As offshore vessel owners adapt to new energy market conditions during the coronavirus pandemic, their seafarers are facing tougher challenges according to a panel of industry leaders
During the Offshore Industry Leaders webinar, top executives highlighted the challenges facing their mariners and discussed strategies owners may need to use to stay afloat as the rocky ride the offshore market has faced in the last several years shows no signs of letting up.
Part of Riviera Maritime Media’s ongoing series of themed webinar weeks, the webinar fell just ahead of Day of the Seafarer 2020, and was sponsored by V.Ships Offshore, whose parent company V.Group called on the industry to show their support for the seafaring community "in what are clearly the most challenging times most will have ever faced in their career".
"We are asking people to show their support by using the hashtag [#SeafarersAreKeyWorkers] created by IMO," a statement from V.Group said.
With some 200,000 seafarers stuck at sea unable to leave vessels or make their way back to family and friends because of complications due to the pandemic, IMO has used the 10th anniversary of its social media-based appreciation efforts to highlight the role that seafarers play as key workers in the transport of goods, commodities and services on which the world relies.
Many seafarers are stuck on vessels after their contractual periods are completed or are unable to return home because of international, regional and national travel restrictions imposed in reaction to the Covid-19 pandemic. Crew changeovers are also hampered with personnel also unable to travel to reach vessels and relieve their colleagues.
Presentations and discussions during the webinar showed a strong focus on the difficulties crews were facing in the current crisis. BW Offshore non-executive director René Kofod-Olsen, Tidewater president and chief executive Quintin Kneen and V.Ships Offshore managing director for offshore shipmanagement Harry Knox weighed in and Mr Olsen began by noting “crew have taken the brunt of the challenge”.
Mr Olsen, who was formerly chief executive of P&O Maritime Logistics and Topaz, remained optimistic.
“Companies will get through this. We give kudos to the seafarers and the people onshore making this work,” he said.
Mr Kneen agreed and added a call to the international authorities to enable effective and timely crew changes. “Seafarers are the real heroes,” he said. “Mariners are stuck offshore on vessels and worried about their families.”
He pointed to bureaucracy involved in crew transfers during Covid-19 restrictions as creating additional anxiety for seafarers unable to return home.
Mr Knox agreed crew changes were the most challenging operational issue facing OSV operators. “There is no visibility on when crew changes will happen and seafarers are the heroes in this case,” he said.
“There needs to be free movement of seafarers and this needs agreements between countries and regions,” said Mr Knox. He challenged the offshore industry and governments to address the issue, otherwise there could be safety concerns.
“It is an operational risk if crew are spending long times away from their families,” he said. “We need to do what we can to do this better.”
OSV leaders also highlighted the market and financial challenges owners face from the coronavirus-induced slump in oil and gas prices and offered insights into how OSV owners could remain robust and resilient in a shifting energy market. They explained how companies need to adjust to changing market conditions and adapt to the new oil price reality and maintain business continuity to overcome the challenges from Covid-19.
Mr Olsen said OSV owners need to adjust their operations and investments to survive a market depression that could last for two to three years.
“We need to dig deep, look at our business models and adapt with the right policies,” he said. “Some owners will need to scrap more vessels to balance the market.”
Mr Kneen said he believes OSV owners should consider consolidation again as a solution to survival as there will be hundreds of idle vessels competing for the same work.
“Demand is down 25%,” he said. “Some 25% of the active fleet is in lay-up and they will be fighting for the work.”
Mr Knox said OSV owners should also consider methods of reducing their operational expenditure. “Consolidation is a big aspect. But restructuring operations and management of vessels is an important part of that.”
By a nearly unanimous margin, attendees of the Offshore Industry Leaders Webinar agreed that OSV owners need to adapt vessels for the growing offshore renewables markets. When asked whether the global energy transition presented broader business opportunities, 91% agreed and only 9% disagreed.
There was less consensus in another poll on whether the industry was ready for production returns to be part of contractual agreements, with 53% disagreeing and 47% agreeing.
In a third poll, attendees were asked to forecast when they expected the offshore industry to “return to some semblance of normality”. Of those who answered, 55% said it would take two years, another 27% said five years, 5% said one year and 13% thought it would take more than five years.
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Webinar panellists (left to right): V.Ships Offshore managing director for offshore shipmanagement Harry Knox, BW Offshore non-executive director René Kofod-Olsen, Tidewater president and chief executive Quintin Kneen
25 June is the annual Day of the Seafarer. There are more than 200,000 crew members currently stranded at sea, according to V.Group, which has worked with other industry stakeholders to ease the plight of seafarers.
IMO has called on its member states to recognise seafarers as key workers and to facilitate their transfer.
V.Group managing director of crew management Allan Falkenberg said his company has helped large numbers of crew reunite with their families or begin working on ships, facilitating 10,282 crew movements since 17 March for those stranded at sea due to the crew change crisis. The seafarers consisted of 92 nationalities from 795 vessels.
“With thousands still confined to vessels as a result of coronavirus restrictions, our crewing teams are working tirelessly to identify all potential crew change opportunities at the ports our seafarers’ vessels are scheduled to visit," Mr Falkenberg said. "We remain hopeful that a solution can be found to the crew change challenge, which remains the number one issue facing the maritime industry.”