Doha: Qatar’s diverse owner Milaha has managed to get through the dire offshore markets via its solid tanker earnings. This widespread fleet is just as well as the firm’s ceo, Abdulrahman Essa Al-Mannai, sees no offshore pick up for at least the next two years.
“With current oil prices showing no signs of an imminent recovery, oil majors are likely to continue to control E&P spending carefully,” Al-Mannai tells Maritime CEO. “We do not believe demand for offshore supply vessels is likely to increase substantially in the next two years. Besides, there is still a significant supply overhang to deal with.”
In this environment, Al-Mannai thinks that 2016 and 2017 will be years of consolidation for the industry with new alliances and partnerships whose main purpose is maintaining positive cash flows.
Milaha currently owns and operates almost 90 vessels ranging from tug boats and offshore support vessels to container vessels and product tankers. It also has varying stakes in four VLGCs and seven LNG carriers.
“We continue to look at opportunities to grow our fleet across a number of sectors,” Al-Mannai says.
On LNG, Al-Mannai reckons the spot market is likely to continue facing challenges for the next few years until the surplus tonnage is absorbed by new projects. He also noted the shorter time charter periods of five to seven years in comparison with the traditional longer charters of over 20 years.
As for the LPG market, Al-Mannai has already seen a drop in VLGC rates this year from the historically high rates of the last two years, which were mainly driven by increasing US exports.
“With over 200 VLGCs now in the water and an additional 25% due for delivery this year, it remains to be seen whether US exports are sufficient to meet the growing LPG fleet,” he muses.