The offshore oil and gas ship market is in sight of its best-ever rates, according to Clarksons Research.
The UK shipbroking group’s offshore index, which tracks day rates for rig, offshore support vessels and subsea units, has risen by a further 27% to a multi-year high of 106 points, the best since 2008.
“Our projections suggest the … index will reach all-time highs in 2024,” managing director Steve Gordon said.
He is projecting oil and gas project investment to hit $125bn this year.
Rig, OSV and subsea markets remain very strong, with rates now higher than 2014 levels in the majority of sectors and regions, Gordon pointed out.
Activity remains particularly robust in the Middle East, Brazil and West Africa, Clarksons Research believes.
Supply side constraints continue, with limited newbuilding orders and ageing fleet dynamics.
Demand growth continued, with the number of active anchor-handling tug supply units and supply ships rising to 2,452 by the end of 2023, up 26% from 2020. Utilisation firmed to 73%.
Clarksons’ OSV rate index jumped by a further 30% to stand at 180 points at the end of 2023, a 15-year high.
Lack of new ships
“Given the short orderbook and the increased time/cost intensity of reactivating long-term layups, previous market peaks are in sight,” Gordon said.
Constraints in fleet supply continue to support tightened markets, following rebalancing during a downturn stretching from 2014 to 2021.
Interest in newbuildings has begun to pick up and 2023 saw the first high-spec orders for several years, while wind-related orders continued to lend some support to yards, Gordon said.
“However, amid challenges securing finance, high newbuild pricing, uncertainty surrounding technology and residual value concerns, the expected uptick in ordering remains likely to filter through gradually,” he cautioned.
Risks remain, notably the possibility of a lower oil price environment and subsequent impacts on offshore project sanctioning and vessel demand.
“Nonetheless, against the backdrop of a positive project investment environment, and fleet supply constraints, offshore market strength appears likely to sustain for sometime yet,” Gordon said.
