September 11, 1998

In a major development underscoring the success of the Alternative Compliance Program (ACP), the U.S. Coast Guard has extended the authorization given to ABS to include mobile offshore drilling units (MODUs) that adhere to the IMO "Code for the Construction and Equipment of Mobile Offshore Drilling Units - 1989" ('89MODU Code).

At the same time the Coast Guard has also authorized ABS to conduct surveys and issue certificates in accordance with the '89 MODU Code. The Coast Guard has previously granted ABS other statutory recognitions including various surveys and certifications in accordance with the Loadline, SOLAS, and MARPOL international maritime conventions.

Under the terms of the ACP, ABS surveyors had been empowered to act as agents of the Coast Guard in issuing SOLAS and MARPOL certificates to U.S.-flag ships in support of the USCG Certificates of Inspection (COI). This voluntary program has now been extended to include owners of new and existing U.S.-flag MODUs, subject to the '89 MODU code, who may wish to enroll.

ABS President Robert Somerville said, "This dual recognition from the Coast Guard is a significant achievement for ABS as it demonstrates the confidence this leading flag state agency has in our capabilities. This is a confidence that was fostered and has grown during the years we have worked together developing the ACP."

Mr. Somerville credited the recent reorganization of ABS offshore activities as a factor in gaining the two new authorizations. "No doubt the Coast Guard viewed our enhanced internal engineering and technical support services as sharpening our practice and reinforcing our leading position within the offshore sector," he said.

He also noted that work is in progress to extend the Coast Guard's authorizations to include existing MODUs that are subject to the IMO "Code for the Construction and Equipment of Mobile Offshore Drilling Units - 1979."

ABS has maintained a dominant position within the MODU and other offshore sectors. "ABS offers the most advanced technology and the most comprehensive Rules and Guidelines to meet the sophisticated needs of this progressive industry," Mr. Somerville said. As evidence, the ABS President cited market share figures within the MODU sector alone which show that 83% of existing jack-up units, 50% of existing semisubmersible units, and 87% of existing drillships are in ABS class, a total of 542 units. More than a dozen of the most advanced drill ships and semisubmersible units now being converted or building are also to ABS class.

United States Coast Guard Rear Admiral Robert C. North, Assistant Commandant for Marine Safety and Environmental Protection, explained that, "This authorization given to ABS to incorporate MODUs into the ACP is an extension of the mutual efforts undertaken by ABS and the Coast Guard to streamline the Coast Guard's inspection activities while maintaining adherence to our common missions of protecting life and property at sea."

He also indicated that, "By incorporating the resources of ABS into our flag-state inspection efforts, a great deal of duplication has been eliminated resulting in significant potential savings for MODU owners with no reduction in the level of safety standards."

For U.S.-flag MODU owners a significant benefit is the harmonization of USCG requirements with international convention standards, particularly those contained within SOLAS, MARPOL, and the ABS Rules. A guide to the enrollment in the ACP is available to owners of both new and existing MODUs. It advises users on the simple procedures of enlisting and participating in the program.

The clear operational and financial savings of the ACP that have been identified by shipowners and operators during the pilot phase and the year since are now expected to encourage participation from owners and operators of MODUs as well.