Industry Brief Offshore Support Vessels

GENERAL AND RESTRICTED
Industry Brief
Offshore Support Vessels
Global Advisory & Research
- Accommodation Vessel, Landing
Craft Tank, General Purpose
Vessel
9 September 2014
Song Eng Eng
[email protected]
General Statistics and Information
Global
OSV
Accommodation Vessel
Malaysia (2012) OSV
*Accommodation Vessel
*General Purpose Vessel
*Landing Craft Tank
4,975
210
249
22
3
7
* Fleet size of Malaysia Offshore Support Vessels Owners'Association members
Our Assessment

Accommodation, landing craft tanks and general purpose vessels form a small share or under 15% of the
Offshore Support Vessel (OSV) family.

Supply of accommodation vessels have been fairly static in recent years with utilization rate of within 60%.
Global daily charter rates range between US$50,000 to US$250,000 per bed for non-submersible vessels.
Charter rates should firm up should the current pace of E&P activities continue.

International oil companies are slowing down their E&P spending this year as rising costs are affecting
profitability. This includes Petronas which announced it plans to cut its capex in 2015. The slowdown in
E&P spending and activity will curtail demand for OSV services which could result in a fall in charter rates
in the future. The near term risk is limited as the existing contracts signed with most OSV operators are on
multiple year terms, however, new and future contracts faces the risk of lower charter rates.
Overview
Total global OSV in operation is estimated at 4,975 according to Infield Systems. By far the largest share
consists of Platform Supply Vessels (54%) and Anchor Handling Tug Supply Vessels (31%). The remaining
supply vessels comprising of Accommodation Vessels, Anchor Handling Tugs, Pipelay, Multi Purpose Support
Vessels and Diving Support Vessels make up a much smaller market share at 15%. There are about 49
Malaysian registered companies that own and operate a total of 249 OSVs.
There are 4 phases to the Exploration and Production (E&P) cycle of an offshore oil and gas field: Exploration,
Development, Production, and Decommissioning. Each phase requires services from different Offshore
Support Vessels (OSV).
Offshore accommodation vessels are typically deployed after the exploration stage, chiefly in the development,
production and decommissioning phases.
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GENERAL AND RESTRICTED
Exploration
Exploration
and
appraisal
drilling to identify & confirm the
presence of hydrocarbons &
commercial viability
Anchor Handling Tug
Anchor Handling Tug Supply
Vessel
Heavy lift vessels
Multi-purpose Support Vessel
Construction,
Installation &
Development
Production
Activities carried out
Production wells are drilled and Oil and gas is extracted from
infrastructure
such
as the deposit. Routine inspection,
production
platforms
and maintenance and repairs are
pipelines are installed.
carried out.
Offshore support vessels provided
Anchor Handling Tug
Anchor Handling Tug
Anchor Handling Tug Supply
Anchor Handling Tug Supply
Vessel
Vessel
Platform supply vessel
Platform supply vessel
Accommodation vessel
Accommodation vessel
Multi-purpose Support Vessel
Multi-purpose Support Vessel
Maintenance Work Vessel
Maintenance Work Vessel
Subsea Construction Vessel
Well intervention vessel
Pipelay
Diving support vessels
Diving support vessels
Liftboat/service rig
Heavy lift vessels
Tug & barge
Tug & barge
Landing craft
Landing craft
Distribution of global accommodation vessels
Decommissioning
Removal of production and
processing infrastructure once a
mature field ceases to be
commercially viable
Anchor Handling Tug
Anchor Handling Tug Supply
Vessel
Accommodation vessel
Maintenance Work Vessel
Multi-purpose Support Vessel
Diving support vessels
Liftboat/service rig
Heavy lift vessels
A landing craft is a highly maneuverable open deck
landing craft with shallow draft and a ramp at the bow
that allow loading and unloading. It is ideal for ship-toship transport and is especially useful for cargo
operations in areas without proper ports or jetties.
A multipurpose supply vessel is a dedicated vessel
which is able to perform multiple maintenance services
on platforms, floaters, subsea wells, pipelines and
risers.
Source: Infield Systems Ltd
Accommodation day rates by vessel type
(US$‘000; 2009-2017)
The fleet size of general purpose vessels and landing
craft tanks appears limited in Malaysia. The vessels
owned by the 23 members of Malaysia Offshore
Support Vessels Owners' Association totaled 3 units
(general purpose vessels) and 7 units (landing craft
tanks).
An accommodation workboat is a vessel that provide
accommodation for personnel, lifting, heli deck,
catering, workshop and storage facilities in offshore
oilfields for offshore construction and/or maintenance
operations. Depending on the size and specifications,
accommodation vessels may accommodate between
150 to 800 people.
There are 210 accommodation vessels globally, of
which 114 are barge-type vessels. Supply has been
relatively constant over the past few years and
utilization rate has hovered around 60%. Historically,
daily rates have been less volatile as charters are
signed for longer multiple year terms.
Source: Infield Systems Ltd
According to Infield Systems, accommodation vessels
within Malaysia are relatively limited with smaller
capacities if compared to the fleet in Indonesia or
Singapore. Fleet size of the 23 members of Malaysia
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GENERAL AND RESTRICTED
Offshore Support Vessels Owners' Association stands
at 22 vessels.
Semisub
Capacity
(no. of m en)
230 – 800
Water depth
If DP, unlimited,
Moored <= 500m
Monohull
200 - 800
Unlimited
Jackup
70-460
120m
Barge
40-900
<= 500m
Source: Maybank Kim Eng; Infield Systems Ltd
DP: Dynamic positioning
Day rates
(US$'000)
150 - 350
100-250
70 - 200
50-150
Non-semisubmersible accommodation
supply/demand and utilization rate
Source: Infield Systems Ltd
There are 4 types of accommodation vessels : barges,
jackup, monohull and semisubmersible vessels.
Semisubmersible accommodation vessels are able to
operate in harsh deepwater environment and have
traditionally commanded the highest daily charter rates
in excess of US$150,000 per bed as it is able to serve
the growing deepwater market. Semisubmersible
accommodation vessels traditionally have not been
widely used in Asia but most are placed in the North
Sea or within Mexico.
Strong
growth
prospects
and
demand
for
accommodation vessels lie in semisubmersibles as it
serves the deepwater market which commands the
highest charter rates and utilization. Traditionally,
semisubmersibles are used in North Sea and Mexico
but there is increasing demand coming from Brazil and
West Africa. In view of this and the limited supply of
semisubmersible-type accommodation vessels, high
utilization and day rates should sustain. Daily rates
range between US$150,000 to US$350,000.
The market for non-semisubmersible accommodation,
namely, barges, jackup and monohull, is growing
within each offshore region, with the exception of
North America which is affected by a reduction in the
operational base of platforms. Elsewhere there are
significant opportunities in South East Asia and the
Middle East. Considering that approximately 70% of
accommodation vessel contracts relate to the
maintenance and modification works, demand for nonsemisubmersible accommodation vessels will be
strong, especially in Asian waters where there is a
substantial amount of maintenance and installation
activity in Malaysia and Indonesia. Daily rates range
between US$50,000 to US$250,000 per bed
depending on the size and specification.
.
Outlook and challenges
Global E&P capex spending
As Exploration & Production (E&P) activities increase,
there will be greater demand for OSV vessels to
provide the necessary services for the E&P activities.
It follows that demand for OSV is very dependent on
E&P capital expenditure (Capex). The global recession
resulted in project delays/cancelations and thus
reduced levels of capex in 2009-2010. Capex
subsequently rebounded in 2011 to record an average
of growth 12% p.a. during 2010-2013.
Source: IEA
Currently, the OSV industry is facing an oversupply
imbalance, particularly, Anchor Handling Tugs and
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GENERAL AND RESTRICTED
Platform Supply Vessels. The global OSV oversupply
was a result of newbuild deliveries following massive
orders for, among others, Anchor Handling Tugs and
Platform Supply Vessels prior to the global economic
downturn in 2008. The large orders of OSV was driven
by E&P spending growing at double-digit levels during
2003 - 2008, which led to a number of new field
development projects, boosting demand for drilling and
subsea services.
Source : Ministry of Transport, Malaysia
E&P capex growth
In Malaysia, OSVs increased by 54 vessels during the
period 2008 to 2012. According to news reports,
Petronas President and CEO Tan Sri Dato' Shamsul
Azhar Abbas warned of the oversupply of OSVs in
Malaysia and that there are indications that charter
rates will fall in the future. Recently quoted OSV
charter rates were 15% below current market rates
due to an increasing supply of OSVs, barges and
drilling rigs coming onstream.
The oversupply in Malaysia largely refers to smaller
vessels, namely, Anchor Handling Tugs below 5,000
bhp category and Platform Supply Vessels below
3,000 DWT.
Also of concern, is growth will be flat for global E&P
capex in 2014. International oil companies are reigning
in their capex plans and postponing projects as costs
have affected profitability although national oil
companies are still keen to sustain their spending. The
slowdown in E&P spending will dampen demand for
OSV services going forward. Petronas announced that
it is planning to cut its capex in 2015 although the
quantum of the cut was not disclosed.
Source: Clarksons
.
Sources :
Infield Systems Ltd
International Energy Agency (IEA)
Ministry of Transport, Malaysia
Malaysia Offshore Support Vessels Owners' Association
Clarksons
Disclaimer:
The information and materials contained in this document is prepared for information purposes only and
general in nature. The research and information contained in this document is based on material compiled
from data considered to be reliable at the time of writing. However information and opinions expressed in the
document should not be construed as final consideration for any business and investment decision making.
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