McDermott International, Inc. (“McDermott” or the “Company”) announced that it is substantially consolidating its Atlantic operations and restructuring.
The restructuring plan includes the closure of the Company’s Morgan City fabrication facility and marine base in Louisiana, expected late this year or early next, once the Company has completed existing projects in its current backlog at the yard.
“After many months of consideration, we have made these decisions which are driven by the evolving market demands of the offshore engineering and construction industry in the Gulf of Mexico,“ said Stephen M. Johnson, Chairman of the Board, President and Chief Executive Officer.
Approximately 350 employees are expected to be impacted through to the time of closure. McDermott will be providing assistance to these employees over the next several months.
McDermott has built a lengthy history of operation in, and service to, Morgan City and its community. Since the beginning, the talents and skills of people from Morgan City have significantly contributed to the success of the company,” said Johnson. “We are hopeful and confident that our highly trained, skilled and experienced employees affected by today’s announcement will find opportunities elsewhere in the marketplace.”
The Morgan City yard was originally developed to serve an offshore industry that has changed significantly over the past fifty years. As hydrocarbon production technology has advanced, McDermott’s customers have increasingly focused on pursuing reserves in greater water depths. The technical demands of deepwater oil and gas developments in the Gulf of Mexico necessitate floating production systems whose size and scope exceed the specification capabilities of the Company’s Morgan City facility. The yard’s location and lack of deepwater quayside access are unable to support McDermott customers’ project needs today.
“We are entering a new chapter in the development of our company, which is necessary for the profitability of the organization. We are committed to driving a more disciplined culture to respond to the needs of our clients, shareholders and employees and to increase McDermott’s ability to deliver projects competitively across our global operations,” said Johnson.
Press Release, August 06, 2013