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Spotlight on Carl Annessa

Published on 30 October 2013

In the ‘Spotlight’ section of the September issue of our newsletter, Making Waves, we interviewed Carl Annessa, a current member of the IMCA Marine Division Committee and the Executive Vice President and Chief Operating Officer of Hornbeck Offshore Services Inc. Here is the excellent interview in its entirety, in which Carl discusses his role at Hornbeck Offshore Services Inc., the future of our industry, the regulation of it, and the people who make it ‘go’.

Carl Annessa

Please tell us about your company and what it does

Hornbeck Offshore Services, Inc. is a leading provider of marine transportation services to exploration and production, oilfield service, offshore construction and US military customers. Since our establishment, we have primarily focused on providing innovative, technologically advanced marine solutions to meet the evolving needs of the deepwater and ultra-deepwater energy industry in domestic and select foreign locations. Throughout our history, we have expanded our fleet of vessels primarily through a series of new vessel construction programs, as well as through acquisitions of existing vessels. We maintain our headquarters in Covington, Louisiana, just outside of New Orleans.
Our emphasis in participating within IMCA is related to our upstream, or oil exploration and development service fleet. We operate one of the youngest and largest fleets of USflagged, new generation offshore supply or service vessels (OSVs) and multi-purpose support vessels (MPSVs). Since 2007, we have expanded our new generation fleet from 25 OSVs focused in the Gulf of Mexico to 50 OSVs and 4 MPSVs primarily operating in three core geographic markets: the Gulf of Mexico, Brazil and Mexico.
Currently, we are engaged in our fifth OSV newbuild program, which also includes the construction of MPSVs, and will grow the fleet upon completion to 70 OSVs and 8 MPSVs.
We have historically operated our US flag fleet in the US Gulf of Mexico. Since 2002, we have sought to incrementally diversify our market presence by also operating in overseas markets. We have focused our international efforts in Mexico, Brazil and the Middle East region. At the end of 2012, we had 19 new generation OSVs working in foreign markets.

What is your current role?

I currently serve the company in capacity of Executive Vice President and Chief Operating Officer.

How did you get to where you are in your career today?

A life-long fascination with boats led me to study naval architecture and marine engineering while at the University of Michigan. While in school I was able to enjoy short term work assignments in small boat yards, marine civil construction and with the US Army Corps of Engineers.

Following graduation, I accepted a position as a mechanical engineer with Avondale Shipyards near New Orleans. I was fortunate to have joined Avondale at a time when the yard had a large backlog of commercial ship construction contracts. Due to the level of activity, I was able to learn many aspects of mechanical design of ship’s systems in a very short period of time. At that time, the US flag fleet was transitioning from steam turbine technology to diesel engine propulsion. In just a few years I was able to experience the building and commissioning of some of the last commercial steamers in the US and the shift to diesel engine propulsion. Pretty cool stuff for a young engineer!

Following my employment with the shipyard, I joined Tidewater Marine as a project engineer. My roles at Tidewater progressed into the technical and operational management of their fleet in various parts of the world. I was able to serve as operations manager and country manager in the Middle East, the Caribbean and in West Africa.

After nearly 17 years with Tidewater, I was invited to by Todd Hornbeck to join him in his venture to restart Hornbeck Offshore Services (HOS). The original company had been purchased by Tidewater in 1996. I have been able to leverage my earlier experiences as we have grown HOS since its inception in 1997.

I suppose that it was in my operational management roles that my understanding of the ‘business of ships’ and their management began to mature. I realized then that more so than the technology (or the’iron’), what really makes the business ‘go’ are the people. It became clear to me that regardless of the nature or condition of a vessel, a successful, safe and efficient vessel operation begins and ends with a vessel’s crew and its leadership.

In each of my professional assignments, I have benefitted from the willingness of many individuals to share with me their own experiences and knowledge. I suppose more than anything else, I owe any success that I have achieved in my career to the attention and efforts of some great mentors and associates with whom I have had the pleasure of working for or with over the years. I hope that I have been able to help others much in the same manner that I was helped, and in so doing, develop sound leadership and reasoning.

What do you see as the key areas affecting the industry at the moment?

It is hard not to talk about key areas affecting the industry without talking about the very element that makes it’go’ – the people. The demands of the client community continue to involve more operational and technical complexity as we take the search for oil and gas into deeper and more hostile waters. Increased pressure by our clients and regulators for defect-free performance within rigorous, non-uniform, checklist-driven and audit-intensive safety management systems has placed an incredible strain on our industry’s fleet management teams and the ships’ crews.

There is no doubt that the industry’s overall incident rates have fallen since the inception of IMO’s Resolution A.741(18), the SMS Code and other similar management systems. However, my concern is that we have gone too far with these systems and have sacrificed good old seamanship and common sense in the bargain.

Every minor incident demands significant investigation and every major incident, though fewer in frequency, demands more regulation. It is becoming increasingly difficult for crews to keep up with the onslaught of the new regulations and new management system changes that are coming over the bulwarks as fast as we can assimilate them, let alone the reporting and recording demands that follow them. My worry is that we reach a state where our officers and crews are spending more time undergoing audits, completing forms and filing reports than they are planning and executing their operational evolutions, or simply looking out of the pilot house windows and paying attention to the sounds that the plant is making.

The demands of a life at sea are difficult enough without making the job itself a burden. My concern is that we will see fewer and fewer young men and women choosing to sail. Despite the great career opportunity that a job in our sector can afford them, many qualified candidates may opt to stay out of the game due to the crush of oversight and professional liability that a position of leadership offshore may bring with it.

How can these issues be taken forward?

I am not sure how to easily curtail the growth of new regulation and additional complexity associated with its implementation. I personally believe that efforts focused on crew competency, rather than compliance or certification, are headed in the right direction. We are most successful at performing incident-free work for our clients, and adding value to our own companies and their investors, when we perform that work competently. Certainly some of the competencies that are required must be measured and if found deficient, developed in the context of safety management system elements that properly address key risks to personal life and the protection of the environment. But let’s work together on developing simple systems that address those large risks, and allow the individual companies to manage the balance of their performance. Our clients have to be prepared to pay for the quality of service to which their safety management systems aspire. They must select and work with high-performing companies that are willing to strengthen the bonds of teamwork and collaboration to deliver safe, incident free operations. This will enable us to curtail the use of audits and systems that do not add any benefit to that goal. In time, poor performing companies need to be eliminated from consideration for future employment.

How do you think IMCA makes a difference?

I believe IMCA has created remarkable value to its membership, and thereby the industry at large, by providing a forum to address and provide guidance on common issues. While some of its guidance has been implemented in regulation or used as source material for the same, the vast majority of the IMCA’s work can be used voluntarily by industry to improve technical and operational performance. I am not sure that all of IMCA’s guidance needs to be codified into a ‘management system’, but IMCA’s continued efforts to refine its earliest guidance and to adapt new guidance for emerging technologies or industry issues remains of high value to the membership.

How do you see the future?

I consider myself an optimist – sort of a’the glass is half full ‘ type. This industry continues to fire my excitement for the future despite my current frustration with what often appears to be new regulations or systems that are implemented without consideration of their costs, benefits, or effectiveness in improving safety or the protection of the environment. I am a’gearhead’ by nature, and I must say that we are enjoying a golden age of technical innovation in every aspect of the offshore sector. Our industry is accomplishing remarkable technical wonders every day; and generally doing so without any adverse effect on life or the environment in which we operate.

I am also very encouraged by the individuals that I encounter in every aspect of this industry- men and women that just love what they do, despite the paperwork, and who recognize the significant contribution that they are making to lives of billions of others on the this planet by delivering abundant and still remarkably inexpensive sources of energy to them. To borrow a phrase from a good customer, ‘our industry was literally borne on the frontier, and has always grown, adapted to and responsibly addressed the challenges it has faced’. My ability to predict the future is no better than anyone else’s, but if I have learned anything in 35 years, it is that the future of the offshore industry will remain one of ample opportunity, filled with continued wonder and excitement as we meet the challenges ahead.