore Technology and the Kursk
The Sovereign Explorer and the Black Marlin

SAFETY
PFEER and the Dacon Scoop
Human Error and Heavy Weather Damage
Lifeboats & Offshore Installations
More about PFEER
The Offshore Safety Regime - Fit for the Next Decade
The Safety Case and its Future
Jigsaw
Collision Risk Management
Shuttle Tanker Collisions
A Good Prospect of Recovery

TECHNICAL
The History of the UT 704
The Peterhead Connection
Goodbye Kiss
Uses for New Ships
Supporting Deepwater Drilling
Jack-up Moving - An Overview
Seismic Surveying
Breaking the Ice
Tank Cleaning and the Environment
More about Mud Tank Cleaning
Datatrac
Tank Cleaning in 2004
Glossary of Terms

CREATIVE WRITING
An Unusual Investigation
Gaia and Oil Pollution
The True Price of Oil
Icebergs and Anchor-Handlers
Atlantic SOS
The Greatest Influence
How It Used to Be
Homemade Pizza
Goodbye Far Turbot
The Ship Manager
Running Aground
A Cook's Tale
Navigating the Channel
The Captain's Letter

GENERAL INTEREST
The Sealaunch Project
Ghost Ships of Hartlepool
Beam Him Up Scotty
Q790
The Bilbao OSV Conference

SHIP MANAGEMENT

IT IS WITH SOME PLEASURE THAT WE PUBLISH THIS, THE FIRST FEATURE WRITTEN FOR OUR 2004/2005 WRITING COMPETITION. FOOD FOR THOUGHT FROM GEORGE HORSINGTON - OF COURSE AT THIS POINT WE HAVE TO EMPHASISE THAT THE VIEWS EXPRESSED ARE ENTIRELY THOSE OF THE WRITER.

I am an odious little jerk. But I am not alone, as most ship managers fall into this category, generically, if not personally. At least I am sure that is what David Ogilvy would think of us. When his company Ogilvy and Mather was being taken over by Martin Sorrell’s WPP agency in the late 1980s, Mr Ogilvy famously commented, “The idea of being taken over by that odious little jerk really gives me the creeps. He's never written an advertisement in his life.”

 I have never commanded a ship in my life. I have been to sea for a rig move and some cargo runs, but simply as a passenger, and fortunately upon the benign waters of the Persian Gulf in late summer. I was conspicuously absent from the back deck when the first anchor clattered onto the crash plate and had left the vessel for the comforts of Dubai before the first shamal storm of the season swept down the Gulf. Seven years on, with the winter weather closing in here and force ten winds whipping up six metres seas offshore on the Caspian Sea, technology means that I can now listen by mobile phone to the excitement that occurs on the bridge of a supply boat in heavy seas. This has convinced me further of my own odiousness and of the nobility of those who undertake perilous journeys at sea; journeys which must be all the more perilous if you have a smug manager sitting in a warm office asking stupid questions about the latest batch of purchase orders and the client’s fuel reconciliation statement, whilst a tempest rages. In response to the question “Why do the righteous suffer?” I think it was C.S. Lewis who responded “Because they are the only ones who can handle it”. I am not sure that is much consolation, but then there are few careers less mundane than commanding an anchor handler in sixty knots of horizontal rain and spray.

 The division of labour between those who “do” on boats in the offshore industry and those who “manage” on shore has never been wider. Many shipping companies have taken the separation to an extreme, outsourcing all the hassles of operating the vessel to professional ship management companies, with a couple of shore-bound captains for ISM purposes and a vast troupe of book keepers to maximise profitability, such that the owners never even see or meet the people operating their “asset”. It is a disconnect that is dangerous and should concern us all, whether odious little jerks or heroes at the helm. It is a concern because without opportunities ashore, the industry will simply become a brief training ground for warranty surveyors, wannabe marine lawyers and other types of consultant; offshore companies will bereft of the expertise they need to manage their assets and their operations safely and effectively; the industry’s ability to recruit and retain talented sea staff will be jeopardised if the bridge of supply boat becomes a dead end in terms of career opportunities. We see the problem manifest in falling real wages for offshore officers, which makes it hard for those living in high cost, developed countries to make a living at sea, and in the ageing officer age profile, indicative of the fact that many are staying in the industry because they have reached a point in their lives where other alternatives are limited.

 So who is to blame for this? Looking at the wider marine industry similar trends can be seen in the container industry – an endless cycle of cost cutting and “dumbing down”. Without wishing to sound odious, if at this point you don’t know what I mean by “dumbing down” you are probably part of that process. However, the container industry has a very different risk profile to the offshore industry with a very different client base. Most container trades are dictated by schedule and the need to move from A to B; what happens along the way is irrelevant provided the containers reach their destination on time. Liability by the liner trade to its clients is very limited. If everyone got compensated every time a container was delayed, there would be no solvent container trades.

 The offshore industry has a very different risk profile, but many odious little jerks fail to recognise the difference between “cost” and “value”. Last month one of our vessels towed out a $750 million topside unit which had taken two years to construct and from which 300,000 barrels per day of production will come in a few months. The day rate for the vessel was thus less than one ten thousandth of the potential downside for the client in the event of the loss of the unit in cash terms, and less than one millionth in terms of consequential losses in the event that production was delayed.

 Unfortunately, blindness to these downside risks is prevalent among both ship owners and charterers. Despite industry profitability at a twenty year high, many energy companies continued to be driven by a myopic focus on cost in the narrowest sense. And many ship owners have joined them in this short-sighted, self defeating drive which focuses on cost, but not value. The disjoint between those offshore and those onshore means that many ship owners and managers are not able to communicate the real value created by high standards. Instead of championing a healthy, vibrant industry, they take the course of least resistance and join the clients in a futile hunt for the next cost to hack down.

 I recall one senior manager of a major offshore company complaining that he spent his life at investor road shows, making powerpoint presentations to rooms full of disinterested suits, who cared only about “Ebidta” and “FCF ratios”. He seemed genuinely surprised when I suggested he begin by conjuring up the image of a rig move West of Shetland in mid winter. He was so absorbed in his spreadsheets and trying to talk about a cash flow projections that he had forgotten what the business is about.

 Ultimately, it is the courage to face the perils at sea which make this industry and its people special and different compared to all the widget makers and software wizards of the world. Not everyone wants to spend every winter being pounded by the sea while the rig calls up and demands one last cargo snatch in marginal weather, and not everyone should have to. If the industry is to prosper in the long term, a bridge must exist between the odious and the offshore.

 George Horsington Nov 2004

The author is a ship manager based in the Former Soviet Union

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