Global Industries Ltd. has announced that Global Production Services is seeking to take advantage of the expected increase in the number of platform salvage opportunities available in the Gulf of Mexico. GPS explained the details of its new program at a luncheon on June 24 in Houston.
Global sees opportunities emerging in the GoM salvage market due to recent policy changes within the Mineral Management Service. The MMS is tightening the rules governing idle structures that require all non-producing facilities without economic rational for remaining on the outer continental shelf be removed, even if other structures on the lease produce hydrocarbons.
In the past, an operator did not have to remove facilities until the lease expired. Global estimates that 1,000 structures of 4,034 structures have been idle for some time because other producing facilities exist on the active leases. The new policy shortens the life of idle facilitiese and creates an increased number of intermediate salvage opportunities.
MMS reports that 2,206 structures removed from the GoM have been mostly smaller, lighter structures in shallow water. As the number of shallow water structures declines and the average age and water depth of the remaining structures increases, the scope of the removal project grows.
In addition to contract removals, GPS plans to initiate purchase agreements to acquire existing, producing platforms. GPS will then lease back these functioning structures to the operator and charge a rental fee for removal of the structure. Under this plan, the operator will continue to own, manage, and operate its lease with MMS until the field is no longer viable. The platform and pipelines become leased assets provided by third party Global Industries.
06/24/03
