From bad to worse in the offshore industry in 2016

UlsteinvikUlsteinvik.Photo: Halvard Alvik / NTB scanpix

In 2016, Norwegian offshore service ship owners experienced the worst downturn since the 1980s. A quarter of offshore ships have been laid off, and 2017 could be even worse.

That is the conclusion of several experts who Sysla have talked to.
At the beginning of 2017, 172 Norwegian offshore vessels are laid off.
In May 2015 the number was 50 and at the beginning of 2016 it was 100 ships. In June 2015, 600 had lost their jobs in the offshore industry. Now the number is at 1,000.
According to figures from Nordea Markets, the value of Norwegian offshore shipping companies on the Oslo Stock Exchange was 44 percent in 2016.
– For offshore shipping companies in 2016, it has been the worst year since the downturn in the 1980s, says senior analyst Christopher Pedersen of Nordea Markets. He points out that a large part of companies have found solutions with its creditors, but that much remains to be solved. He is not optimistic about 2017.
– Despite this, we believe the worst is yet to come, says Pedersen. He justifies this by saying that many companies, particularly in subsea operations, have kept contract reserves, but that many of these are now running out.
CEO Sturla Henriksen at NSA predicted at the beginning of 2016 that the year would be much worse than in 2015 and got it right. He predicts the same for 2017.
– Even though oil prices have risen slightly, we see few bright spots in 2017. Expectation of positive earnings in offshore shipping companies will first come in 2020.
Source: NTB scanpix / Norway Today

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