North Sea offshore support vessel owners have been bursting with confidence after the spot fleet shrank last month — but brokers are warning this situation will not last.
The average number of platform supply vessels available during September was lower than during any previous month in 2020.
Several owners in the UK market managed to secure spot fixtures of up to £16,500 ($21,260) per day, while fixtures in Norway have been reported at up to NOK 190,000 ($20,440) per day.
This compares to lows of £2,000 per day during the dark days of lockdowns and the fall in the oil price earlier this year. Ships have since been deployed elsewhere, scrapped or converted for other industries.
Norwegian broker Seabrokers said: "The North Sea spot market recorded a much tighter level of supply through September than we have experienced for most of the year so far.
Owners beware
"This was especially the case for the PSV sector, where owners carried a much higher level of confidence throughout the month."
The company called this confidence "justified", but said the "usual caveats apply" to the market.
"We are still in the peak summer season and demand levels may taper off as we approach winter," Seabroker said. "There are also seven or eight PSVs due to return from Russia over the coming weeks."
Rates now lower
Solstad Offshore's 4,700-dwt Normand Supra (built 2014) is already back and has been fixed at the much lower rate of £6,000 per day by Equinor in the UK.
"Charterers will be hoping that this may release some of the pressure that has built up on the spot side," Seabrokers said.
The North Sea spot market recorded a much tighter level of supply through September than we have experienced for most of the year so far
Seabrokers
"Regardless, it has been more than welcome for owners to achieve more stable levels of demand and utilisation for their active tonnage in recent weeks."
Seabrokers said large PSVs averaged 82% utilisation in September, against 61% in August.
Rates averaged £9,651 last month, compared to £10,434 in September 2019.
For anchor-handling tug supply vessels, utilisation was 74%, up from 63% in August, while rates averaged out at £29,683, down from £33,057 a year ago.
Norwegian broker Westshore tallies 25 active AHTS units in the North Sea, against 32 in lay-up. Ten vessels were waiting prompt at quays on Wednesday.
Nothing left in Norway
There are 53 operational PSVs. Norway is sold out, while five are charter-free in the UK. Another 46 PSVs are laid up.
Westshore puts PSV utilisation at 91% this week, with AHTS units at 60%.
Rig moves are being fixed at £15,000 per day using AHTS vessels, while charterers Equinor, Total, DEME and Ithaca Energy were looking for PSVs.
One PSV being reactivated in the North Sea is the 4,000-dwt Troms Mira (built 2015), after US owner Tidewater picked up a 120-day firm charter for the vessel with Peterson.
Seabrokers said positive news has been in short supply for the offshore exploration and production market this year.
But research company Rystad Energy has produced a report highlighting the potential for oil and gas project sanctioning to bounce back strongly in 2021 and 2022.
2020 disappoints
With the Covid-19 pandemic and lower oil price environment making investment decisions increasingly difficult, Rystad has indicated that the total value of oil and gas project sanctioning may only reach $53bn around the globe this year, with $34bn of that relating to offshore projects.
That compares to a figure of $190bn for 2019, of which $101bn was offshore.
Rystad said a backlog of postponed projects from this year could mean the total value of final investment decisions might double next year and then exceed pre-pandemic levels from 2022.
The company's forecast has total commitments for 2021 at $100bn, with offshore at $64bn of this.
For 2022, the company is forecasting investment figures of $195bn, with offshore accounting for $95bn of this.
