Clarksons Research is taking a positive view on offshore vessel markets, although the UK company believes it is too early to assess the full impact of Russia’s war in Ukraine.
Managing director Stephen Gordon said offshore markets are “making encouraging progress”.
“Despite the huge geopolitical and economic uncertainty, our latest review profiles encouraging progress for offshore oil and gas and a continuation of offshore wind’s rapid growth,” he added. “Overall, cautious optimism.”
The Clarksons offshore index of rig, offshore support vessel (OSV) and subsea ship rates has risen 32% since the start of 2021, hitting levels last seen in 2015.
Gordon puts the recovery down to higher oil prices, increasing offshore activity and the impact on fleet supply of consolidation, restructuring, limited newbuildings and the ongoing removal of older tonnage.
“Overall, sentiment is positive for further market improvements. Offshore wind meanwhile, continued its rapid and exciting growth phase, with ongoing newbuild investment and high peak-season vessel utilisation,” Gordon said.
Referring to Ukraine, he added: “For the moment, it is too early to understand the full impact on the world economy and overall energy balances.”
On top of the Ukraine conflict, there are new Chinese Covid-19 lockdowns and speculation that US and Middle East oil production will increase, the researcher pointed out.
Offshore activity may benefit from diversification of energy supply, Clarksons Research believes.
And concerns around the security of supply may free investment previously held back due to a focus on decarbonisation or direct shareholder returns, Gordon argues.
Offshore oil production is expected to grow by 3.5% in 2022 to 25.4m barrels per day (bpd), 27% of global oil output.
Spending to rise
Total capital commitments for new oil and gas project are projected to reach $86bn in 2022, a little above 2021 and double the spend in 2020.
And global exploration and production spending is expected to grow by 16% this year.
OSV markets had a positive 2021, and demand rose by 14% from 2020.
Clarksons’ OSV rate index added 28% over the year.
The fleet continues to shrink, with ship removals up 75% in 2021 through scrapping or vessels leaving the sector.
Fundamentals firing
“Much of the improvement has come due to fundamental improvements in demand,” Gordon said.
Subsea support vessel demand and rates improved markedly across the mid-2021 peak season, and despite first-quarter seasonal softness, sentiment is positive for 2022.
Global multipurpose support vessel utilisation is estimated to have reached a peak of 80% in September 2021, the highest for six years.
Rates assessments were also up, by as much as 40% depending on vessel type.
