Offshore Industry Is Moving Up And Out Of The Doldrums

Speaking at the Marine Money ship finance forum in New Orleans, a representative of VesselsValue said he is optimistic about the offshore industry for the first time in years.

“For the past six years I’ve been a pessimist,” said Robert Day the head of offshore at VesselsValue. “It’s my pleasure to say I have become optimistic because the offshore market is moving up and moving out.”

Day’s focus was on the Offshore Supply Vessel (OSV) market, but he was quick to say the entire market is turning positive and he believes values will continue to rise.

According to Day, there are several indicators that suggest offshore demand will increase. First, the backlog of available vessels is increasing and offshore drillers are reporting strong utilization figures. Second is the fact that few ships are getting scrapped. Finally, there are few newbuilds coming online but more laid-up vessels are getting reactivated.

Day said that reactivations are especially bullish for the market outlook because it’s expensive to reactivate offshore rigs and offshore vessels so companies would not pay these high reactivation costs if they did not have a long-term positive outlook.

One example Day provided is the HOS Rosebud, a large US-flagged PSV built in 2013. Hornbeck Offshore Services purchased the vessel in February 2022 for $10.7 million and today its estimated resale value is $18.2 million.

“The fundamentals are there,” said Day. “We are seeing more and more transactions offshore and they are showing no signs of slowing down.“