Harvey Gulf International Marine goes into Chapter 11

Louisiana-based offshore oil-rig supplier and service provider Harvey Gulf International Marine LLC, which has more than 50 vessels in its fleet, has filed for Chapter 11 bankruptcy in Houston, Texas, aiming to achieve a debt-for-equity swap with lenders.

The company filed notice that it had more than $1bn in debt and has an agreement with lenders to reduce what the company owes. Lenders in return would receive the equity in the company when it exits bankruptcy. Other creditors, such as suppliers, would be paid in full.

Harvey Gulf operates vessels that qualify under the Jones Act. US authorities have for decades allowed exemptions to the Jones Act to the oil-and-gas industry, permitting often cheaper foreign-flagged vessels. The Obama administration had proposed rescinding those exemptions, a move solidly supported by Harvey Gulf. But days after a full-page advertisement in the Wall Street Journal urging the new administration to follow through with the Obama plan, US Customs and Border Protection withdrew the Obama proposal. The US energy industry had lobbied the agency to keep the exemptions in place.