Discounted rate on a room with an ocean view
Shell Offshore Inc. is working to reduce costs, improve efficiencies and unlock value in the US Gulf of Mexico.
Flotels are exactly what they sound like they might be. Floating hotels. But beyond providing accommodations for 80 to 200 people at any given time in the middle of the ocean, they host crews working in the high seas on deep-water energy industry projects.
Why flotels?
Offshore platforms have limited numbers of people that can be on the platform at any given time. When maintenance and routine activities, inspections, or light construction work take place on offshore platforms, these semi-submersible accommodation vessels “parked” next to the offshore facility help facilitate contractor and employee management.
However, scheduling a flotel isn’t as easy as booking a hotel room online. It requires planning, coordination, and the ability to anticipate future needs.
The need
In 2024, Shell Offshore Inc. deep-water teams were busy planning for upcoming activities.
Enchilada and Salsa, offshore facilities in the US Gulf of Mexico, needed marine vessels for various projects, including facility modifications and maintenance. Vito, another offshore facility that achieved first oil in February 2024, was also looking for marine vessel support for its potential waterflood project. At this time, teams were being asked to challenge previously endorsed charter costs and time.
Located some 150 miles southeast of New Orleans sits Vito.
The call for solutions
The teams from Enchilada, Salsa, and Vito realized that joining forces together could be the key to unlocking greater value and efficiencies. By coming together and seeking support for all three offshore facilities, instead of one at a time, they were able to secure a more competitive deal for the flotels.
This provided the opportunity to secure a charter from Hornbeck Offshore Services Inc. (Hornbeck Offshore) for the project at Enchilada/Salsa and also issue a contingent award letter to Hornbeck Offshore for the possible Vito waterflood project, both below current market prices. Through this integrated approach, Shell Deep Water will achieve future cost savings by efficiently bundling the requirements of both projects with the same vessel operator.
“Thanks to internal coordination, we were able to leverage relationships, find efficiencies and reduce rates. It came down to identifying and taking advantages of optimization opportunities, all in the best interest of the business.”
Greer Prather, Marine Commercial Lead for the GoM Supply Chain
A win-win
Hornbeck Offshore prides themselves on providing marine solutions to meet evolving business needs and are well-equipped to service those needs.
"This deal required flexibility, transparency, and trust to develop a solution that met the needs of all parties. The open and collaborative process was the key to attaining an optimal result."
Todd Hornbeck, CEO, Hornbeck Offshore
For Hornbeck Offshore, multiple contracts for a large organization like Shell mean more vessels are deployed, conducting work for longer periods of time. For the Shell Deep Water Gulf of Mexico business, this integrated approach reduces the administration of conducting separate tenders and while improving coordination across the GOM portfolio.
“By leveraging demand across the Gulf through a 'One-Shell' mentality, we were able to provide Hornbeck commitments now and in the immediate future that enabled them to give us a more attractive deal.”
Gary Popham, CP Lead Brownfield GOM Projects