From bad to worse for offshore shipping companies

ÅgotnesÅgotnes.Photo: Tore Meek / NTB scanpix

The coming weeks and months will be brutal for offshore shipping companies, predicts an analyst. At the beginning of 2015 there were zero anchor handling and supply vessels in circulation.
Now there are a total of 128.
Analyst Inger Louise Molvaer in West Whore Shipbrokers (which is one of the heavy players in brokering offshore deals), told Dagens Næringsliv that the situation will get worse before it gets better.

‘Contracts at prices below break-even levels have now become quite standard in the industry and the key to survival has become a game of who bleeds the least. This is about to evolve into a pure hemorrhage’, she said.

The activity of anchor handling vessels is related to the oil companies who drill new wells.

Figures from Westshore show that there are now 53 rigs in circulation in the North Sea, and Molvaer expects there will be another ten before the New Year. Globally, half of the rigs are without contracts.

Molvaer see no sign of improvement until at least the second quarter of next year.

‘Shipowners have the choice to continue as now or to take account of the realities. I would definitely recommend the latter, which includes adding more ships laid up for better balance between supply and demand.

Moreover, the industry is obviously ripe for consolidation. There are about 400 offshore support vessels in the North Sea that are owned or operated by 70 different players’, she says.


Source: NTB scanpix / Norway Today