McDermott International

McDermott International. It is a global provider of engineering, procurement, construction, and installation services primarily for the energy industry. Founded in 1923, the company has been instrumental in developing major offshore oil and gas infrastructure and LNG facilities worldwide. Headquartered in Houston, Texas, it operates across the Americas, the Middle East, and the Asia-Pacific region, executing complex projects for clients like Saudi Aramco, Chevron Corporation, and ExxonMobil.

History

The company was established in 1923 by Tom McDermott Sr. as a small welding shop in New Orleans, Louisiana. Its early growth was tied to the burgeoning Gulf of Mexico oil industry, where it began fabricating offshore drilling platforms. A significant milestone was the 1949 installation of the first offshore platform in the Gulf of Mexico for Kerr-McGee. Through strategic acquisitions, including J. Ray McDermott in 1978 and the Babcock & Wilcox nuclear construction business in 1978, it expanded its capabilities. The 1982 merger with Pullman Incorporated formed Pullman Kellogg, later Kellogg Brown & Root, before the company re-emerged as an independent entity. In 2018, it completed a transformative merger with Chicago Bridge & Iron Company, significantly expanding its LNG and subsea project portfolio.

Operations and services

The company's core operations span the entire project lifecycle, from initial front-end engineering and design to procurement, construction, and installation. Key service lines include the design and fabrication of fixed and floating offshore platforms, complex subsea production systems, and onshore LNG liquefaction and regasification plants. It utilizes a fleet of specialized vessels, such as the DB 50 and the LV 108, for heavy-lift and pipelay operations. The company maintains major fabrication yards in locations like Baton Rouge, Louisiana; Dubai, United Arab Emirates; and Dammam, Saudi Arabia, serving key markets including the North Sea, West Africa, and Australia.

Major projects

The company has been involved in numerous landmark energy projects globally. In the Middle East, it executed the massive Marjan and Berri Increment Programs for Saudi Aramco, involving new offshore platforms and subsea pipelines. In Australia, it played a crucial role in the Ichthys LNG and Wheatstone LNG projects, providing offshore production facilities and subsea umbilicals, risers, and flowlines systems. Other significant undertakings include the Cameron LNG project in Louisiana, the Borgland Dolphin platform in the North Sea, and the Shah Deniz gas field development in the Caspian Sea for BP.

Corporate structure and subsidiaries

The company operates through a matrix of regional divisions and specialized business units. Its primary operating subsidiary is McDermott, Inc., which manages most project execution. Other notable subsidiaries include the marine construction specialist J. Ray McDermott, S.A. and the technology-focused CB&I Storage Solutions. Following the 2018 merger, it integrated the legacy Chicago Bridge & Iron Company businesses, such as CB&I LLC, into its operations. The corporate entity is publicly traded on the New York Stock Exchange and maintains principal offices in Houston, The Woodlands, Texas, and London.

Financial performance and challenges

The company's financial history has been marked by significant volatility, heavily influenced by cyclical oil prices and project execution risks. The complex integration following the Chicago Bridge & Iron Company merger, coupled with substantial cost overruns on several fixed-price contracts, led to severe financial distress. This culminated in a January 2020 filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. It emerged from restructuring in June 2020 with a deleveraged balance sheet, with significant ownership transferred to creditors including Baupost Group and HPS Investment Partners. Subsequent performance has focused on completing its backlog of projects for clients like Saudi Aramco and QatarEnergy while navigating ongoing industry challenges.

Category:Engineering and construction companies of the United States Category:Companies based in Houston Category:Oilfield service companies Category:Companies that filed for Chapter 11 bankruptcy