Demand for OSVs has risen substantially as oil prices, at more than US$120/barrel, are at a seven-year high and energy companies boost capital expenditure.
Offshore drilling rig and OSV utilisations are climbing and dayrates are rising, but so is operating expenditure (opex) for owners, delegates heard at Riviera Maritime Media’s Annual Offshore Support Journal Conference, Awards and Exhibition, London, UK, 15 June 2022.
Seacor Marine Holdings president, chief executive and director John Gellert spoke about the challenges and opportunities in the growing sector, which is recovering from the previous seven-year downturn and the global Covid pandemic.
“The pandemic is largely behind us and there has been a change in client requirements,” said Mr Gellert. “Demand is rising and prices are rebounding, but opex costs are higher and there are shortages in the labour market.”
Seacor is overcoming the challenges by keeping full utilisation of the fleet and raising seafarer’s wages to retain them, because “it is difficult to find qualified people and it takes time to train and certify them.”
Seacor is also fitting hybrid propulsion and energy storage systems on its vessels to reduce fuel costs and emissions, Mr Gellert added.
Rystad Energy senior partner and deputy chief executive Lars Eirik Nicolaisen provided an indepth analysis of the energy sector and the effect of rising oil prices on the global offshore rig and OSV market.
Increased oil prices have led to a resurgence in offshore exploration and development projects, while Russia’s invasion of Ukraine and the resulting geopolitical reaction is driving demand for renewable energy.
“There is an energy crunch and a scramble for oil and gas,” said Mr Nicolaisen. “There is also a renewed focus on renewables in the energy transition.”
Europe is attempting to minimise Russian oil and gas exports by searching for LNG, piped gas and oil from other producers in the Middle East, Americas and Asia.
Westwood Global Energy Group head of offshore energy services and director Thom Payne analysed the current worldwide offshore markets, starting with project investment.
He forecast there would be 76 final investment decisions on projects covering a total capital expenditure of US$75Bn in 2022. This is compared with just 48 projects (US$14Bn) in 2020 and 68 projects (US$41Bn) in 2021.
Increasing energy company investment is driving mobile drilling rig utilisation and charter rates higher with semi-submersible drilling rigs being fixed for more than US$350,000/day versus below US$200,000/day in 2020.
This increases demand for OSVs, reactivation of laid-up vessels and raises dayrates, said Mr Payne.
VesselsValue head of offshore Robert Day said these fundamentals are driving up the value of OSVs, but reducing the number of sales candidates. He said values had already risen by 20% for platform supply vessels and anchor handlers this year and would continue to climb over the rest of 2022.