Although pleased that his organisation’s long-term plan has come to fruition, the head of the Brazilian Association of Offshore Support Companies (ABEAM) is not getting carried away with the fact that, for the first time in seven years, there are more Brazilian- flagged offshore support vessels (OSVs) operating in Brazil than foreign-flagged ships.
Ronaldo Lima, president of ABEAM, said that the ABEAM figures released in March of this year were “an anomaly and an aberration”, and the switch in favour of the Brazilian flag would soon be overturned. ABEAM’s latest circular showed that there were 247 Brazilian-flagged and 229 foreign-flagged vessels in Brazilian waters.
When OSJ interviewed Mr Lima in his Botafogo (Rio de Janeiro) office, he said, “The fact is that there are a number of international tenders underway right now that have been delayed by some months, and these are the main reason for the turnaround [towards more Brazilian-flagged vessels being operated]. You also have to factor in the fact that a number of Brazilian-flagged vessels are entering the market every year.”
Indeed, that is the case with companies that own and operate OSVs and a shipyard – such as Wilson, Sons, Companhia Brasileira de Offshore, Starnav, Bram Offshore (Edison Chouest) and Bravante. They clearly have the best business strategy during a period of retrenchment from Petrobras, the state-controlled oil giant, which rules the market with a 90 per cent share.
Last year, around 15 Brazilian-built, Brazilian-flagged OSVs entered the market. This year, about the same number can be expected to join the fray. Whereas in the past Brazilian shipyards specialising in OSVs concentrated on crewboats, smaller PSV 3000s and oil spill recovery vessels, over the last three years, they have ramped up production and improved equipment to the point where larger platform supply vessels (PSVs) in the 4500–5000 range, and some anchor-handling tug/supply (AHTS) vessels can be constructed with relative ease.
So, armed with long-term eight-year (plus eight) contracts to build from Petrobras yards belonging to the shipping groups mentioned above (Guarujá 1 and 2, for Wilson, Sons; Oceana and Aliança shipyards for CBO Group; Detroit for Starnav; Navship for Bram Offshore and São Miguel for Bravante) are now building, on average, 15 OSVs a year.
Some are so confident that, even during the occasional hiatuses in the market, they are building OSVs on spec, confident that the Brazilian market will always grow, despite occasional lulls.
Petrobras, backed by the Brazilian Government, always intended to increase the number of Brazilian-built OSVs, in order to create jobs (directly and indirectly) in the shipbuilding industries, and brought its local content (LC) rules into force to make sure that most of the profits – and jobs– stayed in Brazil. On average, LC stipulations are that at least 70 per cent of components must be Brazilian sourced.
Numbers of OSVs deployed in Brazil – both Brazilian and foreign flagged – were supposed to grow exponentially up until the year 2020, but then came the dramatic fall in the oil price last year and drastic cost-cutting throughout the industry.
Although Mr Lima said he realises that the rapid fall in oil price and the Lava Jato (Car Wash) investigations at Petrobras have also had a strong bearing on what happens to the Brazilian OSV market, he also believes that, after the five tenders that are currently being negotiated – for PSV 3000s, PSV 4500s, AHTS 18000s, AHTS 18000 ROVs (for northeast Brazil) and for AHTS 21000s – foreign-flagged vessel owners will be slightly in the lead on the ABEAM league table. He suggests that, once they bring in new tonnage from overseas and get operating again, the switch will be flipped back.
He told OSJ, “Even though I think we are seeing an anomaly, I can also see that the balance is slowly changing. Some foreign owners have taken their vessels away from Brazil, and many others – with vessels anchored in Guanabara Bay – are thinking of doing the same. But if they leave, where will they go? Rates may be low and the problems at Petrobras are considerable, but rates are also low in other markets around the world, especially in the North Sea, where they are terrible.
Mr Lima added that, in Brazil, until the oil crisis began last year, PSV 3000s were being chartered for US$28,000 and US$29,000, but rates have fallen to around US$23,000 per day. Rates for anchor handlers are also down about 20 per cent to around US$45,000 per day.
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