Rigs report: global floater utilisation to hit 90% by 2024

“We’ve been seeing some recovery in the drilling space, especially in floaters,” said MSI associate director Ferenc Pasztor, speaking at the OSJ online regional forum: OSV market opportunities offshore Brazil on 22 March. Mr Pasztor said the rig market has benefited from increased demand and “fairly strong scrapping activity” over the last few years.

He was particularly bullish on the global floater market. “We are seeing a strong recovery and based on our basis assumption, by 2024, we are projecting a 90% utilisation rate. Historically, that’s a really healthy level. Obviously, day rates are expected to increase accordingly. And this trend is visible globally, but also in Brazil, and in the wider South America region.”

Mr Pasztor noted Brazil has historically been the largest offshore oil and gas market in South America, but recent large discoveries offshore Guyana and Suriname are driving activity, too. There are about 30 floaters active in the region.

This increased offshore activity will drive demand for OSVs, not only from exploration, but also production and the installation of new floating production, storage and offloading (FPSO) vessels, he noted. About 14 new FPSOs will be installed in Brazil by 2024. MSI projects demand for PSVs will eclipse 200 vessels, larger AHTS vessels (12,000-bhp+), 175 vessels and smaller AHTS vessels more than 75.

Day rates for large OSVs have jumped up significantly in Brazil, with AHTS vessels (21,000 bhp) fixed at more than US$60,000 per day, AHTS vessels (18,000 bhp) at more than US$50,000 per day, PSVs (4,500 dwt) at US$30,000 per day and PSVs (3,500 dwt) at more than US$20,000 per day.

Mr Pasztor said most of the available OSVs are being utilised in Brazil, with available large AHTS vessels “maxed out.” Those that are in layup are significantly older than those currently active, he noted, with ages as high as 34 years old.

“Additional vessels will be needed in Brazil and also the wider South American region.” OSV owners will be faced with moving vessels to the region. Based on the strong recovery in day rates, Mr Pasztor said, “This decision is getting more and more justifiable.”

Joining Mr Pasztor on the panel, V.Ships Brazil managing director Leo Freitas said the Brazil offshore market was “picking up,” noting 20 drilling units were working. Mr Freitas said the number of tenders and proposals over the last few months is “quite huge and increasing.” He noted, however, this “does put some strain on the availability to find experienced seafarers.”

This will be a particular challenge for OSV owners bringing tonnage to the region because they will have to comply with Brazilian local content requirements. Mr Freitas said regulations will require two-thirds of the crew to be Brazilian. “Where do we get these specially training, experienced people from?” he said. He also noted there is upward pressure on wages.