Interview with Dockwise CEO Andre Goedee: Drydocking FPSOs at Sea and the Fairstar Deal

I met up with Andre Goedee, CEO of Dockwise, at the Offshore Technology Conference in Houston last week.  Here’s what he had to say…

What’s the approach right now with Fairstar?  Are things getting sorted out with the Fairstar-Dockwise deal?  The last I heard things were “heating up” a bit between the two companies.

Not as far as we’re concerned.  We look at our control to be at over 54 percent, we still have of course a couple of formal position points ahead of us, like our AGM, but we’re confident we are able to explain the business case to our shareholders.

We have put our price forward, and there is a lot of speculation about the remaining 46 percent.

We’ve said we find the 22 percent premium on the value of the stock prior to our offer, to be a decent proposal, and that’s where we are. 

What does Fairstar think they are worth?

I have no idea, you’ll have to ask Fairstar.

Fair enough. 

Moving on… the Dockwise Vanguard was a bit of a feature for you this year at OTC Houston, and your company is planning to do some remarkable things once she’s delivered, such as dry-docking an FPSO while still attached to the buoy. 

How long has that concept been considered?

Really, we’ve been looking at this idea ever since we made the decision to build the Vanguard.  The idea behind this vessel is that it serves a couple of market segments.

First of all, we’re looking at the new, big production semis for deep water, because everything is getting bigger, and we’re looking at the potential to transport a fully integrated semi, so it’s not a separate hull, but a hull including the topside.

On Jack & St. Malo, they were just a little bit ahead of us, but if you look at Goliat, which is a fully integrated semi headed to northern Norway, that’s the idea we had when we decided to build it.

Is that one of those cylindrical FPSOs by Sevan Marine?

Yes, that is correct. Recently we have transported the Sevan Brasil, which is a drilling rig of a similar cylindrical shape as the Goliat.

Our next target market are spar buoys.

I think Statoil awarded Dockwise a contract for such a project recently isn’t that correct?

Yes, Aasta Hansteen.  It’s a long spar, and wider than the others we’ve transported in the past. Of the 17 spar buoys that are now installed in the Gulf of Mexico, we’ve transported 15 of them.

Perdido and Tahiti were the last two, but the Aasta Hansteen spar will be of a new generation of spars and a step up. We see new spar buoys targeted for the deepwater projects in the Gulf of Mexico and that’s a major segment we see as an ideal fit for the Dockwise Vanguard.

Our third targeted segment for the Dockwise Vanguard is transporting new builds from the Far East that do not have their own propulsion to either Brazil or West Africa. Then we would look at the transportation, or lifting, of the converted FPSOs.  Considering that there have been about 80 FPSOs in operation over the past 10 years, there is a particular need for this as many are now seeing maintenance issues that will require dry-docking.

Gradually, we have a lot of discussions ongoing with the FPSO owners and the oil companies about new builds and I expect that not too long from now, we’re probably going to sign another deal for the Dockwise Vanguard with one of the FPSOs.

How many contracts do you have signed for the Vanguard already?

We have three contracts at the moment for around $100 million, and the vessel is still under construction.

That’s fairly unique in an industry where everyone is fairly traditional from the beginning.

Well, the Dockwise Vanguard is certainly not a traditional vessel.

Nothing traditional about it indeed.

Recently, we’ve also decided to convert the Black Marlin and make it as big as the Blue Marlin for the near top end of the market, right under the Dockwise Vanguard cargo size.

The Blue Marlin and the Black Marlin were sister ships weren’t they?

We are going to make them sister ships again.

So, maybe I’m missing something, but as sister ships, I would think that both ships would have the same capacity when they were originally built?

They were exactly the same.

So what happened with the Blue Marlin?

We converted the Blue Marlin in 2004 when we signed the Thunderhorse contract with BP, then we converted her to a capacity of 75 thousand tons. Since then, she has been carrying around all these 6th Generation semis, big production units, and that part of the market is going to be so crowded in the next couple years that we decided to upgrade her sister ship.

Going back to the Fairstar deal, because we have decided to convert the Black Marlin, we need another vessel like her to fill in that segment of the market.

The Fairstar deal is significant for us because it is fully complementary to everything else that we do. In the fact that they have the converted barges, FORTE and FJELL, and for our offshore work, those vessels are pretty interesting. The other two vessels are a good addition to the rest of the fleet looking at their size.

What is Dockwise’s role in the Australian Ichthys project? 

The Ichthys project has a couple of components. There is an LNG project, which consists of modules, which is something that Fairstar is partly working on, but before that, the big production unit, which still needs to be built, that’s the unit which will be the largest floating production unit ever built.

The Prelude?

No, no, this will be the integrated semisubmersible that will be built and will be close to 100 thousand tons in weight.  This is something that we are looking at for the Dockwise Vanguard.  Then, there is an FPSO as part of this project, and the LNG systems. All of these projects have a significant magnitude, and most of it is pretty interesting for the Dockwise Vanguard.

Do you foresee building any more of these ships once this one is launched?

Well we take the position that we want to see this one done first. I would certainly like to have the first  three years under contract and then looking at the market, I think there might be a chance that we look at another one.

When will the Dockwise Vanguard be delivered?

Mid-December she’ll be delivered, but she will be in the water by August.

Who is classing this ship?

It’s DNV.

Was there a particular reason you chose DNV over any of the other classification societies?

We have a very strong relationship with DNV for all our vessels, so for a vessel with as much novelty and technology as the Dockwise Vanguard, we find DNV to be the most qualified.

Was this an in-house design?

We came up with the concept, because we knew pretty well what we wanted, essentially a semisubmersible aircraft carrier, and we figured out the basic conceptual design in-house, and then went to Deltamarin in Finland and they worked on it to see if it would work.  A few months later they came back and say we have something you need to see, and we think it’s doable. Here it is.

And how long have you been with Dockwise Andre?

I’ve been CEO since 2003, so almost 10 years now.

What has been the biggest challenge for you as CEO?

The biggest challenge was in 2006 when our parent company, Heerema sold us and we went through full control auction where we had a lot of bidders for our company.  That was 8 to 10 months of very complex negotiations, and the company was finally sold to a private equity firm.

All in all, it has been a really good situation for us ever since and has left us in the position to make a lot of investments and grow the company which has accelerated us in the right direction.