Barely recognizable from the Gulf of Mexico saturation diving company that emerged from a three-way merger back in 1969, Oceaneering is today in fully fledged dynamic growth mode. In the US, Russell McCulley looks at the company's plans to build more than two dozen new ROV systems in 2012 and hire more than 300 for its core business in coming months. In Scotland, David Morgan checks out Oceaneering Umbilical Solutions' pioneering test, qualification and reliability lab.
While the numbers vary, analysts agree that the ROV market is on the upswing as E&P activity heats up and new deepwater rigs are launched. A recent report from Douglas- Westwood paints an especially rosy picture, estimating that annual market expenditure on work-class ROV support will rise from $891 million in 2010 to nearly $1.7 billion in 2015.
This is, of course, good news for Oceaneering.
‘The ROV is Oceaneering's core business,' says Houston-based Kevin Kerins, who as senior VP of remotely operated vehicles oversees an offshore staff of some 2000 ROV pilots worldwide. ‘Over half of the profit in the company comes out of the ROV business.'
Kerins' optimism stems from the number of floating rigs scheduled to enter the market over the next several years, many of them without firm contracts. According to ODS-Petrodata, there are currently 70 drillships, semisubmersibles and tender-assist drilling rigs on order and under construction, with delivery dates of 2012-18. ‘The number of uncontracted rigs coming up for delivery is fairly high, including some being delivered now,' Kerins says. ‘That usually serves us pretty well.' Oceaneering tends to build its ROV systems on spec, so that they can be deployed quickly when the need arises, he says. ‘It works in our favor when these [rig] contracts come up quickly, because of the availability of ROV systems.'
Delivery of a complete ROV system takes about nine months, Kerins says, including the shipment of key long lead equipment such as winches, foam blocks and umbilicals. ‘We're on most of the deepwater rigs in the world, and a lot of the rigs being delivered now are cookie cutters – sister ships of vessels we are already on so we can mobilize equipment pretty quickly.' The company has done all the preliminary engineering needed to supply ROV systems for such designs, he says. ‘We also meet with the drilling companies and offer our engineering services to them up front, a year, two years in advance of a rig being built. We go in and do all the deck loading analysis they need to know to put equipment on for 10,000ft of water, or even deeper now.'
This year, Oceaneering expects to add close to 25 ROV systems to its fleet and hire an additional 300 employees for its offshore ROV services business. For onshore operations – operational support, tech support, logistics, crew training and supply chain management – the company employs nearly 500.
It's a competitive business, with many ROV companies seeking to line up contracts by bidding low. Oceaneering has opted for another strategy, Kerins says. ‘We're certainly not the lowest bidder. Our whole model is based on up-time, and our customers are willing to pay a little bit more for less downtime.'
The company has been fine-tuning its delivery systems over the past two decades. Early on, Kerins says, ‘Oceaneering, like every other company, had one of everything'. The fleet was something of a hodgepodge, with incompatible components and unique systems; if a ROV malfunctioned, it was difficult to replace it without replacing an entire system that might weigh more, require more deck space or have a different method of operation requiring a different crew. In the 1990s, Oceaneering began building and standardizing its systems internally. ‘And that's something we have maintained – compatibility across our fleet, being able to interchange ROVs and "mix" the systems,' Kerins says. Control over inventory and compatibility among parts and systems means that if something does get knocked out of service, downtime is minimized.
Up to a quarter of Oceaneering's ROV business now involves vessel-based construction work, a ‘growing part of our business', Kerins says. To provide support for construction and rig-based ROV systems, the company has established a network of operational centers placed in strategic locations across the globe. ‘Our aim was to put operational support and logistics as close to the job as possible,' he says. Oceaneering also operates three major training centers for ROV operators in the US, Brazil and Indonesia. The ROV group alone spends more than $10 million each year to train pilots and crew, Kerins says. ‘Flying a ROV is a touch,' he says. ‘Some people have it and some don't. We developed simulators for training, but all the simulators and training in the world may not make a guy a great pilot. So we developed other things that are part of the control system' – for example, an acoustic positioning ‘auto-hover' system for ROVs that prevents a unit from drifting off course if a seafloor disturbance inhibits visibility.
ROV manufacturers continue to improve visibility under normal circumstances. ‘Customers always want better video,' Kerins says. While high-definition video has been an option on ROVs for some time, ‘it really wasn't of any use', he says. ‘You had to convert the HD camera signal to some method that would go up the fiber and then convert it back to a video signal. You have to be able to record it, add overlay data and you need the ability to give the recording to a client in some media.'
To streamline the process, Oceaneering developed a HD camera system internally – the company recently delivered its 100th such system – and has taken the technology a step further with the introduction of the Ocean ProHD-3D system, from subsidiary Deep Sea Systems International, which offers full 3D stereoscopic high-definition imaging for both pilot and the end user. The system is rated to 4000m operating depths and has generated considerable interest from the industry, Kerins says. ‘The advantage for operators is to have the depth of field to do manipulator work up close,' he says. ‘They can set up the convergence for that sweet spot where 3D is just perfect – generally about five feet in front of the ROV where the work is done with the manipulator. But if they want to hold back at 10-15ft to allow them to see a drill bit being stabbed into casing, or casing into casing, it can be adjusted.'
Oceaneering also developed its ROV electronic control system in-house. Called Oceaneering Power & Control, or OPAC, the system allows for greater interchangeability with other Oceaneering ROVs and has been installed on about 60% of the company's fleet. The company is currently working on what Kerins calls ‘intelligent diagnostics', a technology that will help pinpoint the root of a problem if a component malfunctions. The system is in beta tests and will likely be rolled out in 2012.
‘When a breaker trips, the key is how fast can you identify the fault? You've got 20-plus possibilities. It could be the breaker, the deck cable, the slip ring, the motor, the cables – it goes on and on. Intelligent diagnostics eliminates a lot of this. Changing the component is not a problem. You can change a component quickly, whether it's a motor or a thruster. The key is how fast you know what the problem is. And we think that will be a strategic advantage.'
Another common cause of downtime is rough weather offshore, which can hinder ROV deployment. The ROV is at greatest risk of damage when it's in the air-sea interface, or splash zone, when excessive horizontal movement can cause it to crash into the side of the vessel or ‘snap load' the umbilical. Oceaneering has addressed the problem in a couple of ways. The company developed a cursored system, since adopted by other ROV operators, that uses a depressor mounted atop the ROV cage to add weight and stability during launch and recovery. In cases where a cursored system cannot be installed, Oceaneering has engineered a long-reach A-frame to keep the ROV and tether management system as far away from the hull as possible during a launch.
Oceaneering got into the umbilicals business in the 1990s through the acquisition of Multiflex, since renamed Oceaneering Umbilical Solutions and with major manufacturing facilities in Panama City, Florida; Rosyth, Scotland; and Niteroi, Brazil. In 2009, the company built a high-specification manufacturing facility in Houston, which houses its High Performance Cable group. The division manufactures tethers and umbilicals for its Magnum and Millennium ROVs, among other specialty cables. The investment in its own ROV umbilical plant was necessary, Kerins says, to maintain greater control over materials and reliability.
In one of its ‘less glamorous' but not insignificant initiatives, Kerins says, the company recently spent about $500,000 to develop a biodegradable oil to prevent corrosion of the zinc coating on umbilicals. ‘Umbilicals are expensive, and they were corroding at an alarming rate,' he says. ‘We did a lot of analysis, collected hundreds of samples and had corrosion experts looking at it. We found that the corrosion was mainly caused by a type of metal-eating microbe.'
The new lubricant, developed in collaboration with New Jersey-based Grignard, has more than doubled the life of umbilicals, he says. Oceaneering is also working on a biodegradable hydraulic oil that can meet stringent environmental requirements. The new lubricant is being developed in partnership with Swiss firm Panolin.
Other developments include an increased focus on tooling through the company's Deepwater Technical Solutions division and a push to build ROV capacity at greater water depths. ‘The next step change now is to go from 3000m to 4000m systems, and the technologies that will be needed to do that,' Kerins says. ‘That will make a difference in our business. People don't realize how technically advanced the umbilical has to be, especially when you go from 3000m to 4000m. Umbilical dynamics – loads and capabilities at the horsepower that our customers want – are nearly at the limit at 3000m. You're really pushing the limit at 4000m, and there are things that have to be done to make umbilicals lighter and stronger that we're working on. And it's the same with tethers.'
Kerins believes the electric work-class ROV and electric tooling – a hot topic a decade ago – could be poised for a comeback as offshore oil & gas exploration moves into more ecologically sensitive environments. Oceaneering built an electric work-class ROV, the E-Magnum, which was lost in theDeepwater Horizon disaster. ‘We built one. It got a contract. And it worked for ten years,' he says. ‘It was a very successful ROV. What it lacked was the all-electric tooling. The typical assortment of tools the industry needs was not there. But our Norway office, over the years, has been developing a whole suite of electric tools. ‘There is a potential for an electric ROV to come back. It fills that "eco" market,' he says. ‘It's clean – there's little potential for discharge if the thrusters and tools are electric. Electric tools are attractive, and if you're going to be working in environments like the Arctic, under the ice, you're going to want that kind of technology.'
Considering how far ROV technology has come since Kerins joined Oceaneering a little more than three decades ago, work-class electric tooling and 4000m operational depths seem imminently achievable. Trained as a diver, he switched to ROVs in 1981, shortly after joining the company, and was asked to work on a drill support contract using ROVs in place of divers. ‘I think it was the first drill support contract the company ever had,' he says. ‘I had done drill support from the diving side, with bell diving. They wanted to apply that to ROVs.
‘This was when the only tool the ROV carried was a toilet brush, for cleaning off the bull's eyes and things like that,' he says.
‘It was addictive because everything you did was something that nobody had ever done before. Everything was a challenge.' RM