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Huge Blow to CHC Helicopters as it Loses Major North Sea Contract

Published in Oil Industry News on Wednesday, 4 January 2017


Graphic for News Item: Huge Blow to CHC Helicopters as it Loses Major North Sea Contract

North Sea Helicopter Operator CHC Helicopters (CHC Scotia Ltd) have failed to secure the renewal of one of their primary contracts after the original contract ended.

Apache signed a 5-year agreement with CHC Helicopters in 2010 and in 2015 invoked a built-in extension clause to continue their agreement for North Sea flights until 2017. Retendering the contract, Apache opted not to use the second extension period.

Apache have now confirmed they have taken the decision to end their 13-year relationship with CHC and award the contract to another North Sea helicopter operator. It is unconfirmed at present who has won the contract but Babcock, Bristow and NHV are all believed to have submitted tenders. Oil and Gas People expects an announcement from the winning operator in the next few days.

CHC will be badly hit by the loss of the Apache contract. Looking back through CHC's flight history on their website, Apache flights accounted for 27% of CHC’s Aberdeen flights in December 2016 and 17% of CHC’s UK wide North Sea flights during the same period.

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The move is expected to have a dramatic impact on CHC’s UK operations and further deepen the on-going financial issues facing CHC Group. It is unlikely the organisation will be able to secure enough new work to allow operations to continue as normal after the contract expires and CHC will be forced to look at measures to offset the loss of revenue.

The decision comes after CHC Scotia Ltd’s parent company CHC Group, announced in May 2016 that it was filing voluntary Chapter 11 petitions.

In America, Chapter 11 is a form of legal protection for struggling business who are failing to repay their creditors or meet their financial obligations. The protection allows the organisation time to reorganise or restructure itself in the hope that the necessary changes will be made to recover their finances and pay off its creditors at a later point.

Oil and Gas People previously covered how CHC used Chapter 11 protection to return 100 leased aircraft without penalty or cost.

Apache’s contract with CHC operates between Aberdeen Airport and The Forties and Beryl Fields in the UK sector of the North Sea. The Forties field is the largest oil field in the North Sea consisting of the Forites Alpha, Bravo, Charlie Delta and Echo platforms and located 110 miles to the East of Aberdeen, the Beryl Field consists of the Beryl A and Beryl B platforms and is located 210 miles North East of Aberdeen.

A CHC Helicopter spokesperson said:

"We were disappointed to be advised shortly before the Christmas break that Apache has decided not to renew their contract with CHC. We have been their aviation partner for more than 13 years, providing outstanding levels of service and customer care.

"We wish them every success in the future. This is a reflection of the aggressive market conditions which the entire oil and gas supply chain has experienced in recent years."





Tags

CHC, S92, Helicopter, Aberdeen, Chapter 11, Apache, Contract, North Sea








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