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    Norwegian operator comments on worldwide market

    Contracts, Tenders and Rates // November 7, 2003
    Norwegian offshore operator Farstad says demand for supply vessels in the North Sea has decreased during the autumn and was approximately 5 per cent lower in the 3rd quarter than for the corresponding period in 2002. In addition, noted the company, therehas been a change from term to spot employment.

    The number of term contracts during the 3rd quarter is much reduced compared to the 3rd quarter in 2002. As a consequence the rate level in the spot market has been very low. The large number of vessels delivered during the year has not resulted in an increase in the number of vessels in the North Sea, but this has not prevented the average utilization ratio for the North Sea from falling below 90 per cent, which is much lower than for the same period last year.

    "It is not expected that the 4th quarter this year and the 1st quarter next year will show an improvement in the rate level," noted Farstad. "The development later in 2004 will depend on the activity in the North Sea and the time needed for the markets outside the North Sea to absorb the surplus tonnage."

    In Australia and the Far East, said Farstad, the level of activity has remained the same as for 2002. The activity during the autumn/winter is expected to be lower. Further development in this region is more uncertain. Brazil, and in particular West Africa, will still require additional tonnage. Activity in these and other markets outside the North Sea still gives reason to hope for a lift in the rates in the North Sea market in the second quarter of 2004, Farstad concluded.

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