Broker Fearnley Offshore Supply says 2017 could be a year in which owners of subsea vessels position themselves for recovery.
In its latest report on the subsea market, Fearnley Offshore said that, although 2016 has been an extremely challenging year for the subsea oil and gas industry, the market "is not without some positive signals."
FOSAS said: "The oil price has doubled since its lowest point 11 months ago, and has again gained some momentum on the back of production cut-deals made recently. And, while the incentive to develop new
oil- and gas production have led to a sharp decline in vessel demand, the low reserve replacement ratio over
the last two years the consequence is, perhaps ironically, that the need for deepwater development will increase significantly going forward."
FOSAS says it expects several large deepwater developments to be awarded going forward. It noted that the second half of 2016 saw a steady number of subsea fixtures compared to the distressed market environment that unfolded the previous year, although it noted that 2016 turned out better for large, Tier 1 contractors than for smaller subsea vessel owners.