A lively debate that pitted leading OSV industry owners and analysts against each other has concluded with two thirds of this year’s audience at Riviera’s Asian Offshore Support Journal Conference believing that meaningful industry recovery is at least two years away.
Speaking in favour of the motion 'This House believes that the depression has bottomed out', Pacific Radiance managing director James Pang and Pareto Securities chief executive David Palmer cited improvements in rig markets and earnings as evidence that the depression has bottomed out and that the worst is over.
These arguments were refuted by CH Offshore’s James Noe, and M3 Marine Group’s Mike Meade, speaking against the motion.
In a passionate closing argument that clearly connected with those present, Mr Noe dismissed Messrs Pang and Palmer's arguments as a false dawn.
As an industry, we have spent so many years “skipping off the bottom” that we have become “desperate for good data points.” He acknowledged recent increases in the rig count in southeast Asia and a slight uptick in the North Sea, including some longer-term contracts, but was equally clear that these data points are just too few and far between to really show a meaningful recovery. “One or two extra rigs in southeast Asia, one or two extra boats in the North Sea, that's not even a band aid on this massive flesh wound that we are all suffering through. My company has 70% utilisation but we are not making any money.”
Foreshadowing the eventual result, the audience were asked to predict when they expected their next pay rise. A clear majority (36%) said in 2019.
The final vote however was more emphatic. Two thirds (65%) rejected the motion, believing that there was still some way to go before the present downturn truly bottoms out.