CNLOPB reviews complaint of unfair contracting

Published on September 6, 2013
Jim Hynes, with Sea-Force Hyperbaric Inc., stands inside the state of the art Mobile Hyperbaric Reception Facility at a grand opening at Newdock in St. John's. — Telegram file photo

Staff at the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) are looking into a complaint of unfair contracting for the offshore, as voiced this week by the lead hands at Sea-Force Hyperbaric.

Representatives for the local company are claiming another supply and service company, Subsea 7, has been contracted by Suncor Energy for work at the Terra Nova oilfield, but has not allowed Sea-Force Hyperbaric “full and fair opportunity” to subcontract on the work.

Sea-Force Hyperbaric is still in its infancy, in possession of a hyperbaric reception facility for deep divers. The facility is stationed in a building at the NewDock yard off Water Street, near the St. John's waterfront. It is prepped to take 18 divers for decompression at a moment’s notice, in the case of a catastrophic incident offshore.

The diving support company has at least one standby contract under its belt, but says its attempts to discuss a potential contract on Suncor Energy’s subsea activities have been rebuffed.

“In the case of Subsea 7 and its campaign for Suncor Energy we have been ignored, our correspondence has not been acknowledged, and we have been subject to blatant disregard by Subsea 7 of their benefits commitments to this province and the supply community,” states a letter written and signed by Sea-Force Hyperbaric directors Jim and Barry Hynes.

The letter was sent by email late Wednesday afternoon to Sandy Martin, a vice-president of Suncor on the East Coast. It was also forwarded by Sea-Force Hyperbaric to CNLOPB president and CEO Scott Tessier, as well as a list of political representatives, regional oil company leaders and reporters.

Speaking with The Telegram Thursday morning, Jim Hynes acknowledged his company did ultimately receive response from Subsea 7 to its inquiries about a potential contract, as outlined in his letter.

He said the response was “dismissive” and claimed the company turned down Sea-Force Hyperbaric’s services by citing a lack of prequalification as a contractor, without offering an opportunity for such an evaluation. “They just ignored us, for months,” Hynes said, of attempts to enter into discussions with the company and have the Sea-Force Hyperbaric operation evaluated.

He said Subsea 7 and Suncor representatives have seen the Sea-Force Hyperbaric facility, but have not performed any kind of detailed audit, as would be required for a potential contractor.

Hynes clarified that Sea-Force Hyperbaric is not demanding to be awarded a contract, but is arguing it has not been given fair consideration for use as a standby facility for divers.

“Suncor is confident in the proven capability of the contractor Subsea 7 — who is a global leader in its field. The company has the people, processes and equipment to execute the program with safety as the top priority, and meet all of the needs of the project including hyperbaric capacity,” stated Suncor Energy spokesman John Downton, in a written response to the accusations.

“When considering new services and suppliers Subsea 7 has a thorough due diligence process intended to ensure that potential contractors have the processes, procedures, equipment and capabilities to safely provide the services offered. Prequalification is an essential first step in that process — which in this case was not completed.”

He added Subsea 7 has proven equipment on standby in the case of an incident offshore. It is the same employed by that company for fall 2012 and winter 2013 work programs.

In a statement to the media, Subsea 7 says its plan for diving emergencies involves certified equipment aboard the project vessel Seven Falcon.

As for Sea-Force Hyperbaric, the company responded to the complaint as follows: “Subsea 7 recently assessed prequalification submissions for the provision of hyperbaric reception facilities to support the 2013 offshore work program for the Terra Nova Project. Following its due diligence process, which aligns with internationally accepted standards, Subsea 7 determined that the submissions did not meet requirements, and potential suppliers were therefore not successful in the prequalification process.”

As the dispute was ongoing between specific companies on a specific contract, Noia president Bob Cadigan said he would not comment directly on the situation. “However, we have seen a concerning trend towards internationalization in the oil and gas industry worldwide, that often makes participation difficult for local supply and services companies who are trying to enter the market,” he said.

“(The Atlantic Accord) provisions were made specifically to help local companies enter the oil and gas supply chain and ensure that the projects executed in Newfoundland and Labrador benefit those adjacent to the resource. These rules are administered by the CNLOPB and we are confident that the board will investigate this situation and ensure that the rules were followed and, if not, to impose a solution consistent with the rules.”  

No timeline was provided for when the regulator’s review of the Sea-Force Hyperbaric complaint might be completed.