Forecasting Service Vessel and Helicopter Trips Related to OCS Development (GM-92-42-134)

BOEMRE ENVIRONMENTAL STUDIES PROGRAM: ONGOING STUDIES
BOEMRE OCS Region:	Gulf of Mexico
Title:	Forecasting Service Vessel and Helicopter Trips Related to OCS Development (GM-92-42-134)
Planning Area:	Gulfwide
Total Cost: $344,053	Period of Performance: FY 2008-2012
Conducting Organization:	Coastal Marine Institute, Louisiana State University
BOEMRE Contact:	Kristen Strellec
Description: Background: The oceans present a unique set of environmental conditions and adverse exposure which affects the methods, equipment, support, and procedures employed in offshore design, construction, and operational activity. Offshore activities often take place at substantial distances from shore and from other structures, at depths which require special equipment and procedures, and operations with rotating crews and a near continuous supply of materials. The offshore service industry provides transportation services to the oil and gas industry. These services involve moving personnel to, from, and between offshore installations and rigs; delivering drilling supplies, equipment, fuel, water, and food; towing rigs and placing and retrieving rig anchors; and supporting offshore construction projects. A wide variety of marine vessels and helicopters comprise the offshore service industry, and the service market is characterized by its cyclic nature – dependent upon oil and gas prices and business cycles in the upstream sector – high levels of competition, fragmented markets, and highly leveraged businesses. Throughout the world wherever oil and gas is discovered, an offshore support industry will develop and evolve with the needs of industry and government regulation. The demand for helicopter and support vessels in the GOM depends on the level of activity and amount of spending by oil and gas companies, where and how capital is allocated (e.g., shallow vs. deepwater, U.S. vs. world, exploration vs. production), and the differences in capital budgeting, if any, between independents and majors. The amount of spending cannot be controlled or predicted, since it depends upon the supply of, and demand for, oil and gas; market expectations regarding supply and demand; weather-related or other natural events; actions of oil producing countries to control prices or change production levels; general economic conditions; government regulation; and the price, availability, and development of alternative fuels. Service vessel utilization rates tend to be seasonally dependent, with higher levels of utilization in the warm temperature months. Flight hours are also seasonal and are influenced by and depend on the number of available daylight hours and occurrence of extreme weather events. Boat owners charge a dayrate for the use of their vessel, while transportation contracts for helicopters and crewboats are typically awarded for a term or one year or longer. Anchor handling towing and supply (AHTS) vessels tend to command the highest dayrates in the GOM, followed by platform supply vessels (PSVs) and crewboats. Construction vessels command a premium similar to jackup units. AHTS vessels are closely correlated to drilling activity, and tend to have more volatile utilization rates than vessels such as crewboats. Boats and helicopters are a commodity item and owners compete primarily on price, although safety, reliability, availability, and service are also important. Dayrates depend on factors such as the type and age of the boat, contract length (spot vs. long term), market conditions, and region of operation. When demand for services outstrips supply, rates increase first in the spot market and then when long-term rates are negotiated. Spot rates are more volatile than long-term contracts, and are also more sensitive to supply/demand imbalances.
Objectives: to expand and update the current BOEMRE descriptions related to service vessel and helicopter trips and to develop methodologies and usable equations to forecast the trips required to support a given level of oil and gas activity as represented by BOEMRE exploration and development (E&D) scenarios; and to describe more precisely the level of diversity and the magnitude of offshore activity in the GOM of the operational requirements associated with various activity classes.
Methods: Provide a general description of the types of offshore service vessels employed in the Gulf of Mexico, review data sources available on the vessel fleet, outline the companies operating in the region, and discuss general market trends impacting the industry. Categorize offshore activities and describe the general service and supply requirements for each category, including the factors that impact the number of service vessel trips and the uncertainty associated with quantification. Develop a method to forecast the total number of service vessel and helicopter trips over a 40-year period using a set of relevant activity variables from the BOEMRE E&D scenarios broken out by planning area, and if feasible, stage of development, water depth, type of service vessel, or other relevant data categories. Discuss the limitations of the model assumptions, and the possible implications they may have on the forecasts and methodologies. Review operator plans from the BOEMRE on estimated service vessel and helicopter trips and compare with the model assumptions and methodologies.
Products: Forecast model and final report.
Importance to BOEMRE: Offshore service vessel and helicopter trips in the OCS are important components in the BOEMRE EIS since they directly impact port activity and comprise a significant portion of the offshore labor market. The BOEMRE requires a defensible method to forecast service vessel and helicopter trips for application in future EIS reports.
Current Status: A theoretical model was developed to quantify the spatial distribution of service vessel activity in the Gulf of Mexico, and all of the previously synthesized and collected data was applied in a spreadsheet-based model to baseline port activity by vessel type and stage of activity. Vessel data from Port Vision has been processed to understand the temporal and spatial variability of vessel counts and movements. A computational framework to correlate vessel tracks with offshore activity has been set up, and preliminary analysis is nearly complete. After this preliminary work is completed, additional data will be needed to enumerate all vessel activity over a longer period of time (time and resources permitting). Gaps remain in vessel identification and the ability to extrapolate over long time horizons (i.e., without additional data support) is expected to involve significant uncertainty. A beta version of the model was presented to BOEMRE personnel and sensitivity analysis performed on the model parameters in a paper describing the model and user inputs. All draft documents and data synthesis have been presented to BOEMRE.
Final Report Due:	January 2012
Publications:	Mark J. Kaiser, "An Integrated Model Framework for Service Vessel Forecasting in the Gulf of Mexico," Energy – The International Journal, 35:2777-2795, 2010. Mark J. Kaiser and Brian Snyder, "An Empirical Analysis of Offshore Service Vessel Requirements in the Gulf of Mexico," International Journal of Energy Sector Management, 4(2): 152-181, 2010.
Affiliated WWW Sites:	None
Revised date:	March 2011
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