In International Shipping News 22/02/2016
Deep Sea Supply said Q4 saw a continued weakening of the global offshore support vessel (OSV) markets, with Brazil remaining difficult and the North Sea spot market seeing “unsustainable rate levels and low utilization.”
Deep Sea Supply’s 2015 consolidated revenues were $132.4 million, with pre-tax losses of $ 119.8 million.
BW offshore says the organizational changes, due to complete in Q1 2016, were a consequence of the current market conditions.
The firm, which posted a US$216 million net loss in 2015, compared to a $187 million profit in 2014, operates 17 floating production vessels (FPSOs), of which 14 FPSOs and one floating storage and offloading vessel are owned.Earlier this month, BW Offshore said overall uptime on the firm’s fleet in Q4 was 99.6% excluding the Cidade de São Mateus, which is yet to be taken off station following a fire 11 February 2015, in which nine people died.
GC Rieber’s profits have taken a hit after suffering from the bankruptcy of Dolphin Geophysical, with which it had vessel lease deals. Its fleet utilization was 73%, compared to 100% in Q4 2014.
The group posted a loss of NOK 400.1 million in Q4, compared to a loss of NOK 201.4 million in the corresponding period 2014, however, this includes a loss of NOK 189.7 million on accounts receivables related to the Dolphin Geophysical bankruptcy.
GC Rieber’s contract coverage for the years 2016, 2017 and 2018 is 43%, 36% and 22% respectively.Meanwhile, another Norwegian vessel operator DOF is faring marginally better with average vessel utilization of 87% in Q4, with 84% in the subsea fleet, 81% in the anchor handler fleet and 96% in the platform supply vessel fleet. Two vessels were in the North Sea spot market and two were laid up, with one of those sold in December. The contract coverage for 2016 for the combined fleet, excluding options, is 70.9%; 80% for the PSV fleet, 69% for the AHTS fleet and 65% for the subsea fleet.
Owners of significant floating assets are continuing to feel the pinch in the offshore market as rates sink to “unsustainable levels.”
Floating production specialist BW Offshore says it is cutting its onshore staff by 35%, while Norwegian offshore ship owner and operator Deep Sea Supply is laying up any vessels without fixed contracts in coming months and GC Rieber has taken a hit due to the bankruptcy of a client.
It says contract coverage for 2016 is “not satisfactory” and predicts no improvement in the market situation for OSVs in the short to medium term. It is selling two anchor handlers, laying up vessels which do not have fixed activity within the next months and reducing its operating expenses on working vessels.
BW Offshore said its cost reduction and “right sizing” would save annual costs of around US$30 million. It did not say how many staff would be impacted and doesn’t give total onshore staff numbers.
“Macro conditions for the offshore industry have continued to deteriorate over the past months and BWO expects reduction in industry capital expenditure to continue,” the firm said. “The FPSO industry is equally affected and the situation does not seem likely to change in the short term.”
The firm’s BW Athena is due to come off hire this month. The FPSO Azurite is currently being marketed for new projects after being returned by the client and the FSO Belokamenka has been returned to BW Offshore.
“The current market situation in the offshore segments is challenging to say the least, and unfortunately is affecting just about everyone operating in this space,” CEO Irene Waage Basili says.
Due to the market deterioration, a NOK 132.8 million impairment on the value of the fleet was also made in Q4, increasing total 2015 impairments to the fleet to NOK 251.6 million.
Source: Offshore Engineer
