Farstad says oil price has recovered, but OSV market hasn'tCompany News // May 13, 2016
Farstad Shipping in Norway had a positive result in the first quarter of 2016, partly as a result of currency gains, but does not expect a recovery in the OSV market in the short term.
"Even though we have experienced a recovery of the oil price during first quarter, there has been no improvement
in the fundamentals for the offshore oil services industry. Market conditions are still challenged by declining activity, and the ongoing cost reduction programmes at oil companies," it said in statements about its first quarter.
"All regions and markets are characterised by unsustainable rate levels resulting in an increasing number of offshore service vessels being laid up. There is still considerable uncertainty as to how long it will take before the offshore activity recovers. And when it recovers, supply vessel owners will face the challenge of oversupply."
As it noted, despite the fact that contracting activity for new vessels has all but stopped, there are still a significant number of offshore vessels on order.
The company has implemented an extensive cost saving programme, and has reduced its operating costs. As of the time of writing, 15 of the group’s vessels were in lay-up (fully or partly).