ΔΙΕΘΝΗΣ ΕΛΛΗΝΙΚΗ ΗΛΕΚΤΡΟΝΙΚΗ ΕΦΗΜΕΡΙΔΑ ΠΟΙΚΙΛΗΣ ΥΛΗΣ - ΕΔΡΑ: ΑΘΗΝΑ

Ει βούλει καλώς ακούειν, μάθε καλώς λέγειν, μαθών δε καλώς λέγειν, πειρώ καλώς πράττειν, και ούτω καρπώση το καλώς ακούειν. (Επίκτητος)

(Αν θέλεις να σε επαινούν, μάθε πρώτα να λες καλά λόγια, και αφού μάθεις να λες καλά λόγια, να κάνεις καλές πράξεις, και τότε θα ακούς καλά λόγια για εσένα).

Τετάρτη 28 Αυγούστου 2019

Offshore Marine - A Case for Optimism or Cause for Concern?







Expert Opinion

Offshore Marine - A Case for Optimism or Cause for Concern?

Ahead of Seatrade Offshore Marine and Workboats Middle East 2019, Dr Ferenc Pasztor, Senior Offshore Analyst of Maritime Strategies International weighs in with his opinion.

It’s no great secret that the most recent downturn badly affected all offshore vessel sectors and it can be hard to see many - if any - opportunities. However, by riding the waves of demand generated by projects sanctioned over the past two and a half years, owners and operators have a chance not only to survive, but in some cases even thrive - which in itself could be seen as a positive achievement.
2019 has brought improving vessel utilisation and dayrates to OSV owners, albeit with significant regional differences. Low capacity OSVs, which had been the worst hit in the downturn now earn above daily operational costs and their utilisation is increasing; and the increase in project sanctioning since 2016 has finally started to translate to higher vessel demand.
There is a good potential for this upturn to remain with us in the long term. Large, integrated E&P companies could increase their efficiencies in this downturn to the point where cash flow surpassed levels seen in the first half of this decade. However, this shift in focus from petroleum reserve accumulation to profitability impacted exploration and discovery levels and if E&P activity does not compensate, production will start to decrease in the coming years. Thankfully, industry stakeholders seem to realise that they would need to spend more to stop that.
While existing risks should still be accounted for (the potential further growth of North American unconventionals still hangs as a big question mark over the offshore industry), recent efficiency gains of offshore projects mean that offshore is more and more competitive with onshore.
How can vessel providers benefit from these trends? Lean companies with low debt levels perhaps have the clearest opportunities. This might be the time to add younger vessels with huge price discounts to the fleet of a private owner, as a catalyst for significant business growth, with good commercial relationships providing the fundamental foundations.
There is a justifiable case for optimism. However, challenges can manifest in many forms. The major market upturn between 2006 and 2013 saw a strong increase in vessel building activity that continues to contribute to the supply overhang of today, and there are many undelivered but practically finished OSVs sitting in the orderbook. There are some minor segments of offshore vessels where this is not the case, however, for the bulk of the fleet (AHTSs and PSVs) we are still far away from a situation in which operators cannot find vessels that comply with their age requirements. And even when that day arrives, there will be many vessels available that are only slightly older than the threshold age. Will operators increase the vessel age limit at that point? Possibly. Because of the oversupply, asset-heavy companies of the supply chain will need to be careful. Ordering newbuilds and reactivating too many laid-up vessels can easily send the whole OSV sector back to the doldrums.
There are risks in OSV financing too. Despite the actual market recovery, there is an increasing risk of a need for further debt restructuring for a number of companies to remain operational. There have also been cases of vessel providers losing out on charter opportunities as they could not pre-finance the operational costs of their vessels until the date of payment from the charterer. Nonetheless, the biggest challenge may come in the form of a lower oil price. If Brent goes below USD 50-60/bbl and stays there, some projects will grind to a halt, and the impact would be even bigger on sanctioning and exploration.
The market will need to look beyond the scope of the current situation to find solutions for mitigating market risks. Greater collaboration and joint ventures have potential – and in fact, providing integrated service packages is a trend we forecast to become stronger. There is clear competitive advantage for companies who can offer not only a PSV, but everything related to the logistics of certain operation. Take supplying a drilling rig as an example, where the ability to provide a supply base, warehousing, port facilities, waste management and customs clearance would provide opportunities for market collaboration.
Partnerships between vessel providers could also create opportunities, such as the potential to move vessels from oversupplied regions to places with barriers of entry for foreign companies. As such barriers will likely increase in the future, these partnerships will be something to continually consider.
In a market that has been rocked with downturn and uncertainty, perhaps it will be the possession of a deep understanding of market dynamics that will be the biggest aid in supporting the journey towards a more positive and buoyant market. Analysis of data from vessel operations will be crucial in not only better understanding the relationship between supply and demand, but also providing accurate market projections. Maritime Strategies International has put a strong emphasis on this – and the surge in data recording has been a key catalyst.

Dr Ferenc Pasztor is set to join a line-up of leading experts at Seatrade Offshore Marine and Workboats Middle East for the market’s most critical assembly of the year. Titled “The Case for Optimism”, our speaker panel will debate whether the market really has cause for confidence, or if current market conditions are simply the new norm