McDermott International
| File:McDermott International logo.svg | |
| Company type | Private |
|---|---|
| Industry | Energy Engineering and Construction |
| Founded | 1923 |
| Founder | Ralph Thomas McDermott |
| Headquarters | Houston, Texas, U.S. |
Key people | Michael McKelvy, President and CEO |
Number of employees | ~40,000 (2021) |
| Footnotes / references [1] | |
McDermott International, Ltd stands as a prominent engineering and construction service provider within the global energy sector. With operations spanning more than 54 nations and a workforce nearing 40,000 employees as of 2021, the company operates a specialized fleet of marine construction vessels alongside fabrication plants worldwide. Although incorporated in Bermuda, its corporate headquarters are situated in Houston’s Energy Corridor, Texas.[2]
1923–2023
Established in 1923 by Ralph Thomas McDermott at the age of 24, the firm originated with a contract to construct 50 wooden drilling rigs for a wildcatter based in Luling, Texas. Drawing upon his father’s background in lumber and oilfield construction, Ralph joined forces with John Raymond McDermott, from whom the company derives its name.
The business extended its reach from Eastland to Luling amid the oil boom of 1930 and shifted its base to Houston in 1932 to seize expanding market prospects. Initial operations consisted of three family-run companies: J. Ray McDermott & Co., Elmax Construction, and Stall & McDermott.
By 1937, McDermott assembled its first construction workforce and inaugurated an office in New Orleans. The company’s innovative spirit was evident in 1938 with the launch of floating drilling rigs tailored for marshlands across Texas and Louisiana. The following year’s acquisition of J.G. McMullen Dredging Company led to the creation of the Olsen Dredging Company subsidiary.
In 1946, these family enterprises were unified under J. Ray McDermott & Co., Inc., registered in Delaware. The subsequent year marked a milestone with the design and installation of the Gulf of Mexico’s first fixed steel platform located beyond sight of land for Superior Oil. This era also witnessed the formal establishment of its contracting division as a fundamental business unit.
Further strategic growth included acquiring assets from Harry F. Allsman Company in 1948 to bolster offshore construction capabilities. In 1949, McDermott launched Derrick Barge 4—the inaugural vessel purpose-built for offshore operations—and officially created its Oil Division to concentrate on energy-related projects.
Restructuring
In 2010, shareholders of McDermott International approved the separation of the U.S.-based government contractor Babcock & Wilcox along with its affiliated domestic entities. The oil and gas services division, J. Ray McDermott, discontinued its original branding and continued operations under the McDermott International name, with David Dickson serving as Chairman, President, and CEO.
2017–2018
On December 18, 2017, McDermott reached an agreement to merge with CB&I, forming a fully integrated company covering both onshore and offshore sectors. This merger was completed in May 2018. After the merger, McDermott secured new contracts with Baker Hughes and BP, while David Dickson remained as CEO. Following the deal, CB&I’s shares were removed from the NYSE on May 11, 2018, and Gary P. Luquette was appointed chairman of the merged organization. Additionally, in May 2018, McDermott was added to the S&P MidCap 400, taking the place of Diebold Nixdorf.
In August 2018, McDermott won a contract from Shell for the Perdido project located in the Gulf of Mexico. During that same month, the company faced legal action from TechnipFMC accusing it of misappropriating trade secrets.
Post combination
After the merger, McDermott encountered difficulties with LNG projects situated in Hackberry, Louisiana and Freeport, Texas, along with challenges in power-related projects. These issues prompted the divestiture of a portion of its pipe fabrication business. The company also arranged a $1.7 billion credit facility featuring super senior loan terms similar to debtor-in-possession financing used during bankruptcy.
In 2019, McDermott expanded its technological capabilities by acquiring Siluria Technologies, gaining access to cutting-edge oxidative coupling of methane technology to broaden its product portfolio. Despite this strategic move, the company reported a loss of $1.9 billion in the third quarter of 2019 and opted not to conduct an earnings call.
2020 bankruptcy
On January 21, 2020, McDermott filed for Chapter 11 bankruptcy protection, leading to the cancellation of all common stock shares. The prearranged restructuring encompassed the parent company along with 247 subsidiaries and was submitted to the U.S. District Court for the Southern District of Texas under case number 20-30336. By June 2020, McDermott successfully emerged from bankruptcy protection, setting the stage for renewed growth opportunities.
Marine fleet
As of 2018, McDermott maintained a varied fleet of marine construction vessels to support its worldwide operations:
- Amazon (leased)
- Derrick Barge 27
- Derrick Barge 30
- Derrick Barge 32
- Derrick Barge 50
- Derrick Lay Vessel 2000
- Emerald Sea
- Intermac 650
- Lay Vessel 108
- Lay Vessel North Ocean 105
- North Ocean 102
- Thebaud Sea