The offshore vessel market is facing a "long hard winter" as falling activity will drive further layups, says broker Westshore.
The Norway based broker says that around 60 offshore support vessels are now laid up in the North Sea - before Vroon Offshore Services today announced it is planning to lay-up 12 vessels, "as a direct result of the ongoing slump in offshore oil and gas activities"
"As winter looms, even fewer opportunities are likely to present themselves so, logically, the number of layups is likely to grow even further," said Westshore in its latest report on the market, released yesterday.
"Nearly all the North Sea owners have taken the hit and put vessels into lay up now. One of the last to fall was Viking Supply, this month announcing it would be taking three of its PSVs out of the market, Idun, Nanna and Frigg Viking."
"The current market conditions, which have created low vessel-utilization levels, require us to substantially reduce operational costs on unemployed vessels," says Vroon. Solstad is also pushing ahead with its plans to reduce its fleet by 10 by the end of the year.
Westshore says grouping layups can be cost effective; by having a number of vessels laid up in one place a skeleton crew can be used to maintain them all, instead of one crew for each vessel.
With costs varying at different ports, this has led to increased interest for berths in the Mediterranean, where one port said that requests for quotes to layup rigs and vessels had come flooding in. The pain is expected to continue as tendering activity has remained limited, says Westshore.
"Ongoing West African tenders were met with a barrage of offers, in one case over 100 vessel bids were submitted for one tender," says the Broker. "Competition was predictably fierce with the victor expected to be lucky if they break even. Vessel contracts being terminated in Brazil and poor activity in other regions are compounding the situation in the North Sea.
"Statoil has laid up yet another rig (Songa Trym, expected to remain laid up until early 2016) and new semisubmersible Bollsta Dolphin, which should have arrived this year to commence its North Sea sector Chevron contract is now reportedly delayed. All the signs point to a long hard winter for the offshore sector."
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