Deep Sea Supply: 10 Vessels Laid Up and More to Come

Photo: Deep Sea Supply Service

Deep Sea Supply, the Norwegian PSV and AHTS owner controlled by billionaire John Fredriksen, says it now has 10 vessels in lay-up and more are expected with still no signs of market recovery in the short to mid-term.

The lay-ups were announced in the company’s third quarter financials report released Friday. In 3Q 2015, the company reported consolidated revenues of US$33.6 million, down US$2 million compared to the same period last year. Deep Sea Supply said the reduction was mainly due to lower utilization due to vessels coming off long term charters and lower rates.

“During the third quarter of 2015, the company has experienced a further weakening of the global OSV markets,” the company said in its report. “In Brazil, the situation remains difficult with reduced activity and foreign flagged vessels being blocked by vessels with local flag. However, for some vessel categories Petrobras has taken actions to solve this situation, and DESS expects blockings of 4 vessels to be lifted.

“The North Sea spot market is challenging with unsustainable rate levels and low utilization, and many owners have chosen to lay up vessels instead of trading in the spot market. No improvement in the market situation for OSVs is expected in the short to medium term.

“The contract coverage for 2016 for the Company is not satisfactory. DESS is currently pursuing some term opportunities, however the competition is fierce and rate levels are low. As a consequence of the weak market, Deep Sea Supply will lay up vessels that do not have any fixed activity the next months, and the number of vessels laid up is expected to increase from the current 10 vessels.

“In addition to laying up vessels to reduce cost, the Company is also working hard to further reduce operating expenses for the vessels in operation.”

Deep Sea Supply’s fleet consists of 16 AHTSs and 25 PSVs.

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