COVID-19:

A transformation booster

2020 is drawing to a close and I would like to thank all BOURBON teams but also our clients, suppliers, shareholders & financial partners who believed in BOURBON and enabled us to get through this new year of crisis. While it can be said without fear of contradiction that few of us will miss it, it would be naive to assess the last few months solely by the yardstick of the terrible pandemic and its human and economic impact.

Since the beginning of the oil crisis, six years ago now, players in the Oil & Gas industry have had to choose between transforming or disappearing. Most oil companies have embraced the energy transition by setting ambitious goals for carbon neutrality. In doing so, they set the tone for an entire sector that has been constantly challenging itself to face what will remain one of the worst crises in its history.

In this context, the public health crisis has acted as a transformation booster on organisations. With the digital revolution, the emergence of green energies, the overhaul of business models and so on, service providers throughout the oil and gas sector are adapting to face this "new normal". Like BOURBON, whose strategic action plan, #BOURBONINMOTION, set out back in 2018 the ambitions of a group focused on innovation, through our Smart shipping program, and on more services for the offshore of tomorrow: integrated logistics, a global Door-to-Rig personnel transport offer, development of services for floating wind turbines, a new external crewing offer, etc.
The finalisation of our financial restructuring this December is a tremendous encouragement for all, both at sea and onshore, to continue along this path. This key step will enable us more than ever to affirm our positioning as a marine services provider with an ever-expanding scope.

2021 will undoubtedly be rich in lessons about our industry's ability to integrate the new technologies and innovations that are sure to revolutionize the entire sector. It will probably be a year rich in challenges, and the rewards will go to those who dare.

So BOURBON's 8,200 employees join me in wishing you good health and offering you our best wishes for 2021! Take care and… Be safe!

Gaël Bodénès
Chairman of BOURBON Maritime.

PartnerSHIP: You said recently that future OSVs will have to be smart, connected and electrified. Can you talk us through what you mean by this?

Bo Jardine: Smart vessels incorporate IoT-based solutions. They are an evolution from traditional boats, employing a lot of automation and using digital technology to perform many operations that were traditionally carried out manually or mechanically, such as tracking cargo inventory using sensors and systems that can optimize where it is carried for stability and fuel efficiency. They allow the real-time capture of data, which they transmit to shore at regular intervals, perhaps every 20 minutes or so, meaning that activity on the board can be monitored. This has benefits in terms of time and money, but also the safety and wellbeing of the crew. Of course, the technology used needs to be intuitive, and some of the digital tools of the near future are still in development, such as AI.

When I talk about connected vessels, I’m looking at the way the information is shared, both onboard and shore-side. There needs to be a complete onboard IT system which gives crew members access to data from their cabins, and this system also has to connect shore-side. This allows real-time remote monitoring for component failure and the use of predictive analytics, which helps the crew do a better job. The more remote monitoring of vessels there is, the more it is possible to troubleshoot before an issue becomes serious. All these things substantially reduce costs, which is why everybody in the industry should be looking at them.

Electrifying vessels entails shifting propulsion from a conventional mechanically driven systems to an electrically driven systems, using an onboard power grid to power everything. This becomes important when you consider future fuels. Any future fuel is going to require a battery. As you incorporate new technologies, how do you transfer power from the fuel cell to the vessel? Probably through an electrical grid. So if it’s powered by hydrogen in years down the road, the power will come through the onboard electrical grid. The more you electrify a vessel, the more you find efficiencies. It opens up a new, more efficient ways of operating.

PartnerSHIP: To what extent are ship-owners and service providers engaged in this transition?

B.J.: The things I’ve been describing are happening today, although maybe they’re not being adopted quite as fast as I’d hoped. BOURBON and other operators are investing in batteries and embracing LNG, hydrogen and IoT systems. Prime examples include but are not limited to higher Hs operability Crew Transfer Vessel (CTV) designs, improved marine access systems (i.e. – W2W, B2W, active fendering), hybrid powered Service Operations Vessels (SOVs), offshore vessel charging, etc. As far as vessels for offshore wind farms are concerned, everything is new, so new technologies are being incorporated everywhere.

PartnerSHIP: What is your role as a charterer?

B.J.: The big question is how should these developments be funded? Should it be through contracts or through traditional financing models, where owners have to take it on the chin? As a charterer, it’s not our role to help with financing, our role is to help people understand the technologies, enlighten them, especially if we are implementing the new technologies. It’s a shared discussion. Sometimes you have to look at where the benefit lies. “If I were an owner, why would I invest in that?” is a question I would ask. Owners were initially a bit hesitant to invest in batteries, but with closer investigation and analysis Owners realized they would be saving money by incorporating the technology. Owners then had to decide whether to place the costs on their own balance sheet or embed into the costs of a charter hire. There’s no “one size fits all” answer here. In addition, battery technology is a good solution in terms of preparing vessels for future fuels and will help with meeting lower carbon emission targets.

The most important thing is that owners, designers, shipyards and OEM integrators all need to collaborate on designing and constructing the OSV of the future, with each party accepting that there will be give and take. BOURBON and other providers should challenge their OEMS to devise better solutions. Collaboration will be the key to success. Shell is looking forward to working with BOURBON and others in the industry to bring forward the vessels of the future.

PartnerSHIP : The International Maritime Bureau (IMB) states that acts of piracy at sea have risen sharply since the beginning of 2020. Do you agree with this analysis? What changes are international companies making to their security policies?

W.B.: I can only agree with this observation. I would add that most specialists would put the true figures about 30% higher than those published. There has indeed been an increase in acts of piracy since the start of the year, but this growth is linked to the reference year 2019, when maritime piracy around the world fell significantly. Shipping companies are constantly trying to adapt to this threat through security analyses, adapting transits, reinforcing anti-boarding devices, new means of detection, creating safe-havens² on board ships and providing specific training and coaching for crew members. The majority of countries along the coast do not yet have the necessary means to prevent or counter the threat of piracy.

PartnerSHIP: The BMI reports that of the 85 seamen kidnapped and held for ransom since the beginning of the year, 80 were kidnapped in the Gulf of Guinea. Would you say this zone is in the process of becoming the most dangerous in the world?

W.B.: In a general environment where maritime piracy in the Gulf of Guinea remains at a high level, it is now predominantly oriented towards the kidnapping of crew members. The number of kidnappings at sea has grown by around 140% in 5 years! Expatriates now account for 90% of those kidnapped and the average number of seafarers taken hostage has risen from 3 to 8. The value of the ransoms varies depending on the nationality and the number of people kidnapped, but it has quadrupled compared to 2015.

It is important for seafarers to be made fully aware of the risks when operating in the Gulf of Guinea (dangerous zones, typology of acts of piracy, etc.). They must be given as much training and protection as possible. In general, crews have barely 5 or 6 minutes after detecting an attack to activate the anti-boarding devices and, when possible, retreat into the ship’s safe-haven.

PartnerSHIP: Nigeria is thought of as the hotbed of maritime piracy, but attacks are increasingly developing off other countries in the Gulf of Guinea. Is it becoming impossible to navigate in the area?

W.B.: Let’s say “difficult” rather than “impossible”. For the past two years, there has been an almost permanent threat, and the areas concerned have been steadily expanding. Pressure from international maritime organisations and structures is increasing vis-à-vis neighbouring states and regional organisations, with some countries threatening to ban their nationals from operating in these waters. While attacks are regularly reported along the West African coast, they are almost always coordinated from the mangrove swamps of the Niger Delta in Nigeria. Regional cooperation, emerging through the Yaoundé agreements, needs to be stepped up and speeded up. Most of the countries affected don’t have anti-piracy laws. New legislation has recently come into force in Nigeria, however.

Any prospect of a multinational regional anti-piracy operation under the aegis of the UN, along the lines of Operation Atalanta off the Horn of Africa, is unrealistic, given the international legal framework, the costs and the current global maritime situation. However, discussions are underway between Western countries to try to ensure coordinated maritime coverage to “support” local navies. Although this presence is symbolic for the moment, it may nevertheless produce specific results, as in the recent case of the Torm Alexandra³ .

Efforts have been made at all levels, but even so, risk remains at a very high level. There is therefore an urgent need to scale up practical initiatives and actions, both on land and at sea, if we are to reverse this criminal trend and stop it spiralling out of control.

¹ We have changed the initials of our interviewee for security reasons.

² A safe-haven is a highly protected area in the ship, a kind of bunker equipped with communication and first aid facilities, where the crew can take refuge for at least 24 hours while waiting to be rescued.

³ On November 7, 2020, the oil tanker Torm Alexandra, attacked by pirates, was rescued by an Italian Navy frigate.

PartnerSHIP: We are ten months or so into the pandemic. How do you see the passenger logistics market now?

Peter Brady: When the pandemic first hit, our focus for 4 to 6 weeks was almost exclusively on repatriating workers. The key problems revolved around securing flights: carriers were reducing their networks, then cancelling flights that were scheduled at short notice, and imposing severe capacity limitations. We also had the challenge of managing connections. Alongside these complications, we had to organise documentation, including visas, transit visas and re-entry documents. Then we had to deal with border closures and organising quarantine periods were required.

Ten months on, we still have much the same problems of network reductions and capacity limitations. In addition, there have been significant changes to the international airline structure. According to the analytics company OAG, one third of airline routes have been lost and over 14,000 city-pair connections have been abandoned, so it’s incredibly difficult routing people and getting flights.

In the marine vertical, there are additional complications surrounding port restrictions and closures. Crews rotating on and off vessels have had to be transferred directly between the airport and the vessel. With oil rigs and gas platforms, it’s not quite as difficult because a lot of companies have temporarily relocated crew into areas where the rigs or platforms are accessible. There are even cases of whole families being relocated to areas where there is direct access to offshore facilities.

PartnerSHIP: Will there be a “new normal” for passenger mobility? Would it have occurred without the pandemic?

P.B.: Some elements will go back to how they were. In the energy, resource and marine space, travel is still mission-critical, so people will still travel to upstream sites for work. Upstream mission-critical travel will return faster than what we call transient business travel (for meetings, conferences, seminars, etc.). There will be a lot more remote working than there used to be, but you can’t replace personal contact so this form of business travel will slowly return.

Since the start of the pandemic, we have also seen changing patterns of mission-critical travel for site workers. This is partly because employees have been relocated to be close to upstream assets, but also because the lack of commercial flights has led to a significant increase in charter flights, which solve the problem of routes being cancelled by airlines.

The last 2 years have seen organisations going one step further than a duty of care, and really focusing on traveller well-being and mental health, especially when they are dealing with people travelling to high-risk destinations, being away from home for three to five weeks. Our clients were also factoring the harmful effect of sleep derivation into travel planning.

Another area where the new changes are continuing an earlier trend is travel documentation. We already have visa processes, work permits, immigration and transit visas. Because of tax policies in many countries and European posted worker conditions, we have to carefully track and document each individual’s travel history. But now health is also a factor: we have to take account of whether people have been travelled from a Covid-19 hotspot, been tested, actually had the virus, and soon been vaccinated. One challenge moving forward will be devising meaningful databases that will allow all this information to be shared.

PartnerSHIP: BOURBON has recently introduced the “Door-to-Rig” integrated service offer for mobility. Do you feel that it addresses current trends?

P.B.: This is very much part of a trend. In all verticals in the energy, resource and marine sector, all organisations tell us they are focused on asset utilisation, cost optimisation around managed transport and accommodation, business continuity and operational efficiencies. They want 24/7 servicing, 365 days a year. They also take user experience and satisfaction, duty of care, health and safety and traveller well-being very seriously. The ability to be able to automate their operations and all the processes involved is very significant. The benefits include higher accuracy, reduced unit costs, simplified and consolidated reporting, optimised asset utilisation and a more consistent user experience for travellers.

PartnerSHIP: Once the current public health crisis is over, will there be a “new normal” for passenger mobility around the world, particularly with regard to professional travel?

Camille Egloff: We have all learned to do things differently during the past ten months or so. We no longer fly halfway round the world for a two-hour meeting, for instance. I think a lot of the changes we have experienced will stick for quite a while. The more disruption there is to traditional offer in terms of travel, the longer it will take for people to regain their old habits. According to our current projections at BCG, we don’t think that normal passenger travel will resume until summer 2023 at best, or possibly the beginning of 2024. Perhaps the news about vaccines will make us a little more optimistic, but at this stage we remain cautious.
 

PartnerSHIP: Companies around the world have begun to demand a more integrated and broader service in terms of passenger transportation and logistics. Does this correspond to the trends you are forecasting for the passenger mobility market?

C.E.: Customers are increasingly looking for all-inclusive packages. This encompasses all aspects of documentation, of course, as well as Covid-testing and the management of quarantine procedures. Indeed, the end-to-end care of the crews being transported now has to be a full part of the offer, along with the new need for tracking and localising people. Even after Covid-19, people will want there to be health testing. This is the new reality: there will be other viruses in the future. Covid-19 is the start of a “new normal”. The world was always a risky place, but it has now grown riskier than it was before. HQSE regulations will become increasingly demanding. This trend will have a big impact for you at BOURBON, because you provide services to the oil and gas sectors, and for obvious reasons these customers are among the most sensitive to HQSE regulations.

PartnerSHIP: Would these trends have occurred anyway, even if it hadn’t been for the pandemic? Has the pandemic merely accelerated the process?

C.E.: Very much so. In a number of industries, the HQSE specialists have been arguing in favour of these kind of procedures for some time, but they have been preaching in the desert, so to speak. But it is no longer an option to say that health and safety issues are not a priority. It’s very much part of the trend in recent years towards a greater focus on the CSR agenda, and specifically towards taking care of employees in a much more conscious way. But in the light of the pandemic, the topics of HQSE regulations and compliance have received CEO attention in the boardroom, and they will unquestionably remain a priority. We estimate that there have been a minimum of five and up to ten years of progress in the space of about six months.