The offshore vessel market continued its path to recovery in the first half of 2022, with the Clarksons offshore index climbing to a seven-year high.
The cross-segment rate index, which covers rigs, offshore support vessels (OSVs) and subsea construction vessel dayrates, was up 17% in the first six months of 2022, building further on the 28% improvement last year.
The active rig count increased by 6% to 499 units in the first six months, with Clarksons Research projecting even higher utilisation. Its rig rate index rose 24% in the first half to 104 points at end-June, though still 38% off 2014 levels.
Furthermore, Clarksons observed an overall OSV rate index up 18% to 126 points and is now up more than 50% since the start of 2021, with large PSV rates closing in on pre-2014 downturn levels in some regions. Anchor handler rates improved gradually, but spot rates for the very large North segment were observed at a record-high £173,750/day ($208,000/day) in late June.
It seems likely that OSV lay-up will decline further as the market continues to tighten
Global OSV utilisation is projected to hit 80% by the end of 2023. It reached 68% at the start of July, which is up 11% from the start of 2021 but down 18% compared to 2014 levels. The number of laid-up assets also continues to decline, with OSV lay-up falling below 800 units for the first time since 2015.
“It seems likely that OSV lay-up will decline further as the market continues to tighten, although many long-term lay-ups are expected to have already been re-purposed for alternative markets or be scrapped,” remarked Steve Gordon, managing director of Clarksons Research.
Subsea support vessel markets have squeezed as the season approaches, with global utilisation reaching 82% in early July, the highest level since 2014, while rates in the United States and the North Sea have risen further.
As for the vessel transactions, Clarksons’ research unit recorded 150 sales, which it hailed as the strongest start to a year on record, with S&P activity picking up notably in the Middle Eastern rig sector, reporting 27 jackup sales. Asset pricing has also begun to improve, with Clarksons OSV secondhand price index up 39% year to date, but still 53% lower than it was at the start of 2014.
Offshore oil & gas fleet newbuild activity remained very limited, excluding FPSOs, while offshore wind continues to account for around 50% of offshore newbuilding activity, with contracting of the WTIVs on track to surpass totals seen last year.
The current index of 74 points remains 27% below the ten-year peak of 101 in 2014 and compares to a ten-year average of 66 and a ten-year low of 44 points in 2017.
“The oil price environment, increasing offshore activity and the multi-year impacts on the fleet supply of consolidation, restructuring, limited newbuilding and ongoing removals have all been supportive of the improving utilisation and day rate environment,” noted Steve Gordon, managing director of Clarksons Research.