Clarksons review highlights challenging nature of the marketPublications // April 2, 2015
A new report from Clarkson Research describes the latest market situation and outlook faced by the offshore industry.
According to Clarkson Research, “a market downturn that was gathering pace six months ago, has since accelerated into a severely challenged outlook” with pressures across all of the major offshore vessel sectors.
With a 50 per cent oil price change, Clarkson Research estimate that the E&P spending of oil companies with an offshore focus will be down between 15 per cent to 20 per cent year on year in 2015 and, while this is less aggressive than the cutbacks to onshore un-conventional spending, it significantly outstrips the pull back of oil companies in 2009.
Clarkson Research says utilisation in the rig market has dropped from 96 per cent to 87 per cent in the past six months with day rates for Ultra Deep units dropping from a peak of US$600,000 per day to under US$350,000 per day today.
In the offshore support vessel (OSV) sector, day rates and prices are also declining and while the orderbook is more limited in relative terms to that in the jack-up and 'floater' sectors at 11 per cent of the fleet, there remains a steady flow of large platform supply vessels (PSVs) slated to enter the market.
A record subsea industry backlog has begun to reduce but still offers some protection in the short term for operators in this market.
For suppliers and yards, the report warns that managing the potential for delay, re-negotiation and cancellation of the orderbook will be important and that prices may need to drop to encourage new waves of ordering.
While the report does highlight a number of opportunities (such as liftboats) and sectors or regions that seem more insulated, tough conditions are expected for most market participants.
Essential reading for all owners, financiers, operators, insurers, suppliers, class societies and flag states you can order at the Clarkson Research webshop:
For the table of contents, see: http://www.crsl.com/samples/OROK_Sample(1).pdf