Sven Ziegler - The Outlook for the Offshore Support Vessel Market

4th RS Platou Shipping and Offshore Conference, Singapore

Offshore Supply Vessel Market

7th of December 2012

RS Platou Economic Research

2 RS Platou Offshore Research

AGENDA •Current market status •Structural drivers: deepwater, age, well complexity •Cyclical drivers: reserves on stream, rig activity •Supply: new orders, orderbook, delays, scrapping, fleet growth •Summary


PSV term-rates have lately shown some weakness

Medium sized PSV Large PSV

3 Oslo RS Platou Offshore Research

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North Sea West Africa Brazil

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00North Sea Brazil

Average Term-rates

USD DAY 2011YTD 2012YTD %

North Sea 20,060 20,983 5

W Africa 20,400 25,600 25

Brazil 25,900 29,500 14

Average Term-rates

‘000/DAY 2011YTD 2012YTD %

North Sea 28,402 27663 -3

Brazil 31,700 34,450 9


AHTS term rates also showing some weakness, but up in Asia

Small/Medium sized AHTS Large AHTS


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00North Sea 16,000 bhp West Africa 16,000 bhp Brazil 18,000 bhp

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North Sea 8-10,000 bhp West Africa 12,000 bhp

Brazil 12,000 bhp SE Asia 12,000 bhp

Average Term-rates

‘000/DAY 2011YTD 2012YTD %

North Sea 15,538 15,688 1

W Africa 18,160 19,675 8

Brazil 29,650 33,150 12

SE Asia 15,525 18,725 21

Average Term-rates|

‘000/DAY 2011YTD 2012YTD %

North Sea 32,248 39,524 23

W Africa 25,550 29,550 16

Brazil 44,200 48,250 9


The North Sea OSV market has come off significantly in 2012

AHTS: Supply, demand and utilisation PSV: Supply, demand and utilisation


Source: RS Platou Offshore Research

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Demand Supply Utilisation

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OSV fleet growth by region (size of fleet in brackets)

AHTS PSV



2012/2011 ,3 months moving average

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-10%

-5%

0%

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10%

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20%

25%

Fle

et

Gro

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(18) (135)

(224)

(182) (1117) (18)

(60) (333) (118)

(21)

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0%

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15%

20%

25%

Fle

et

Gro

wth

(59)

(265)

(102)

(158) (1814)

(134) (211)

(110)

(671) (76)


55% of oil and gas offshore discoveries in deep-water (07-11)!

7 Oslo

Shallow water ex – Middle East Shallow water Middle East

Mid-water (400-3000ft) Deep-water (>3000ft)

Source: Infield

RS Platou Offshore Research

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Ye

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SW MW DW

Deepwater fields are fast-tracked, leading to more SS development drilling

Time from discovery to onstream Subsea vs surface wells

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Source: Infield

Oslo RS Platou Offshore Research

Fields >50mboe and ex-Middle East

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Operational surface wells Operational subsea wells

Operational surface wells

Operational subsea wells


Fixing activity increasing, even without Petrobras

Floater fixing activity (incl. November 2012) Market share by floater type* (fixing activity)


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Rig

ye

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MW DW UDW Petrobras*

0%

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100%

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Mar

ket

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UDW DW MW

Petrobras* newbuilds only and not annualized

12/11 +104% -22% -1%

*Petrobras newbuilds not included


UDW units crowding out other floaters

Brazil West Africa

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oat

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MW DW UDW

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MW DW UDW


Tendency towards longer duration wells

Jackups on contract and shallow water wells drilled Deepwater (>3000ft): Average well days by basin

11

Source: IHS, World Oil, BOEMRE and RS Platou Offshore Research


- 20 40 60 80 100 120 140 160

Other

Kutei Basin

Exmouth Plateau

Baram Delta

Ravva Sub-basin

KG Deep Water Sub-…

Nile Delta Basin

Senegal Basin

Lower Congo Basin

Niger Delta

Cote d'Ivoire Basin

Tano Basin

Sigsbee Sub-basin

East Campos Sub-basin

Espirito Santo Salt Sub-…

Sergipe Sub-basin

Santos Basin

Sao Paulo Plateau Sub-…

Well days

Brazil

USA

W Africa

India

Pacific

Average

(pre – salt)

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Jack

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Wells <400ft Jackups on contract


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Oil Revenues Order Intake

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Offshore Drilling Multi-Service Equipment and Services

Subsea Other E&P (Estimated)

+7.3%

+9.3%

+14.6%

+15.3%

-13.0%

+10.0%

E&P spending expected to continue to rise

Oil revenues and oil service companies order intake* E&P spending and oil service co’s revenues

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Source: Reuters, RS Platou


*Only oil service companies reporting order intake


Offshore development activity increasing (reserves under development)

Shallow water Midwater+


Source: Infield

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bn

TO

E

400-2999 3000+

118%

41%


Active MODU utilisations elevated

Jackups Floaters



60%

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100%

2006 2007 2008 2009 2010 2011 2012

Act

ive

uti

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IC blt >=1998

IC blt <1998

70%

75%

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90%

95%

100%

70%

75%

80%

85%

90%

95%

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2006 2007 2008 2009 2010 2011 2012A

ctiv

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ilisa

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UDW

DW

MW


Supply, demand and utilisation: MODUs

Jackups Floaters

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70%

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Utilis

atio

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Ja

cku

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Total supply

Active supply

Demand

Active utilization

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90 %

100 %

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120 %

130 %

140 %

150 %

160 %

170 %

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Utilisa

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Flo

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Total supply

Active supply

Demand

Active utilization

Solid line - 30 p.a. JU assumed scrapped/removed Dotted line – 15 p.a. JUs assumed scrapped/removed


Offshore Support Vessel Demand Summary

Estimated demand by water depth Demand growth by source (%)


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1,000

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3,500

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

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Shallow Deep

-1%

1%

3%

5%

7%

9%

11%

13%

15%

08 09 10 11 12 13 14

An

nu

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(%

)Production Support Drill ing Support Construction Support

Note: Due to lack of data (non-existing), supply vessel demand is not recorded directly, However, demand may be calculated implicitly through: dayrates= f(utilisation=demand/supply) - dayrates, utilisation and supply are known variables. The implicit demand is compared to our bottom up model, which estimates OSV demand mainly through rig support, production support and construction support. R2 of the bottom up demand model and implicit demand was in the period 1998-2011 88.85%.

CAGR* 97-11 Shallow 5.2% Deep 8.3% Total 6.7%

CAGR* - Compounded annual growth

9.2%

4.6%


Ordering activity: AHTS & PSV

AHTS PSV

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10-15,999 BHP 16,000+ BHP <10,000 BHP

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-500 m2 500-899 m2 900+ m2


Existing OSV fleet and orderbook by year of delivery


November 2012

Delivered ON ORDER IN %

UNITS EXIST.FLEET ON ORDER 2012 2012 2013 2014+ OF EXIST.FLEET

PSV (M2) -500 365 48 11 19 23 6 13.2

500-749 433 52 17 6 30 6 12.0

750-899 85 103 14 12 56 31 121.2

900+ 236 161 45 28 68 64 68.2

TOTAL 1,119 364 87 65 177 107 32.5

AHTS (BHP) 4-7,999 1,127 107 65 55 40 10 9.5

8-9,999 212 8 12 8 0 1 3.8

10-15,999 314 28 10 16 10 3 8.9

16-19,999 107 26 6 11 11 4 24.3

20,000+ 68 16 2 2 11 3 23.5

TOTAL 1,828 185 95 92 72 21 10.1


Vessels are significantly delayed

AHTS

19 Oslo

Floaters PSV

RS Platou Offshore Research

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Del. according to jan 2012 o’book

Actual del. of vsls in Jan 2012 o’book

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Del. according to jan 2012 o’book

Actual del. of vsls in Jan 2012 o’book


Few signs of significant pickup in rate of delivery

AHTS – deliveries by region of build PSV – deliveries by region of build


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Brazil China Other Norway North America

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Brazil China Other Norway North America


Expected OSV fleet growth

AHTS PSV

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-5 %

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Deliveries Scrapping/Removals Fleet Growth -5 %

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Global OSV utlisation likely to rise further, albeit with short term weakness


November 2012

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Global supply, demand and utilization rate


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D '0

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Asia 12,000 bhp N Sea 10-15,999 bhp N Sea 16-19,999 bhp

W Africa 16,000 bhp Brazil 15,000 bhp

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Brazil 500-750 m2 N Sea 500-749 m2 N Sea 900+ m2

W Africa 500-749m2 Brazil 900+ m2

Dayrate forecast – AHTS and PSV ($)

AHTS PSV


basis 12 month charter

Note: The forecasts are annual averages and will therefore not indicate variations within a year.


Summary


December 2012


RS Platou ASA (Oslo): Haakon VII's gate 10 N-0116 Oslo Norway Switchboard telephone: +47 23 11 20 00 www.platou.com

RS Platou (Asia) Pte. Ltd.: 3 Temasek Avenue #20-01, Centennial Tower Singapore, 039190 Telephone: +65 6336 8733 www.platou.com


A large part of the 70s/80s built fleet has already been removed


November 2012

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1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014

Ves

sels

NO DP Removed DP DP1 DP2

Existing fleet (including 2012) 70/80s 90s 00s+ Total DP2 3 43 546 592 DP1 14 55 192 261 DP 1 7 22 31 No DP 148 39 35 222 Removed 87 2 0 89 Total 253 146 795 1194

Sven Ziegler - The Outlook for the Offshore Support Vessel Market

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Transcript of Sven Ziegler - The Outlook for the Offshore Support Vessel Market