North Sea spot market remains volatile says brokerNews // December 13, 2005
Broker Seascope Offshore says the average spot market rates for most classes of vessels fell back in November relative to October but then bounced back with anchor handlers being chartered routinely in the £30,000-40,000 range.
"As always the spot market is characterised by its volatility and this is unlikely to change in the foreseeable future," said Seascope in its latest monthly report on the market, released last week.
"There has been a high volume of medium/long term chartering over the last month or so and with several requirements outstanding the general feeling amongst vessel owners is one of optimism that the current momentum will continue for some while yet," said Seascope Offshore.
"So far this year the market has been able to absorb the newbuilding tonnage delivered in Europe/Brazil and the Far East without any problem due to high demand worldwide. Whether this impressive trend can continue from 2006–2008 as a high number of vessels are delivered remains to be seen but as long as the fundamental factors such as the oil price stay positive then vessel owners will believe that it can," said the company.
However, Seascope Offshore said the decision by the Government in the UK to raise the supplementary tax paid by oil companies producing in the UK sector to 20 per cent (raising total corporation tax payments to 50 per cent) "has the propensity to dent confidence and hit investment."
As the UK sector is effectively in competition with other offshore regions for oil company funds this move has gone down like a lead balloon with UKOOA, who warn that the second major change to the tax regime in three years could deter investment in new fields and make older fields less attractive for increased recovery thereby accelerating decommissioning plans for platforms/pipelines.