Oil price slump already affecting West African marketNews // January 16, 2015
Broker Chart Shipping says the dramatic developments in the oil and gas industry in December had a direct and rapid impact on the OSV market in Africa.
The price of Brent crude plummeted in December, to finish at around US$55 per barrel, leading to a number of explorers to cancel or postpone imminent projects.
"In a few notable cases, projects that were already in play were cancelled with rigs and vessels early terminated," said the broker, citing Statoil’s charter of the drillship Stena Carron in Angola.
"In this environment, there has been a growing concern amongst both oil companies and vessel owners about the market in 2015, with both bracing themselves for a potential freefall in revenues.
"The PSV market was particularly affected, with availability continuing to rise in December to significant levels. The average availability figure for December was 16.25, up from 13.5 units in November.
"This is a startling change in the landscape when compared to December 2013, when average PSV availability was just under 2.5 units.
"Day rates, as can be expected, slid further, with medium sized PSVs fixed at below US$18,000 for both spot and term, although some owners managed to get numbers in the low 20s depending on the particular circumstance and vessel specification."
Chart Shipping said large PSVs remained relatively stable for spot rates, but saw a big reduction in the term rates as owners competed to lock away vessels in order to get them through the tough times anticipated ahead.