Strong confidence in the offshore vessel market has seen orders placed in the previous market upcycle re-activated to take advantage of renewed investor interest, according to a new report from Maritime Strategies International (MSI).
In its third quarter offshore support vessel (OSV) sector report MSI notes that of the 17 vessels delivered to date in 2024, 13 were ordered more than a decade ago, leaving just over 50 vessels still pending from the previous upcycle, some of which are anticipated to be taken up by operators as newbuild options in the coming years.
Newbuild orders have been relatively few since 2015 with just 77 vessels ordered between 2015 and 2023 followed by a small recovery in 2023 when 29 AHTS and nine PSVs were ordered.
This trend is partially due to the oil and gas industry’s struggle to recover from the 2015 downturn prior to the impact of Covid-19 in 2020-2022. Some owners are unwilling to spend capex on new assets, with some investors turning away from oil and gas investments to focus on renewables and greener causes.
For those committed to conventional energy markets, these previously delayed or abandoned vessels provide an option to be utilized before investors consider ordering newbuilds with similar specifications.
In addition no OSVs have been removed from the fleet since the last quarter, suggesting that owners continue to retain vessels in service. This trend reflects an ongoing reluctance to retire older tonnage despite the evolving market landscape.
“This pattern underscores the long tail of the previous upcycle, where a sudden increase in demand was met with a flurry of newbuild contracts, many of which experienced prolonged delays due to market volatility.
"This trend is indicative of a strategic pivot by operators and investors toward markets with robust exploration and production activity, where the demand for OSVs is more immediate and where economic conditions have supported offshore developments,” said Markets Todd Jensen, MSI Senior Analyst, Offshore Energy.