Register for a free trial
Social

Two-tier market could see vessels trapped in layup

Tue 04 Jul 2017 by David Foxwell

Two-tier market could see vessels trapped in layup

Are you prepared for the upturn, or will it cost too much to reactivate your vessels?

Everyone understands that large numbers of offshore support vessels are laid up, but owners are often reluctant to disclose whether they are in warm layup and ready to return to work, or cold layup, a state that would require significant work, time and money to bring them back into operation.

It is also clear that the owners are taking different approaches to laying up vessels – there is no one-size-fits-all approach, and where vessels are laid up will affect the amount of work required to bring them back into service.

Owners with vessels laid up in warm water – such as offshore West Africa – could find that they are trapped by the amount of work needed.

Peter Döring, a broker at Mercers Offshore, estimates there are approximately 50 vessels in layup in West Africa. In the warm waters there hull fouling is going to be a major problem when it comes to reactivation.

Mr Döring cited an example of a requirement for three PSVs to support drilling work. He said he was inundated with vessels, some of which were in warm layup, others not. The status of some vessels being bid for the contract was unclear.

If a vessel has worked recently, it stands a much greater chance of picking up a fixture, but a lot of owners have turned off the lights and walked away.

Mr Döring says some owners have “given up”. Vessels known to be in the region have their beacons turned off and cannot be found on AIS.

He says a two-tier market has developed in which a number of vessels that are trading regularly are available at short notice with many others that have not worked recently unlikely to pick up work.

There is no sign of improvement yet, he says. It’s a desperate situation for owners, but he suggests that when the market eventually picks up rates for offshore vessels in the region could skyrocket.

By the time the recovery comes, fewer and fewer vessels will be active and available, an effect likely to be compounded by the fact that there are only two drydocks in the region that can handle vessels that need to be reactivated.

Recent whitepapers

Related articles