This is an interesting article, as it demonstrates the strategies that a business might utilize in a fight to grow market share in a shrinking market, put a Competitor out of business, or drive further consolidation through the acquisition of Babcock by an Organization even more desperate to remain in business than Babcock's stated goal of getting out of it. It is always worth considering that having a contract and operating it at a loss may be a better (cheaper) option than owning the assets and infrastucture and continuing to pay the cost of maintaining, insuring, and staffing it, with no revenue generation. This may trigger the next consolidation round, as the simplest mechanism to maintain pricing, is to reduce excess capacity and limit the Competition in the marketplace. It may be too late to recover the pricing in the short term, but just still being in business may be the ultimate survival goal of all the offshore operators. It's really starting to have major impacts now, beyond all the incredible things that have already happened in the last couple of years, and the almost unbelievable things that have happened so far this year.
https://www.energyvoice.com/oilandga...pter-contract/Babcock begins Total helicopter contract after rivals criticised ‘unsustainable pricing’
Babcock has started a North Sea helicopter contract with Total which rival CHC criticised as “unsustainable pricing”.
by Allister Thomas
14/10/2020, 12:01 am
© Babcock
Babcock has started a North Sea helicopter contract with Total which rival CHC criticised as “unsustainable pricing”.
In August, Babcock
won the long-term contract from CHC to transport Total workers to its central North Sea platforms.
The US helicopter firm took a
thinly-veiled swipe at Total over loss of the work, saying “unsustainable pricing, will ultimately see an end to future industry investment in technology, safety improvements and the next generation of engineers and pilots.”
Babcock has now started flights using its fleet of S-92 helicopters, with over a hundred men and women having safely been flown offshore in the first week.
Contract performance manager Michelle Innes said: “It’s great to see this contract get underway smoothly and efficiently. We’re looking forward to continuing to work with Total for years to come.”
Babcock is an established helicopter operator and Total already has first-hand experience of working with the company in the UK North Sea.
Flights to the Culzean and Gryphon fields are currently provided by Babcock under a separate agreement. Total has operated both fields since its acquisition of Maersk Oil in 2018.
Babcock will begin another contract to transport Total workers in Denmark in January, which has also been subject to
criticism.
NHV, which lost out on the Danish deal, said in August that Babcock and Total were engaging “in a race to the bottom”.
Despite not having a presence in Denmark, Babcock undercut NHV in its bid, including the promise of new aircraft.
NHV CEO Steffan Bay said: “What I can say is that Total got what they wanted, even cheaper rates than they already had.
“Similar to CHC we had to give concessions to Total in the past, so it was not a very profitable contract for us anyway, hence the surprise that Babcock could perform it at even lower rates.”
Babcock did not respond to either CHC or NHV’s remarks.