Tidewater Stock

Tidewater Inc. (Tidewater) provides marine and transportation services to the global offshore energy industry.

The company offers a large and diversified fleet of offshore service vessels (OSV or vessels), with active vessels serving customers in over 30 countries as of December 31, 2022.

The company manages its operations through the following five geographically aligned reporting segments: Americas, Asia Pacific, Middle East, Europe/Mediterranean, and West Africa.

The company’s vessels routinely move between geographic regions. The company conducts its business through domestic and international subsidiaries, as well as through joint ventures that the company may or may not control (generally where required to satisfy local ownership or local content requirements).

The company’s vessels and associated services support all phases of offshore crude oil and natural gas (also referred to as oil and gas) exploration, field development and production, as well as windfarm development and maintenance. The company’s services include towing of, and anchor handling for, mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover and production activities; offshore construction and seismic and subsea support; geotechnical survey support for windfarm construction, and a variety of other specialized services, such as pipe and cable laying.

The company’s active OSV fleet consists primarily of company owned vessels.

The company’s principal customers include large, international integrated and independent oil and natural gas exploration, field development and production companies (IOCs); mid-sized and smaller independent exploration and production (E&P) companies; foreign government-owned or government-controlled organizations that explore for, develop and produce oil and natural gas (NOCs); offshore drilling contractors; and other companies that provide various services to the offshore energy industry, including among other things, offshore construction companies, windfarm development companies, diving companies, and well stimulation companies.

On April 22, 2022, Tidewater acquired all of the issued and outstanding shares of Swire Pacific Offshore Holdings Limited (SPO).

The company has substantial operations in Brazil, Mexico, Guyana, the North Sea (including the United Kingdom (U.K.) and Norway), Southeast Asia, Saudi Arabia, Egypt, Angola and throughout the west coast of Africa, which generate a large portion of the company’s revenue.

Vessel Classifications

The company’s primary vessel classifications include Anchor Handling Towing Supply Vessels (AHTS) and Platform Supply Vessels (PSVs). A description of the type of vessels categorized in each vessel class and the services typically performed follows.

Anchor Handling Towing Supply Vessels

The most versatile vessels in the Tidewater fleet are large, powerful AHTS vessels, capable of all types of towing, anchor handling activities, and varied subsea operations. Fitted with experienced crews and state of the art technology, AHTS vessels of various classes are capable of positioning and mooring drilling rigs in virtually any location, depth or sea condition and under a wide range of conditions. With a wide range of power, sizes and capacities, these vessels are also well-suited for general offshore support services, drilling rig support functions and cargo transport assignments.

The company operates AHTS vessels throughout its service regions.

Small AHTS Class: Generally, this vessel class includes AHTS vessels that have up to 8,000 brake horsepower (BHP). These vessels typically work in shallow waters along the coast or on the continental shelf. The company operates small AHTS vessels.

Medium AHTS Class: Generally, this vessel class includes AHTS vessels that have between 8,000 and 16,000 BHP. These vessels can work in shallow waters along the coast or on the continental shelf or in intermediate depths offshore. The company operates medium AHTS vessels.

Large AHTS Class: Generally, this vessel class includes AHTS vessels with over 16,000 BHP. These vessels primarily work in deepwater. Large AHTS vessels are equipped to tow drilling rigs and other marine equipment, as well as to set anchors for the positioning and mooring of drilling rigs that generally do not have dynamic positioning capabilities. The company operates large AHTS vessels.

Platform Supply Vessels (PSV)

PSVs generally have cargo carrying capacities, both below deck (liquid mud tanks and dry bulk tanks) and above deck. Most of the company’s PSVs are outfitted with dynamic positioning capabilities, which allow the vessels to maintain an absolute or relative position when mooring to an offshore installation, rig or another vessel is deemed unsafe, impractical or undesirable. Many of the company’s PSVs also have oil recovery, firefighting, standby rescue and/or other specialized equipment. The company operates PSVs throughout its service regions.

Large PSVs: Generally, this vessel class includes PSVs that have greater than 900 square meters of deck space. The company operates large PSVs.

Medium PSVs: Generally, this vessel class includes PSVs that have between 500 and 900 square meters of deck space. The company operates medium PSVs.

Other Vessels

The company’s other vessels class includes crew boats, utility vessels and offshore tugs. Crew boats and utility vessels are chartered to customers for use in transporting personnel and supplies from shore bases to offshore drilling rigs, platforms and other installations. These vessels are also often equipped for oil field security missions in markets where piracy, kidnapping or other potential violence presents a concern. Offshore tugs are used to tow floating drilling rigs and barges; to assist in the docking of tankers; and to assist pipe laying, cable laying and construction barges. The company operates vessels classified as other.

In addition, the company has two offshore tugs and two crew boats under construction for use in its African markets. The company expects the tugs to be completed in 2023 and the crew boats to be completed in 2024.

Customers

The company’s customers were Chevron Corporation and Saudi Aramco for the year ended December 31, 2022.

International Labour Organization’s Maritime Labour Convention

The International Labour Organization's Maritime Labour Convention, 2006 (the MLC) mandates globally, among other things, seafarer living and working conditions (accommodations, wages, conditions of employment, health and other benefits) aboard ships that are engaged in commercial activities. Since its initial entry into force on August 20, 2013, 90 countries have ratified the MLC.

The company maintains certification of its vessels to MLC requirements, performs maintenance and repairs at shipyards, and makes port calls during ocean voyages in accordance with the MLC based on the dates of enforcement by countries in which the company operates. In addition, where possible, the company continues to work with identified flag states to seek substantial equivalencies to comparable national and industry laws that meet the intent of the MLC and allow the company to standardize operational protocols among the company’s fleet.

Government Regulation

The company is subject to various United States (U.S.) federal, state and local statutes and regulations governing the ownership, operation and maintenance of vessels. The company’s U.S. flagged vessels are subject to the jurisdiction of the U.S. Coast Guard, the U.S. Customs and Border Protection, and the U.S. Maritime Administration. The company is also subject to international laws and conventions and the laws of international jurisdictions where the company operates.

The company’s vessel operations in the U.S. Gulf of Mexico (GOM) are considered coastwise trade. The U.S. law requires that vessels engaged in the U.S. coastwise trade must be built in the U.S. and registered under the U.S. flag. In addition, once a U.S. built vessel is registered under a non-U.S. flag, it cannot thereafter engage in the U.S. coastwise trade. Therefore, the company’s non-U.S. flagged vessels must operate outside of the U.S. coastwise trade zone.

All the company’s offshore vessels are subject to either United States or international safety and classification standards or sometimes both. The company’s U.S. flagged AHTS vessels, PSVs and other vessels are required to undergo periodic inspections generally twice within every five-year period pursuant to the U.S. Coast Guard regulations. Vessels registered under flags other than the United States are subject to similar regulations and are governed by the laws of the applicable international jurisdictions and the rules and requirements of various classification societies, such as the American Bureau of Shipping.

The company complies with the International Ship and Port Facility Security (ISPS) Code, an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988), and further mandated in the Maritime Transportation and Security Act of 2002 to align the United States regulations with those of the ISPS Code and SOLAS. Under the ISPS Code, the company performs worldwide security assessments, risk analyses, and develop vessel and required port facility security plans to enhance safe and secure vessel and facility operations. Additionally, the company has developed security annexes for those U.S. flag vessels that transit or work in waters designated as high risk by the U.S. Coast Guard pursuant to the latest revision of Maritime Security Directive 104-6.

Occupational Safety and Health Compliance

In the U.S., the company is subject to the Occupational Safety and Health Act (OSHA) and other similar laws and regulations, which establish workplace standards for the protection of the health and safety of employees, including the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace, potential harmful effects of these substances, and appropriate control measures.

Certain of the international jurisdictions in which the company operates have ratified the MLC, which establishes minimum requirements for working conditions of seafarers, including conditions of employment, hours of work and rest, grievance and complaints procedures, accommodations, recreational facilities, food and catering, health protection, medical care, welfare and social security protection. Although the U.S. is not a party to the MLC, the U.S. flag vessels operating internationally must comply with the MLC when calling on a port in a country that is a party to the MLC.

Environmental Compliance

A wide range of governmental regulatory agencies, including the U.S. Coast Guard (USCG), the U.S. Environmental Protection Agency (EPA), the U.S. Department of Transportation’s Office of Pipeline Safety, the U.S. Bureau of Safety and Environmental Enforcement and certain individual states, regulate vessels and other structures in accordance with the requirements of federal and state law. Little uniformity among the regulations issued by these agencies exists at this time, which increases the company’s compliance costs and risk of non-compliance. Existing U.S. environmental laws and regulations to which the company is subject include, but are not limited to:

The Clean Air Act, which restricts the emission of air pollutants from many sources and imposes various preconstruction, operational, monitoring and reporting requirements, and that the EPA has relied upon as the authority for adopting climate change regulatory initiatives relating to greenhouse gas emissions;

The Clean Water Act, which regulates discharges of pollutants from facilities to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the U.S.;

The Oil Pollution Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in waters of the United States;

The Comprehensive Environmental Response, Compensation and Liability Act of 1980, which imposes liability on generators, transporters, and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur; and

The U.S. Department of the Interior regulations, which govern crude oil and natural gas operations on federal lands and waters and impose obligations for establishing financial assurances for decommissioning activities, liabilities for pollution cleanup costs resulting from operations, and potential liabilities for pollution damages.

In the U.S. and abroad, the company is subject to the International Convention for the Prevention of Pollution from Ships (MARPOL), an international convention that imposes environmental standards on the shipping industry relating to oil spills, management of garbage, the handling of certain substances, sewage and air emissions. Annex VI of MARPOL addresses air emissions, including emissions of sulfur and nitrous oxide, and requires the use of low sulfur fuels worldwide in both auxiliary and main propulsion diesel engines on vessels.

Seasonality

The company’s global vessel fleet generally has its highest utilization rates in the warmer months when the weather is more favorable for offshore exploration, field development and construction work in the oil and gas industry. The company’s vessels that operate offshore in India, other areas in Southeast Asia and the Western Pacific are impacted by the monsoon season, which occurs across the region from November to April.

History

Tidewater Inc., a Delaware corporation, was incorporated in 1956.