Everett, Wash.-based OceanGate has had to postpone this summer’s deep-sea dives to the Titanic shipwreck, just as they were about to start, due to complications relating to the expedition’s intended mothership.
The complications have to do with the status of the Norwegian-flagged MV Havila Harmony under Canadian maritime law, OceanGate CEO Stockton Rush told GeekWire today. The ship’s operators at Reach Subsea feared that the ship might be impounded if the expedition went forward as planned, Rush said.
Rush said that the issue cropped up last Friday, and that the resulting complications couldn’t be resolved in time to do this year’s Titanic Survey Expedition. The first departure from St. John’s, Newfoundland, had been scheduled for June 28.
“I’ve been up in my life, and I’ve been down in my life,” Rush said. “I was as happy as I’ve ever been on Thursday night, and by Saturday I was almost as low as I’ve ever been. … It’s been quite a swing, and I hope I don’t ever go through that again.”
OceanGate’s clients have paid more than $100,000 each to take part in the expedition as mission specialists. They were due to join professional crew members on the company’s Titan deep-sea submersible to see the 107-year-old wreck of the Titanic, nearly 4,000 meters below the surface of the Atlantic.
Those dives are now being rescheduled for mid-2020, and Rush said more than 75 percent of the mission specialists are willing to wait another year.
“The response has been all over the map,” Rush said. “I would say it’s largely been supportive. This is a setback for them; it’s a setback for us.”
OceanGate had been working with Reach Subsea to identify the appropriate vessel for the expedition and verify that the chosen ship would fill all the requirements for this summer’s series of voyages. He said OceanGate’s personnel checked the Havila Harmony’s specifications against 500 pages’ worth of procedures and documents.
In the end, the sticking point had to do with a Canadian law against using foreign-flag vessels for commercial voyages that have Canadian ports as their starting point and end point. The Coasting Trade Act is analogous to the United States’ Jones Act, which created complications for the Puerto Rico hurricane relief effort in 2017.
Based on informal advice, it initially looked as if the Havila Harmony would be able to take on the Titanic expedition because the voyage didn’t involve port-to-port commerce, Rush said. But as the date of the expedition neared, Reach Subsea picked up indications that there might be trouble.
Late last week, OceanGate was notified that the risk of having the ship impounded was too great, and that the expedition would have to use a substitute vessel instead. But Rush said Reach Subsea had been told during earlier discussions that the substitute was unacceptable.
Rush said the issue couldn’t be resolved in time to make the weather-dependent window for this summer’s trips. “When you start rushing an expedition, you start asking for mistakes — and in our business, mistakes could be fatal,” he said.
Now OceanGate is discussing the financial fallout with Reach Subsea as well as with clients and investors. “We have other projects, but nothing close to the magnitude of the Titanic,” Rush said. “It does put a hiccup in our financials.”
We’ve sent an email to Reach Subsea’s office in Norway, asking for comment, and we’ll update this report with anything we hear back.
Rush said that OceanGate was “fine for the time being,” and that another equity round would probably be conducted to boost the privately held venture’s capital. (For what it’s worth, OceanGate filed notice with the Securities and Exchange Commission in April that it was planning a $5 million debt financing round.)
OceanGate’s Titan submersible will be shipped from its deep-sea testing grounds in the Bahamas back to the Seattle area. Instead of going to Newfoundland, Rush and his teammates are likely to conduct further tests of the sub’s high-tech laser-mapping system in Elliott Bay. They’ll also be going over all of the arrangements for next year’s expedition — and figuring out how best to avoid the snags that spoiled this year’s expedition.
“We’re reassessing,” Rush said. “Do we need to buy our own ship?”