Broker reflects on concerns about North Sea marketNews // May 30, 2014
Fearnley Offshore Supply says the market for offshore support vessels in the North sea "has not developed nearly as positively as most market players had predicted" in the last 2-3 months.
The broker said rates have come down quite considerably. "The latest spot fixtures in Norway are as low as NKr 85,000-100,000 per day for a large, modern, sophisticated PSVs," said the broker. "Statoil has not declared all of the options it had on mid-term charters, clearly indicating that that the market for PSVs may not show the forecasted strength during the summer of 2014."
In the last week of May 2014 several PSVs and AHTS vessel mobilized for the Russian Arctic. Fearnley Offshore Supply said it expects this to have more of a positive impact on the market for AHTS vessels than for PSVs – simply because more than twice as many AHTS than PSVs were pulled out of the spot market. Several vessels are now also mobilizing for pre-committed seasonal subsea support work.
"The term market in the North Sea for PSVs is steady with firm rates not subject to great variations," said the broker in its latest market report. "Large/modern vessels have been chartered at rates varying between NKr 150,000 and NKr 220,000 depending on size and sophistication of the vessel as well as charter periods.
"At the end of May 2014, there were few outstanding long-term enquiries."
The broker noted that although vessels have left the North Sea for Brazil and other markets, other vessels have been arriving there, hoping to benefit from the expected market uplift.
"A number of rigs are rolling off contracts, and some newbuilds with delivery scheduled the next year do not have new commitments in place," said the company. "For the global floater fleet we expect additional units to be stacked. The jack-up market is also expected to be hit by challenges."
"In the North Sea, we see rigs coming off contracts in the next 12-18 months with few prospects for new commitments. Some of the units may face idle time and need to be
relocated to other areas."