D. Chapter Resources
II. UNDERWATER CONTRACTORS
4. Labor Force
The Bureau of Labor Statistics provides labor statistics for a generalized category of
“commercial divers.” The BLS estimates that 2,680 commercial divers are employed in the U.S., with the highest concentration located in Florida, Virginia and South Carolina. According to 2006 salary estimates, commercial divers had average annual earnings of $45,410 (U.S. Dept.
of Labor, BLS, 2007b).
The BLS breaks out employers of commercial divers into five categories: other support services, other heavy and civil engineering construction, highway, street and bridge construction, support activities for water transportation and amusement parks and arcades.
Often divers have to piece together short periods of work for a number of employers or work on contracts. For example, construction divers rarely have a project that supplies more than 90 consecutive days of work. Therefore, self-employment is quite common among commercial divers.
All three major diving companies report that the ability to attract and retain skilled employees is an important factor in their success. Global Industries, Ltd. reports that their ability to expand operations is impacted by their ability to increase their labor force. The demand for skilled workers in the underwater construction industry is high, and supply is limited. As a result of the cyclical nature of the oil and gas industry as well as the physically demanding nature of the work, skilled workers may choose to pursue employment in other fields. A significant increase in the wages paid or benefits offered by competing employers could result in a reduction in one company’s skilled labor force, increases in employee costs, or both. If either of these events occurs, Global Industries’ operations and results could be materially adversely affected (SEC, 2005g).
Helix
Energy Global
Solutions Industries Oceaneering
Louisiana Carlyss Port of Iberia Fourchon Morgan City New Orleans Texas
Houston Dallas
5. Typical Firms
The underwater contracting industry is divided into two segments, large corporations operating in all water depths with their own support fleet of vessels, and small organizations targeting surface diving projects, with some ownership of vessels.
The Atlantic Communications’ Gulf Coast Oil Directory lists a total of 46 Diving and ROV contractors in its directory. Of these 46, 26 are reported with a range for the number of employees. As shown in Figure 12, the majority of companies (17 companies) in the GOM area are smaller with a range of 1 to 25 employees. Only two companies, Helix Energy Solutions Group Inc and Oceaneering International have over 500 employees.
0 2 4 6 8 10 12 14 16 18
1 to 25 26 to 100 101 to 250 251 to 500 501-1000
number of companies
number of employees
Figure 12. Number of employees at GOM-based diving and ROV contractors.
There are three major competitors in the U.S. GOM. These companies are Helix Energy Solutions Group Inc. (formerly Cal Dive Inc.), Global Industries, Ltd, and Oceaneering International, Inc. (SEC, 2006i).
The companies report that the marine contracting industry is highly competitive. Price is a factor, however, the ability to deploy modern equipment and techniques, acquire specialized vessels, attract and retain skilled personnel, and demonstrate a good safety record is also important (SEC, 2005g and SEC, 2005h). Competition for ROV services has historically been based on equipment availability, location of or ability to deploy equipment, quality of service and price. The ability to develop improved equipment and techniques and to attract and retain skilled personnel is also an important competitive factor in the ROV market (SEC, 2006j).
Helix Energy Solutions Group Inc. is the market leader in the diving support business in the GOM OCS. Their services include construction, inspection, maintenance, repair and decommissioning. Helix owns a fleet of 26 vessels, including 23 surface and saturation diving
Source: Atlantic Communications, 2006.
support vessels capable of operating in water depths of up to 1,000 feet, as well as three shallow- water pipelay vessels (SEC, 2006i). In August 2005, Helix acquired five diving support vessels, two shallow water pipelay vessels and a portable saturation diving system from Torch Offshore.
In November 2005, Helix acquired all of Stolt Offshore’s assets operating in the GOM. Stolt Offshore was previously Helix’s major competitor in the GOM. In January 2006, Helix also acquired Stolt’s shallow water pipelay vessel (SEC, 2005h).
Oceaneering International owns the largest and most technically advanced fleet of ROV’s in the world. Oceaneering owns 186 work-class ROV’s and estimates that it has a market share of 36 percent. Oceaneering’s major customers accounted for 23 percent of consolidated revenue. Four of their top five customers are oil and gas exploration and production companies. The other top- five customer was the U.S. Navy (SEC, 2006j).
In March 2004 it was estimated (most recent estimate) that approximately 435 work- and heavy work-class ROV systems were active in the world (see Table 4), representing approximately $1.5 billion in capital assets. The majority of these systems are owned by seven major commercial operators (totaling approximately 405 systems). Another 30 systems are operated by smaller companies, academia, and other non-commercial organizations (Marine Technology Society, ROV Committee, 2006e).
Table 4
Work Class ROV Systems Operating Worldwide
Source: Marine Technology Society, ROV Committee, 2006e.
The health of the ROV industry is closely tied to the level of activity in the offshore oil and gas industry. The majority of work class ROV systems are employed by offshore hydrocarbon exploration and production companies. The second most significant market is the support of installing and maintaining undersea cable systems. The split between these two markets can be difficult to define because of the dual use of many systems. However, it is estimated that of the 400 commercial systems deployed, about 85 percent is for hydrocarbon production and 15 percent is for undersea cable support (Marine Technology Society, ROV Committee, 2006e).
Oceaneering International, Inc. 152
Subsea 7 (Halliburton/Subsea) 78
Stolt (Stolt/Comex/Seaway) 35
Sonsub (Saipem) 59
Fugro (ex Racal/Thales) 36
Canyon (Cal Dive) 23
Technip-Coflexip 22
Others- Approximate number of specialty systems, plus systems operated by smaller companies.
30
Total Systems 435
Work Class ROV Systems Operating Worldwide
C. Industry Trends and Outlook