Turning the Tide

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Leading the industry comes naturally to Tidewater, Inc.

In the world of offshore energy exploration and production, Tidewater, Inc. is about as legendary as it gets.

Tidewater (NYSE:TDW) pioneered the workboat industry, building the world’s first offshore supply vessel (OSV), the Ebb Tide, in 1955. In the intervening years, Tidewater’s reputation as an innovator and trusted partner to the world’s largest offshore resource companies has grown with its fleet.

Today, the Houston-based firm owns and operates the largest fleet of OSVs in the world. They provide energy firms with critical support, including towing and anchor-handling for drilling rigs and equipment, transporting supplies and people, and the provision of direct assistance needed for specialized services such as pipe laying, cable laying, pollution and fire control, and seismic work.

The company’s physical footprint, which at present is comprised of 25 offices on six continents, combined with its financial strength and dedication to operational excellence, sets Tidewater in a league of its own. “Wherever a US-based company can go, either we are there today, or we will operate there tomorrow, or we operated there yesterday,” said Jeff Gorski, the company’s Chief Operating Officer.

In 2018, Tidewater merged with another leading OSV operator, GulfMark Offshore, a union that has positioned Tidewater as a top-three operator in every major market in the world.

The path to the GulfMark merger can be traced to 2013, when Tidewater acquired the Norwegian platform supply vessel company Troms Offshore, adding a group of technically advanced North Sea-based deepwater PSVs to their fleet.

“We were working for some prominent customers in Norway that wanted to work with us in Brazil, including Statoil, which is now Equinor. We knew the customers, and we'd been in and out of the Norwegian North Sea sector, so it was time to more fully enter the market through the acquisition of a company that had earned a solid reputation for safe and reliable operations, and brought with it a young and very technical fleet,” Gorski explained.

The acquisition also enhanced Tidewater’s reputation for working in harsh environments. Certain vessels in the Troms fleet were built to ice class specifications, making them structurally sound for navigation in icy waters. “There are places around the world at certain times of the year when you have icebergs and very cold water, and that’s when you're going to need cold water expertise,” he noted.

One appeal of the GulfMark acquisition was that firm’s significant footprint in both the Norwegian and UK sectors of the North Sea. Another was their presence in the Gulf of Mexico, which, despite being a challenging market, is strategically significant given its proximity to Trinidad and Tobago, the largest oil and natural gas producer in the Caribbean.

“What GulfMark accessed by coming to Tidewater was a bigger playground,” Gorski confirmed. “We could take their assets working for similar customers but in totally different geographies without having to go through the expense of setting up new businesses.”

“We were fortunate at a point that we had enough strength in all the markets that we merged in, but the other benefit was markets where GulfMark wasn't currently working, we were able to move their idle assets. And back to the financial strength of Tidewater we're able to reactivate vessels.

“We're able to have the cash and bring them out of warm or cold stack and put them into another contract. That strong balance sheet, very low leverage, allows us to take care of new market opportunities.”

Gorski spearheaded significant updates to Tidewater’s operating system, a process that began after the Troms vessels became part of the fleet. “UniSea is a real-time operational system where the crew does data entry in real time. They don’t have to work a shift and then sit down for three hours and do their paperwork,” he said.

Tidewater now uses UniSea modules for their procedures and manuals, incident reporting, environmental and fuel consumption reporting, risk assessments, international ship and port facility security codes, permit to work, audits, and other business processes.

The Fleet to Beat

“Customers are requesting the highest spec drilling rigs because they want the best of the best,” Gorski said of the Tidewater customer base. “They get the best of the best drilling rig because it allows them to drill oil most efficiently, on time, while minimizing any kind of exposure in the environment.”

As offshore rigs become more technologically sophisticated and complex, they require support vessels to be equally nimble and tech-forward, and Tidewater fits that bill. Each vessel in the fleet is rated at Level 2 Dynamic Positioning, or DP2. Dynamic positioning uses state-of-the-art radar, SONAR and other wave detection technologies to keep large vessels steady while working in deep water.

“If you have a several hundred million-dollar rig that needs support from an OSV company, I guarantee you that they want the vessel equipped with DP2 before they will be allowed to come into the 500-meter zone,” Gorski declared, referring to the operational safety zone around offshore rigs. “They want to have well-trained crews, people they know and trust, when that vessel comes in and does the dance with that drilling rig, ship, or platform, that the vessel will leave the 500m incident-free.”

The firm has spent significant time and energy creating a world class DP2 organization, establishing a DP Excellence Committee aligned with the Nautical Institute, a UK-based NGO offering education, training, and professional support to mariners and the industry at large. Tidewater worked together with the institute to develop its training program for dynamic positioning operations.

Gorski said of the program, “This was an in-house effort, but we saw a value to have it being recognized and being internationally accredited.” That alignment with the Institute is particularly significant; the lessons learned by Tidewater in the field, process improvements, and their dedication to continuous improvement have helped the Institute improve their systems, as well.

“We were investing so much in training and developing our future that we realized we needed to have international accreditation,” he added. “If our training allows our people to get certifications by the Nautical Institute which is recognized globally as an industry-standard, even better. That’s what we’ve been doing since 2012.”