FEBRUARY 2017 CONSOLIDATION ON THE INCREASE IN NORWAY CONTENTS 3 OSV MARKET ROUND-UP ABOUT SEABROKERS GROUP 6 OSV AVAILABILITY, RATES & The Seabrokers Group was established in 1982. We provide a unique and varied range of services to UTILISATION - NORTH SEA clients. The Seabrokers Group has an experienced workforce within Shipbroking, Real Estate, 7 MONTHLY OSV SPOT RATES - Facilities Management, Construction, Cranes & Transportation, Sea Surveillance and Safe Lifting NORTH SEA Operations. Our head office is situated in Stavan- ger, but we also have offices in Aberdeen, Bergen, 8 FEATURE VESSEL Rio de Janeiro and Singapore. The Seabrokers Group is different – and we are 9 OSV NEWBUILDINGS, CONVERSIONS, proud of this fact. Our information, experience and knowledge provide us with the ability to perform SALE & PURCHASE in our diverse business areas. 11 SUBSEA Seabrokers Chartering AS and Seabrokers Ltd are certified by DNV GL in line with Management System Standard ISO 9001:2008. 14 RENEWABLES 15 RIGS 16 CONUNDRUM CORNER & DUTY PHONES SHIPBROKING REAL ESTATE SECURALIFT FACILITY MANAGEMENT Production and Administration: Seabrokers Ltd, Aberdeen SEA SURVEILLANCE ENTREPRENEUR For your free copy of Seabreeze, email: YACHTING CRANES & TRANSPORTATION [email protected] The Seabreeze Monthly Market Report OUR OFFICES: is distributed worldwide through STAVANGER BERGEN SKIEN our offices in Aberdeen, Stavanger, Singapore and Rio de Janeiro. ABERDEEN RIO DE JANEIRO SINGAPORE © Seabrokers Group 2017 www.seabrokers-group.com OSV MARKET ROUND-UP NORTH SEA LAYUP TIME TO CONSOLIDATE IN NORWAY ACTIVITY DICTATES Stakeholders in the global OSV 33 CSVs, 66 PSVs and 55 AHTS market have long been stating units. Solstad Offshore will MARKET that a great deal of consolidation be the parent company of the is required if owners are to have consolidated “Solstad Farstad” Owners with vessels plying any chance of improving market group. their trade in the North Sea conditions. The oversupply of spot market have encountered tonnage is vast; that cannot be The three parties have indicated mixed results for the first couple questioned. However the market that cost savings of NOK 400-650 of months of 2017. Average PSV is not just saturated in terms of million (USD 47.5-77.2 million) fixture rates are marginally up the number of vessels, but also in per year could be achieved as a on 2016 levels, while average terms of the number of players. result of the merger. This would AHTS rates are well down in be achieved via the “realisation comparison with 2016 (see p.6-7). In Northwest Europe alone, of substantial cost and revenue However, the market dynamics there are roughly 50 different synergies.“ within the spot market over owners with vessels based here. the spring and summer seasons While a handful of these owners The merged entity will also may largely be dictated by the have no active units anymore benefit from the combination willingness and/or ability of vessel (i.e. only laid up tonnage), the of “Solstad’s CSV capabilities; owners to reactivate tonnage from competition for every possible with Farstad’s AHTS experience, layup if it becomes necessary. contract is extremely intense. international presence and long-standing presence in Brazil Offshore activity is projected to That is why many will view and Australia; together with increase in the North Sea over the planned merger of Solstad, Deep Sea Supply’s cost efficient the coming months, with a Farstad and Deep Sea Supply as PSV operating model.” significant number of stacked rigs a positive sign for the industry. due to be reactivated (including This develoment will by no There is no denying that a long, Deepsea Stavanger, ENSCO means act as a panacea for the arduous recovery lies ahead for 122, Island Innovator, Maersk sector, but it is a step in the right OSV owners, however there are Gallant, Maersk Resolute, Ocean direction. It does not remove any some signs (of which this merger Guardian, Paragon B391, Songa tonnage but at least it reduces is one) that a chink of light may Enabler, Stena Spey and West the number of competing parties be appearing at the end of the Phoenix). Some of these units slightly, and each time this is tunnel, with a slight increase are already back in action while achieved it will improve the in tendering activity identified others will be reinstated to the overall market dynamics from an recently as well. Farstad itself active fleet over the next three owners’ perspective. acknowledged in its quarterly or four months. While these results that utilisation and rate reactivations may be counteracted Coming in the wake of Solstad’s levels in the North Sea market by some other rigs coming off prior merger with Rem Offshore, further weakened during the contract, if there is a tangible the new combined entity will final quarter of 2016, however increase in activity then the operate what it claims to be this was tempered with the view impact on spot market rates the “largest company in the that “conditions are projected will depend on the movement high-end global offshore supply to reach a low point over the of support vessels into or out of vessel industry with a fleet of winter season.” Perhaps all hope layup. 154 vessels.” This will consist of is not lost for owners after all. SEABREEZE 3 OSV MARKET ROUND-UP FLURRY OF FIXTURES FOR FARSTAD Farstad has had a positive start to 2017, with the capture of a range of new contracts allowing the owner to reactivate three of its laid up vessels. In Norway, AHTS vessel Far Sigma is going back into service after she was awarded a one- well firm contract with Lundin Norway AS to support a drilling campaign with semisubmersible Island Innovator. Meanwhile, two of Farstad’s 3.5 months (including mobili- UK sector extended for at least PSVs which had been laid up sation time) to support a field four more months; while Petro in Norway have recently been development project. Services, with end client Total, reactivated after work was has awarded PSV Far Starling secured for them offshore Egypt. Meanwhile, PSV Far Spica a one-month firm contract to The Far Server and Far Serenade (pictured c/o O Halland) has had support a “ready for operation” have been chartered for at least her contract with ENGIE in the campaign in Congo. FAIRFIELD TIES UP TWO In addition to the fixtures above, Edda Fram. Both contracts are Farstad has also been awarded a for work in the UK sector with 12-month contract for PSV Far commencement in April. The Far Symphony with Fairfield Betula Symphony will support Fairfield’s Limited. This charter comes with P&A campaign with Transocean six additional one-month options. semi Sedco 712 at the Osprey and Fairfield has also just awarded an Merlin fields, while the Edda Fram 18-month plus 3-month option (pictured c/o D Dodds) will provide contract to Østensjø Rederi PSV support at the Dunlin platform. APACHE DEALS FOR DESS Deep Sea Supply has secured been scheduled to conclude their long-term contract extensions for commitments in March and July two of its Ulstein PX 105 PSVs. 2018 respectively. In relation to The Sea Forth and Sea Flyer this, Apache has also recently (pictured c/o D Dodds) have had added a third Deep Sea Supply their charters with Apache North PSV (Sea Tantalus) to its North Sea Ltd extended until January Sea fleet after the award of a 1, 2020. They had previously six-month firm contract. 4 SEABREEZE OSV MARKET ROUND-UP STATOIL TIES UP EMERGENCY RESPONSE COVER Statoil has awarded four long- term ERRV contracts with a total value, including options, of NOK 2.7 billion (USD 320 million). The vessels chartered will form part of Statoil’s area-wide emergency response cover on the Norwegian continental shelf. Simon Møkster Shipping was the recipient of three of the contracts, for the Stril Poseidon (pictured), Stril Merkur and Stril Herkules, while Havila Shipping picked up a fixture for the Havila Troll. All four units are already working for Statoil under prior commitments. one-year options available. The Stril Herkules; and November new terms will start in July 2018 2017 for the Havila Troll, each All of the contracts are for a firm for the Stril Poseidon; December upon the conclusion of their prior period of seven years, with five 2018 for the Stril Merkur and contracts. TOTAL TAKES AURORA FOR SHETLAND WORK Solstad Offshore has secured a to commencing this charter in contract in the UK sector that February, the Normand Aurora has enabled it to reactivate PSV had been laid up in Norway for Normand Aurora from layup. the last couple of months. The vessel was awarded a 90- Total is using the Aurora to day firm contract with Total E&P provide support for its drilling UK Ltd, with three further one- campaign with Seadrill semi month options available. Prior West Phoenix west of Shetland. TWO PSVS BACK WITH PETERSON Peterson has awarded new term work in the southern sector of contracts that will see two PSVs the North Sea. Both vessels have reactivated from layup. been laid up in Norway since they concluded prior commit- Myklebusthaug and Island ments with Peterson in 2016. Offshore were the recipients of one-year plus options contracts The Dina Merkur is a UT 755 LC for the Dina Merkur (pictured) PSV, while the Island Endeavour and the Island Endeavour to is a UT 755 LN PSV. SEABREEZE 5 OSV RATES & UTILISATION FEBRUARY 2017 - DAILY NORTH SEA OSV AVAILABILITY PSV 2017 PSV 2016 AHTS 2017 AHTS 2016 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26