Solstad Offshore has secured contracts for its support vessels in Australia and is preparing to scrap its oldest ships
The Oslo-listed offshore support vessel owner has secured a one-year contract to support a major drilling campaign offshore northwest Australia and will transfer one of its largest anchor handling tug and supply (AHTS) vessels Normand Ranger from Norway to Australia in Q2 2021.
According to Automatic Identification System data, the 2010-built, VS 480-design anchor handler was still in Norway on 25 February. It will join Solstad AHTSs Normand Saracen and Far Senator to support a moored semi-submersible rig from a base in Dampier, Australia during the drilling campaign.
The arrival of Normand Ranger will increase Solstad’s fleet in Australia and New Zealand to five large AHTS and five PSVs, managed from Solstad’s Perth office.
Solstad also won a contract for its platform supply vessel Far Seeker to support Santos’ drilling programme offshore Timor Leste. The 2008-built UT 751 E-design ship will predominantly operate from Darwin, Australia for a firm contractual period of six months, starting in April 2021. Santos has options to extend this charter for longer if required.
These contracts come as Solstad said its income and vessel utilisation had been hit by energy companies reducing their expenditure due to lower oil prices in 2020 and the global coronavirus pandemic. Exploration and production companies are re-scrutinising their spending plans and postponing or cancelling projects resulting in reduced OSV utilisation.
Solstad chief executive Lars Peder Solstad said “The Covid-19 pandemic continues to have a huge impact on markets and operations.”
However, Solstad has found ways to overcome these challenges. “We have not experienced major Covid-19-related disruptions to daily operations, and we continue to implement measures to keep it that way,” said Mr Solstad. He said markets remain down in terms of activity levels in Solstad’s main markets, but looking beyond Q1 2021, there is potential. “We see some early signs of recovery within oil and gas,” he said.
However, Mr Solstad thinks the offshore vessel sector needs change. “As an industry we continue to make life hard for ourselves by competing at unsustainable rate levels,” he said. “Even in a scenario with more normalised activity levels, oversupply remains an issue. Further consolidation and recycling of vessels are needed,” Mr Solstad continued. “An active involvement from the main banks is essential to make this happen.”
Solstad is prepared to recycle its older vessels to help restore the supply-demand balance after it restructured its balance sheet in 2020. “With a green light to sell and recycle the oldest part of our fleet, we are shaping up Solstad for the next chapter and focus on the opportunities on the horizon,” Mr Solstad said.
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