Solstad comments on the North Sea market - sees plenty of construction work aheadNews // March 7, 2006
Solstad Offshore says the market in the North Sea in 2005 was "very tight" with the highest activity in the last three quarters of the year, due mainly to a high level of development activity and an increase in the number of drilling rigs operating in the area, and says it anticipates a high level of activity in 2006 and beyond.
In a commentary published with its latest financial results, Solstad said it foresees an increasing need for modern tonnage, particularly in West Africa, Brazil, the Gulf of Mexico, Mediterranean and the Asia.
"In 2006, this high level of activity is expected to continue – not only in the North Sea but also internationally. However, Solstad have more vessels than usual in yard for conversion, installation of new equipment or planned periodic maintenance and this will impact the first quarter of 2006," noted the company.
"In the long-term the company anticipates that the continued high oil price will result in increased activity. The falling reserve replacement ratio for oil, in recent years combined with improved revenues for the oil and oil service companies, will lead to a greater demand for exploration and development services," said Solstad.
"Geographically, it is anticipated that there will be increased activity in all areas, resulting in a positive demand for vessels. Increased investments in subsea developments will ensure high activity in the construction market for many years to come. The requirement for AHTS services will also increase due to the large number of new drilling rigs on the market."