Family firm still struggling, 18 months after Gulf oil spill
Leslie Bertucci, co-owner of R&D Industries in Harvey, stands in front of the company’s compartmentalized storage tank, designed by her husband and co-owner Dan Ness.
Watching it leave, co-owner Leslie Bertucci raised her camera phone and snapped a couple of pictures of a cherished sight in the last few months: a paying customer.
For R&D, this was rain after a drought, a breath of oxygen flowing into a small oilfield supply company that has been gasping for air. The company, which rents modular storage containers and racks to offshore rigs, has managed to stay in business since the Deepwater Horizon exploded last year and radically reshaped deepwater drilling in the Gulf.
But it’s been grueling.
R&D survived a four-month deepwater drilling moratorium that ended in October. Since then, it has been struggling to navigate the re-made regulatory environment that has settled over the Gulf, leaving drilling activity far short of where it was when Deepwater Horizon blew, killing 11 workers.
Bertucci and her husband, Dan Ness, founded R&D 11 years ago in their house in Metairie to manufacture and rent specialized equipment to deepwater drillers. When the moratorium clanged down and the Gulf went quiet, Bertucci said revenue plunged 80 percent almost overnight.
The company survived, in part, by enforcing furious economies, Bertucci said.
The couple slashed their own salaries by 75 percent. Months later they eliminated them entirely, and then began shoveling personal savings into company operations.
Bertucci said they slashed every discretionary nickel, ended their practice of cookouts or gifts for customers, cut off all charitable contributions.
Remarkably, over the course of 18 months, R&D has held on to its small workforce of a dozen or so employees.
“We didn’t lay off anybody but ourselves,” she said.
‘Not a penny‘
Meanwhile, Bertucci learned that R&D didn’t qualify for compensation from a $20 billion fund that BP established shortly after the spill.
Although the company had contracts in hand, it received no compensation for lost revenue, or for the estimated $144,000 in equipment that went to the bottom of the Gulf with the Deepwater Horizon.
“We haven’t received a penny. Not a penny,” she said.
However, since the spring, business has inched back up, “but it’s excruciating how slow it is.”
“I didn’t think a year and a half ago I’d be excited to have the numbers I have today,” she said. “They’re not great. But they’re creeping back up slowly.”
Bertucci said she and Ness are back on the payroll, but business is still down more than a third of what it was before the oil spill. The day of the BP disaster, Bertucci said her company had equipment on 23 deepwater rigs; today they’re on 12.
If her projections work out, Bertucci expects that next summer the business will be where it was in June of 2010.
Depressed deepwater drilling
On the day BP’s rig blew, 33 deepwater rigs were operating in the Gulf.
Today there are about 34, but only about half are drilling, said Eric Smith, associate director of the Tulane University Energy Institute. The rest are awaiting permits.
Just last week, a joint report by the Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement found that BP, Halliburton, its drilling contractor and Transocean, owner of the Deepwater Horizon, took disastrous shortcuts that led to the blowout of the 18,000-foot Macondo well, killing 11 crew members and spilling nearly 5 million barrels of oil into the Gulf.
Since the relaxation of a moratorium after the spill, Gulf deepwater drillers have been operating in a new environment in which regulators have ordered increased oversight at every stage of oil and gas development, and invited more government agencies to consult and comment on drilling permit applications, Smith said.
The result is that permit applications are significantly backlogged and deepwater drilling remains depressed.
Pleading their cases
In the months since the spill, Bertucci has become a highly visible spokesperson for thousands of small secondary businesses that support — and are supported by — the multi-billion-dollar corporate behemoths in the oil and gas industry.
Bertucci has pleaded the case of small businesses in Washington and before the president’s National Oil Spill Commission in New Orleans. She is the subject of a short pro-business video by the Heritage Foundation and the Institute for Energy Research.
Her message is clear: although the blowout was a disaster, the moratorium was an overreaction, and the post-moratorium regulatory environment has tilted the balance of oversight versus production too far in favor of oversight.
During the slowdown, Bertucci and Ness began looking to other markets for business. In the last few months, they have sought an international technical certification for their tanks and racks so they can bid on deepwater jobs in other regions — especially Brazil, which appears to be the preeminent new deepwater market.
During the darkest days of the moratorium, Bertucci frequently said the company needed to keep a full workforce on hand for the day the moratorium was lifted, for on that day, she believed, R&D would be swept off its feet with customers stampeding back into the Gulf.
It hasn’t worked out that way at all.
“It turned out to be sort of a joke. A joke on us,” she said.
“It was a very cruel joke.”
Bruce Nolan can be reached at firstname.lastname@example.org or 504.826.3344.
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Posted on September 18, 2011, in Gulf of Mexico, Oil & Gas - offshore, Regulation and tagged Barack Obama, BOEMRE, BP, Bureau of Ocean Energy Management Regulation and Enforcement, deepwater horizon, gulf of mexico, Heritage Foundation, Institute for Energy Research, Macondo Prospect, Obama administration, Offshore drilling, offshore drilling moratorium, Oil & Gas - offshore, Regulation, Transocean. Bookmark the permalink. 2 Comments.