Big game hunting in the intervention business

Owen Kratz marks his 60th birthday this year, but he's far from settling down. The CEO of Helix Energy Solutions Group, including the business unit Well Ops, including business unit Well Ops, has the global intervention business in his sights, with an exanding fleet and a passion for the industry.

It is not quite the game warden job he had always wanted, and set out to Kenya to find after comleting a degree in biology and chemistry in New York, Luckily, for Helix, Kratz's career changed when he met a North Sea diver from Rhodesia, who ersuaded him to take the same path. In 1984, Kratz joined Cal Dive, which eventually became Helix Well Ops, as a dive superintendent.

What fascinates—and drives—Kratz is the industry’s changing nature and needs. “There are a lot of different things these intervention vessels can do. But, maybe five years from now there could be a decommissioning vessel. I see light intervention vessels, wireline vessels, top hole drilling vessels, vessels specializing in just doing production enhancement. Some of them could also do well start up and clean up.“Then there is decommissioning. Decommissioning is changing faster than we can design for. Probably 80% of the intervention market has historically been decommissioning, where producers felt most comfortable trying it out, and there is a big back log in decommissioning, and post-Macondo, going forward, you may not be able to decommission as you used to.”

Not only that, but Xmas tree design has changed, and continues to change, he says. There had been a shift from vertical to horizontal trees to facilitate completion and recompletion operations. Now companies are going back to vertical trees, partly because of increasing pressure requirements and to allow tree recovery and repair without pulling the completion. “This is why I like intervention,” Kratz says. “It is constantly changing and you have to figure out where the market is going. You have to look at all the solutions a company is going to need.”

However you look at it, there will be a need for more vessels, led by the ever increasing numbers of subsea, especially deepwater, wells.

Helix Wells Ops currently operates five vessels (three light well intervention and two heavy intervention), capturing about 50% of the global fleet. They are the Seawell, Well Enhancer and H534 (a converted drillship) monohulls, the Q4000 semisubmersible, and the chartered Skandi Constructor and HPI monohulls.

In addition, it has on order the Q5000 and the larger Q7000 semisubmersible, both being built by Sembcorp Marine’s Jurong Shipyard subsidiary in Singapore, and due for delivery in 2015 and 2016 respectively. The Q5000 has a five-year contract, with options, with BP. Helix Well Ops will also operate intervention services on two newbuild monohulls being built for Siem Offshore, for client Petrobras, on a four-year contract, with options.

Kratz thinks Helix will build at least one more, giving a total of 10 vessels, before 2018, and that the global fleet will add up to about 20, maintaining the company’s 50% market share, by vessel numbers.

Norway’s Island Offshore currently has three vessels, Malaysia’s Bumi Armada has the Synergy, in partnership with Fugro, and Aker Solutions has the Skandi Aker. FTO Services, founded in 2012 as a joint venture between FMC Technologies and Edison Chouest Offshore, is also bringing out a vessel.

“There is a lot of difference in the market and not one right solution, that is why we have our fleet,” Kratz says. “We are not trying to come up with a product, we are a solution provider.”

What surprises Kratz is the time it has taken the industry to adopt intervention technologies, and now the interest in using it. Instead of having an under-utilized specialist vessel, the firm is having to aggressively build up its fleet to meet demand.

“We knew it (the Q4000, delivered in 2002) would be required eventually,” Kratz says. “Once you go deep, the only way to develop is with subsea wells and if you have subsea wells you would have to be able to access them. That’s why we started to position ourselves in deep water, but it was way too early.”

Others see the opportunity too. “There are a lot of people trying to figure out how to use it,” he says. “There is a lot of reinventing the wheel. We have had thedubious honor of learning from mistakes over the last 20 years.”