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Offshore Support Journal

Offshore Support Journal

Market data: May was a month of contract renewals

Thu 14 Jun 2018 by Craig Jallal, tankers and markets editor

Market data: May was a month of contract renewals
The deck of Skandi Kvitsøy, which will support Chevron’s North Sea drilling operations (credit: Sverre Fangel Brekke)

May saw a round of long-term contract renewals, but few reports of short-term business

A number of long-term contracts were renewed in May in the anchor-handling tug supply (AHTS) and platform supply vessel (PSV) sectors, but short-term business was light. Values did creep up slightly during the month, but older units, as ever, face challenging times.

The renewal of long-term contracts was the main news in the AHTS sector. Petrobras extended its contracts for two Solstad Farstad vessels and renewed another contract for three years to support its exploration and production activities on the Brazilian continental shelf. AHTS BOS Topazio was awarded a new three-year contract with a possible two-year extension that will commence in Q1 2019, in direct continuation of its current charter. The vessel was built in 2005 at the Itajai shipyard and has a bollard pull of 146 tonnes.

AHTS Far Santana had its contract amended to Q2 2019. The 2000 Ulstein-built vessel, has a 203-tonne bollard pull and is equipped with a Fugro FCV work-class ROV, capable of operating in depths of up to 3,000 m.

Construction support vessel Far Saga’s contract has been extended until Q2 2020, with commencement also due to take place during Q2 2018. Built by Simek in 2001, it is equipped with two i-Tech 7 work-class ROVs, which can operate in water up to 3,000 m deep.

In other news, Aberdeen-based subsea services provider Bibby Offshore has secured a two-year framework agreement with independent oil and gas firm Spirit Energy. The two-year agreement was awarded in April and follows on from a previous five-year agreement. Bibby will carry out inspection, repair and maintenance (IRM), remotely operated vehicle (ROV) and subsea survey operations covering a number of Spirit Energy’s North Sea structures and pipelines.

Multi-role diving and ROV support vessel Bibby Sapphire, is equipped with a Quasar MKII work-class ROV and two Seaeye Lynx observation-class ROVs. Bibby Sapphire has a 94 m length, a 22 m breadth, and a capacity of 2,800 dwt. The vessel has a DP2 dynamic positioning classification, a helideck and can accommodate 136 seafarers.

Bibby Offshore chief executive Howard Woodcock said: “The award of a further two-year framework with Spirit Energy is a clear demonstration of the strength of the relationship between Bibby Offshore and the client.

“Having successfully delivered a varied programme of work across the company’s Morecambe Bay assets and North Sea pipelines and structures over the past five years, this latest agreement highlights the ongoing confidence in our ability to deliver safe, on time, multi-scope operations to meet the needs of our client.”

Another IRM project was awarded to Subsea 7, which will position the Seven Viking from January 2019 for five years with options for extensions in the North Sea. No exact value was disclosed for the contract but Subsea 7 described it as “substantial”, noting it defines this as between US$150M and US$300M.

The contract stipulates the support vessel should be equipped with work- and observation-class ROVs and a module handling support system and must be capable of performing standard inspections, light construction and scale squeeze operations, module handling and Christmas tree installation.

The X-BOW hulled 5,125 dwt Seven Viking, built in 2013 by Ulstein, has a length of 107 m and a beam of 25 m. It can accommodate 90 people and has a service speed of 14 knots. Project management and engineering support will be provided by Subsea 7 subsidiary i-Tech Services’ Stavanger office.

i-Tech Services senior vice president Steven Wisely said the contract was a renewal of an existing one the company held with Statoil, adding “It proves the concept of Seven Viking, which is the only vessel of its kind in the world.

“Over the course of the contract we look forward to introducing new innovative technologies, including remote controlled operations from onshore.”

Short-term contracts

A number of short-term contracts in the PSV sector were announced in May. In the North Sea Norwegian offshore services group DOF announced that it and subsidiary Norskan Offshore have won contracts with Petrobras and Chevron for the vessels Skandi Fluminense and Skandi Kvitsøy.

DOF’s contract is with Chevron North Sea Limited for Skandi Kvitsøy to support drilling operations in the North Sea for approximately 140 days, commencing June 2018. Skandi Kvitsøy is an STX PSV 09 CD platform supply vessel, built in 2012. It measures 87 m in length by 19 m in breadth, with a capacity of 4,700 dwt. The PSV can accommodate 26 people, holds a Clean Design DNV GL notation and is compliant with the Norwegian Clean Seas Association for Operating Companies.

Norskan Offshore has also signed a one-year contract with Brazilian oil firm Petrobras, with estimated start-up in July, for its Skandi Fluminense AHTS vessel and one ROV. Skandi Fluminense is a Rolls-Royce UT 722 L AHTS vessel, built in 2007. It measures 80.5 m in length, has a breadth of 18 m and a capacity of 2,659 dwt. It can accommodate 40 people and has a bollard pull of 211 tonnes.

In other news, Seabrokers report that PSV Havila Fortune has been reactivated from lay-up in Norway. The 2008-delivered PSV is a MT 6009 MkII design with a deck area of 683 m² and went into lay-up in late 2017. Havila Fortune will be working for Axxis Geo Solutions providing seismic support.

Long-term contracts in the PSV sector include Østensjø Rederi’s PSV Edda Frende, which has been contracted in the UK sector of the North Sea for three years from May 2018 by Shell. According to market reports, Shell has a request for tenders for another long-term PSV campaign running for at least 18 months.

Siem Offshore’s dual-fuel PSV Siem Pride has been taken by Norske Shell for five more years. The original contract commenced in 2015. Siem Pride is Wärtsilä’s VS 4411 DF design, powered by either LNG or marine diesel oil. It has a length of 89.2 m, a deck area of 980 m² and a capacity of 5,500 dwt.

OSV values have been in a challenging place recently. VesselsValue head of offshore Charlie Hockless said: “The OSV space is poised for significant movement over the coming years.”

He felt that OSV demand will recover and those with modern, high quality tonnage are in a strong position to ride the market up, provided their vessels are in good working condition. Those with older vessels (15-years or older) face a challenging and costly period.

He noted that: “Vessels that are low-spec and laid-up at this age are finding their asset values aligning with (or being lower than) the costs associated with reactivating and re-classing their vessels. This will therefore lead to a point where owners and financiers will have to decide to either accept these costs or scrap the vessel and take the financial write off.”

 

Charlie Hockless– Lead Offshore Analyst, VesselsValue

Mr Hockless began his Offshore career in 2013 at the Paris-based shipbroker Socomet Sales. It is here where he specialised in the Offshore sector, particularly focusing on the West African OSV market. He joined VesselsValue in 2015 to lead the Offshore project from inception, launching the first set of values in April 2016. Mr Hockless has overseen the development of VV Offshore, working together with the London analyst team and dedicated Offshore research team based on the Isle of Wight.  

 

 

 

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