|Profitting in a slump |
Sasha Harrinanan Thursday, August 10 2017
The global energy price slump has been well-documented; including the “cold stacking”, otherwise known as mothballing, of nine drilling vessels in Chaguaramas, but what those not familiar with the sector may not know, is that a local company is earning foreign exchange (forex) through its provision of maintenance services for those vessels
Business Day spoke with Managing Director of JSL International (Trinidad) Limited (JSL), Javid Ramcharitar, to find out more about its contract with Transocean Limited (Transocean) and about how JSL has used this ‘downtime’ to increase its operational efficiencies.
“As a country, I think we are very blessed to have those nine vessels cold stacked within the Chaguaramas basin because it generates a lot of opportunity for companies like JSL while promoting the use of local content (and) earning forex. We are the local agents for those vessels. The presence of these vessels here has generated 100-plus jobs for TT nationals. The vessels have been cold stacked in Chaguaramas since early 2015.”
Ramcharitar declined to say how much JSL earns from its Transocean contract but he did confirm that payments are made in US dollars.
“Companies like JSL should (therefore) be encouraged because we bring in forex. It’s also a significant contributor to the country’s forex supply because those vessels are also supposed to pay fees to the Government of TT. From what I understand, they are paying those fees to the Ministry of Transport but I don’t have details.”
According to an article published in another local newspaper on January 8, 2017, the ministry was reported to have lost out on at least US $35 million because it has been “slow to conclude negotiations with... Transocean”
Business Day contacted the ministry, seeking an update on this matter but up to press time, a response was still pending.
JSL is a one point of contact service company, providing support services to companies in the upstream energy sector. Established in Trinidad in 2008, JSL’s corporate headquarters are located in Houston, Texas. Apart from its support operations base presence at Caribbean Dockyard’s (CARIDOC) 26-acre yard in Chaguaramas, JSL has a presence in more then ten Caribbean and Latin American countries. They include Colombia, French Guiana, Grenada, Guyana, the Gulf of Mexico, Mexico, Nicaragua and Suriname.
According to its website, “the JSL International Group of Companies shall establish 100 percent Market Domination in all of the regions that we operate in by offering its Unparalleled Single Point of Contact Model for Logistical and Project Support Services to the Upstream Energy Sector.”
Asked what sort of support JSL provides to Transocean’s cold stacked vessels, Ramcharitar said this included hiring “all of the personnel that they require for the vessels, all of the catering for those personnel, assist with any third-party support and services, coordinate all relevant Customs and Immigration formalities and provide ‘home to work’ round trip transport for the personnel who are based on the rig. They are on a two-weeks on, two-weeks off shift.
“Ship Gear I and Ship Gear II officers; similar to the classification of able-bodied seamen or motormen, basically act as ship security officers, they deal with the day-to-day reporting - things like adherence to all of the HSE (health, safety and environment) procedures, emergency response procedures, on-going monitoring and surveillance.”
Transocean is one of the world’s largest offshore drilling contractors, based in Vernier, Switzerland.
JSL was hired in 2016 after Transocean parted ways with its previous, overseas-based, agent. While Ramcharitar declined to speak about what led to the change in agents, he did tell Business Day that JSL was “approached by Transocean in mid-2016.”
“There is no specific (end date) for the cold stacking contract; basically once the vessels are here, we will provide support services to them,” Ramcharitar said.
According to the website, www. monitor-systems-engineering.com, cold stacking, “is a cost reduction step taken when a rig’s contracting prospects look bleak or available contract terms do not justify an adequate return on the investment needed to make the unit work ready.
“For example, a conventional GOM jackup might see its costs reduced from US $30,000 per day when operational to as little as $2,000 per day when cold stacked. Cost savings primarily come from crew reductions to skeletal levels. Steps taken to protect the rig’s facilities include applying protective coatings, filling engines with protective fluids et cetera.
“With the costs of crewing up, inspection, deferred maintenance, and potentially refurbishment acting as deterrents to reactivation, cold-stacked rigs may be out of service for extended periods of time and may not be actively marketed. A return to service can be a costly proposition, often requiring tens of millions of dollars for refitting costs,” Monitor Systems Engineering stated.
Asked why JSL chose Chaguaramas as the base of its local service operations, Ramcharitar cited the area’s sheltered, deep water harbour, the presence of a Customs and Immigration post, the International Ship and Port Facility Security (ISPS) port facilities, ease of access to potable water, fuel for bunkering and the presence of “a lot of infrastructure in place within the Chaguaramas area to support the oil and gas sector, as compared to other port facilities in the country.”
However, the one way in, one way out, road connecting the Western peninsula to the rest of Trinidad is something which Ramcharitar said needed to be addressed.
He recommended the use of a ferry service between Chaguaramas and Port-of-Spain for people who work in the Western peninsula, thus reducing the traffic jam associated with the area during peak drive times.
Until an alternate route or mode of transport is introduced, JSL has flexible working arrangements for onshore staff, encourages them to carpool, and tries to hire qualified people who live in Chaguaramas and neighbouring communities.
Regarding its strategies to deal with “recessionary pressures”, Ramcharitar said, “over the past two years, we have been ensuring across-the-board adherence to international best practice and standards.
“We did this by initiating a drive towards obtaining ISO certification. We started working towards that in 2015 and I’m very proud to say that JSL has successfully been awarded ISO 9001 2008 certification for the provision of manpower resourcing for the upstream oil and gas sector.
“We are the only company in the Caribbean and South America that has been successful in achieving this certification. The certification has given us a strategic and competitive advantage because it allows us to be able to focus, not only on the drilling contractor market but also the operators within TT (such as bpTT and Shell),” Ramcharitar stated.
Business Day also spoke with JSL’s Finance Director and Chief Compliance Officer, Avinash Mohan.
“Operating transparently is crucial within the energy industry.
So our focus, across the company, has been on ensuring compliance with anti-bribery and anticorruption regulations.
This extends from the board of directors to management, employees and even to third-party sub-contractors, vendors and customers.” Mohan explained that JSL promotes compliance through on-going training on an online platform which it developed in partnership with TRACE International. “They are the standard setters in terms of anti-bribery, anticorruption, compliance.” Activity may be relatively slow in TT but JSL is using its Chaguaramas base to provide support services to drilling activity offshore in Guyana and Suriname.
“We’ve seen an uptick in activity over the last year and a half. There’s been a lot more frequency and dependency in terms of offshore drilling programmes that’s been happening in both countries.” In addition to this, Ramcharitar revealed that on July 4, 2017, JSL was awarded the agency services and logistical support contract to support Transocean’s drilling contract in Grenada on behalf of another operator.
“We are supporting the entire project from Chaguaramas.
The Transocean rig, Development Driller III, is currently drilling offshore Grenada in the Nutmeg-2 block. We’ve been providing support services, including some personnel.
The contract is for however long Transocean is there,” Ramcharitar stated.
According to an August 2, 2017, article on www.
upstreamonline.com, “Russian-backed player tests Grenada waters”, “Little-known Russianbacked company Global Petroleum Group (GPG) is drilling an exploration well south of the Caribbean island of Grenada, following a rich oil and gas trend that has yielded multiple discoveries off Venezuela’s Gulf of Paria and TT.
“Information on the well has been described as extremely tight.
Upstream has learned that the company spudded Nutmeg-2 in late June, using the Transoceanowned semi-submersible Development Driller III in about 400 feet of water,” the article stated.
For more information on JSL, visit its website, www.jslinternational.net/