There are significant opportunities for offshore vessel operators in Saudi Arabia and UAE, but rates remain just above breakeven levels
Well placed sources says Saudi Aramco requires as many as 200 more offshore support vessels (OSVs) in the coming years to meet its requirements for developing more of its largest offshore fields. The world’s top oil producer has already handed out US$5Bn worth of project contracts to construction groups and floated tenders for 33 vessels.
Zamil Offshore consultant engineer, business development, international marketing and risk management executive Hassan Abouraya told OSJ that the tenders include requirements for dynamic positioning class accommodation vessels, crewboats, liftboats, utility and supply vessels, anchor handlers, docking tugs and maintenance boats.
“We are tendering for 12 vessels,” he said, adding that “there are a lot of surplus vessels worldwide so we can acquire brand new vessels for a few million dollars”. Some of these are already in the Middle East as are a number of laid-up vessels that could be for sale.
Earlier this year, Zamil acquired Zamil LB2, a liftboat, in China. “It only took three months to prepare it for delivery,” he said, noting that the company took delivery of it on 2 October at Dammam port in Saudi Arabia.
Founded in 1977, Zamil has accumulated a fleet of 79 diversified offshore vessels and four liftboats. “Twenty-six vessels were built at our Dammam shipyards. This includes seven Rolls-Royce UT 733 version-2 anchor handlers with 80 tonnes bollard pull and 10 diesel-electric anchor handlers with 65 tonnes bollard pull,” said Mr Abouraya.
The fleet includes dive support, maintenance, construction and supply vessels, utility and crewboats. Most of these vessels are in long-term charter contracts with Aramco, plus one is chartered in Sharjah, another is in Oman and a few are under final negotiations to work for Saipem in the Arabian Gulf region.
Aramco is encouraging contractors to invest in Saudi goods, services and people, a policy for which Zamil is a leading advocate. “Saudisation is happening, and we announced recently 100% Saudi crew on board of one of our vessels,” said Mr Abouraya. “Over the last six years, we have trained almost 600 Saudis under the Saudisation programme.”
In the UAE, there are ongoing offshore projects that are keeping vessels employed, although rates have plunged to just over breakeven levels and many vessels are laid up. Stanford Marine is in the market to charter in more vessels to meet increasing requirements. General manager Shamjith said the Stanford fleet has an utilisation of 90%.
“We own 40 vessels in the Middle East, chartered in six and have plans to charter in more to cater for requirements,” he told OSJ. “We have term charters, but rates are low as we compete with Southeast Asian owners. This forces us to cut. It is a matter of survival until rates improve.”
Allianz Marine Services has grown its business in the UAE by acquiring vessels when it has fresh requirements. “We have a lot of operations in Abu Dhabi and Kuwait, and there are still requirements for shallow-draught workboats for offshore construction projects,” said director Murali Krishna.
“Since 2016, it has been the right market for picking up vessels and reaching deals. We have bought crewboats, barges and landing craft to meet logistics and offshore requirements.” He said Allianz was looking at opening operations in India, Egypt and West Africa.
Owners are being pressured to reduce fuel costs by oil companies and charterers in the Middle East, said Miclyn Express Offshore (MEO) operations manager Ravinder Hoonjan. This is why he would recommend that “vessel owners need to monitor and better manage the fuel consumption”. Fuel costs are of greater importance for vessels that are placing heavy loads on engines, he added.