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    Norwegian firm says market was "better than expected"

    News // March 28, 2002
    Farstad, the Norwegian offshore vessel operator, reports that the market for supply vessels in the North Sea during the 4th quarter was "better than expected".

    This was due to a higher than expected level of demand and a net reduction of tonnage in the North Sea. The demand for supply vessels was for a large part of the quarter on a par with the demand in the 2nd and 3rd quarters, but fell back somewhat towardsthe end of the year.

    Altogether the demand for supply vessels in 2001 was around 3 per cent higher than in 2000. The number of vessels in the North Sea at the end of 2001 was slightly higher than a year ago, says the company.

    The average utilisation ratio for the entire North Sea tonnage was 94% in 2001 compared with 90% in 2000. The average for the 4th quarter was 93%, while it was 95.5%, 97.5% and 90% for the 3rd, 2nd and 1st quarters respectively.

    Farstad says rates on the spot market remained high throughout the period, but fell back somewhat towards the end of the year. This trend continued in January. February has seen an improvement in the market.

    The outlook for the rest of 2002 in the North Sea will continue to depend on the supply of available tonnage on the market, notes Farstad. The expected levels of activity both in and outside the North Sea are expected to result in a good market in both the 2nd and 3rd quarters.

    The relatively large number of vessels still being constructed together with a certain degree of uncertainty regarding the future development of oil prices means that we have more moderate expectations for the 4th quarter and 2003.

    The levels of activity in the markets outside the North Sea (Brazil, West Africa, and The East/Australia) have also remained at a good stable level. We still expect the demand for supply vessels to increase in these markets. New demand for vessel services will to a great extent have to be met by transferring vessels from the North Sea.

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