Scrap to improve profits in OSV sector

Calls for more scrapping of older offshore support vessels (OSVs) were welcomed from operators and builders alike during the opening session of TradeWinds Offshore Marine conference in Singapore on Thursday.

Speaking to more than 140 delegates, Hallin Marine’s business development director John Payne suggested that supply would continue to outstrip demand as long as a market remained for older tonnage.  Payne welcomed the development of new designs from fellow panelist Torgeir Haugan of STX OSV but questioned whether the market ‘could afford’ the new designs in a market where ‘price comes first, technology second’.

Highlighting a long-term shift from AHTS to PSVs in Asia, Fearnley’s broker Harald Paulsen Lovik told delegates during the Q&A session that European vessel designs incorporating greater fuel efficiencies, carrying capacities and lower emissions were gaining ground in Asian markets.

But despite predictions of growing demand for OSVs to service deepwater E&P activity in China, Malaysia and Indonesia, Lovik predicted that day rates would remain flat for the next 9-12 months, giving rise to questions of whether charterers would be prepared to pay for more expensive and technically advanced boats.

Wärtsilä VP, Riku-Pekka Hägg noted that while there was interest in high tech vessels in Asia, the enthusiasm was not reflected in the charter rates. He added that ‘modest steps’ towards high end vessels were being driven by legislation in market characterized by an ‘extreme focus on cost.’