Broker notes slowdown in rate of vessel orders

News - May 14, 2008

Broker Braemar Seascope Offshore says availability of medium/large PSVs on the North sea spot market tightened during April, and consequently average rate levels increased - for the first quarter of 2008 rates averaged around £11-12,000 but increased to £16-18,000.

"Ironically, rates for large AHTS have gone in the other direction," said the broker in its latest report on the market, "with average rate levels in the £24-27,000 range during April compared to +/- £70,000 during February/March."

"With a handful of newbuild PSV’s due to enter the North Sea market over the next month or so it will be interesting to note if the average rate levels for this sector of the market will be sustainable given the improvement in general weather conditions and the lack of pipelay activity in North West Europe this season," said the company.

Braemar Seascope said a recent influx of new tonnage will to some extent be offset by the recent/impending departure of a significant number of AHTS/PSVs for various medium/long term assignments overseas.

These include the AHT Janus (19,000bhp - Brazil), AHTS Sea Lynx (15,000bhp - Mediterranean), AHTS Northern Comrade (11,140bhp - Russia), AHTS Highland Courage (16,320bhp -Ghana), AHTS Boulder (12,240bhp - Mediterranean), PSV Normand Aurora (P105 - Mediterranean), PSV Normand Flipper (UT745E - Mediterranean) and the PSV Maliviya 30 (UT755L -Mauritania).

Although the oil price has increased to record levels and more high specification drillships/semis continue to be ordered it would seem that the rate of ‘new’ orders in the offshore support vessel sector has slowed significantly over the last month, in Europe at least.

"This is probably no great surprise given lead times and concerns about the market’s ability to absorb an orderbook that, by some estimates, is close to 1,000 units if all the Chinese shipyards are factored in," noted the broker.