Offshore - Tickets & Crews

[cascade]

A while back - people / members talked about the ticket - license you had to hold in getting a job at BCFS - and a mention was made that when the Offshore Oil / Gas opened up - then crews would be leaving BCFS and look else where - pay was better ect....

So what has happen and where is the Offshore- gas / Oil business going to be be based ? What type of crews do they need ?

[YZFNick]

I haven't heard anything about rigs being open yet. I believe they will be in Queen Charlotte Sound and to the north of Vancouver Island.

If you want to make some money - buy land in Port Hardy. It could be the next Fort McMurray.

[cascade]

Nick,

Is this something that will happen or just been talked about?

It will open up the North part of Vancouver Island and of course in place like Prince Rupert. Where would they put a"Offshore" tug - supply vessel port ?

Is it Gas or Oil?

The reason I am asking is that 20 years ago Norway was a broke country - very poor average income - then along comes the North Sea Oil & Gas business. Not that many fields in there sector - but where the Norwegian made money and vastly improved the country was in the support services - Supply vessel & tug - plus the fabrication of equipment and safety gear ect....

Will crews on BCFS be prepared to move ? in search of the all mighty $

[YZFNick]

This has been talked about, as far as I know there is oil there, but some political/environmental hurdles need to be jumped first. I think they would put the port in Prince Rupert because it would be the easiest place to put a pipeline and would me more open to new traffic compared to somewhere on the Island.

As far as people to man these rigs, I think the majority of people would not come from BC Ferries, but from the BC citizens who already work in oil and gas in Alberta. It would merely divert the flow of labour from Alberta's frontier to BC's frontier. It would be nice to have a manufacturing industry grow on Vancouver Island. Everything is resource based and it would be great for the island's economy to diversify from mining, logging, fishing and tourism.

Port Hardy will grow in terms of being the jumping off point and supply centre to the rigs. The highway up there is good and it's by far the fastest way up to the Sound when you compare it to a mainland route.

[cascade]

That's very interesting Nick,

As for Sea based crews - it takes years to learn how to operate in these waters - therefore would fisherman be a more likely source of crews than ferry crews - as the weather up there is a lot more violent than crossing the strait - which I know can kick up a swell.

Also has BC got anything or Transport Canada got anything ready for licensing crews for this type of work? What about are First Nation friends - would they be a source for re-training ?

Rig's need supplies - where would these products / services come from?

[YZFNick]

There is offshore drilling in Newfoundland. I'm sure all the tickets out there apply in BC. It would be nice if BCIT reopened their PVR Marine school. My father was the last certified shipwrite in BC and that was 1981! How can we be a great seafaring province when we're not training and keeping our own people. I know people that have gone to Massachusetts to start a career as a shipwrite. And they're not coming back either. As the country with the longest coastline in the world, this is embarrasing.

[cascade]

Why is there a lack of interest - due to the length of the BC Coast ?

Is the take up at BCIT for these types of course - AB / Deck Officer - Watch Leader ect.....are they full or not.

Are the youth of BC to "soft" - can't handle the hard work?

As I mention in another thread - I would love to do my job in BC - but the Federal government's tax and reg's kill any type of Canadian shipping business. You notice that CP has sold the last of it's shipping business and even that was 100% held offshore - not in Canada.

[kylefossett]

bcit does have a marine program. bridge tickets and engine room tickets. 6 months classroom followed by 6 months at sea rotated over a 2-3 yr period. the at sea portion could have you placed on a deep sea vessel sailing around the world. a friend of my cousin took this program. my younger brother looked at this program before being accepted to the coast guard college in halifax. he is actually on board the coast guard ship on its way to the gulf coast.


cascade- what do you know about the seaspan ipo. will this make them enough money to buy the container ships they want and is this a good investment thing for somebody like me who has a decent size portfolio know but wants to expand to other investments

[Scott]

The oil and gas issue on the coast is very politically contentious, and no where close to being reality yet. No one really knows for sure how much oil is down there, but there could be a lot. I suppose the rise in the price of oil could create an increase in exploration... but there is still a moratorium on exploring or drilling off the B.C. coastline as far as I know.. and it will take the federal government to change that. David Anderson, up until last year was B.C.'s main federal Liberal cabinet minister... and he was/is dead set opposed to any oil exploration off the coast. The new Liberal government may be a little more open to open up the area, but like anything the federal government does, it will probably take years before it happens. And if it does... then you'll have Clayquot Sound all over again I bet... and probably 10 times worse (referring to the protests). You have the Natives to deal with, and then the huge areas of protected land, national and provincial parks, international areas of conservation, the Great Bear Rainforest... I can just see all the hippies and Greenpeacers heading up the coast to protest. Those will be some good years for the mid-coast run.. if it's still around. The Queen of Chilliwack will probably never smell the same again.

Even if/when the moratorium is lifted... then exploration can begin... it'll still be years before the oil starts flowing. The current BC Liberal government is pretty keen on at least seeing what's up there... but like I said before, they can't really do anything until the feds lift the moratorium.

It's ironic that one of the largest oil tanker companies in the world is headquartered in Vancouver... Teekay Shipping. I read that in the Vancouver Sun a few weeks ago. Apparently their business is booming and they're building some nice new big ships.

I don't know if anyone has read "The Outlaw Sea" by William Langewiesche. It was a really interesting eye-opener to me about just how the international shipping industry works... or doesn't work, even in this day and age. Relating to this topic, the book talks about the poor regulations surrounding oil tankers... and how it's so hard to change things due to the "flags of convenience." I believe that CP ships is owned by our own Prime Minister's family and even he can't do business in his own country.. what a joke.

[cascade]

Kylefossett - Here is the info on the Seaspan IPO in New York.

What WMG has done now is re-finance the whole group. The Seaspan part of there operations is the cash cow. The Tugs and now the Container business bring in large sums of money. They have a very good tie up with the Chinese's - as you will see from the info - which means they have "ring fence" this investment. It also leaves them free to develop other parts of the Group. As I mention a few times - if they WMG - don't get the contract to build the next 3 new vessels for BCFS - then they will turn one of two of there yards into Container Ports - as you see they will have 23 vessels and need space to service them.


GEORGE/KEITH - DOMNIC

FURTHER TELCON,GOOD TO SPEAK TO YOU BOTH AGAIN

Seaspan ends IPO losing streak
===============================

SEASPAN Corp begins trading on the New York Stock Exchange today after
successfully completing its massive offering last night û without
dropping its price. At $21/share, in the middle of its proposed
$20-$22 target range, Seaspan reportedly sold the full 28.57M shares
for a gross take of $600M û a dramatic success in light of recent
shipping IPO weaknesses. Underwriters including Citigroup and Merrill
Lynch have been granted an option to purchase an additional 4.285M
shares. Proceeds from the current IPO will be used to acquire the
existing 10-ship fleet owned by Seaspan Container Lines and chartered
to China Shipping Container Lines (CSCL). In its most recent
prospectus, Seaspan said it would pursue a follow-up offering in 1Q07.
Together with borrowings from the companyÆs new credit facility and
proceeds from the current over-allotment sale to underwriters, the
future offering will fund the acquisition of 13 additional vessels to
be delivered by Samsung through 2007 and chartered to CSCL and CP
Ships. The companyÆs fleet will eventually total 23 ships with overall
capacity of 116,900 TEU.

Best regards
SSY/LDN

[cascade]

John,

I don't think Paul Martin had any interest in CP Ship's - he was / had a business which run Bulker on the Lakes. He had a London office - but was small - bit player. The two vessel I know about were small - 10,000dwt. WE have two 53,000 dwt Handymax Dry Bulker.

The only Canadian Shipping business - is the Federal Line from Montreal. We looked at two of there Dry Bulk Cargo - 2x sisters - which were ICE class. They had lost a couple of contracts in Northern Canada - hence didn't need the vessels. Made a bid - but lost out. Sort of glad as the market for TC has gone south big time -but ship asset value not followed it.

[cascade]

Kylefossett,

Investment - there is lot's of IPO's in shipping - BUT I would not invest in any of them. The market is very fluid right now and asset values are craze. Take for an example a 1996 built Dry Cargo vessel 53,000 dwt - in June 2003 she would be sold for around $13M. In June 2004 she would be sold for $35M - in todays market she would be worth maybe $30M. So companies went to the market with very high asset values - BUT the Income - which is the TC (Time Charter) was in 2003 $6,500 per day then it jumped in June 2004 to $25,000 per day and now it is back down to around $18,000 per day. It has been as high in 2005 as $38,000 per day. So in a general re-cap the income is from supply & demand. Lack of vessels on the market.

Why - well they have - shipyards - been building container ships like there is no tomorrow - but China and India need raw materials - so they need Handymax - Dry Bulk vessel to carry this cargo - which makes the goods - therefore the container ships then transport the product to North America - so you get your pair of trainers from Nike for $150.

Ship owners needed finance - and it became cheaper going to the market - IPO - then asking the Banks.
Also in America the tax treatment for an Listing (IPO) was what ship owners looked for. They would sell about 40% of the share capital. They would manage and run the business - if they make a mistake - well tough - so what to the shareholders. In the past families have owned Ship's - and controlled shipping. Greece & Norway the biggest ship owning countries. These two countries have "private" backers from the Middle East.

Tankers are mostly Norwegian and Greek - Dry Bulker are Greek and Others.

Save your money - don't put it into shipping - at least not now. The risk are to great. You need to understand and watch the market on a daily bases. If you want to learn - come and work for me in London.

[Scott]

Sorry, I got mixed up between CP ships and Canadian Steamship Line.

Here's what CBC says about it:

Canada Steamship Lines

Before August 2003, Martin and his wife Sheila owned all of the company's voting shares. The sons – Paul William, James and David – owned the common stock. Although CSL is privately held and therefore not required to publicly disclose its financial records, CanWest News reported in early 2003 that CSL controlled assets worth upwards of $693 million and had annual revenues of $283 million.

The company operates a fleet of self-unloading bulk carrier ships on the Great Lakes-St. Lawrence. Its parent company – CSL Group Inc. – is headquartered in Montreal, and operates offices in Halifax, Winnipeg, Burlington, Boston, Singapore and Sydney, Australia. The company operates 37 bulk carriers across the world under the banner of Canada Steamship Lines and CSL International based in Massachusetts. According to company literature, it's "the largest fleet of dry bulk self-unloading vessels in the world."

Martin first joined the company in the 1970s when it was owned by the Power Corp. He was appointed CSL president in 1974. Seven years later, he and partner Laurence Pathy bought the company for $189 million. Martin bought Pathy out in 1988 and took full control.

[cascade]

John,

You are correct about Paul Martin - as I mention his fleet operate on the Great Lakes - and they are what we call "Dry Bulk Cargo Vessel - Lake". They are no good for open sea travel and purely designed for the Lakes. The offices they have are Brokerage Office - as they shipped a lot of Grain & Ore type products. Where these office are support this. His London Office - was small 2x people and was a broker.

The Shipping people are upset as they though when he got in - that it would open up Canada for the Shipping industry worldwide. America & China and India are the 3 main consumers of products shipped by water - inward and outward. But as most politician - he has done nothing. A lot of talk when Kemp was running for the USA President - that the Jones Act would be adjusted and in-line the Income Tax bill for shipping would also be adjusted to reflect this change in America and Canada.

I know a number of very rich ship owners who would love to come and live in Canada - as worldwide - we have a much better - safe - living standards than the Yanks...

[lubicon1]

Hi Everyone. First time caller, long time listener as they say. I've been meaning to sign up for awhile and figured this is as good a post as any since I work in the oil patch.

First, there have not been any commercial discoveries of oil or gas made offshore BC. No drilling has been done since a moratorium was put in place many years ago. There is some noise in government about lifting the moratorium which would allow drilling to resume (if anyone is still interested).

My guess is most if not all the logistics, staging etc would be handled out of Prince Rupert as it seems to be the closest and most suitable location to both the offshore working area, and the source of supplies (ie Alberta).

As for jobs, they come in all types. There is the rig itself which consists of the drilling crew, the nautical type guys (ie a Captain), and the support people (radio operators, cooks, etc.). Then there are all the supply positions to be filled (supply boats transferring people/goods back and forth from the rig land). Presumably the BC Ferry people would be interested in the latter 3 types of jobs. The job environment couldn't be more different than a ferry operation. The crews would operate on a rotation of something like 2-3 weeks on, 2-3 weeks off working 12 hrs/day every day you are on the rig. It is a 24hr/day operation and would most certainly be a non union environment.

The money is very good but you work very hard for it. I'm not saying BC Ferry people are unsuitable (they probably are well suited), it's just a very different job.

[cascade]

Welcome aboard Lubicon1,

In Norway - once they discover oil & gas offshore - most of the rigs came from American operators - and crewed by the same. They made the country for the support side of the oil & gas. Supply vessels to the rigs and on-shore fabrication for the business. Plus a lot of the maintenance required in keeping the rigs safe.

Therefore my view is that - the rigs - once they start drilling - if & when - then it will be done by American owner rigs and crew - that BC could be like Norway and handle the supply line to the rigs and do a lot of the on-shore fabrication.

There is a good oil business in Alberta - mostly working on the Tar Sands - plus a few on-shore drilling and small sweet gas cracking plants.

[lubicon1]

Offshore Canada (Newfoundland, Nova Scotia), most of the rigs are foreign owned but the rig crews are pretty much 100% Canadian staffed.

I caught a great show a few months ago on Discovery Channel (I think). It was on the largest semi-submersable rig in the world (Eric Raud I think the name was - it translates to Eric the Red in English). It was drilling offshore Nova Scotia. The thing is an absolute beast in size. The captain was Norwegian but the crew was Canadian.

[cascade]

I am glad to see that there are a few Canadians working on the rigs - worldwide.

I think we would do very well in the supply business for the rigs - as the local people in the region have the skills & knowledge needed.