Derrick Offshore highlights further subsea vessel activityNews // January 21, 2013
As UK-based broker Derrick Offshore highlighted recently, a number of contracts for subsea vessels have been concluded in recent weeks.
Olympic Shipping, Rem Offshore, Island Offshore and Siem Offshore all announced major contracts, totaling over US$500 million just prior to the end of 2012.
Island Offshore and Olympic Shipping both announced contracts for newbuild vessels in December with Olympic declaring an option for a second MT 6022 MkII at Kleven whilst Island placed an order for an SX121 at Ulstein yard. The Island vessel is the same design as two other vessels in their fleet, Island Constructor and Island Intervention, although the newbuild will be slightly longer. No financials were released for these deals, but the first MT 6022 MkII is costing Olympic NKr 600 million (US$105 million) whilst recently GC Rieber placed an order for an SX121 at Ulstein Verft at a cost of NKr 800 million (US$145 million). Both orders are for large subsea construction vessels, with both units arriving with 250 tonne cranes and around 100 berths.
Derrick Offshore said Rem Offshore finally revealed the identity of the charterer for its second newbuild MT 6022 which is being built once again at Kleven (in fact, this will be their eighth vessel from Kleven). DeepOcean is the company taking the vessel for eight years at a total cost of NKr 1 billion, which equates to roughly US$60,000 per day. "They had been heavily rumoured to be the charterer of the vessel and had been looking for a vessel with similar specifications so the deal does not come at a great surprise although the length of the charter is longer than most," said Derrick Offshore.
"A deal which does come as a bit of a surprise is the purchase of Seven Sisters by Subsea 7 from Siem Offshore at a value of US$84 million," said Dan Quarm, a broker at Derrick Offshore. "This MT 6016L design unit had been on charter to Subsea 7 since its delivery from Kleven in June 2008 with the charter due to come to an end in June 2013. Subsea 7 obviously sought to retain control of the vessel after this period ended and Siem Offshore would have been keen to get the cash to help fund their recent newbuilding orders. They gained approximately US$28 million from the sale after repayment of mortgage debt of US$38 million."
"We expect that 2013 will see the trend of newbuild orders continue, but foresee that smaller, multi-role vessels may be more popular as smaller contractors and owners will look to cash in on the continued growth in the subsea sector," Mr Quarm said.
"Smaller vessels will also be able to perform work in the windfarm sector when work is required there and need to be cost effective because of the price sensitivity in the renewables market. For the most part we expect that there will be few orders for larger vessels in 2013.
"Recent announcements by some of the major oil companies have indicated that offshore, and in particular deepwater E&P, still remains a priority for them due to the consistently high oil price. Any shocks to the market could still have a dramatic effect on the industry as shown by the Macondo disaster in 2010, though the Gulf market has now made a decent recovery in terms of rates and activity."