North Sea status report 14

Compiled using data and graphs provided by Offshore Shipbrokers Ltd (OSL)

Supply vessels

October was in general a slightly less profitable month for owners than September though still producing very respectable day rates and undoubtedly allowing owners to attain continued good levels of utilisation. Following on from September’s extremely buoyant rates, the beginning of October saw AHTS fixtures being concluded at between the £120,000-£140,000 levels, however this was short lived and by the second week of the month rates had dropped off considerably to the £35,000-£50,000 level.

The middle of the month saw another spike back above the £100,000 mark as delays due to bad weather combined with numerous rig move requirements saw the market tighten. The remainder of the month then witnessed a dip back down to the £30k levels as availability improved, followed by a rise back to £60k-80k levels at around the end of the month.

By the beginning of November rates were once again back above the £100,000 level and, with AHTS’s in extremely short supply, rates headed back up towards the £120,000-£140,000 region. PSV owners saw far less dramatic fluctuations in rate levels with fixtures generally being concluded in the £25,000-£35,000 levels. If would seem that PSV rates have now settled into these levels over the last few months with only occasional spikes into the £40,000-£50,000 region during periods of extremely tight availability and sub-£20,000 generally only when a large number of AHTS’s are lying idle and competing for cargo run work.

With the worldwide vessel orderbook for AHTS’s and PSVs reaching approximately 700 deliveries between now and mid-2012, and nearly 100 vessels completed already during 2007, one can only begin to wonder when something has to give. This time last year we had expected to see, by this point, the effects of an over-supply of tonnage beginning to be felt by the market; however, given that vessel rates remain extremely buoyant, it would seem that the majority of deliveries to date have been well absorbed.

With oil prices now having hit a record high of US$98/barrel, and showing little signs of a return to normality, it would seem there remains plenty of enthusiasm for offshore exploration, with many operators and construction companies continuing to look busy for several years ahead. Even so, analysts are only predicting an increase in worldwide AHTS demand of circa 50 per cent and increased PSV demand of circa 35 per cent. With the current orderbook expected to see the AHTS fleet increase by approximately 80 per cent and the PSV fleet by circa 45 per cent by 2010, it is only a matter of time before supply begins to overtake demand, resulting in a downturn in vessel day rates.

Safety/standby vessels

October continued to be another buoyant month for ERRV owners but with occasional periods of improved availability. Further fresh term requirements have come to the market, however the majority of the fixtures to report have come from the Norwegian sector, with StatoilHydro renewing a number of its longer term ERRV contracts. The majority of the vessels fixed were for periods of circa three years commencing from mid- to late-2008 with many being renewals of existing charters.

Newbuildings

‘K’ Line Offshore has ordered four PSVs of the Aker Yards PSV06 CD design, with deliveries scheduled between the fourth quarter of 2010 and the third quarter of 2011. Bourbon has ordered two multi-purpose supply vessels from Socarenam in France with scheduled delivery in the second half of 2009.

Global Offshore Services, Singapore, a wholly owned subsidiary of Greatship India, has signed a contract for two multipurpose PSVs of 4,600dwt and DP2 class at Mazagon Dock in Mumbai, with expected delivery in mid-2010.

Opielok Bereederungs GmbH & Co in Germany has ordered two PSVs of UT755 LN design from the Bharati Shipyard. DOF Installer ASA has signed a contract with Aker Yards for an AHTS of Aker AHO4 CD design with delivery scheduled for the first half of 2011.

GulfMark Offshore has ordered three PSVs of 3,000 dwt to be constructed by Bender Shipbuilding & Repair in Mobile, Alabama and two AHTS’s of 10,000 bhp, to be constructed at Gdansk Shiprepair Remontowa in Poland. The first of these vessels is scheduled to be delivered in the fourth quarter of 2009 with the last for completion in the third quarter of 2010.

Bharati Shipyard has received an order from the Shipping Corporation of India to build four AHTS’s of Havyard design at a contract price of approximately US$89.23 million. Havila Shipping, through Havila Shipping Pte Ltd in Singapore, has ordered a PSV of Havyard 832 CD design with delivery from Fjellstrand Verft during autumn 2009. Tidewater has ordered at least four more AHTS’s from the Remontowa shipyard in Poland.

DOF has ordered two PSVs of Aker PSV09 CD design from Cochin Shipyard, with scheduled delivery in May and September 2010. Ezra Holdings Ltd has ordered a second multi-functional support vessel (MFSV) from Karmsund Maritime Service in Norway, with delivery expected during the second quarter of 2010.

Secondhand

Siem Offshore has sold its 1985-built standby vessel, Ocean Knarr, to Amber Navigation Co Ltd. The sale price was US$10.5 million and the ship was due to be handed over to its new owner in November. OSJ