August 2020
Offshore Market Report
August bliss for AHTS owners
The PSV owners have through the summer continued to struggle with low activity and low rates. Even though more than 40 PSV have gone into lay up since the crises started in March, there have also been more than 20 PSVs who have had their long-term contracts cancelled. In addition, the low number of rigs currently active in the North Sea made the market conditions very poor both in the spot and term market. In August Hermitage Offshore Services
voluntarily filed for Chapter 11 petition due to the challenging market conditions.
In the AHTS market the current low number of vessels in the spot market has somewhat balanced out the effect of reduced activity. In August there were only around 20 AHTS vessels trading in the spot market and with increased rig activity the rates spiked at NOK 750.000 on several rig moves.
Availability in the Subsea market remains tight with a large portion of the fleet currently working in the renewables
sector. Aquaculture,Tank, Dry Cargo
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Spot North Sea
The PSV spot market was heavily in Charterers favour in July, with an average day rate of NOK 51.500 and very low utilization numbers. On the Norwegian side the utilization in June was in the region of 53% and late in July only 2 out of 11 PSVs trading spot were on hire. On the UK side the utilization numbers were higher (about 67%), but there were always a handful of PSVs in port which kept the average day rate on similar levels as in Norway. The three first weeks of August was very similar, but towards the end of the month we saw a significant increase in rates on both sides of the basin due to increased activity. The rates on the Norwegian side was lifted to around NOK 150.000 levels while in the UK the rates went above GBP 10.000 on a few fixtures. On the UK side the rates have already been reduced back to the levels we saw earlier this summer, while in Norway the rate levels have so far been maintained. The average PSV rate in August was close to NOK 100.000 and on the UK side the average rate was in the region of NOK 50.000.
For AHTS owners July was quite stable with most fixtures in the NOK 200.000 range, which was also the average for the month. In August however the market tightened significantly, and the average rate jumped to NOK 380.000. As mentioned in our intro, the low number of AHTS vessels currently trading in the North Sea is a large contributor to the recent uplift in the market.
Some new term fixtures and extensions
Charterer Type Vessel’s name Scope of work / Period / Rate (approx.)
Chrysaor UK PSV Farland Supply duties 1 year firm + opt / RNR
CNOOC PSV Rem Supplier Supply duties 2 wells firm + opt / RNR
Saipem PSV Sea Gull Supply duties 150 days firm + opt / RNR
Petrofac PSV KL Brisfjord Supply duties Stena Spey 1 well firm / RNR
CoP N PSV Island Challenger Supply duties Leiv Eriksson 1 well firm + opt / RNR Aquaculture,Tank, Dry Cargo CoP N PSV Viking Princess Supply duties Leiv Eriksson 1 well firm + opt / RNR
Petrofac PSV Hermit Storm Supply duties Stena Spey 1 well firm / RNR
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Well Expertise PSV Stril Luna Supply duties Borgland Dolphin 1 well firm / RNR
Well Expertise PSV North Cruys Supply duties Borgland Dolphin 1 well firm / RNR
Gazprom PSV Sayan Princess Supply duties 3 months firm + opt / RNR
Total UK PSV VOS Paradise Supply duties 1 month firm + opt / RNR
Total UK PSV Hermit Thunder Supply duties 1 year firm + opt / RNR
Undisclosed AHTS Loke Viking All duties 165 days firm + opt / RNR
Total DK PSV Havila Fanø Ext. Supply duties until 01.06.2021 /RNR
Total DK PSV Havila Herøy Ext. Supply duties until 01.06.2021 /RNR
Outstanding term requirements North Sea
Charterer Type Period / Commencement
Peterson PSV Supply duties 110 days firm + opt / Oct 2020
Wintershall DEA PSV Supply duties Brage – 1 year firm + opt / Dec 2020
Around the world
Brazil
Solstad Offshore ASA have announced several contract extensions in Brazil with Equinor and Total. Equinor Brazil has extended the contracts for the PSV's Sea Brasil by 1 year until December 2021 and Far Scotsman by 6 months until May 2022. Both vessels will continue to support Equinor on their operation and development activities in Brazil.
In addition, Total E&P do Brazil have extended the contracts for the PSV Normand Swift and the AHTS Far Sagaris until December 2020 to support Total's activities in the Lapa Field.
Australia
Solstad have fixed to the AHTS duo Normand Saracen and Far Senator, along with the PSV Normand Leader to BP Developments Australia Pty Ltd to support BP's Ironbark Campaign in the Carnarvon Basin offshore Western Australia. The vessels will be working with the semi-submersible drilling rig 'Ocean Apex' throughout the one well campaign, estimated at approximately
90 days duration. Commencement of the contract will take place during Q4 Aquaculture,Tank, Dry Cargo 2020, and the vessels will operate from Dampier.
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Subsea and Renewables
TechnipFMC has been awarded an EPCI contract by Petrobras for the pre- salt Mero field, located in the Santos Basin (Brazil) at 2,100 meters deep. The contract covers engineering, procurement, construction, installation and pre-commissioning of the infield rigid riser and flowlines for production, including the water alternate gas wells. It also comprises the installation and pre-commissioning of service flexible lines and steel tube umbilicals, as well as towing and hook up of the FPSO. The offshore campaign is scheduled to start in 2022.
Subsea 7 has been awarded contract for the installation of the submarine cable system on an offshore wind farm project in Taiwan. Offshore activities are expected to commence in 2023.
Subsea 7 has also been award of a contract for work offshore Trinidad and Tobago. The contract scope covers the project management, engineering, procurement, installation and pull-in of one subsea rigid flowline and flexible riser together with flexible flowlines and associated subsea infrastructure and umbilical system. Offshore installation activities are scheduled for 2021.
DOF Subsea has been awarded four new contracts by Petrobras. At least three vessels from the DOF fleet shall be mobilized to perform flexible pipeline, risers and subsea equipment inspection in Campos Basin, Santos Basin, Marlin Field and Espírito Santos Basin. The contract value is more than USD 110 million with planned commencement in Q4 2020 and estimated to be performed within 550 days.
DOF Subsea has also been awarded a turnkey contract performing marine operations in connection with a decommissioning project by Teekay Petrojarl Floating Production. The award covers project management, engineering, procurement and all offshore marine operations. The offshore works include preparatory works at the sites including installation of a temporary mooring system, towing operations and recovery of risers and mooring systems. DOF Subsea will deploy Skandi Acergy, Skandi Iceman, Skandi Hera in addition to selected third party vessels to deliver the scope. The project has already commenced and is scheduled to be completed within Q4 2020.
Chevron Australia have awarded DOF Subsea an IMR Services Contract to Support Chevron's North-West Shelf
and near shore subsea assets in Australia with DP Vessels, ROVs, AUVs, Intervention, Inspection, Management and Engineering Services. This key award builds on previous successful IMR campaigns over the life of the existing IMR services contract and secures a further 5-year term under the new contract.
Skandi Neptune has been fixed to EnCana in Canada for a decommissioning at Ovintiv's Deep Panuke field. DOF Subsea is responsible for work
Aquaculture,Tank, Dry Cargo including removal of subsea structures, transport, and disposal of infrastructure at the field.
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Saipem has been awarded new offshore wind contracts, for projects currently under development off the coasts of England, Scotland and France, for a total value of over 90 million euros. Saipem have also been awarded contracts for Equinor and SSE Renewables for the transportation and installation of two offshore HVDC (High Voltage Direct Current) platforms for the first two phases of the Dogger Bank project: Dogger Bank A and Dogger Bank B. Both platforms will have a capacity of 1.2 GW and will consist of a ca. 2,900-ton jacket and a ca. 8,500- ton topside.
Saipem has also been awarded an installation contract by Seaway 7 related to the Seagreen Offshore Wind Farm, a 1,075MW joint venture project between SSE Renewables (49%) and Total (51%) off the East coast of Scotland. The scope of work entails the installation of 114 foundations for an equivalent number of wind turbines.
Lastly, Saipem has been awarded a contract for the transportation and installation of the jacket and topside of the offshore substation at St-Brieuc offshore wind farm, located in Brittany, France, which is being developed by Ailes Marines, part of the Iberdrola group. All project management and engineering activities shall be executed by Saipem SA, Saipem’s French subsidiary established in Paris.
These offshore installation projects will be carried out by the crane vessel Saipem 7000.
DEME Offshore has been awarded an EPIC contract for the inter-array cables at the Dogger Bank A and Dogger Bank B offshore wind farms in the UK sector. DEME Offshore's scope comprises the engineering, procurement, construction and installation of the subsea cables for the combined 2.4 GW A and B wind farms. The contractor will supply and install 650 km of 66 kV inter-array cables and all associated accessories. The company will utilize its DP3 cable lay vessel Living Stone for the job. Construction of the cable will commence in 2021.
Olympic Taurus has been fixed to Ithaca UK for a walk-to-work (W2W) scope at the FPF-1 floating production facility. The vessel is fixed for 60 days firm with further options until mid-November.
Olympic Taurus has also been fixed on a contract with Baltic Taucher for UXO work in Danish water, followed up by a short work scope in Baltic.
Olympic Triton has returned from Nigeria and have picked up a job for UTROV / Boskalis for boulder clearance at Moray East Wind Farm. The vessel is thereafter close to being fixed for an IMR campaign on the Norwegian sector to an undisclosed charterer for a couple of months.
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Olympic Delta continues to work for Van Oord with different projects and work scopes and will continue for approx. another month.
Solstad has been awarded a contract for Normand Vision for Ocean Installer. Commencement will be in Q1 2021 and the firm and optional periods covers the majority of 2021.
Reach Subsea and MMT Group have been awarded a contract with a major European energy company for a cable route survey. The campaign will be carried out by ROV support vessel Havila Subsea, utilising the Surveyor Interceptor ROV. The project will have two phases and will be conducted during Q4 in 2020 and in 2021.
Havila has secured a three-year bareboat contract for the subsea vessel Havila Harmony with OceanPact Netherlands B.V. The vessel will operate in Brazil and commencement will be in fourth quarter 2020.
Sale and Purchase
The Tidewater PSV Highland Rover has been reported sold for scrapping in Turkey. Furthermore, the two PSVs Highland Bugler and Highland Challenger along with the two ATHS Highland Valour and Highland Courage have also been reported be have been sold.
Atlantic Offshore’s Ocean Clever has been sold and have already been taken over by her new Owners.
The UT 755 PSV Gardwill (built as the Olympic Provider and later renamed KL Arendalfjord) has been sold out of the offshore market. The vessel has been renamed Smøla Viking and is currently being utilized in the fishfarm industry.
DOF have sold the 2002 built AHTS Skandi Giant to an undisclosed
international buyer. DOF have also agreed to sell the 1983 built Skandi Hav Aquaculture,Tank, Dry Cargo for recycling in Turkey. The vessel is currently located in Las Palmas and is expected to embark on her final voyage to Turkey later in the month.
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Asso Group have recently purchased the 2011 built ST 254L Polar King from G.C. Rieber Shipping and the vessel will be renamed Argo. The vessel was taken over by her new Owners late August.
Island Offshore have agreed to sell two if its PSVs, namely the Island Dawn and Island Duchess. The two UT 717 CD design vessels were reportedly sold to Hadi International Marine Services and were joined by an additional sister vessel, the Island Dragon, which was taken on a bareboat deal, with a purchase option.
Following the Charter 11 process in Hermitage Offshore Ltd, the intention is to sell off the fleet of 10 PSVs and 11 crew vessels in an auction scheduled to take place on 8th October. The sales process is expected to close on the 22nd of October. The four vessels trading spot for the time being is now in the process of being laid up, along West Coast Norway.
Hermitage Offshore Ltd announced to have sold the two sister vessels Hermit Baron and Hermit Brilliance, previously known as the Sanko Baron and Sanko Brilliance, to an unnamed buyer. The sale was concluded just hours before the company filed for protection under the Chapter 11 regime.
The AHTS Maersk Advancer (23,500 bhp) was recently sold to Karadeniz Energy Group in Turkey for conversion to a power-ship. Her sister vessel, the Maersk Asserter have followed suit and the vessels have been renamed Karadeniz Powership Ersen Bay and Karadeniz Powership Ali Bey respectively.
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PSV’s – North Sea average spot rates
kr 180 000 kr 150 000 kr 160 000 kr 125 000 kr 140 000
kr 120 000 kr 100 000
kr 100 000 kr 75 000 kr 80 000 kr 50 000 kr 60 000
kr 40 000 kr 25 000
kr 20 000 kr 0
kr 0
Oct Apr
Jan Jun
Feb Mar
Aug Sep Nov Dec Aug 27 28 29 30 31 32 33 34 35 May Week 2019 2020 Norway UK Norway UK
PSV’s – North Sea utilisation and supply / demand
100% 60 90% 55 50 80% 45 70% 40 60% 35 50% 30 40% 25 30% 20 15 20% 10 10% 5
0% 0
Jul
Jul
Oct Apr
Jan Jun
Feb Mar
Nov Aug Sep Dec Aug
Oct Apr
Jan Jun
May
Feb Mar
Dec Nov
Aug Sep Aug May 2019 2020 2019 2020
Norway PSV - Average of Demand
Aquaculture,Tank, Dry Cargo UK PSV - Average of Supply
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AHTS’ – North Sea average spot rates
kr 700 000 kr 450 000
kr 400 000 kr 600 000 kr 350 000 kr 500 000 kr 300 000
kr 400 000 kr 250 000
kr 200 000 kr 300 000 kr 150 000 kr 200 000 kr 100 000
kr 100 000 kr 50 000
kr 0
kr 0
Jul
Oct Apr
Jan Jun
Feb Mar
Nov Dec
Aug Sep Aug 27 28 29 30 31 32 33 34 35 May Week 2019 2020 Norway UK Norway UK
AHTS’ – North Sea utilisation and supply / demand
35 100% 90% 30 80% 25 70% 60% 20 50% 15 40%
30% 10
20%
5 10%
0% 0
Jul
Oct Apr
Jan Jun
Jul
Mar Feb
Aug Sep Nov Dec Aug
May
Oct Apr
Jan Jun
Feb Mar
Aug Sep Nov Dec Aug May 2019 2020 2019 2020
Norway AHTS - Average of Demand
Aquaculture,Tank, Dry Cargo UK AHTS - Average of Supply
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