Over-supply concerns growing on back of massive orderbookNews // October 12, 2005
Seascope Offshore is the latest voice to raise concerns about the very large number of newbuilds currently on order.
In its latest monthly report, Seascope Offshore said several shipowners were "voicing their concern" at the North West European orderbook, where there are more than 50 AHTS/PSVs due for delivery in the next 18 months or so.
"There could, of course, be other factors behind it but perhaps this concern contributed to a recent long term fixture of a medium sized PSV being concluded around 10 per cent below the level for a similar ship/duration a couple of months ago," noted Seascope in its latest report on the support vessel market.
According to Seascope, the orderbook in Europe represents around 20 per cent of the existing North Sea supply vessel market which suggests that local demand will have to increase by a similar amount to absorb this extra tonnage or a large proportion of it may have to go overseas to avoid the domestic market undergoing some kind of realignment.
However, the number of vessel’s mobilising overseas has slowed dramatically over the last few years partly because there are so many units being built at local shipyards overseas that, suggests Seascope, have to be absorbed first before charterers look further a field.
"In the Far East/India, there is also a vast amount of tonnage on order (including large anchor handlers) which will presumably have a competitive edge in respect of mob/demob costs over European based vessels for business in Asia / Middle East," noted Seascope, highlighting the fact that in other major markets like Brazil there has been a move over the last few years towards increasing the local content of vessels supporting the offshore industry, which limits the opportunities for European flagged/built tonnage.
"The optimists will point out that the consistently high oil price has led to a building boom in the rig sector and therefore vessel demand will increase as these new units will need to be supported. There are now over 60 units on order with Aker Drilling being the latest to throw their hat into the ring by investing over $1billion in two Semis with delivery set for 2008," the Seascope report concluded.