Will the Credit Crunch Have an effect on ROV work?

[rover22]

Hi all,

I think it is the oil price mainly and the credit crunch secondly that is slowing some projects down and hitting some companies. Lower oil prices have made many projects unviable financially and they have been shelved until the price rises, while the credit crunch has hit operating and service companies in the financial side in that some have seen a depreciation in their nett worth and a reduced ability to receive bridging finance and loans to finance projects. Evidence of this reduced ability to secure finance is evident in deferred ROV system deliveries from manufacturers. Where long lead times were a fact of life in the past, project delays and increased difficulties in receiving financial support from lending institutions has made some operating companies cancel or delay (in most cases) taking delivery of ( and thus having to make payment in full for) ROV systems. Two companies I have worked for have taken this option of delaying taking delivery of new-build systems to protect their financial state, while a third saw itself go from a 9-month delivery lead time to 2 months in one month.

Also, it is apparent that more and more operators are having to chose between insisting on experienced ROV operators at high day rates or less experienced or inexperienced ROV operators on low day rates to make up teams (and increase profit margins). This ties in with Excableguys comments. I have seldom in the last 2 years worked with a team of experienced peple. Usually it is one or two with experience and the rest very inexperienced.

I guess 2009 will be an interesting year. Personnaly I think that the demand for experienced guys will increase and self-sponsored course graduates/trainees will be going hungry while the ones with suitable technical training & experience applying for and receiving epmployment and training from operating companies will make up the bulk of trainees out there for the forseeable future.

In closing, although the oil price is still falling, OPEC have announced on several recent public occasions that they want to see oil at a reasonable price and that they consider 75 USD to be a reasonable price. This should see some shelved projects come back on line, but will only serve to depress the ecnomies of developed countries (not to mention developing countries) where most ROV-operating companies are based, even further, thus further reducing their ability to receive credit and reduce their reserve finaces to fund ROV systems aquisition and expansion of operations. This, I think, will have the effect of reducing work opportunities and new-start opportunities of ROV personel further.

I look forward to comments on the above.

Regards,

ROVER22

[Anonymous]

And still these so called training schools are churning out trainees.I think things are going to slow dramatically in 2009,which will hopefully thin some of these training establishments down a bit…most other skilled trades require an apprenticeship how on earth can someone go to an ROV training school for a week and come out,and be classed as a trainee for offshore ROV work.There is DEFINATELY too many trainees saturating the industry now,and we dont need any more.Sorry to sound harsh,but there is only so much work around guys for so many people………

[Anonymous]

and because there is so many trainees saturating the industry,this WILL keep the offshore dayrates down…..look at the pitifull dayrates being paid out there compared to other offshore jobs.A mate of mine is a instrument technician,and has just gone out on his first offshore job,in the middle east.he is on $1000USD a day,and flys over to Dubai business class paid by his company…….Why doesnt the ROV industry always pay these kind of rates,and treat their guys well,because they know they can grab a trainee from the lucky dip bag………sorry for the rant…..

[rover22]

Hi Brigs34,

I agree with you, I am researching this a bit further and hope to have figures on trainees turned out of schools and to continue gathering data on hiring practices (frequency and number of trainees), self-sponsored to company-sponsored trainees on courses etc. It really seems that the new guys think that we are trying to block them or put them off, but the reality is there are approx. 350-550 trainees a year (rough figures) walking out of schools with certificates, but the number of offshore positions for raw trainees is extremely limited, with more opportunities existing for guys with 3-5 years experience and track-record. Unfortunately, it is a fact that companies never asked private citizens to attend courses, they do this specutivly and from the posts on this site, most fail to understand or follow this logic. The facts do trully speak for themselves, despite training schools claiming "oh, ou last class were all employed by a large company straight away" (the standard pitch) and the promise of "normal day rates" that are slightly less than that of experienced supervisors. While there is a place for schools, there is a very urgent need for companies through IMCA to start self-regulating the trainign industry that is, to my mind, blindly robbing many people of hard-earned money for training in a field they are unsuited for or have little real chance of getting work. To make matters worse, many trainees resign from employment to take training using borrowed or saved money to do this, only to be in the dwang when reality strikes and the companies dont call asking for their services as promised by the schools or as envisaged.

Regarding use of inexperienced personnel, at present, the last real gate to control the flood is (a) the ROV company project managers who screen (and hopefully check CV accuracies) applications and (b) the client who should have an experienced rep screening CV’s of ROV personnel put forward for projects to determine the suitability.

In many regions, a lot of CV’s are rejected as being unsuitable (lack of experience, lack of ROV-type experience or suchlike) while very few trainees are given opportunities offshore unless they are part of an experienced team and employed by the ROV operator on a long-term project, or in most cases, have spent time as a base tech maintaining systems and configuring them for offshore projects as part of system mobs.

Unfortunately, there are a lot of self-made and embellished CV’s out there been presented (ie I served 2 months on ROV XYZ, but was actually a deck hand on the same vessel so am claiming it as experience (which was ommited from the CV)) through to blatant forging of others CV’s. I recently reviewed a CV for m client and read of the applicants experience consisting of being on jobs I was supervisor on, on the same system and at the times I was there, yet I dont remember him being there. Investigation showed he was lying on his CV to get work and he even admitted that he was doing what others had told or recommended him to do. esson here, people are lying to get work and we end up with a liability on the team who claims knowledge and experience he does not have.

Again, from experience, despite the checks, you do land up with a muppet from time to time and they seem to think that being offshore is their big day out and everyone is there for them instead of getting their heads down and working. Some are just unsuited for the industry. I strongly recommend that specific details showing their unsuitability be noted and sent to the base and that the base be advised to recall them ASAP and replace them with better people. With facts, it is relatively easy to run someone off, but without them, you will probably be stuck.

Lastly, on some rare occasions, you do meet guys who you are sure wold make good ROV operators. With encouragement and help, I have seen several go from normal onshore techs to being offshore Pilot/Techs, some even as night-shift supervisors on the odd occasion and I think that we should, as more experienced guys, keep an eye out for talent and help and guide where we can. We would have appreciated it or benefited from this in the past, and it is doing this that will see the development of people in or industry. This is something that is badly needed I think.

Lets keep our eyes open and hope that things improve. A lot of it is up to us and we must try and do what we can where and when we can.

Regards,

ROVER 22

[Bacaruda]

The first of many ???

http://www.offshore247.com/news/art.aspx?Id=12506

[K2]

Bacaruda

This one was on the cards. Snippets from their Q3 report:

…..will continue to focus it’s activities on bringing new wells into production……

Following paragraph reads:

……..the company anticipates incurring substancial expenditures…to meet contractual and debt obligations….the companys cashflow is ….not …sufficient to satisfy it’s current obligations and requirements of it’s capital investment program…..

Money is made from production. Wells take an age from discovery to production. Knowing their financial difficulties it’s odd how they focused on further spending.

Certainly worth reading through company reports if you’re considering working for them.

On the personnel side, I haven’t seen any change in experience for a while. It appears the norm for two good guys to be working with inexperienced guys. I always ask who is on the team before going on a job, if I don’t know the names I query their experience. As we all know, if the job goes tits up you will be associated with it (not so good if you are agency and rely on your reputation). If the job goes well then nothing is said. I prefer not to set myself up for any drama. At the end of the day you negotiate the jobs you go on. If you’re salaried then it ain’t so easy.

Stay Safe

😉

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