World Wide Supply sees challenging market in 2015/2016 - expresses concern about Brazilian contractsCompany News // August 28, 2015
The Board of Directors of World Wide Supply, which operates a fleet of modern PSVs, say they expect a challenging market for the rest of 2015 and 2016.
Announcing results for the second quarter, the company said the four vessels it has on charter with Petrobras have performed "very well" in the first half year 2015 with an average utilization of 96.35 per cent including off-hire with 12 days in June for one of the vessels due to a collision (the vessel was on loss of hire insurance in July until 17 August and is now back on hire).
Four of the vessels are employed on long term contracts with Petrobras until June 2018. The company highlighted the fact that the contracts are based on yearly renewal of a Certificate of Charter Authorization (CAA) and AIT (Registration Certificate of temporary foreign Vessel), which provides the license to operate in Brazilian waters with foreign flag.
"Brazilian flagged vessels are in a position to use their rights according to Brazilian law to block circulation of foreign flagged vessels," said World Wide Supply. "These blocking rights are used at the time of renewal of the CAA and AIT certificates. Without the certificates the foreign flagged vessels are not allowed to operate in Brazilian waters.
"A non-renewal of the CAA and AIT certificates due to blocking can lead to a Petrobras cancellation of the contracts. Historically Petrobras has lifted all blocking situations related to all long term foreign contracts by employing the Brazilian flagged vessels."
Currently, two of World Wide Supply's vessels are blocked but are on hire according to contract.
World Wide Supply said it expects the situation to be clarified in September 2015 and is hoping that the block will be lifted and CAA and AIT certificates renewed.
The remaining two vessels are working in the spot market in the North Sea, but will be laid up at the beginning of September. The company said cashflow from the four vessels covers financial expenses and lay up costs for the two other vessels.