PathFinder First to Back New 'Fleet' Concept for Offshore Cabins

PathFinder Energy Services has become the first oilfield service company to buy into a brand new concept in the supply of offshore accommodation cabins. The leading directional drilling services provider has agreed a contract with offshore accommodation provider Duffy & McGovern to enter into a unique fleet hire arrangement for offshore engineers' cabins. The deal will see the contract hire concept, now ubiquitous in the company car business, applied to the offshore accommodation market for the first time.

Worth around £370,000 to Duffy & McGovern, the contract sees PathFinder entering into a five-year outsourcing deal on five offshore cabins in a phased replacement of part of its own fleet which is going out of service. As part of the long-term contract, Duffy & McGovern will custom design and build state-of-the-art engineering cabins as well as managing all maintenance, servicing, and recertification of the modules on behalf of PathFinder. This will save the company hundreds of thousands of pounds in immediate capital expenditure to purchase cabins and, in the longer term, on upkeep and fleet management. At the end of the five-year contract PathFinder has the option to extend the hire agreement, purchase the cabins or hand them back to Duffy & McGovern.

General manager for PathFinder, Trevor McAllister, said "In the past we have typically purchased and managed our own fleet of around 12 offshore cabins which we use predominantly in the provision of MWD and LWD services on various rigs in the North Sea. However, that fleet is now ageing and in need of significant investment to upgrade it and we felt that on balance the outsourcing deal with a specialist provider like Duffy & McGovern was the most cost-effective and convenient route, both from the point of view of capital expenditure and long term maintenance and logistical management of the fleet.

"Like most companies we prefer to invest our capital expenditure and management time on developing core business activities, whilst at the same time knowing that our offshore engineers are working in a purpose-built, safe and comfortable environment," continues Mr McAllister. "With this deal we can achieve both those objectives."

Duffy & McGovern will build five brand new A60, Zone 1, DNV 271, 16 x 8 foot cabins for PathFinder, which will be fully branded with PathFinder's corporate logo and colours and dedicated for use by the company over the period of the outsourcing contract. The cabins are being built to the customer's exact specification including many of the operational features typically required such as preinstalled network cabling for printers, voltage stabilisers, storage and equipment racks and flat screens for PCs. The fleet will be fully managed by Duffy & McGovern and will be part of the accommodation firm's online fleet management database which tracks real time cabin locations, certification and regulatory requirements as well as forecasting maintenance work.

The first deal of its kind, it is predicted that more and more companies who operate cabin fleets will now favor this method as a more flexible and cost-effective way of managing their offshore cabin needs in the medium to long term.

"In much the same way as big business has bought into the benefits of contract hire on company cars, we believe that the industry will quickly assess their current situation and see the rationale for going down this route," says Duffy & McGovern commercial director Craig Russell. "Increasingly our customers view their cabins as a necessary 'evil' but would prefer to concentrate on core areas of their business without the concerns of running a fleet of cabins. Our fleet outsourcing service is an appealing opportunity in the current climate for fleet owners to renew their older assets and eliminate capital expenditure and depreciation costs."

Under its Global Partnership service, Duffy & McGovern also offers customers the opportunity to take the outsourcing fleet hire concept one step further and actually sell its existing fleet of modules to Duffy & McGovern to release invested capital.

"Companies interested in outsourcing their offshore cabins don't have to write off their existing fleet to do so," explains Craig Russell. "We will pay to acquire modules that can be refurbished, bring them up to the Duffy & McGovern standard and incorporate those modules into a rental fleet for their use. But at the same time they are in full control of the fleet, with an unprecedented degree of management and budgetary flexibility. This is a scheme we believe will solve the ageing fleet problems of the major energy service players in the future."

Duffy & McGovern is currently finalising the design and specification of PathFinder's new fleet of cabins which will be complete and ready for use by October 2005.