26 Maritime Reporter & Engineering News
will facilitate continued growth for our
Asia-Pacific business.
MR: What do you consider the top
priorities for your company in the
coming 12 to 24 months?
Crager:
• Deepwater field development and
marine pipeline projects
Arctic projects
LNG projects
Deepwater hybrid risers
FPSO, FSO, FLNG, FSRU
Long-distance subsea tie-backs
High-pressure/high-temperature
(HP/HT) projects
MR: What is your outlook for the
business in 2006 and beyond?
Crager: Barring an unforeseen shock,
we envision sustained demand that will
put continuing pressure on increased
production of oil and gas. The upside
may be limited by the industry operating
at nearly full capacity. That is, the
industry has only so may drill rigs,
installation vessels, reservoir engineers
and technical staff to progress develop-
ments. These industry constraints will
dampen significant year-on-year growth
in the numbers of offshore projects.
The cost of technical personnel will rise
as competition increases between opera-
tors, contractors and equipment suppli-
ers for scarce resources. National oil
companies also are demanding increas-
ing levels of local content, causing diffi-
culties in staffing major projects in
remote locations. Rising costs for raw
materials and equipment will further
impact development of projects. Also
note: projects that were marginal at $30
oil are likely to remain marginal at $50
oil due to cost increases.
High political risk in some oil and gas
provinces, including parts of the Middle
East and West Africa, will continue to
cause operators to balance their portfo-
lios and investments, driving develop-
ment activity toward locations-such as
the U.S. Gulf of Mexico-that enjoy more
predictable and acceptable political and
fiscal risks.
While perhaps located in increasingly
challenging frontiers-such as the off-
shore arctic and deeper waters-and more
expensive to develop, operators likely
will pursue exploration and develop-
ment in regions less impacted by politi-
cal unrest.
MR: What markets do you see as
being lucrative in the coming years?
Which segments do you see on the
decline?
Crager: Potential growth areas:
Construction vessels capable of multi-
tasking in deepwater, including laying
large-diameter pipelines efficiently and
installing deepwater templates, moor-
ings, risers and other equipment
Multifunction construction vessel for
the arctic environment
Multipurpose vessel for subsea tie-
back installations
FPSOs in GOM
Floating LNG and floating storage and
regasification units
Potential decline areas:
Areas with high risks because of polit-
ical, economic and cultural unrest
MR: What do you consider to be the
biggest challenges to your company's
success?
Crager:
Shortage of skilled personnel
Globalization; i.e., the ability to out-
source project scope and resource shar-
ing
Local content requirements of NOCs
and alliances with indigenous contrac-
tors
Commoditization of "highly" special-
ized services and operator expectations
for low-cost solutions
Jones Act for offshore Alaskan arctic
vessels and GOM shuttle vessels
Offshore arctic design and construc-
tion technology advancement to miti-
gate high investment costs
Limited visa quotas limiting move-
ment of skilled engineers.
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