Global offshore rotorcraft activity hit by oil price headwinds

“Tracking crew transfer and rotorcraft activity can provide insight into what’s happening offshore early on,” Air and Sea Analytics managing director Stephen Robertson told Offshore Support Journal. “Tracking the number of flights between the shore and platforms is an excellent indicator of the volume of offshore activity.”

Mr Robertson closely monitors global and regional offshore heavy- and super medium-rotorcraft activity and by his own account flights were down over 29% year-on-year during some weeks in April.

“The oil industry has seen downcycles and price drops,” said Mr Robertson, “but we have never seen negative oil prices and a global pandemic that has brought the entire global economy to a halt. We are in uncharted territory.”

He observed that while OPEC made significant cuts in production – 10M barrels of oil per day (bpd) – they were not significant in the face of the demand destruction of 20M to 30M bpd in the market. “They brought a pea shooter to a gunfight,” he said.

With the cuts having little effect boosting prices, oil companies have responded by aggressively cutting opex and capex, with some slashing 2020 budgets by 30% or more.

What does this mean for offshore rotorcraft activity? “Manned production rigs are the beating heart of the offshore crew transfer business and account for more than two-thirds of crew transfer activity,” said Mr Robertson.

Mr Robertson said the industry has already begun to see a material impact on offshore crew transfer activity. He says Covid-19 mitigation measures have resulted in reduced manning levels on platforms, social distancing on flights and the inability to bring in crews because of travel restrictions and border lockdowns. “This is not a factor in the UK or Norway, where you have people in country who can fly and work offshore,” he pointed out. “If you are Ghana or Suriname, where you don’t have enough resources in country it’s a big issue.”

In addition, increasing spacing between the passengers on a helicopter reduces carrying capacity. For aircraft such as Leonardo’s AW139 this might mean leaving the first row of seats empty, reducing the maximum capacity of the aircraft from 12 to eight passengers.