March 2007 North Sea Market Report - Offshore Shipbrokers

continued ….
Senergy SS 1 year Jan-08
Senergy JU 1 year Jan-08
Shell Norway SS 4 years + opts Jan-09
Statoil SS Newbuld Drilling rigs - 3 to 10 years Aug-07
Statoil SS 13 wells (1035 days) + 3 well opts Dec-08
Total E&P HDJU/SS Circa 170 days Victoria Field Apr-07
Vermilion Exploration JU/SS 1 Well - Aquitaine Basin Sep-07
SUPPORT VESSELS
March was another excellent month for owners with the majority experiencing good utilisation of their vessels
and buoyant dayrates being earned. It’s certainly beginning to look like the summer is going to be another
scorcher however looking ahead at the longer term, there are some dark clouds starting to form on the
horizon.
At the beginning of the month the AHTS market was reasonably steady with the majority of vessels working
and dayrates around the £50,000 level. By the end of the first week of March the rig move market had gone
slightly quieter with dayrates dropping to the £40,000 level and a number of owners forced to turn to Cargo
work to keep their vessels utilised.
By the middle of the month the market had tightened once again with rates quickly doubling and by the 3 rd
week of the month AHTS rates had reached £95,000. This was short lived however and by the end of March
AHTS rates had once again dropped off to the £40,000 levels where they remain at the time of writing.
The PSV market was once again a far less turbulent affair with rate levels spending the majority of the month
around the £30,000 - £40,000 levels. Looking ahead at April however we are expecting to see in the region
of 10 PSV’s leaving the spot market for term charters which will only leave circa 13 PSV’s to service
charterers needs. With virtually half the fleet leaving in such a short space of time you don’t have to be an
economist to work out the likely effect of such a dramatic swing in the supply / demand equation!
Getting back to the mention of dark clouds on the horizon, though it is now widely accepted that this summer
is looking somewhat tight for PSV availability, this buoyant market is unlikely to last with in the region of 200
newbuild vessels scheduled for delivery worldwide this year alone.
This is in fact just the tip of the iceberg with circa 550-600 newbuild vessels now on order worldwide and
scheduled for delivery between now and 2011.
Though the majority of these vessels are not destined for the North Sea and many are in fact built against
existing requirements, there is no doubt at all that a large number will undoubtedly find their way to the North
Sea.
At a recent conference in London, a leading industry analyst gave their view of the impact of these deliveries
which they expect will cause the worldwide fleet to grow by circa 40% whilst demand is only expected to
grow by circa 6%, even taking into account the rapid growth seen in such regions as China and India.
Of the North Sea demand, one of the leading charterers Statoil spoke of their requirement for the coming few
years and in fact anticipate a reduction from 15000 vessel days to 13000 vessel days, a reduction of some
13%. Given their impending merger with Norsk Hydro there is no doubt at all that we will see further
reductions in vessel requirements from the two biggest Norwegian operators as they benefit from vessel
sharing within each others term fleet.
13 Rubislaw Terrace
Aberdeen AB10 1XE
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aberdeen@offshore-shipbrokers.co.uk
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London E1 6BX
Telephone No +44 (0) 207 3779774
london@offshore-shipbrokers.co.uk