Offshore support vessel market to dip

Oct. 19, 1998
The market for offshore support vessels will weaken over the short term, because of the Asian economic crisis and low oil prices, but longer-term prospects are more healthy. This is the prediction of Ocean Shipping Consultants Ltd. (OSC), Chertsey, U.K., which said employment of most classes of support vessel will be determined by a combination of rig movements and general offshore exploration and development activity.

The market for offshore support vessels will weaken over the short term, because of the Asian economic crisis and low oil prices, but longer-term prospects are more healthy.

This is the prediction of Ocean Shipping Consultants Ltd. (OSC), Chertsey, U.K., which said employment of most classes of support vessel will be determined by a combination of rig movements and general offshore exploration and development activity.

"World offshore oil production is forecast to increase from the current 23 million b/d level to about 25.3 million b/d by 2000, more than 31 million b/d by 2005, and to 36.6 million b/d by 2010," said OSC. "Total forward expansion thus equates to more than 60%-equivalent to an average of around 3.5%/year."

OSC expects annual offshore gas production to expand too, from 545 billion cu m in 1996 to 658 billion cu m by 2000, to more than 750 billion cu m by 2005, and to 890 billion cu m by 2010: "Total forward expansion equates to just over 63%, equivalent to an average of just under 3.75%/year."

The analyst also expects the number of wells drilled offshore this year to exceed the peak of 1997 for most of the forecast period, though there will be a marginal downturn in 1998.

"In terms of actual numbers of wells drilled," said OSC, "the annual volume is expected to average about 3,000-3,100 for much of the forward period, as against the 2,928 expected in 1998, the 2,963 level of 1997, and the 2,500 level approximated in the first half of the 1990s."

Supply vessel demand

OSC reckons the development of more fields, often in remote locations, will underpin support vessel demand, although this will be set against the trend of reduced staff levels on platforms and increased use of subsea developments.

Demand for general-purpose anchor handling tug/supply vessels (AHTS) is expected to rise 4% this year and to 7.5% above last year's level by 2000, and to begin to decline by 2005.

OSC said there are 43 new AHTS ships on order worldwide, equivalent to 3% of the existing world fleet: "The vast majority of the vessels on order are high-capacity units, underlining the trend towards larger, higher-capacity units for operation in deepwater locations."

Demand for platform supply vessels (PSVs) is expected to rise by 10% by 2000, 20.5% by 2005, and 22.5% by 2010, compared with 1997. There are 36 PSVs on order, equivalent to 25% of the existing fleet, and again the trend is towards higher-capacity ships for deepwater fields.

The seismic vessel fleet has expanded only marginally in recent years, said OSC, and slow expansion is expected to continue. Nine seismic ships are on order, equivalent to 3.6% of the global fleet.

"This marginal aggregate fleet development is somewhat misleading," said OSC, "as the new vessels represent the very latest in terms of seismic technology, with vessel size and capability becoming ever larger.

"Indeed, given the high-technology nature of this sector, to include the modern vessels in the same fleet discussions as the older vessels in the fleet is misleading, as they operate in essentially different markets."

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