Tidewater Inc. to replenish its aging vessel fleet

(AP) – Tidewater Inc., which provides transportation for the offshore petroleum industry, will invest $300 million to $500 million annually through 2011 to update its vessel fleet, the company’s head says.

The company hopes to take advantage of growing opportunities in international markets, Tidewater chairman Dean Taylor said last week at an energy conference.

Tidewater recently accepted 16 new vessels and plans to receive another 50 by 2011. About three-quarters of Tidewater’s fleet, or 321 vessels, were built before 2000. Those boats average 25 years old, about the age when such vessels are retired, Taylor said.

The older vessels, which are less efficient, generate only about half of the company’s profits, Taylor said.

In July, Tidewater reported the earnings of $356.6 million, the highest in the company’s 51-year history. Revenue also passed $1 billion for the first time ever.

In 1997, 49 percent of Tidewater’s revenue and 41 percent of its profit were generated by its international operations. Today, those numbers have climbed to 85 percent and 91 percent, Taylor said.

“About a year ago, it became clear that we are not a Gulf of Mexico company anymore,” Taylor said. “Demand is strong everywhere but the Gulf of Mexico. We’re not going to give up on the Gulf of Mexico, but for the time being our attention is focused elsewhere.”

In addition to the construction of new vessels, Tidewater also is considering buying vessels from other companies or acquiring competitors.

But the company will be prudent where acquisitions are concerned, said Joseph Bennett, the company’s senior vice president.

Taylor recently announced that Tidewater would remain in New Orleans after considering a move to Houston.