Tidewater’s Quintin Kneen on OSV newbuilding: 'It’s not economic to order'

When asked whether the time was right for a newbuilding programme, Tidewater president and chief executive Quintin Kneen didn’t stutter or hesitate, “It’s not economic to order a boat today,” he said.

Speaking to a packed room at the 36th Marine Money Week conference in New York on 24 June, Mr Kneen was asked to comment on the potential for material newbuilding programmes and particularly on a firm order for four platform supply vessels (PSVs) that was reportedly backed by Evangelos Marinakis-led Capital Offshore. The programme could see an additional four PSVs built, if options were exercised with China’s Fujian Mawei shipyard, according to industry trade journal Trade Winds. No details were revealed regarding pricing or delivery dates, and brokers declined to comment to OSJ.

While not having any personal knowledge beyond what was publicly disclosed, Mr Kneen said, “When I see ordering, I know it will happen, but not like we saw in 2009-2013, and there are several reasons for that.”

While the OSV market has not seen any significant newbuilds ordered since the market crashed in 2014, he explained one difficulty is straight economics; a baseline vessel favoured in most segments would cost US$65M to build. “That means you are going to need a substantially higher day rate today. From my perspective, I don’t see any reason to build.”

While the offshore oil and gas market is now humming, he also highlighted the impact of the energy transition on the life of the asset framed by the move away from hydrocarbons. “What’s the life of that boat? Is it really 30 years? 20 years?”

He made the point that an OSV built with today’s engine technology would have to be refit over its service life, adding potentially another US$15M-US$20M of cost. “That just throws more capex into the equation and destroys the economics based on prevailing rates,” said Mr Kneen.

Meanwhile, Mr Marinakis’s Capital Offshore has been a high flyer, following its formation in November 2023 and acquisition of PSVs from Standard Supply. The billionaire’s other companies have been investing in other shipping segments, too.

And, overall, Greek owners have far outpaced the rest of their European counterparts in newbuilding investment the last five years, ordering 816 vessels of all types, totalling US$56.9Bn, according to Clarksons Research data.