Home' Work Boat World : December 2015 Contents Laid up not paid up
A no-holds-barred look at the real goings on within the OSV industry. By HIERONYMUS BOSCH
Winter’s coming in Northern Europe and with it more bad news
for the offshore industry. Cromarty Firth looks like a graveyard of
idle drilling rigs, whilst the number of offshore support vessels
laid up in the North Sea topped seventy in November, with news
that Siem Offshore was laying up two more high horsepower
At the same time, Deep Sea Supply announced two more modern
platform supply vessels would be laid up after their contracts in Brazil
were early terminated due to cabotage restrictions there. Worldwide,
informal estimates suggest that close to three hundred offshore
vessels are now cold stacked, down manned and locked up. More
than fifty rigs sit cold and dark and laid up too.
The situation isn’t pretty anywhere. Observers in Singapore have
noticed that every available wharf space seems full of idle vessels. The
Pacific Richfield jetty in particular has been noted as jam packed with
over thirty vessels of all types and specifications, which may or may
not be manned, and may or may not be on or off charter. Labuan
anchorage is full of vessels idled from work in Malaysia, as the
drilling fleet there has shrunk to historic lows, whilst new lay up
areas in Batam and Johor are marketed to rig and boat owners alike to
“Owners are laying up new tonnage”
What makes this round of lay ups especially unusual is that the
tonnage involved is different. In previous offshore industry cycles
one category of tonnage has consistently been hardest hit – old ships.
In the late 1990s, it was the ships from the 1970s which ended up
disproportionately stacked, obsolete tonnage which had seen better
days, UT704 Mark 1 design vessels and old Gulf of Mexico bats with
mid deck funnels.
This time though, the wo rldwide fleet is more much modern.
Twenty- and thirty-year-old vessels largely left the industry in the
downturn of 2009. So instead of the old, owners are laying up new
tonnage, locking and leaving ships five years old or less, an
unprecedented step; one which raises many technical challenges.
Leaving modern, high value tonnage unattended for months or years
is a gamble which has hitherto not been attempted before, and
certainly not on such a wide scale. Nobody has ever attempted to lay
up a US$800 million DP3 drill ship for years on end before, or a
US$100 million 250-tonne bollard pull anchor handler with a
500-tonne winch. OSVs are much more complex and sophisticated
than tankers, bulkers or container vessels which makes lay up harder.
The last deep downturn in the late 1980s showed how expensive
and time consuming resurrecting laid up tonnage was. Fuel turned to
sludge, and clogged filters and equipment through microbial
degradation. Machinery seized and corroded if not properly
lubricated and prepared prior to lay up. Humidity destroyed electrical
panels, and spread mould and decay through accommodation.
Corrosion rusted steel and ate away bulk heads and tanks. Owners
who left ships in 1987, especially in the tropical climes of South East
Asia, found that reviving the tonnage for service in the early 1990s
was a painful and expensive process.
Some boats, especially those built in the the Gulf of Mexico in the
1970s, ended up being scrapped in the early 1990s when it became
obvious that it just wasn’t cost effective to throw hundreds of
thousands of dollars at ships which were already twenty years old to
get them through special surveys.
“When owners buy ships they don’t consider that they
might be laying them up.”
That was before the massive advances in automation which
we have seen since 2000, with the complex computer control
systems throughout vessels in everything from tank tender
systems to dynamic positioning, diesel electric propulsion with
its complex switchboards and power control, and even
shipboard IT and satellite networks.
It is safe to say that none of the engine manufacturers and
thruster makers whose state-of-the-art products have brought so
many advances in position keeping, station keeping and fuel
efficiency considered the possibility that their equipment might be
sat idle for, who knows, two or three or even five years? “Lies idle
for years on end and can easily and reliably be re-activated” has
never been a selling point from manufacturers, because when
owners buy ships they don’t consider that they might be laying
them up. If they did, they wouldn’t have bought the ships in the
The typical problems aren’t going to stem from machinery failures
but from the printed circuit boards and electronics which control the
hardware. Every piece of ship’s equipment has electrolytic capacitors
inside, w hich have a clear and definite lifespan. The capacitors
contain fluid inside that is necessary for them to function, and over
time they start to leak and dry out, especially if they are not in use,
and there is no current flowing through them. Once dried out, they
fail and usually form a short-circuit.
Each ship contains hundreds of them, and only a very patient
electrical officer is going to be able to resolve the specific ones
which have failed when the ship comes out of lay up. Of course, it
might be possible to replace the entire PCB, if the manufacturer is
still supporting equipment designed a decade ago and
manufactured five years ago, in five years time. Other problems
with idle electrical include dirty or tarnished or oxidised wire
contacts, which are a special problem in the hot and humid
conditions of the Arabian Gulf or Indonesia. Every piece of
electronics has a switch, or connector, or jumper wires on it
somewhere, and all of them are prone to oxidisation over time, if
left idle. Finding which takes time and money.
Faced with the risks and uncertainties of lay up, some owners
have banged their chests and declared “no lay ups”. This macho
bombast typically lasts six months before the haemorrhage of cash
from keeping vessels manned and maintained with no work bites.
Businesses don’t go bankrupt because they lose money in the
management accounts, they go bankrupt because they run out of
cash to pay their staff, suppliers and lenders. Lay up is hard and
owners have to plan for it carefully. But failing to lay up tonnage
that isn’t working is a recipe for financial ruin. Lay up and
hibernate is what bears do when the cold bites. Owners should
8 December 2015 WORK BOAT WORLD
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