Clarksons Platou analyst Turner Holm gave the offshore industry a pep talk Monday afternoon, promising that good times are ahead for the lagging sector.
Holm told attendees at UK broker's Oil Services Seminar in Houston Monday afternoon that offshore was on the cusp of a demand-led recovery, thanks to rising rig counts and utilization rates for the largest OSVs, plus surging spot and term rates in the North Sea.
“[Last year, I said] sell your house, sell your car and buy yourself and OSV," he said. "I hope you bought three. Why? Because it’s never going to be as cheap again as it has been in the last 12 months.
“Finally, it’s coming. I know it’s been tough over the last five years, I know a lot of people are skeptical, but it’s coming.”
Holm said by the end of 2020, mid-sized ships would be earning the same rates as the largest ships, which, in the North Sea are getting $20,000 a day on the spot market and have an 87% utilization rate globally.
Rig counts are growing, too, in the Caribbean basin and West Africa. In Brazil, formerly the largest offshore market, Petrobras' exploration and production rates are expected to rise with oil majors set to enter the market.
In the US, Holm said there were only 71 large OSVs total to support exploration efforts around Mexico and the northern coast of South America. Five are in layup, meaning the supply for those large ships could dry up soon.
Clarksons has been bullish on the offshore sector picking up from its multi-year downturn. Earlier this year, Holm said things were picking up. He backed New York-traded Tidewater — which is up more than 15% to $22.12 after ending 2018 at $19.13 — to benefit.
Last month, the company said North Sea growth was helping things pick up in West Africa, but the recovery seemed uneven.
“We’re going to be making money again by the end of 2020," Holm predicted Monday.
“Everywhere we look around the world, we’re seeing very positive things in terms of demand.”
