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THE KULLUK INCIDENT
December 2012
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April 2010
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October 2003
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February 1982
THE OCEAN EXPRESS
April 1976

 

 

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NEWS AND VIEWS JUNE 2008  

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THE PRICE OF OIL

We do not often mention politics in this column, but some comment is almost forced upon us by the price of oil, which is now so high that the the whole fabric of civilisation is beginning to change. Fishing boats are now staying port and lorries are parked up while the driver engage in protests against - well some-one. Sales of motor cars have plummeted and the press is full of hints on how one might spend less on any sort of hydrocarbon products. For instance, at speeds up to 40 mph, 64 kph, it is a good thing to have the car windows open to keep cool, but at higher speeds it is better to keep the windows closed and have the AC on.

Is it likely that, despite the current buoyant state of the industry, that there will be some requirements for economy in the operation of support vessels. Twenty years ago, when exactly the opposite situation existed, the oil price was so low that almost no support vessels were needed, and single ships would supply complete offshore infrastructures. Despite the low oil price, operators were making economies where-ever they possibly could, and were monitoring the quantities of fuel used by individual vessels. This resulted in Masters and Chiefs engaging in all sorts of experiments with engines, generators and propellers and in addition found ways of concealing fuel whose presence had been overlooked, in order to appear unfeasibly economical during subsequent charters.

But wait a minute. this is not what this was supposed to be about. The politics are about the visit of Gordon Brown to Aberdeen to see the movers and shakers in the oil and gas industry. These are the guys you may remember who have been fairly hammered by the former Chancellor over the years, and who have as a result, threatened to shut down and move to more profitable parts of the world, and Gordon was asking them if they could possibly find their way clear to turning the tap a bit more. And lets face it, no matter who said what to who, there is little that can be done in the short term. Meanwhile George Bush was in Saudi Arabia with more or less the same question. Of course the Uk industry is in decline, and no matter how much more efficient the extraction process becomes, the stuff will never quite gush out of the ground in quite the same way as it did back in the 1970s. There is also some doubt that the Saudis are able to increase production at a whim. About 15 years ago I worked in Saudi and it was rumoured that because of maintenance costs a number of offshore fields were to be closed down. This was apparently because the costs of improving the facilities at Mecca had used up all the money in the royal coffers.

Where will it all end. We can only wait and see.

OFFSHORE EMERGENCY RESPONSE

On 5th June Oil and Gas UK held an emergency response seminar. This seems to be part of an ongoing process where different groups are looking at how to leave offshore installations in an emergency. The presentations are available on the Oil & Gas UK website. When I had a look at these "presentations" it occurred to me to wonder what had happened to the formal presentation of "papers". Surely back in the old days the results of a conference would have been a set of papers which documented research or opinion and  could later be used for reference and a jumping off point for further studies. If we were hoping to get anything out of these papers if we had not been to the seminar and taken  detailed notes, we could think again. Most of the presentations were nothing more than a list of headings, to remind the speakers what they were going to say next, and unfortunately it was evident that most of them were historic rather than current. Most of us know the history, but we still need a way forward.

In the background there is a move in the UK towards a change in the standards required for lifeboats. They are after all just little boats imported from the marine industry on the assumption that they will work just as well for offshore installations. As well as importing the hardware the offshore industry also imported the standard for construction and offshore lifeboats are therefore constructed on the basis of the weight of an individual being 75 kilos, in accordance with SOLAS. Of course it may be true that many ships crews have an average weight of 75 kilos each and anyway it is often the case that the lifeboats could take many more people than the crew. In years gone by the same could have been said to have been true of offshore lifeboats, even if the average offshore worker weighed a lot more than 75 kilos, and almost as importantly his backside was quite a lot wider than that of a Pilipino AB, there were always a lot more seats than people.

Today, a variety of factors have ensured that every possible bed offshore, whether on exploration rigs, platforms or accommodation units, is always occupied and where possible additional space for beds is being made. This means that virtually every lifeboat seat in the event of an emergency would be occupied. Now the regulators are asking - would everybody fit, and almost as importantly, even f they did fit are lifeboats fit for purpose? We are still looking for answers to these questions.

THE VALUE OF INVESTMENT

Amongst the general feeling of euphoria as the oil companies report record profits and there is a high level of employment for oil workers, and in fact anyone anywhere who fancies being an oil worker, we read of a bit of bleating from Oil and Gas Uk about the return for their investment. They are complaining that today they do not get nearly as much for their money as they did a few years ago when the oil price was low. Anyone who has worked in the industry through the ups and downs that have been experienced over the last thirty years would find it almost impossible to believe that anyone would raise this point.

When  the oil price is low the first thing that the oil companies do is downsize. They sack as many of their staff as they can and work their way out of any contracts with their suppliers, in some cases paying for the  privilege. Their suppliers in turn begin to go into hibernation and even the operators of mobile drilling rigs will begin to lay them up and lay off the crews. In the latter case this will  be despite the fact that the cost of re-activating them will be much higher than the cost of continuing to operate them at a loss for the duration of the down turn, and they know this from experience.

Some companies, on the other hand who are not solely motivated by the quarterly financial results, and therefore the share price have a sense of responsibility for their staff. They will have set the salaries and conditions of work so that they can continue to employ them no matter what the conditions outside in the world, and therefore give them, the employees, the confidence to take out mortgages have children, and lead reasonable lives. These companies are surprised to find that when bust turns to boom, and the leviathan that is the oil industry stirs in its lair, they begin to lose these staff who they have nurtured over the years, and so they have to raise their salaries and then their rates. Further up the pecking order all the heavy duty plant is dusted down and refurbished - at enormous cost - and finally there are not enough people and not enough rigs or anything - and so prices of everything goes through the roof. WILL NO-ONE EVER LEARN HOW TO DEAL WITH THIS!!

THE COURAGEOUS III

Many years ago I was master of an anchor-handler working out if Montrose, which is a port with a very tricky approach. It is served by a channel which is not wide enough for a ship to turn round, not even a little ship, and it is also too narrow for two ships to pass. Because of this limitation it is not possible to enter or leave in foggy conditions, and so one day I found myself at anchor adjacent to the entrance waiting for the fog to lift. Eventually it did lift, and the pilot called me and asked if I would like to have a go and get into port. Being young and enthusiastic I said yes, the pilot boat approached and we up anchored and got on our way. Of course, as we entered the channel the fog came down again, and there we were, with no option but to carry on in nil visibility. The pilot manned the radar and I steered the ship, accepting instructions from him. After what seemed like for ever a barge which was alongside just ahead of our berth loomed out of the mist. We went full astern, avoided a collision and put the ship alongside.

This little story has a remote relationship to the misfortunes of the Courageous III who grounding has been reported on the MAIB website. The Courageous III is a fishing vessel. On 5th May this year the Captain decided to leave Peterhead in very poor visibility, despite the fact that his gyro was not working at all and the magnetic compass was not working very well. The radar was working and they had it on ships head up. The fishing harbour is at the North end of the Peterhead harbour of refuge, so it would be necessary for the fishing boat to pass through the entrance to the fishing harbour travel a half mile or so south and then turn to port to go through the main harbour entrance in to the North Sea. The Captain decided that they would carry out this transit with he and the mate looking out of the bridge windows, one on the port side and the other on the starboard side. Of course they had no points of reference and without them realising the helm went hard astarboard. and the ship ran aground, fortunately on a rising tide. All our items today seem to be ending in a question, and in this case we would ask whether fishermen think they can walk on water!  

THE SECOND OIL BOOM

I included the last item mainly because my sole topic this month has been the price of oil and its consequences. But here is a final word. The Telegraph on line suggests that the North Sea is going through its second oil boom, but surely it is a third. During the desperate downturn of the mid 1980s, which I think was between teh first and second oil booms,  there were bumper stickers on sale in the city of Aberdeen. They said "God Please Give Us Another Oil Boom - This Time We Promise We Won't Piss It Away". And here's the last question - Did they?

Victor Gibson

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