Solstad Results Shed Light on Weak Offshore Service Market

Photo credit: Solstad Offshore
Photo credit: Solstad Offshore

Oil services firm Solstad Offshore, which has a fleet of 44 wholly owned or partly owned vessels, reported a drop in operating profit to NOK 98 million in Q2 compared to NOK 219 million a year ago as low oil prices continue to keep exploration and development activity in the oil and gas sector at a low level, the company reported Friday.

A few highlights from their financial results:

* Market for supply vessels is weak and Solstad has 13 vessels laid up

* Says there is no expectation of an imminent improvement in the market

* CEO Lars Peder Solstad says: “We are in three segments today (PSV, or platform supply vessels; AHTS, or anchor handling tug supply vessels; and subsea) and they all desperately need consolidation. We want to take an active role and are chasing tonnage in all of these segments.”

* CEO says: “We would prefer the subsea and anchor handling segments, but we will look at all opportunities.”

* CEO says: “Consolidation will obviously give synergies on the cost side, but I also believe it can have a positive effect on rates.”

* CEO says: “the Aker deal has put us in a great position when it comes to consolidation and our ambition is to come out strengthened on the other side of the slump.”

* Investment firm Aker, in which billionaire Kjell Inge Roekke is the main owner, injected cash in Solstad and is now the main owner ahead of the Solstad family

* CEO says: “We will see a lot of consolidation in the market in the near future. A lot of things will happen.”

* Solstad Offshore has already made a merger with smaller firm Rem Offshore

(Reuters contributed to this post. Reporting by Joachim Dagenborg, editing by Gwladys Fouche)