OSV Market In Complete Turnaround of Fortunes

The OSV (Offshore Support Vessel) is in a state of complete recovery from the lows of the past couple of years. In its latest weekly report, shipbroker Intermodal said that “the OSV market has turned from an all-time low to great earnings in the past 2 years, as investments in the North Sea’s Oil and Gas industry are expected to reach an all-time high”.

According to Intermodal’s offshore broker, Mr. George Vitsos, “several key projects are getting authorized in Norway and the UK, with the biggest amongst them being Rosebank, the Cambo oil field, and Clair Phase III (Clair South), the approval of which could set a new all-time high record for offshore investments in 2024. In Norway, the temporary tax regime has emboldened several investments on the Norwegian Continental Shelf, which are set to surpass the total investments made in 2013, with a record-breaking amount of $21bn. In the UK, offshore and gas investments are not on the same level as in the NCS, as it is estimated that in 2023, investments will be around 75% lower compared to the all-time high of $18Bn achieved in 2013. But this is set to change. In 2024, there can be up to 14 new Oil and Gas field projects that, if given the green light, will mark this year as the one with the highest number of projects ever accredited in the UK North Sea”.

Intermodal’s analyst added that “however, there is a slight problem. There are not enough ships. The size of the current fleet is not adequate to serve and support the offshore investments, as the extremely low rates of the past have led to increased scrapping and lay-up levels. On top of that, the current newbuilding activity on the offshore segment has hit rock bottom, going from 33% of the fleet in 2014 to a present 3%, due to the increased N/B prices, lack of financing, shortage in slot availability and considerable construction time. Not so long ago, the sole available OSV in the Norwegian sea was fixed to perform a spot job at approx. $30,000/day, leaving the region once again sold-out. Moreover, 6 x large-sized PSVs are set to depart and work internationally, adding to the 10 x PSVs that already left the region during the past months, leaving the area with fewer than 170 vessels”, Mr. Vitsos said.

“In spite of the fact that the OSV industry has recovered from an arduous decade, there are still great challenges ahead, especially for the shipowners, who are now called to cover the increasing demand for offshore tonnage as the investments in the Oil and Gas industry are soaring”, Intermodal’s analyst concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide