Download - Overview Offshore Support Vessels (Final)
Sector Overview
Teddy H Tsai – Head of Research, Pacific Transportation Asia Pte Ltd.
October 24, 2008
Opportunities in the offshore support vessel market
2
Investment View Investment drivers
Offshore oil & gas exploration moving to deep water – High oil & gas prices makes offshore development more cost effective. Average long-term oil price assumption by E&P companies around US$55-65/bbl, lower than current levels.
E&P capex expected to grow substantially – Expect deep water E&P capex of US$20bn from 2006-2010. Although most of this would be for rigs, higher specification supply vessels would also be required.
Favorable supply side dynamics – Fleet is old for total offshore supply fleet. 45% of the fleet is over 25 years old.
JV Partner or takeover – To be determined We require an experienced team with technical expertise operating in offshore services. We aim for partners that have strong relationships with oil majors, or with national oil
companies in Asia and Mid-East. Broad range of offshore supply vessel expertise. We aim to build a fleet of different
types of high specification multi-functional offshore vessels, including PSV, AHTS, DSV, ROV, cable laying, etc.
We are evaluating possible take private transactions of listed shipyard/offshore chartering companies. (e.g. Jaya Holdings)
3
Vessel Types
Anchor Handling Towing and Supply (AHTS) vessels Fitted for deep-water anchor handling and
towing operations, equipped with a winch capable to lift a barge or other offshore vessels’ anchors.
Main duty is to move rigs, tow barges, setting anchors, and provide supply support.
Equipped with large cranes, winches, and large open deck space. Winch and engine capacity determines power. Higher horsepower is used to handle heavier gear.
4
Vessel Types
Platform Supply Vessels (PSV) Main purpose is to move cargoes and
supplies to/from offshore installations. Flexible platform structure, enables multiple-
purpose supply cargo carrying capacity Standard Type – UT755, a Rolls Royce
designed PSV, over 100 in operations
Diving Support Vessels (DSV) Helipad Diving support equipment Large Cranes
May also be used as a standby/support vessel, with fire fighting, rescue operations, or oil recovery equipment.
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Vessel Types
Remote Operating Vessels (ROV) Support Support vessel for remote operating vessels Often equipped with a moon pool, an
opening in the floor of the hull giving access to the sea, to facilitate ROV launching.
ROVs are used for underwater activities, equipped with cameras and arms for underwater duties.
Multi-Purpose Service Vessel (MPSV) Multi-Purpose (MPP) use Equipment for sub-sea service, large crane,
winches, and/or fire fighting equipment.
May have other equipment, such as ROV support, diving support, etc.
Dynamic positioning systems
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Vessel Types
Cable & Pipe Laying Vessels Photo is of a pipe laying vessel Used to lay underwater pipes or cables. Pipes and cables are pre-loaded on a spool
on the vessel, and conveyors and rollers move the pipe downwards into the ocean.
Standby and Rescue Vessels Standby duties are where a vessel is waiting
near offshore installations in case of emergencies, to pick up people.
Typically with helipad, fire fighting, rescue operations, or oil recovery equipment.
Typically can accommodate up a large number of passengers, up to 300 persons
Dynamic positioning (DP2) capabilities
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Vessel Types
Seismic Survey Vessels Survey vessel with seismic prospecting
equipment, called seismic streamers. Can be capable of a range of duties including
survey, patrolling, fishery protection, emergency standby, pollution control, fire fighting, salvage, towing, etc.
Fast Supply Intervention Vessels (FSIV) A type of crew boat that has high speeds
enabling fast delivery of personnel and cargo. Fitted with fuel and water cargo capabilities. Max speeds up to 30 knots. Can have fire fighting capabilities.
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Vessel Types
Well Stimulation Vessel Specialized vessel used to maximize oil
production by creating a more efficient reservoir flow path.
Increases oil recovery with blending, pumping, and storage systems.
Well Intervention Vessel Has specialized equipment that is used to
maintain and repair oil & gas wells, down to depths of 600 meters for this (UT767) type.
Can deploy ROV for repair operations on the seabed.
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Key Markets / Routes
AHTS Spot Rates North Sea spot rates have increased
significantly since our last update, following the seasonality that we saw in 2006.
Strong rates due to tight utilization rates in the North Sea market for larger AHTS vessels.
Large AHTS Spot Rates
80,533
-
20,000
40,000
60,000
80,000
100,000
120,000
Jan
Feb Mar AprMay Ju
n Jul
AugSep Oct Nov
Dec
2005 2006 2007 2008
£/DayLarge PSV Spot Rates
27,225
-5,000
10,00015,00020,00025,00030,00035,00040,00045,000
Jan
Feb Mar AprMay Ju
n Jul
AugSep Oct Nov
Dec
2005 2006 2007 2008
£/Day
PSV Spot Rates North Sea spot rates have increased
significantly since our last update, but not as well as AHTS vessels.
A higher % of PSV are on term contracts, hence the lesser volatility compared to AHTS vessels.
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Market Rate Indicators
Source: Pareto Securities
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Technical Specifications / Definitions
Dynamic Positioning - System that enables a vessel to stay in position without the use of cables, mooring, anchoring, or arms. There are three classes (DP, DP2, DP3), based on levels of failsafe.
BHP – Brake Horse Power, measure of power for AHTS vessels BP – Bollard Pull, indicator of a tug’s power to pull or push Fi-Fi – Fire Fighting Equipment
Asset prices vary quite significantly according to cost, type, and age, ranging from <US$10mn to close to US$600mn.
Demand Environment
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Demand Drivers
High oil prices will result in more offshore development
Offshore support vessels are driven by increasing capex on offshore oil exploration.
Approximately 25% of US oil & natural gas production comes from offshore areas, and likely to increase. Internationally, the North Sea in Europe, and oil fields in SE Asia, are key areas of offshore development.
There is a trend towards more offshore development, especially in deep waters. Infield systems forecasts deepwater capex to exceed US$20bn from 2006-2010.
Daily offshore oil & gas production, currently standing at around 43 million barrels of oil equivalent (boe), is forecast to grow to 53 million boe in 2010 and drive industry annual expenditure from $193 billion in 2006 to $248 billion by 2010, according to Energy Business Reports.
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Commodity Prices
OPEC surplus capacity is minimal
Sustained upward pressures on price encourages investment in projects previously considered uneconomic.
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80
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88
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
OPEC Supply OPEC Demand
mbpdCrude Oil Prices (1984-2008)
0
20
40
60
80
100
120
19
84
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86
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08
YT
D
US
D/
barr
el
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World Oil Supply
World oil supply is slowing, with the incremental growth coming from offshore areas.
Annual Change in Global Oil Production
3.58%
0.51%
1.92%
-4.70%
8.21%
-4.76%
0
10
20
30
40
50
60
70
80
90
1965 1970 1975 1980 1985 1990 1995 2000 2005
Million barrels per day
-0.09
-0.06
-0.03
0
0.03
0.06
0.09
0.12
Y-o-Y% growth
Total World Oil Production Y-o-Y % growth
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Underlying Demand Growth
World Oil Demand has been growing steadily, despite the increase in crude oil prices.
World Oil Demand Vs Crude Oil Prices
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65
70
75
80
85
90
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92
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YT
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Millio
n b
arr
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/d
ay
0
20
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60
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100
120
US
D/
barr
el
World Oil Demand Crude Oil Prices
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Ship Demand Growth
US offshore rig fleet is growing, this will increase demand for AHTS, PSV, and other support vessels to operate in the US Gulf as well. We see a similar trend here in Asia, with more offshore developments, and required # of support vessels.
1877
1550
1600
1650
1700
1750
1800
1850
1900
1950
14-Jul-06
14-Oct-06
14-Jan-07
14-Apr-07
14-Jul-07
14-Oct-07
14-Jan-08
14-Apr-08
US Rig Count
# of Rigs
Supply / Demand Outlook
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Global Fleet SummaryOB as a
Existing Orderbook % of FleetAHTS 1562 472 30%PSV 488 196 40%Supply 669 46 7%AHT 528 30 6%MSV 139 76 55%Standby/Resc. 327 43 13%Crew Boat 263 18 7%Seis. Survey 184 25 14%C,U & FP Lay 41 5 12%Misc Offshore 40 0 0%Hvy Dk Cargo 47 2 4%Utility 184 9 5%Well Stimul. 16 4 25%Pipe Layer 14 5 36%Diving Spt 67 8 12%ROV/Sub Spt 9 8 89%Maintenance 47 11 23%
Stratification by Type (# of Ships)Fleet Replacement Profile (Total)
4707
993
2141
0
1000
2000
3000
4000
5000
Existing Orderbook >25
All All_Offshore_Supply
Orderbook delivery schedule (# of ships)
(Total)444
309
177
621 0
0100200300400500
2008 2009 2010 2011 2012 2013
All All_Offshore_Supply
s
Across all types, 45% of the fleet is older than 25 years, versus 21% of the existing fleet on order.
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Fleet Growth
For AHTS vessels - Average fleet growth of 2.6% per annum.
Currently at the high end with 4.8% YoY growth in 2008 expected.
Historical Fleet Grow th -PSV/Supply (# of Ships)
0
200400
600
8001000
1200
1400
1600
1800
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
% G
row
th
Fleet % Grow th
Historical Fleet Growth -AHT/Supply (# of Ships)
0
500
1000
1500
2000
2500
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
% G
row
th
Fleet % Growth
For PSV vessels - Average fleet growth of 3.8% per annum. 2008
growth is quite reasonable at 3.9%.
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Fleet Growth (Cont.)
For Crew boats - Average fleet growth of 2.6% per annum.
Growth in 2008 expected to be 2.1%.
For other offshore vessels - Average fleet growth of 1.9% per annum. 2008
growth is at 2.5% YoY growth.
Historical Fleet Growth -Crew/Workboat (# of Ships)
0
50
100
150
200
250
300
350
400
450
500
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
% G
row
th
Fleet % Growth
Historical Fleet Growth -Other Offshore (# of Ships)
0
200
400
600
800
1000
1200
1400
1600
1800
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
% G
row
th
Fleet % Growth
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Age & Fleet Size Profile
Over 45% of the fleet is over 25 years of age, or 2.2 million dwt. This would require additional growth in fleet for replacement, as well as to fulfill growth from new demand.
As exploration moves to deeper waters, we see greater demand for larger, more complex, more powerful support vessels. This is measures in terms of brake horse power (BHP) of the engines, winches, etc. Also requirements for multi-functional equipment, such as fire fighting, diving support, etc.
Fleet age profile (Total)2141
675
174 197
621865
340
500
1000
1500
2000
2500
>25 21-25 16-20 11-15 6-10 1-5 <1
All All_Offshore_Supply
Agewise tonnage (Total)
2.2
1.0
0.4 0.3
1.5
2.0
0.10.0
1.0
2.0
3.0
>25 21-25 16-20 11-15 6-10 1-5 <1
All All_Offshore_Supply
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Orderbook vs. % of existing fleet
For AHTS vessels - Orderbook at 25% of existing fleet is quite low
compared to other vessel types.
Historical Fleet Growth -AHT/Supply (# of Ships)
0
500
1000
1500
2000
2500
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
OB
as
a %
of F
leet
Fleet OB as a % of Fleet
Historical Fleet Growth -PSV/Supply (# of Ships)
0
200
400
600
800
1000
1200
1400
1600
1800
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
OB
as
a %
of F
leet
Fleet OB as a % of Fleet
For PSV vessels - Orderbook at 15.6% of existing fleet is very
low compared to other vessel types.
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Orderbook vs. % of existing fleet
For Crew Boats - Orderbook at 5.6% of existing fleet is similar
to 1998 peak levels. Yet, this may not be enough, especially for fast intervention type vessels.
For other offshore vessels - Orderbook at 12.4% of existing fleet is at
historical high levels. This may be a bit misleading, considering that there are many specialized types of offshore vessels.
Historical Fleet Growth -Crew/Workboat (# of Ships)
0
50
100
150
200
250
300
350
400
450
500
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
OB
as
a %
of F
leet
Fleet OB as a % of Fleet
Historical Fleet Growth -Other Offshore (# of Ships)
0
200
400
600
800
1000
1200
1400
1600
1800
1996 1998 2000 2002 2004 2006 2008
# of
Shi
ps
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
OB
as
a %
of F
leet
Fleet OB as a % of Fleet
25
Supply Outlook – Fleet Replacement Profile (Table)
Smallest size is most attractive in terms of fleet retirement. However, demand is focused on the larger sizes.
Fairly small orderbook provides opportunities if we can obtain the assets.
Fleet Replacem ent Profile (# of Ships)Offshore SupplyOffshore SupplyOffshore SupplyOffshore SupplyOffshore SupplyTotal0-1999 2000-3999 4000-5999 6000-7999 8000-9999
Exis ting 4633 808 213 43 16 5713New buildings 388 368 176 24 8 964>25 2590 82 18 4 3 2697>25 as a % of Exis ting 55.9% 10.1% 8.5% 9.3% 18.8% 47.2%NB as a % of Exis ting 8.4% 45.5% 82.6% 55.8% 50.0% 16.9%
Fleet Replacem ent Profile (m ln Dw t)Offshore SupplyOffshore SupplyOffshore SupplyOffshore SupplyOffshore SupplyTotal0-1999 2000-3999 4000-5999 6000-7999 8000-9999
Exis ting 3.1 2.2 1.0 0.3 0.1 6.7New buildings 0.4 1.0 0.8 0.2 0.1 2.5>25 1.5 0.2 0.1 0.0 0.0 1.9>25 as a % of Exis ting 49.8% 9.2% 8.7% 9.2% 18.1% 27.9%NB as a % of Exis ting 13.1% 46.4% 82.0% 51.5% 49.9% 36.7%
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Top PlayersTop 50 Average
Top 50 Others Total % of Fleet AgeAHTS 967 614 1581 61% 17 PSV 438 64 502 87% 8 Supply 570 512 1082 53% 21 AHT 295 233 528 56% 20 MSV 109 33 142 77% 15 Standby/Resc. 255 75 330 77% 27 Crew Boat 148 40 188 79% 23 Seis. Survey 159 51 210 76% 25
Top 50 owners as a % of Total
AHTS Ships PSV Ships Supply Ships STANDBY Ships CREW BOAT ShipsTidewater Marine 179 Edison Chouest 49 Tidewater Marine 150 Vroon B.V. 42 Tidewater Marine 15
Swire Group 52 Tidewater Marine 44 Trico Marine 38 Seacor Holdings Inc. 29 Miclyn Express Off. 9Seacor Holdings Inc. 51 Bourbon 31 Seacor Holdings Inc. 35 Craig Group 27 Norsul Offshore 9
CNOOC 50 GulfMark Offshore 28 Hornbeck Offshore 29 A.P. Moller 19 Arabian Gulf Mech. 7A.P. Moller 47 Farstad Shipping 23 Abdon Callais 24 Nomis Shipping Ltd. 13 Seacor Holdings Inc. 6Bourbon 34 Hornbeck Offshore 19 Edison Chouest 21 Mokster Shipping 10 Kaspmornefteflot 5
Indian Govt. 31 Rigdon Marine 17 Zamil Operations 13 Al-Mojil Group 9 Lamnalco Ltd. 5Farstad Shipping 26 DOF Management 16 ESNAAD 11 Emas Laut Sdn. Bhd. 8 Apsheron Oil Fleet 4Kaspmornefteflot 23 Seacor Holdings Inc. 14 Aries Marine Corp. 10 CNOOC 8 Modest Maritime Serv 4Whitesea Shpg. 22 Marine Management 12 L & M Bo-Truc Rental 9 Ocean Mainport 7 Baruna Raya Logistic 4
Maridive & Oil Serv 22 Trico Marine 11 Bumi Armada Nav. 9 Halul Offshore 6 Syarikat Borcos Shpg 4GulfMark Offshore 21 Siem Offshore 10 NIOC 9 Thor Ltd. 5 A.A. Turki Corp 4Edison Chouest 18 A.P. Moller 8 Odyssea Marine 9 Ajang Shipping 5 Bourbon 3Zamil Operations 18 Island Offshore Mngt 8 TMM Grupo 8 ENI S.p.A. 4 Bambini Srl 3
Pertamina 16 Havila Shipping 8 Baruna Raya Logistic 8 Topaz Energy 4 Offshore Oil Serv. 3
The offshore support vessel fleet is quite concentrated.
PSV young fleet, others segments are quite old.