Singapore: Today in our penultimate roundup of interviews as part of Maritime CEO’s celebrations in passing the 200-interview mark, we turn our attention to owners, and specifically offshore owners.
With the downturn in commercial shipping, offshore suddenly became a very tempting new avenue for many. The market has ballooned in recent years, and supply/demand issues have hit certain sectors, however, investment in offshore-related vessels continues to ramp up.
Chellsea, one of Singapore’s newer entrants into the offshore support vessel (OSV) scene, is undergoing a period of significant expansion. Part of the Kishinchand Chellaram (KC Group) of shipping companies, Chellsea was set up by Gautam Chellaram two years ago as part of the group’s strategic diversification.
The Chellarams traditionally have focused on dry bulk via Hong Kong’s KC Maritime, but saw the coming offshore explosion and bought a platform supply vessel in 2011, kicking off new firm Chellsea. A sister ship was added last year. In the last couple of months Chellsea went to a new level, ordering in China four plus four options of Rolls Royce designed, high spec, large accommodation, DP II PSVs with the first to be delivered in early 2015.
“The strategy for Chellsea in ordering these vessels,” said Chellaram, “is to order high spec and build quality vessels, with a focus on winning long-term business. There is no compromise in quality, which is what will win us long-term business with oil majors.”
If anyone ever wanted advice on how to operate OSVs there are few people on earth more qualified than Indonesian national Rony Sudjaka, the chairman and md of Singapore-based OSV specialist Pacific Richfield Marine. Sudjaka’s father worked in Hong Kong at the old Taikoo Shipyard from 1926, before moving back to Indonesia to do contracting work. Sudjaka himself, now 76, has been in the OSV business now for more than half a century.
Sudjaka now owns 55 ships. His shipyard in Singapore has one dock and is able to build eight ships every 18 months.
Also in the Lion Republic is Nordic Maritime, one of myriad Scandinavian shipping companies that calls Singapore home. The offshore specialist is increasingly carving a niche out of Indonesia to cement its strong Southeast Asian business.
Founded in 1999, Nordic Maritime now operates seven vessels – both owned and under third party management. The fleet is made up of five seismic vessels and two survey/chase support vessels.
There’s also a DP2 multipurpose supply vessel under construction for delivery late this year plus two DP2 400-men accommodation/construction vessels coming into the market next year.
Also of interest being built is a catamaran hybrid design under construction for seismic support and chase operation which is due out in the third quarter of next year. “This is an exciting project which can be very interesting for the Southeast Asian market with a low fuel consumption and high functionality to support the seismic survey vessels,” claimed Kjell Gauksheim, Nordic Maritime’s ceo.
On market prospects, Gauksheim is confident his two chosen sectors have good supply/demand ratios, something that he is not so sure about in other offshore support divisions.
“For certain OSV vessels the market is already facing an overcapacity and supply,” he said. “However, we are very focused on our two segments and have strong belief in these.”
Feeling the heat from this overcapacity has been Singapore offshore contractor Otto Marine which has endured a tough couple of years as it fights to get back in the black. As well its shipbuilding capabilities Otto Marine has 63 vessels operating around the world. New CEO Garrick Stanley is confident rates will continue to rise.
“We are bullish about the sector as it has been relatively flat over the last five years,” he said this August, adding: “The newbuilding program has slowed in the last two years and the demand and supply equilibrium has started to stabilise.”
One of the booming areas for offshore is in Mexico and in July we caught up with a leading player there. 80 years ago a Mexican, Alfonso Negroe Garcia, founded the offshore operating group Canega. Today the diversified company is on the cusp of serious expansion guided by current president, Alfonso Negroe, a descendant of the founder.
Canega currently operates a fleet of 22 offshore vessels of various types including platform supply vessels and diving vessels. There are no ships on order at present.
Strong in Mexico and its Gulf plus the Caribbean plus with a decent foothold in the US Canega is looking further afield for new business although Negroe remained a little coy as to where this expansion might take place.
“Canega has plans to expand its fleet of owned and operated vessels and expand into other areas of the world in the near future with the acquisition of more vessels,” Negroe said without elaborating.
While the spectre of overcapacity remains high in the OSV sector, this is not a universal feeling held by Negroe.
“At the present time there is a shortage of tonnage in the US Gulf, Mexico and Caribbean due to the high demand of bigger vessels and the fact that most oil companies and countries are putting restrictions on the age of vessels typically with a maximum of 10 years,” said Negroe.
In Dubai in August we caught up with a fast growing local offshore player, Arina Offshore, which currently owns three ships and operates a further 14.
Managing director Captain Charles Verghese said medium term business plans include: “Sustained growth of fleet size with acquiring more vessels based on contracts in existing regions and looking at developing contracts in emerging markets especially Africa and Mexico.”
Meanwhile, Romania’s GSP Offshore has ambitions to head into deepwater operatations. Gabriel Comanecu, ceo and president of the company, told Maritime CEO this July: “We’re heading towards deepwater operations and the fleet development focuses mainly into that.”
GSP Offshore has seven MODUs, ten multifunctional OSVs with different operational capabilities, a fleet of five construction vessels which includes two pipelay vessels, one semisubmersible barge and two crane barges. It also provides operational management for 15 OSVs.
“GSP Offshore is determined to continue its strategic growth: deepwater operations, the service offering diversification in order to meet the renewable energy offshore market and the submarine cable installation market are some of our objectives in the short and medium term. And, as a consequence, GSP’s fleet is going to develop further. The offshore drilling operational capacity will be supported by newbuild units from drillships to ultra drillships, jack ups and drilling barges,” said Comanecu.
Similarly looking to expand is Dutch offshore operator Workfox, which has plans to grow its area of business well beyond its North Sea origins. The company currently has five jack-ups all working in the North Sea in both oil and gas as well as the offshore wind market.
Brazil, Mexico, Southeast Asia and Australia were all listed by managing director Keesjan Cordia as potentially interesting places for this European company to expand to when we interviewed him in July.
To do this will require more jack-ups, and Martime CEO expects Workfox to be hunting well priced offshore units soon.
“Newbuildings are getting more expensive,” admitted Cordia, “but the margins of profitability are still making sense to invest.”
Finally in our roundup we covered the offshore wind market a couple of weeks ago, a sector that is getting more competitive.
Frank Hansen, ceo of Denmark’s CT Offshore, told Maritime CEO he is seeing more and more companies entering and investing in this relatively new sector, especially financially heavy companies from the oil and gas industry.
“Large investments have been made on the vessel side during the past five years and many more are possible to come,” he said, adding: “This of course also has an impact on the competition.”
However, CT Offshore’s niche, namely cable installation is relatively well insulated.
CT Offshore currently has four vessels in its fleet, a cable layer, a trenching and post-lay burial vessel, and two survey ships. There are no ships on order.
CT Offshore operates mainly in Northern Europe, and currently primarily in the UK.
“In the future we know that the German and French regions will be very important due to the overall EU goals for implementing renewable energy,” Hansen said of future intentions. He is very bullish on the coming 10 years of offshore wind power developments in the EU.
Launched in late January by shipping media veterans at Asia Shipping Media, Maritime CEO this week celebrates its 200th interview.
Every day we catch up with a top name in shipping to gauge their thoughts on the industry, with every Friday guaranteed to be a shipowner interview. The best interviews appear in our quarterly magazine. Our aim is to cover every facet of the industry, but only from the viewpoint of the top echelon of management. [31/10/13]