Norwegian offshore support vessel (OSV) owners have secured new contracts for vessels operating in the volatile North Sea market as energy companies continue platform upkeep and subsea projects
OSV owners are facing a tough period ahead after a poor year of operations due to the cutbacks in energy investment that followed the global coronavirus pandemic.
But evidence from recent vessel charters indicates there remains activity in the North Sea term charter market and strong levels of subsea work.
Eidesvik Offshore was awarded a time charter contract by Wintershall Dea Norge for its 2013-built platform supply vessel (PSV) Viking Princess. This one-year contract is scheduled to commence in December 2020, and there are options to extend this charter into 2022.
Eidesvik also secured a contract with DEME Offshore, for a fixed period of 84 days for its 2015-built subsea construction support vessel Viking Neptun. This charter started this month and will run until September 2021, although there are extension options.
Eidesvik is expecting challenges ahead in the North Sea due to oversupply of OSVs and low demand levels. “The general market continues to be negatively impacted by low activity and low spending levels from the oil and gas companies,” Eidesvik said in a report.
“The North Sea spot market experienced a volatile quarter,” it continued. “Short term we expect supply to remain above demand, hence some challenging winter months ahead are expected.”
Eidesvik’s PSV utilisation rates ranged from 40% to 100% in Q3 2020 and spot market day rates fluctuated. There could be improvements in the market in 2021.
“Medium term we expect a gradual market improvement in 2021, based on an expected increase in rig activity, mainly on the Norwegian continental shelf,” Eidesvik said.
In the subsea market, Eidesvik encountered higher utilisation than anticipated in Q3 2020, of over 70%, due to “an active quarter for the North Sea subsea fleet”.
But the Oslo-listed owner expects a tough Q4 2020 and Q1 2021. “Entering the winter season, vessel availability is increasing with few near-term subsea requirements in the market,” Eidesvik said.
“Due to publicly announced subsea project deferrals we do not expect any incremental increase in the subsea activity levels short term.”
However, its vessel utilisation is expected to improve due to its increasing use in the growing renewables sector. “The renewables market remains active and will yet again utilise part of the advanced North Sea subsea fleet over the winter months,” said Eidesvik. “We maintain our positive outlook for this segment in a long-term perspective.”
In the UK side of the North Sea, Serica Energy chartered Rem Offshore’s 2012-built PSV Rem Mira for one year as it continues operating the Bruce platform and associated Keith and Rhum fields.
Serica is also a partner in the producing Erskine platform and is the development operator for the Columbus gas-condensate field, both located in the UK central North Sea.
Earlier this month, DOF announced a long-term contract for its 2012-built PSV Skandi Aukra from UK oil producer Chrysaor for two years from December 2020.
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