Deep Sea Supply (DSS) has described its contract coverage for 2016 as “not satisfactory”, leading the offshore support vessel (OSV) owner to consider laying up more vessels or employing them in new ways. The Oslo-listed company is currently in “advanced” contract negotiations for some term employment, “however, the competition is fierce and rate levels are low”, DSS said in its second-quarter 2016 financial results. Any vessels that do not have fixed activity in the next few months will be laid up, and the company is “working hard” to reduce the operating expenses of those that are employed, DSS added.
The company is ruling nothing out, and said its board is actively considering “alternative use” of the fleet, which could include the use of vessels for aquaculture shipping.
It fixed an anchor handling tug supply (AHTS) vessel and two platform support vessels (PSVs) during the second quarter.
“In Brazil, the situation remains challenging, and the company now has only four vessels left operating in Brazil. The North Sea spot market is challenging with unsustainable rate levels for PSVs,” DSS said in its report.
The owner only has one PSV operating in the North Sea spot market, having sold two AHTS vessels in February.
DSS decreased its vessel operating expenses by $700,000 during the first half of 2016, which it said was due to vessels being laid up, the two vessel sales and “underlying cost reductions”.