State officials and representatives from McDermott International say they are committed to helping the workers who are laid off when the company’s oilfield fabrication yard in Amelia closes.
Gov. Bobby Jindal visited the yard with local business representatives Tuesday to provide assurances to workers after the energy services and engineering firm’s announcement that 350 jobs would be eliminated when the yard closes late this year or early next.
“Our No. 1 priority is to make sure that workers impacted by this decision will land on their feet at other companies in Louisiana,” Jindal said.
The governor and company executives spoke of the increasingly heavy deepwater demands of McDermott’s customers as a reason it’s being shuttered.
The company has handled deepwater projects like topsides for BP’s Thunderhorse platform, but company officials said the yard’s 20- to 25-feet deep access waterways are prohibitive to customers’ current demands.
“It’s for that reason, not because of the workforce or the state’s business climate that McDermott told us they were making this very difficult business decision,” Jindal said.
The Amelia yard will be relocated to Altamira, Mexico. The company’s second quarter financial results noted a year-over-year decrease in revenue was partially offset by higher revenues in the Atlantic segment. The statement attributed those higher revenues to increased fabrication activity in Mexico.
Steven W. Roll, vice president and general manager of McDermott’s Atlantic region, sidestepped questions about how the prospect for lower operating costs in Mexico played into the decision to close the yard.
The company has agreed to keep its lease on the property, showing it’s open to future development there, Jindal said. He also noted McDermott had committed to entertaining offers from other companies that could make use of the location through a partnership.
A handful of local business owners flanked Jindal as he told reporters about the needs of various state employers.
“Many of the employers who demand the same kinds of skills as the Morgan City yard are literally waiting in the wings,” Jindal said, citing local companies like Edison Chouest and Bollinger Shipyards. The operation is often referred to as the Morgan City yard because of its proximity to the St. Mary Parish city.
State economic development officials will connect McDermott with some of the large industrial companies that may have a need for modular fabrication work that could be performed at that facility, Jindal added.
In coming weeks, McDermott will hold job fairs for the displaced workers.
“We are going to do everything in our power to see the men and women of McDermott have outstanding career options, not just jobs, but good paying jobs in this area available to them as their work here comes to a close,” Jindal said.
Stephen Moret, state economic development director, said he is confident in finding the displaced workers jobs because of heavy demand for similar construction jobs in the state.
McDermott’s roots are deep in the Houma-Thibodaux area oilfield. The company has operated in Morgan City for 57 years, and its Amelia yard, which spans 300 acres, was billed as the offshore oil industry’s first dedicated steel fabrication yard when it opened in the mid-1950s.
Earlier this year, St. Mary Parish President Paul Naquin Jr. said the yard has regularly employed more than 1,000 people from the Morgan City and Houma-Thibodaux areas.
As many as 3,500 employees and contractors worked at the site for a major contract for BP to produce several deepwater platforms in the last decade.
In May, Naquin said the yard was in the running for a large fabrication contract tied to a deepwater platform for BP. The project was expected to bring in nearly 1,500 workers to the yard, but BP pulled back on that contract.
McDermott International announced in July it will close its last remaining New Orleans office in October.
Following other local oil and gas companies, McDermott moved its corporate headquarters from New Orleans to Houston in 2005.