Offshore developments, decommissioning tighten subsea vessel markets

Deepwater oil and gas projects, particularly in Latin America, along with developments in shallow water areas such as Norway and southeast Asia, are driving demand for offshore support vessels (OSVs).

In previous market upturns, rising demand has encouraged owners to invest in newbuilds in considerable numbers, many without any long-term contracts, but this upcycle is different.

Strategic Offshore Research managing director Ian McIntosh said there is very little speculative newbuildings as finance is difficult to secure, and there is a shortage of shipyard slots and mechanical equipment.

He provided insights into the global subsea market during Riviera’s Offshore Support Journal Subsea Conference, held in London, UK, on 3 February.

Mr McIntosh said Brazil and Norway are hot markets for subsea support vessels due to the number of oil and gas developments underway and planned for the next few years.

There has been a shift in quality vessels into the Middle East and southeast Asian markets, leaving shortages in the North Sea and offshore Latin America and West Africa.

This comes as more opportunities are emerging for OSVs, such as supporting decommissioning of oil and gas infrastructure, particularly in the UK sector and in the Gulf of Mexico (Gulf of America), but also in Thailand and Australia.

Mr McIntosh expects strong demand for vessels to support the decommissioning sector for at least seven years, primarily in the UK.