Westshore comments on anchor handler marketNews // October 26, 2016
In a report on the North Sea market issued earlier this week, broker Westshore noted that there are fewer than 10 anchor handling vessels actively trading on the Norwegian sector and none of them were in work.
"A year ago today three vessels were fixed for the move of Songa Equinox at around £5,000 and we thought it couldn't get much worse," said Westshore. "Although we see average spot rates might have bottomed out last year, the market in general has still deteriorated."
The broker noted that there were 23 AHTS trading out of the Norwegian ports this time last year with around half of them out working.
"Layups are needed to get closer to market balance, but what will really make the difference is quite simply more activity," said the broker. "You can layup every vessel bar one and have one charterer seeking one boat, et voila - market balance, but that's still catastrophic no matter how you slice it."
Westshore said the cost of hiring a rig has dropped 70 per cent since 2014 and the cost of drilling a well has almost halved depending on which stats you look at. The question is how long before that results in more rigs on hire and more wells being drilled?