Offshore support vessel (OSV) owners and operators need to collaborate in digitalisation and connectivity if they want to thrive in the future market.
As we hear at our Annual Offshore Support Journal Conference, Awards and Exhibition, being held this week in London, there are green shoots of recovery in OSV demand. But strong forces are at work to cap revenues and profitability which will continue to impact owners for years to come, unless they innovate together.
OSV owners have suffered during the worst market downturn for generations due to oil prices crashing from record highs in 2014 to unproductive levels. They then recovered to more profitable concentrations for oil companies while sector costs returned to controllable levels. This has fuelled a mild improvement in vessel demand that is expected to expand in 2019.
Worldwide, offshore exploration activity is anticipated to rise this year, improving demand for drilling rigs and support vessels. There is also steady demand from offshore development work on projects sanctioned after sector costs had shrunk. But with hundreds of vessels in warm layup, the sector remains severely over-tonnaged, too much for any profit growth.
Therefore, OSV owners need another way to boost margins and this means digitalising operations and extending broadband communications. Working in isolation is counter-intuitive and OSV operators’ best bet would be to collaborate on connectivity and maximise digitalisation and using internet of things (IoT) technology.
But OSV owners are in competition aren’t they? Well, this is not as far-fetched as first thought: there are examples already in the sector. One view of the North Sea oil industry would be to see individual oil and gas production centres, each operated by different partnerships, although some will have the same operator.
However, look again and there is co-operation in oil and gas exports through the immense pipeline network. Another look and there is a vast fibre optic nexus and radiowave network for 3G and 4G connectivity.
Vessels can use broadband to communicate, go online and transfer huge volumes of information through Tampnet’s offshore nebulous of connectivity. Huge areas of the North Sea are covered for fast internet access through a low-latency wireless network and a growing fleet of vessels, rigs and offshore production platforms are benefitting.
Tampnet has a similar fibre and GSM/long-term evolution (LTE) network in the US Gulf of Mexico that links hundreds of platforms, rigs and vessels to fast, high-volume broadband communications.
On the narrowband level, there is a growing mesh of secure base stations and terminals on commercial ships, providing a backbone for IoT solutions
KNL Networks is building this nexus with military-grade security using digital shortwave radio communications technology. As each ship is connected this mesh extends further. It enables data transmissions from ships to shore and between vessels as a demonstration of what can be achieved through collaboration.
OSV owners need to use these examples to orchestrate technology collaboration of their own. It means jointly co-operating with satellite communications service providers and satellite operators to ensure connectivity is available for IoT, project communications and crew welfare solutions. It means teamwork in digitalisation and intelligence, while supporting innovators to drive enhancements in operations and efficiency.
Offshore digital oilfield technology increases expectations from energy companies for fibre-like connectivity even outside 4G networks and that requires high-throughput satellite coverage.
OSV operators need to co-operate to ensure this is available at affordable prices and IoT applications are ready for their operational needs. It is through collaboration and digital innovation that owners will thrive in a market upturn. To achieve this, they need the connectivity in remote offshore locations and to guarantee this, they need to work together.
OSV connectivity and digitalisation will be discussed in depth during the Annual Offshore Support Journal Conference, Awards and Exhibition, held 6-7 February in London