Worldwide production, E&P and subsea activity all increasing says FearnleysNews // November 11, 2005
Broker Fearnleys Offshore Supply says production, exploration and subsea construction activity is "soaring" in almost every region of the world, and vessel demand outweighs supply in every market.
In the latest issue of Fearnley's Supply & Special Ships report, the broker said Canadian drilling activity is once again on the go with the jack-up Gorilla VI commencing a six plus six month programme that will include wells for Husky and EnCana. The last available Canadian AHTS Venture Sea secured the support work and will enjoy a minimum of six months at what is believed to be very attractive terms.
"Further South, Hurricane Wilma was only one of many hurricanes to pass through the US Gulf this summer. With Katrina and Rita wreaking havoc on oil and gas fields and disrupting exploration and production, owners are witnessing a level of demand greater than ever before," said Fearnleys, noting that day rates have skyrocketed for all types of marine equipment and charterers are searching frantically to locate available marine units.
Extensive pipeline and platform repair works are attracting foreign flagged construction vessels to the US Gulf, and the North Sea and West Africa charterers can expect fierce competition for these vessels in the foreseeable future, said Fearnleys.
Trinidad has once again managed to escape hurricane damage and drilling activity continues as planned. Aleutian Key will arrive in December to kick off a one year campaign for EOG Resources and British Gas. The rig will be supported by the sister vessels Boa Queen and Boa King.
"In line with our previous predictions, Tunisia, Libya, Israel and Egypt have all contributed to increased vessel activity in the Mediterranean. An additional four to six vessels are expected to head for the Med in the next couple of months to start term commitments," said Fearnleys. "Day rates are comparable to those earned in West Africa and in many owners' opinions, the operational challenges are fewer."
Vessel owners with assets along the West African coast are also reaping the benefits of increased demand, and day rates there have caught up with other regions and very few vessels leave the region to pursue opportunities elsewhere. "Anchor handlers are earning two Dollars per bhp and straight supply vessels earn close to six Dollars per deadweight ton," noted the broker.
Fearnleys said the Southeast Asian market continues its upward climb. Day rates for medium-sized anchor handlers have reached 2-2.5 Dollar per bhp and, as an example, 1970s-built UT 704s are reportedly being fixed for spot work in the mid to high teens. Utilization is at 100 per cent, with demand for vessels greatly surpassing supply. "New deliveries from mainly Singaporean and Chinese yards seem to have little, if any,
impact on the Southeast Asian market. Of the latest newbuilds to deliver half have left the region for contracts in other areas and the other half secure work in 'new' markets within the region, neither significantly impacting the supply and demand situation," said Fearnleys.
"As a whole," concluded the broker, "the international market seems to be closing in on a level of activity where owners can feel comfortable with the medium term outlook."