Maritime CEO

M3 Marine: Thailand and Malaysia hot prospects for OSVs


Singapore: Thailand and Malaysia are deemed very hot areas for the booming offshore support vessel (OSV) market, says one of the region’s top brokers. Mike Meade, ceo of Asia’s largest independent offshore brokerage M3 Marine reckons the capital expenditure for exploration and production (E&P) in Asia will grow by 53% between 2013 and 2017, with an “above average spend” in India, Malaysia and Indonesia.
“We are seeing an increase in activity across the board,” he told Maritime CEO, “with notably jack up utilisation – and rates – increasing and the subsea sector described by many as hot.”
This has a direct knock on correlation in vessel demand, Meade explained and he has seen immediate increased activity levels in Thailand and Malaysia.
“Once Indonesia can resolve its regulatory issues that market should bode well for OSV operators too,” he added.
Continuing on Indonesia, Singapore-based Meade noted the increase in E&P capex spend in Indonesia between 2013 and 2017 is forecast to be $18.7bn, an increase of more than 172%. The spend will be across the board with both shelf and deepwater developments.
“Indonesia is geographically huge,” Meade said. “Thus overall logistics needs are greater than other areas. Indonesian oil and gas fields are spread from Sumatra in the west to Irian Jaya in the east, more than five hours in a plane as the crow flies. The OSV demand growth in Indonesia across the board is significant.”
According to the M3 boss, the challenges for the oil companies is in chartering vessels that fly the Indonesian flag and owners complying with the flag demands. Indonesian cabotage for OSVs of more than 5,000BHP was implemented on 1 January this year without a prescribed waiver system in place.
“This is causing disruption,” Meade reported.
It is also difficult for Indonesian owners to expand their fleets as rapidly as market demands, Meade said, as international banks are still wary of providing shipping loans in Indonesia, in part due to a lack of liquidity on the banks’ part, but also the regulatory environment does not provide the banks the protection they need on their mortgages. “Add to this a burdensome bureaucracy as result of trying to combat corruption and it makes for interesting times in OSV contracting in Indonesia,” Meade said.
M3 remains optimistic on the prospects of the newbuild small to mid-sized OSVs, typically deployed in Asia, as compared to the larger vessels in the North Sea and Brazil. [30/01/13]

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