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New report confirms potentially serious damage to the deepwater construction market in the US Gulf of Mexico from proposed Jones Act changes

Published on 5 April 2017

The International Marine Contractors Association (IMCA) issued its report on 4 April into the potential impact of the Jones Act proposals published by the US Customs and Border Protection agency (CBP) on 18 January.  The report is available on IMCA’s website *.

IMCA has conducted a detailed analysis of the technical requirements of conducting various operations in deepwater (>1,000m or 3,280 ft) cross-matched to the vessels active in the Gulf of Mexico in late 2016. The results confirm the practical reality that the US coastwise fleet is unable, on its own, to support activities in the deepwater market. For instance: there are no coastwise qualified deepwater pipelay vessels, and there are no coastwise approved deepwater heavy lift vessels.

The marine construction industry has relied upon long-standing CBP rulings which permit a small market for non-coastwise qualified (foreign flagged) vessels engaged in specific niche activities other than transport. The proposed revocations and modifications to the Jones Act could effectively stop deepwater developments because there would be no domestic capacity to install the facilities.

The limited number but high investment deepwater developments have been the engine of growth in the Gulf of Mexico for many years. The potential implications for the oil and gas industry in effectively stopping these investments are huge. The resulting impact on businesses and jobs would be very significant both offshore and onshore. Reference should be made to the economic impact report issued by the API **.

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