More pain before gain for vessels and rigs

Aberdeen and London-based Offshore Shipbrokers has suggested that there is more pain to come for North Sea vessel operators before any market pick-up can be detected early next year.

In its latest North Sea rig and vessel market analysis, the broker says there are signs that the market rates for support vessels may have bottomed out and it notes that some owners are choosing to lay up vessels rather than run them at a loss.Vessel day rates in November “..Gave very little for owners to be optimistic about with rates showing no improvement at all from last month’s levels,” the broker notes. “On the plus side however, rates did not drop any further and it looks like they may now finally have found the bottom.”

Platform supply vessels are fixing regularly at rates of between £2,000 and £3,000 a day, while anchor handling tug support. Others are opting to put boats in lay-up: Ten North Sea vessels have been laid up already and more heading the same way, Offshore Shipbrokers’ November market report says.

Conversely rig rates are indicating an improving market for the drilling sector, Offshore Shipbrokers suggests, and November indicated “some signs of hope.”

There were a “healthy number” of rig fixtures concluded in November for drilling start-ups in 2010 and 2011, the latest report from the broker says.

And it adds: “It would seem that rig dayrates have now fallen to a level where they are nonce again becoming attractive to operators. For the latest round of rig fixtures we have seen standard jack-ups fetching between US $90,000 – $115,000, heavy duty jack-ups fetching $140,000 – $180,000 and standard semi-subs now fixing at around $250,000 – $285,000.”

Nevertheless there are 12 North Sea units still idle and uncommitted, while potentially, another six are due back off contract in the next couple of months.

Turning to prospects for 2010, Offshore Shipbrokers says predicting next year’s vessel market will be difficult, yet adds: “..The common belief currently is that the first half of the year will bring more pain with low rates and poor utilisation but the second half of the year see[ing] the beginning of the recovery.”

And it adds: “Recent rig fixtures will certainly have reinforced this belief and it would seem some markets outwith  the North Sea are still very buoyant, Brazil in particular with Petrobras fixing 13 vessels this month for commencement early next year.”