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.
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.
At Shell, integrated teams scan opportunities to leverage the scale of our portfolio and deliver value through innovative, cost-optimized solutions. A cross functional team with representatives from Assets, Supply Chain, Maintenance, and Projects spotted the potential to aggregate demand, combine scope and optimize the use of vessels.
By bundling the requirements of both projects with the same vessel operator, the team was able to agree a charter with Hornbeck Offshore Services Inc. (Hornbeck Offshore) for a vessel to initially support the project at Enchilada/Salsa, with an additional option to utilize the same vessel for the Vito waterflood project, at below current market prices. This approach enabled the team to simplify the marine vessel fleet, improve resource utilization and efficiency, and secure a more competitive rate for the flotel, generating significant cost savings and additional value.
Greer Prather, Marine Commercial Lead for the GoM Supply Chain“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.”
A win-win
Hornbeck Offshore prides themselves on providing marine solutions to meet evolving business needs and are well-equipped to service those needs.
Todd Hornbeck, CEO, Hornbeck Offshore"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."
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.
Gary Popham, CP Lead Brownfield GOM Projects“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.”