Singapore: Weaker utilisation and a “highly competitive market” are making life extremely difficult for OSV players, a leading name in the industry told delegates attending the Sea Asia conference.
The managing director of Swire Pacific Offshore, Neil Glenn, commented that falling oil prices are creating significant short-term challenges for operators.
“The lower oil prices are making oil and gas operators reduce their capital and operational expenditure which has a significant knock-on effect on the offshore industry.
“Day rates for new charters are coming under pressure and the oil and gas industry is also requesting reduced rates for existing contracts.
“This is leading to weaker utilisation and a highly competitive market environment,” Glenn said.
Glenn said this is creating overall revenue pressure for players in the industry, adding that there are three key things that the industry can do to manage these challenges.
“The industry needs to look at how it can sustainably reduce costs while maintaining training, safety and quality standards. We also need to be more stringent in vessel finance discipline and look at opportunities for consolidation so we can leverage economies of scale,” he said.
Moving forward, Glenn added that players “need to seek to learn, adapt and engage with all stakeholders in the industry to find out how it can meet their needs on a sustainable basis.”