French orders to foreign shipyards

The
offshore
market
in 1999
Allow us to first salute the end of the 20th century, which
witnessed the birth of the offshore industry in its first half,
with the first underwater oil production operations in the
bayous of Louisiana and on the Caspian Sea port of Baku.
The exploration of oil fields existing beneath the ocean floor
has been growing continually for forty years now, in spite
of several oil shocks and crises in the offshore industry
resulting from these shocks. In the sixties and seventies,
this activity gave rise to widespread technical and human
activities that ended in man’s freedom from the limitations
of the continental plateau. The offshore sector proved to be
extremely capital intensive, requiring colossal investments
that resulted in such extraordinary successes as the harnessing
of North Sea and deepwater Brazilian oil resources.
On oil markets, the beginning of 1999 confirmed the
downward trend evident throughout 1998. Still, the new
century appears to be more promising. At the end of the
first quarter of 1999, the barrel of Brent was at around
$10, reaching its lowest level for thirty years. Since that
time, prices have increased to well over $20 per barrel.
As a result, in 2000 oil companies will probably increase
their exploration budgets by an average of 15%, basing
their estimates on a level of $12 to 15 per barrel. The real
effect of these actions on the offshore market will depend
on how much money is actually spent on investment.
Expenditures could be delayed or postponed because of
too great instability in oil prices during the first half of 2000.
The oil sector pursued its restructuring trend in 1999 with
the particularly visible BP Amoco/Arco and TotalFina/Elf
mergers. In a nearly corollary manner, the offshore sector
experienced new company concentrations. The receding
of stock prices of offshore companies also furthered this
movement. Nonetheless, it should be noted that some
companies maintained their current levels or even grew
in size through positive expectations for the future or
anticipations of mergers.
In general, the depression experienced in offshore markets
and consequently, the release onto the market of units -
multipurpose support vessels, supply ships, drilling vessels,
repair and construction vessels and others - was reinforced
by restructuring in the oil and offshore sectors. This also
caused restructuring in the use of hired equipment and
naturally in charters as well.
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