The well intervention market is a niche one, with only a few main players – including Helix/Well Ops, Island Offshore, AKOFS Offshore and Siem Offshore – and only three key geographical regions; Northwest Europe, South America and the US Gulf of Mexico.
Unsurprisingly then, the fleet operates in regions with high numbers of installed subsea wells, particularly those with aging installations.
Regions seen with potential developing well intervention markets include West Africa and Australia.
The fleet is a varied one, with lines sometimes blurred between drilling rigs, heavy well intervention units, light well intervention units, and jack-ups kitted out with modular intervention kits.
IHS Markit categorizes all intervention units as light well intervention vessels, with the following definition:
Purpose-built or converted to perform well work, such as riser or riserless well intervention, top hole drilling, and well plug and abandonment. In addition to these main functions, some units may also be capable of doing subsea installation, construction, and survey work.
IHS Markit currently tracks a fleet size of 20 well intervention vessels within its ConstructionVesselBase database, with the fleet mainly located in Northwest Europe (nine), US Gulf of Mexico (four) and South America (four), with the remaining vessels located in the APAC/West Africa regions.
FTAI Ocean’s DP3 subsea construction vessel Pride is also expected to join the fleet in 2021, after Osbit was contracted last year to design and construct a tower system which will enable Pride to undertake riserless and riser-based well intervention and plug and abandonment (P&A) operations in depths of up to 1,500 meters of water.
Pride is expected to enter the well intervention services market upon the installation of the tower in the second quarter of 2021.
Newbuild semi well intervention unit Etesco Interventor is also still yet to be delivered from the Dalian yard, China, after Petrobras and Etesco reached an agreement to cancel the charter of the unit in 2017, bringing the total potential fleet size to 22 vessels, if there are no retirements.
| Vessel name | Hull shape | Delivery year | Conversion year |
|---|---|---|---|
| AKOFS Seafarer | Ship | 2010 | - |
| Derwent | Semi | 2013 | - |
| Energy Endeavour | Jackup | 1982 | 2018 |
| Etesco Interventor | Semi | 2020 | - |
| Fugro Synergy | Ship | 2009 | - |
| Island Constructor | Ship | 2008 | - |
| Island Frontier | Ship | 2004 | - |
| Island Performer | Ship | 2014 | - |
| Island Wellserver | Ship | 2008 | - |
| Norshore Atlantic | Ship | 2014 | - |
| Q4000 | Semi | 2002 | - |
| Q5000 | Semi | 2015 | - |
| Q7000 | Semi | 2019 | - |
| Seawell | Ship | 1987 | - |
| Siem Helix 1 | Ship | 2016 | - |
| Siem Heilx 2 | Ship | 2016 | - |
| Skandi Constrctor | Ship | 2009 | - |
| Skandi Santos | Ship | 2009 | - |
| Uncle John | Semi | 1977 | - |
| Well Enhancer | Ship | 2009 | - |
| Pride | Ship | 2014 | 2021 |
| Aker Wayfarer | Ship | 2019 | - |
| Data from ConstructionVesselBase |
In recent years, the LWI fleet, like so many other segments, has struggled with the downturn in oil and gas.
There are few long-term contracts available in this market, with only Petrobras and Equinor offering the security of a long-term charter. Hence, the market is reliant upon securing seasonal shorter-term work and tends to be one of the first to be affected in terms of rates and utilization. Data from ConstructionVesselBase shows that only six LWI vessels are on or about to start long-term contracts.
While some of the ship-shaped units are able to compete in the subsea construction or diving market during lean times, some of the larger semisubmersible units are too niche to find employment elsewhere. The semisubmersible units also face stiff competition from a struggling rigs market. Prior to the Covid-19 pandemic, 2020 finally promised some very modest rate increases and a stabilizing market, after a protracted recovery period.
| Year | Not working | Total supply | Utilization |
|---|---|---|---|
| 2016 | 3617 | 5965 | 39% |
| 2017 | 3299 | 6163 | 46% |
| 2018 | 2849 | 6535 | 56% |
| 2019 | 2489 | 6623 | 62% |
| Q1 2020 | 945 | 1729 | 45% |
| Total | 13199 | 27015 | 51% |
| Data from ConstructionVesselBase |
The LWI market has been a notoriously difficult market for new entrants, with only a limited market, clients, and regions, and there have been casualties along the way. The aforementioned Etesco Interventor remains at the Dalian yard. At the same time, the PaxOcean yard also ended up with newbuild semisubmersible Derwent in 2014, following the termination of a shipbuilding contract with Hallin Marine. To date, the vessel is yet to find a buyer, or work. Meanwhile, the Skandi Constructor, which started out life as Marine Subsea’s Sarah, and is now owned by DOF Subsea, has spent most of its recent working life as a walk-to-work vessel in the wind market, despite still being equipped with a tower on board.
Helix’s semisubmersible Q7000, originally scheduled for delivery in 2017, was finally delivered from the yard in November 2019, after securing its first scope of work in Nigeria, West Africa, which it started in January 2020.
However, the unit is now another maritime victim of Covid-19 and (at the time of writing) was warm stacked while discussions with clients about future work for later this year remain ongoing.
The outlook for the LWI vessel market will mainly rest on the oil price and the subsequent decisions made by operators.
Unlike subsea construction vessels, there are few other markets for these vessels to seek refuge in, and the semisubmersible units, in particular, may struggle in the jostle to find work against the rig market.
However, one area in which we have seen growth for these units is the decommissioning market. In 2019, the global LWI fleet carried out 680 days of decommissioning/removal work, compared to 340 days in 2018 and 124 days in 2017 – and this is an area IHS Markit would expect continued growth in, particularly with the growing decommissioning market in the North Sea.