Osv shipbuilders14 yudu by Richard

2014 • A supplement to Offshore Support Journal

guide to

osv shipbuilders

Rising stars

securing growing market share 2014 sees steep decline in offshore vessel orders European yard bucks trend with low cost vessels

“Launch of the NCA80E is a major milestone for the group as it is based on Nam Cheong’s proprietary design and is also our first vessel launch in Singapore.”

Datuk Tiong Su Kouk, executive chairman, Nam Cheong Limited

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contents

November 2014

Turkish yards are among a number of rising stars in the OSV shipbuilding sector, building hulls for other yards and complete vessels

comment 5 After a dip in orders this year, yards building offshore support vessels could find order intake in 2015 is poor too

yard news 6 A digest of recent news from yards building OSVs

15 Compared with preceding years, the number of OSVs ordered in 2014 has plunged

trends in osv construction 9 In the medium term, demand for offshore vessels is likely to climb again, but in the short term, the number of contracts for newbuilds is likely to be adversely affected by the falling oil price

who’s building what 12 The OSV orderbook by country, schedule and market share

contracts in 2014 15 The number of offshore units ordered in 2014 plunged

28 European yards mostly build high spec vessels, but some construct less complex units

OSVs on order by region 18 Regional yards’ share of the market for the main vessel types

market data – PSV builders 22 A number of now well known shipyards in China hold the lion’s share of the orderbook for platform supply vessels, but De Hoop in the Netherlands also stands out as a builder of small PSVs

Datuk Tiong Su Kouk, executive chairman, Nam Cheong, says NCA80E is a major milestone for the group

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market data – AHTS builders 24 There are still a good number of small anchor handlers on order for the southeast Asian market, but at the upper end of the sector only a few vessels on order and fewer yards that can build them outside Europe Guide to OSV Shipbuilders I November 2014 I 1

contents

guide to

osv shipbuilders

area reports

Supplement to Offshore Support Journal

28 Europe: an analysis of the top 10 offshore vessel shipbuilders in Europe shows that

Published November 2014

Dutch-owned yards – not Norwegian yards, as might have been expected – have the largest orderbooks currently 31 North America: yards in the US that are capable of building offshore vessels have benefited hugely from a boom in orders in the last two to three years, but that could change as the oil price falls 35 China: European shipowners invariably turn to Chinese yards when they want to build relatively unsophisticated vessels in series 36 Middle East: as demand grows for more high spec offshore vessels for use in the Middle East market and beyond, so shipyards there have come to see joint ventures with leading players from outside the region as the way forward 38 Southeast Asia: yards in southeast Asia that used to build larger numbers of small, unsophisticated anchor handlers need to have a rethink – they can’t compete with China and the market has moved on 41 Brazil: Brazil needs more shipyards if it is to meet ambitious targets for domestically constructed offshore support vessels, but not all of the existing yards in the country are performing well 42 India: In recent years, Indian shipyards have built large numbers of offshore support vessels, but there are few on order in the country currently

rising stars 45 Yards in eastern Europe that began by building hulls for completion elsewhere and purpose-built facilities in countries such as Vietnam are picking up more and more OSV orders

market data 48 Top 50 OSV builders ranked by orderbook

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European yards such as Havyard in Norway continue to build large numbers of highly sophisticated OSVs and also export their designs

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2014 • A supplement to Offshore Support Journal

guide to

osv shipbuilders

Rising stars

securing growing market share 2014 sees steep decline in offshore vessel orders European yard bucks trend with low cost vessels

Front cover: A vessel is launched from Cemre Shipyard in Poland, which built the hull of the ship, Polarsyssel, for Havyard Leirvik in Norway. (photo: Cemre Shipyard)

“Launch of the NCA80E is a major milestone for the group as it is based on Nam Cheong’s proprietary design and is also our first vessel launch in Singapore.”

Datuk Tiong Su Kouk, executive chairman, Nam Cheong Limited

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comment

David Foxwell

“

Slowdown likely to quickly affect order intake

ay you live in interesting times” is said to be an English translation of a traditional Chinese curse, although the saying is probably apocryphal and no Chinese source has ever been produced. Whatever the source of the phrase, it has become well known, and shipyards specialising in building offshore support vessels could be in for an interesting 12-18 months if the recent steep fall in the oil price to around US$85/barrel (Brent crude) is the start of a ‘new normal’ rather than a just a blip. In case anyone had forgotten, the old ‘new normal’ had the price at in excess of US$100 barrel or more – significantly more. As of the third week of October, Brent crude was close to a four-year low as the supply and demand equation rapidly adjusted. In fact, Brent crude fell as low as US$83 a barrel at one point, as supply increases coincided with a gloomy economic outlook in Europe and China. At the time of writing, oil prices were down more than 25 per cent since June, and forecasts of world oil demand growth in 2015 have been slashed. In the absence of any intervention in the market from the Organisation of Petroleum Exporting Countries (OPEC), the price doesn’t seem likely to bounce any time soon. Some analysts are already talking about a level of US$75-80/barrel, a level that will have a lot of people in the oilfield supply chain seriously concerned. To draw on another quotation (which could also be apocryphal), one allegedly given by former British prime minister Harold McMillan when asked by a journalist what was most likely to blow governments off course (that is, something that could precipitate an unexpected change), “events, dear boy, events” – for which read geopolitical events – could yet drive the price back upwards. However, given the level to which the price has so rapidly fallen, even ‘events’ seem unlikely to drive the price back to about US$100.00. When the International Energy Agency (IEA) released its October oil market report, it gave it the sub-heading “Reduced economic outlook contributes to cut in global oil demand growth outlook, even as output surges.” That neatly summarises the nature of the problem yards are faced with. As the oil price falls projects are being pushed further to the right or will be cancelled. Rig utilisation isn’t going to look terribly healthy, and demand for vessels to support them will decline as a result. In the oil market report for October the IEA reduced its forecast for global oil demand for 2014 by 0.2 million barrels per day (mb/d) from the previous month, to 92.4 mb/d, on lower expectations of economic growth and

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the weak recent trend. Annual demand growth for 2014 is now projected at 0.7 mb/d, rising tentatively to 1.1 mb/d in 2015 if the macroeconomic backdrop improves. The impact of the falling oil price is going to be significant, but has only really become an issue in the last 2-3 months of this year. Looking at 2014 as a whole it has not been an especially good one for the offshore vessel market anyway, certainly nothing like as good as it was predicted to be in the North Sea, Gulf of Mexico or Southeast Asia. As owners began to report third quarter results towards the end of October, the talk was of a “flat” third quarter as fewer rigs were utilised than anticipated, and as oil producers continued to focus on reducing costs. These factors resulted in generally favourable, but slower than anticipated markets in the Gulf of Mexico and the North Sea. The Southeast Asian market remains “challenged” because national oil companies have been slow to award new contracts, a fact compounded by an increasing supply of offshore vessels in that region. As one of the best known owners, GulfMark Offshore put it, “there is a strong sentiment within the market that worldwide utilisation in the offshore supply vessel industry will decrease in 2015.”

014 certainly hasn’t been a good year for shipyard orders, as is highlighted elsewhere in this issue. Although the offshore vessel sector had come to be seen as a bright spot in the global shipbuilding market, the number of orders in 2014 is actually way down compared with levels in 2012 and 2013. Some shipyards – thinking particularly here of yards in the US – are still working their way through a decent order backlog, thanks to an order binge in the last 2-3 years by certain owners, but others will already be scratching their heads wondering how to find orders to extend their order backlog beyond the end of 2015 and into 2016. A look at the worldwide offshore vessel orderbook by scheduled year of delivery demonstrates that a good number of vessels are due to be delivered in 2015, with around a third fewer vessels overall due to be delivered in 2016. Not taking into account possible slippage – and the possibility of cancellations – 2017 looks a lot less healthy. A lot of builders are going to need to secure deals pretty quickly in late 2014/ early 2015 in order to ensure that capacity is utilised beyond 2016. Prices for newbuilds are almost certainly on the way down, and competition will intensify. OSJ

Guide to OSV Shipbuilders I November 2014 I 5

yard news

Siem Industries acquires Flensburger shipyard Flensburger Schiffbau-Gesellschaft (FSG) in Germany has a new owner – Siem Industries. Siem Industries is controlled by Kristian Siem whose company also controls Siem Offshore and has stakes in numerous other companies, including Subsea 7. Mr Siem, Siem Industries’ chairman, has been a director of the company since 1982. He is also Chairman of Subsea 7 and a director of Siem Offshore among other posts. Peter Sierk and Frank Bywater, the managing directors of FSG, said they welcomed the deal. “We are very glad about the new perspectives that open up as a consequence of this decision. We

Siem Offshore has a couple of well intervention vessels under construction at Flensburger in Germany welcome Siem Industries on board – this time, not as a client but as owner of FSG. This means a great chance for all of us –

Vard Holdings benefits from Island order In September 2014, Vard Holdings Ltd secured a contract with Island Offshore for the construction of an as yet unspecified type of offshore support vessel. The total value of the contract is close to

NKr300 million (US$46.43 million). The vessel is scheduled for delivery from Vard Brevik in Norway in the first quarter of 2016. The hull of the vessel will be delivered from Vard Braila in Romania.

Huangpu Shipyard delivers platform supply vessel Pacific Radiance recently took delivery of the newbuild multipurpose platform supply vessel (PSV) Westsea Victoria. The vessel was built to the Focal 528 design at the Huangpu Shipyard in China. Sources indicate the vessel will operate offshore Australia.

The Focal 528 design has a length of 86m, a deck area of 1,000m² and accommodation capacity for 90 people. The vessel design allows for the installation of a helideck, an active heave compensated subsea crane and a moonpool.

Incat Tasmania holds naming ceremony for Caspian crewboat A 70m fast crewboat was named Muslim Magomayev at a ceremony at Incat Tasmania’s shipyard on 15 September. This is the first vessel that the Australian shipbuilder has built for the offshore oil and gas industry. When sea trials are completed, the boat will depart for Baku, Azerbaijan. The vessel was built for Caspian Marine Services. First of its type, the DP2 70m vessel will operate fast crew transfers for 150 offshore workers to multiple installations in the Caspian Sea. The high speed of the 70m

design will allow operational efficiency over helicopter transfer for both passengers and cargo, The small waterplane area twin-hull (SWATH) design, along with active ride control, will reduce stress on passengers so they arrive at an oil platform relaxed and fit to work. Muslim Magomayev has a deadweight of 200 tonnes and is capable of carrying 150 passengers and 14 crew, along with deck cargo, in up to 40 knot winds and seas of 3m significant wave height.

the shipyard and its employees.” “Siem Industries is a successful, expanding and financially strong familyowned enterprise. It allows us to continue our successful developments in the global offshore market,” they said. Siem Offshore currently has two well intervention vessels under construction at the German yard, which also holds orders for a ropax ferry for CMAL in Scotland, a second seismic vessel for WesternGeco and an innovative LNG-fuelled roro ferry for SeaRoad in Australia. FSG will therefore be operating at full capacity until the third quarter of 2016.

Grandweld to design and build crewboats for FNSA Grandweld has won a contract to design and build two 42m crewboats for Fujairah National Shipping Agency (FNSA). The contract was signed on 24 September 2014. Grandweld’s 42m crewboat is fitted with IMO Tier II-compliant main engines and advanced navigation and communication equipment. Designed to meet the client’s specific needs, the vessels can exceed a speed of 26 knots. Grandweld said FNSA’s boats will benefit from high quality seating, VIP accommodation, a large deck area and enhanced comfort for the crew. The crewboats will seat 31 offshore personnel and have a 100m2 cargo area for over 70 tonnes of deck cargo. The vessels will be built at Grandweld’s yard in Dubai Maritime City and will be capable of executing several missions such as security duties, fast transportation of offshore personnel and cargo and supply of fuel and fresh water. Grandweld Shipyards recently completed delivery of four 42m aluminium crewboats to Cotemar SA de CV in Mexico. The contract to build the crewboats was signed in June 2013. They are fitted with EPA Tier 3-compliant main engines and advanced navigation equipment.

Sinopacific Shipbuilding Group secures more contracts Sinopacific Shipbuilding Group in China has signed contracts with Mexican shipping company Naviera Petrolera Integral SA de CV for the construction of three SPP17A vessels and signed contracts for a number of other vessels in recent months. All of the vessels for the Mexican client will be built at Sinopacific’s Zhejiang Shipyard and are due to be delivered before the end of 2015. This is the first time Sinopacific has built vessels for the Mexican market. Sinopacific has also recently signed a contract with Shenzhen Huawei Offshore Shipping Transport Co Ltd (Huawei Offshore, 6 I Guide to OSV Shipbuilders I November 2014

a subsidiary of Shanghai Salvage Company) for the construction of five offshore vessels. All of the vessels are Sinopacific designs – three are Sinopacific SPA85L anchor-handling tug/ supply (AHTS) vessels, and two are Sinopacific SPP35ML PSVs. The vessels will be built at Zhejiang and are due to be delivered from February 2016 onwards. The Chinese shipbuilding group also recently secured a contract from Singaporean company Vallianz Holdings Ltd for the construction of four SPA60 vessels, which are due to be delivered from the end of 2014 to the beginning of 2015.

Sinopacific is one of the most successful builders of offshore vessels www.osjonline.com

Another newbuild from Eastern Shipbuilding A sister ship to Stril Luna is also being built at Gondan

Gondan delivers Møkster PSV On 29 August, Simon Møkster Shipping’s newbuild Stril Luna was delivered by Astilleros Gondan in Spain. The vessel was delivered to Statoil on 4 September and is now on a threeyear contract with the oil company. The vessel is a UT 776 WP design, and it is the first vessel in the world with the new Rolls-Royce Unified Bridge system. Stril Luna is the second unit Gondan has delivered to the Norwegian shipowner, who took delivery of Stril Merkur, a multipurpose vessel, in 2011. Gondan recently began construction of a third ship for Simon Møkster Shipping, a sister vessel to Stril Luna.

Eastern Shipbuilding Group in the US has delivered the PSV Bravante VIII to Bravante Group of Brazil. Eastern also recently launched a sister vessel, Bravante IX. These are the final two of five PSVs being built for Bravante by Eastern Shipbuilding. The vessels have been built to the Vard SV290 design, giving them a length of 86.5m and breadth of 18.3m. They have a clear deck area of 870m² and deadweight of 4,500 tonnes. The units have a fully integrated bridge arranged for increased visibility. Eastern Shipbuilding Group also recently delivered HOS Black Rock and launched HOS Brass Ring for Hornbeck Offshore. Both vessels were built to the Vard SV310 design, designated as HOSMAX 310 for Hornbeck. The units have a length of 92.0m, breadth of 19.5m and deck area of 1,037m². Following HOS Black Rock, Hornbeck is now awaiting delivery of sister vessels HOS Black Watch, HOS Brass Ring and HOS Briarwood in late 2014 and early 2015.

TRIYARDS Holdings to build another liftboat TRIYARDS Holdings Ltd has added another liftboat contract to its orderbook. The order for an as yet unnamed client, comes soon after two other liftboat contracts worth US$112 million that were awarded in July 2014. TRIYARDS’ chief executive officer Chan Eng Yew said, “Our recent orders attest to the

industry’s confidence in us and our ability to meet our clients’ stringent requirements on safety, quality, timeliness of delivery and cost efficiency.” He said that operators “are starting to realise the high value-to-cost ratio of using liftboats”, increasing demand for these vessels. The unit is scheduled for completion in 2016.

Havyard Design & Solutions AHTS for CBO Havyard Design & Solutions is to deliver a design an equipment package for four AHTS vessels, which will be built and operated by the Brazilian company Grupo CBO. The vessels are to be built to the Havyard 843 design, which has also been adapted to

specific tender requirements from Petrobras. The vessels will have a length of 81.50m, breadth of 19.50m and a depth to main deck of 8.50m. They will have a speed of 16 knots, a bollard pull of 195 tonnes and an accommodation capacity for 30 people.

Third L-class PSV named at Japan Marine United Swire Pacific Offshore Operations (Pte) Ltd (SPO) celebrated the naming and delivery of its third L-class PSV, Pacific Legend, in Kyoto, Japan, on 30 September 2014. “Delivery of Pacific Legend continues our successful partnership with Japan Marine United (JMU),” said the company. Swire Pacific Offshore also recently

celebrated the naming and delivery of its first G-class PSV, Pacific Gannet, which was also built at JMU. JMU has worked with SPO for a number of years, completing the construction of its four-vessel H-class 4,700 dwt PSV series in addition to the current L-class series of 5,200 dwt PSVs.

More Chinese newbuilds for Vroon Offshore Nanjing East Star Shipyard in China recently delivered the ERRV VOS Fairness to Vroon Offshore. VOS Fairness is a state-of-the-art class-A ERRV, equipped with two daughter craft and one fast rescue craft. It is the second delivery in a newbuilding programme of 10 vessels, with six 50m ERRVs being built at Nanjing and four 60m www.osjonline.com

fast supply vessels under construction at Fujian Southeast Shipyard, also in China. VOS Fairness will operate in the North Sea out of Aberdeen for Vroon Offshore Services. It is now being prepared for standby duties and was due to commence a long-term charter on 1 October. OSJ

in brief • Hyundai Mipo Dockyard (HMD) recently delivered the fourth PSV it has built for BP Shipping at its shipyard in Ulsan, South Korea. HMD secured a contract for four PSVs from BP Shipping in March 2012 and has already delivered three, starting in January 2014. The PSV Frayja is 97m in length, with a breadth of 20m and depth of 8.5m, and is equipped with oil recovery equipment and a dynamic positioning system. The vessel is now on its way to the North Sea. • The board of directors of TAS Offshore Berhad (TAS) has announced that its wholly owned subsidiary TA Ventures (L) Ltd has entered into a joint venture agreement with businessman Chan Baihang to build and sell offshore support vessels built in China. Mr Chan Baihang hails from Guangdong, China, and is involved in numerous businesses. He owns transportation companies, a construction firm and is also involved with both chartering and shipowning. • Fujian Southeast shipyard in China has laid the keel of Sentinel Marine’s fourth emergency response and rescue vessel (ERRV), Hull SK 88. The keel was laid on 27 August. • Simek shipyard in Norway recently launched Fletcher Shipping’s PSV FS Cygnus. Broker Westshore said the vessel, which is a DP2 UT 755 LC design, is expected to be delivered in mid/late November 2014. • Ulstein Design & Solutions has entered into a contract with Wuchang Shipbuilding Industry Co Ltd in China for a design and equipment package for four PX121-type PSVs. The vessels were ordered by Singaporebased Otto Offshore Ltd, who will take delivery of all of the vessels in 2016. The contract also includes an option for four more vessels. • ALP Maritime has confirmed that Niigata Shipyard in Japan has cut the first steel for the first of its new class of ocean-going tugs. Steel was cut for the first vessel, ALP Striker, on schedule on 3 September.

Guide to OSV Shipbuilders I November 2014 I 7

trends

Short-term downturn could extend throughout 2015

www.osjonline.com

AHTS

1,600

PSV

80% 70%

1,400 Graph shows the upsizing of the PSV fleet as a higher 53.3% proportion of large PSVs are being ordered to supply larger distances and harsher environments

1,200

Vessels

1,000 800

orderbook fleet

60%

OB as a % of the Fleet

50% 40%

31.0% 30%

600 18.7%

400

20%

14.1% 7.3%

200

5.5%

7.2%

8.6%

5.4%

very large >16k bhp

large 12-16k bhp

medium 8-12k bhp

small 4-8k bhp

very small <4k bhp

AHT

10%

2.2%

0.0% very large >4k dwt

large medium small <2k crew/fast 3-4k dwt 2-3k dwt dwt supply

Source: Clarkson Research (Correct as of 01.09.2014)

OSV CONTRACTING 2007 TO 1 SEPTEMBER 2014 – AHTS large AHTS

small AHTS/AHT

400

300 vessels

emand for offshore vessels will rebound, but 2015 could be a tough year, according to Singapore Management University (SMU) visiting professor of maritime economics and shipping finance Dr Stavros Tsolakis. Dr Tsolakis opened the Asian Offshore Support Journal conference, which took place in Singapore in September, on a sober note, highlighting low vessel utilisation and low levels of newbuilding activity in the offshore support vessel market. Exploration and production spend remained flat in 2014, he said, contributing to a slow-down in contracting activity and demand for offshore support vessels (OSVs). Dr Tsolakis alluded to tight market conditions throughout 2015, with a supply glut developing in the offshore drilling market as record number of newbuild drilling units join the global fleet and older rigs come off contracts. However, the seasoned maritime researcher believes that, despite these concerns, a rebound is on the horizon, with operators having recently announced a large volume of reserve additions in new offshore discoveries. Of the 80 billion barrels of oil equivalent announced as new reserves in 2013, over half are in ultra-deep water, according to Dr Tsolakis. The visiting professor at SMU is positive there will not be any let-up in deepwater development, despite concerns about the effects of the falling oil price. Most industry players at the conference agreed that the newbuild OSV market has swung in favour of vessel owners. Shipowners are demanding better quality but at lower prices, said Ang Kok Leong, executive director of Singapore-based shipyard ASL Marine. Mr Ang called on fellow shipbuilders to work with vessel owners to add value to designs and adopt innovative approaches to production while waiting out what he described as “the tough and challenging market in 2015”. Mr Ang’s fellow panellist and group

OSV ORDERBOOK AS A PERCENTAGE OF THE OSV FLEET

200

100

0 2007

2008

2009

2010

2011

2012

2013

2014 ytd

Source: Clarkson Research (Correct as of 01.09.2014)

OSV CONTRACTING 2007 TO 1 SEPTEMBER 2014 – PSV small PSV/crew

large PSV 250 200 vessels

In the medium-term, demand for offshore vessels is likely to climb again, but in the short-term, the number of contracts for newbuilds is likely to be adversely affected by uncertainty about the oil price and exploration and production activity levels

150 100 50 0

2007

2008

2009

2010

2011

2012

2013

2014 ytd

Source: Clarkson Research (Correct as of 01.09.2014)

Guide to OSV Shipbuilders I November 2014 I 9

trends

OSV ORDERBOOK DELIVERY SCHEDULE

ORDERBOOK AS A PERCENTAGE OF WORLD FLEET

300

25% AHTS

PSV

250

In terms of number of mobile offshore units 20%

vessels

200 148

15%

208

150 10% 100 5% 50

Sep-14

Mar-14

Sep-13

Mar-13

Sep-12

Mar-12

Sep-11

Mar-11

Sep-10

2016+

Mar-10

2015

Sep-09

2014

Mar-09

Sep-08

0% 16

Source: Clarkson Research (Correct as of 01.09.2014)

executive officer of Mwalaysia-based Nam Cheong Dockyard Leong Seong Keat said that, with its “design one, build many” shipbuilding strategy, the Malaysian shipbuilder is building higher spec vessels that “do not cost a lot more”. Singapore-listed Pacific Radiance managing director James Pang said he foresees a large influx of rigs entering in the market without contracts in the next few years, which will put pressure on day rates for rigs as well as OSVs. Mermaid Marine Australia (MMA) chartering manager Stephen Clark shared Mr Pang’s sentiment. “Rig operating rates are being squeezed, and that will ultimately trickle down to the day rates for vessels,” Mr Clark remarked. “The first people to go … will be those with speculative builds and

commoditised vessels.” Mr Pang concurred, highlighting owners with fleets consisting of not more than a handful of vessels as being at risk of not having access to “the same level of safety and process systems” necessary to compete with the larger players. Analysis of the OSV construction market by Clarkson Research shows that: • the OSV market is the largest market in numerical terms with 611 vessels currently on order • its current combined orderbook is US$19.7 billion, and a total of US$3.5 billion has been contracted in the year to date • China is currently the largest builder country for OSVs with 329 vessels currently on order of a combined US$10.0 billion

• anchor-handling tug/supply (AHTS) vessel contracting has fallen since 2007 with only 34 AHTS contracts placed in 2014 by 1 September, which represents a 50 per cent drop in contracting on an annualised basis • the platform supply vessel (PSV) market saw a later uptick in contracting, and orders have been primarily for larger units, but contracting is down by 42 per cent on an annualised basis in 2014 • the majority of vessels are scheduled for delivery in 2015 • in the AHTS sector, small vessels (4,000– 8,000 bhp) account for 59 per cent of deliveries scheduled for 2014 • in the PSV sector, large vessels (>4,000 dwt) account for 44 per cent of deliveries scheduled for 2014. OSJ

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10 I Guide to OSV Shipbuilders I November 2014

www.GulfCoastShipyardGroup.com info@GulfCoastShipyardGroup.com Contacts: Jimmy Rivers, jrivers@gulfcoastshipyardgroup.com, 504.256.3870 John F. Dane, jfdane@gulfcoastshipyardgroup.com, 228.223.7144

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who’s building what

OSV orderbook by country, schedule and market share OFFSHORE ORDERBOOK BY BUILDER COUNTRY

dredgers

mobile offs. production

AHTS >8,000 bhp

AHTS< 8,000 bhp & AHT

PSV/supply >3,000 dwt

PSV/supply <3,000 dwt

utility support

total all types

% of total

102

176

593

45%

Brazil

113

South Korea

United States

Singapore

Netherlands

Norway

U.A.E.

Malaysia

India

Total Top 10

236

116

299

1,151

87%

Total 11-20

131

10%

Others (16)

Global Total

241

125

340

1,322

100%

AHTS MARKET MARKET SHARE – 2007-SEPTEMBER 2014 Europe 100%

Singapore

South Korea

n=312

n=781

China

USA

PSV MARKET MARKET SHARE – 2007-SEPTEMBER 2014

Other

Europe

n=515

100%

Singapore

South Korea

China

USA

n=465

n=527

n=510

63%

41%

19%

1996-2004

2005-2009

2010-ytd

Other

80%

23%

40%

63%

Percentage

80%

60%

rescue & salvage

MSV/DSV/ ROV support

logistics

accommodation

liftboat/ installation

China P.R.

builder country

construction vessel/Barge

SUPPORT

mobile offs.drilling

PRODUCTION

survey

DEVELOPMENT

60%

40%

20%

0% 1996-2004

2005-2009

2010-ytd

Source: Clarkson Research (Correct as of 01.09.2014)

12 I Guide to OSV Shipbuilders I November 2014

www.osjonline.com

ORDERBOOK BY BUILDER COUNTRY – NO OF UNITS ON ORDER AND DELIVERIES, 2014 ONWARDS 2007

2008

2009

2010

2011

2012

2013

Aug*

2014

2015

2016

2017+

China

567

573

519

505

485

507

623

593

194

288

104

Singapore

178

162

134

121

128

131

South Korea

103

120

112

Malaysia

100

Indonesia

102

Japan

Vietnam

Hong Kong

Other Asia

1063

1095

953

867

927

961

862

279

398

161

India

103

102

UAE

Sri Lanka

Saudi Arabia

MIDDLE EAST/ISC

159

188

168

165

145

130

109

Norway

163

123

ASIA-PACIFIC

Other Middle East/ISC

The Netherlands

Spain

Poland

Russia

Finland

360

330

253

190

194

200

180

178

116

111

113

181

150

125

109

Germany France Other Europe EUROPE Brazil United States Mexico Other Americas AMERICAS REST OF THE WORLD WORLD TOTAL Fixed structures

218

200

128

126

185

247

225

201

1,822

1,848

1,530

1,373

1,399

1,514

1,491

1,322

438

574

253

193

202

190

225

262

301

353

235

150

Orderbook based on latest known scheduled delivery dates, not accounting for possible slippage or cancellation. Orderbook by year of delivery statistics may not equal the total orderbook shown due to units with no currently known date of delivery. *Denotes year to date.

OSV ORDERBOOK DELIVERY SCHEDULE

ORDERBOOK BY BUILDER REGION – 2007-SEPT 2014 US$ billion

US$ billion

Rest of the World

200

100

Americas

Rest of the World

Europe

Americas 80

Based on latest scheduled delivery dates, not accounting for possible slippage and cancellation.

Europe MiddleEast/ISC

Middle East/ISC

160

Asia-Pacific

120

0 2014

2015

2016

2017

2007

2008

2009

2010

2011

2012

2013

2014

Source: Clarkson Research

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Guide to OSV Shipbuilders I November 2014 I 13

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14 I Guide to OSV Shipbuilders I November 2014

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contracts in 2014

2014 sees steep decline in orders The number of offshore units of all types ordered in each of the last 3-4 years was broadly stable, at or around 550–650 per annum, but the number of contracts in 2014 plunged

fter a steep decline between 2007 and 2009, the number of orders for offshore vessels was relatively stable in the period 2010–2013, but data from Clarkson Research suggests that 2014 has seen a significant decline in the number of orders. In 2007, approximately 1,000 contracts for offshore units of all types were placed. This fell to fewer than 700 in 2008 and fell again sharply in 2009 to fewer than 500 units of all types ordered. Fewer than 300 units of all types had been ordered by 30 September 2014. As the table showing contracting by builder region reproduced here clearly indicates, orders recovered somewhat in 2010 and remained at or about the same level until 2013, primarily as a result of a consistently high oil price and the effect that this had on exploration and production (E&P) activity by the oil majors. Many yards are still working their way through orders placed in the last two to three years, but the decline in orders in 2014 does not augur well for yards once they have worked their way through the current orderbook. The large number of vessels in the orderbook in the US is particularly noticeable, and rates and utilisation levels will surely fall if rigs do not arrive in the Gulf of Mexico in anticipated numbers in 2015. The sharp decline in the oil price in the third quarter of 2014 – and the cancellation NEWBUILDING CONTRACTS 2014 other Europe 12%

Brazil 4%

Yards in most countries have seen fewer orders in 2014 than in preceding years or postponement of one or two high profile development projects – will accentuate concerns that demand for offshore vessels could decline further. This is bad news for yards that have traditionally specialised in building offshore vessels. Equally, it is also bad news for yards that have moved into building offshore units in the aftermath of the worldwide recession, when orders for conventional vessels were few and far between. As another well known broker put it recently, “There are many elements negatively affecting our view of the oil service industry’s CONTRACTING BY BUILDER REGION 2007-2014 – NUMBER OF UNITS no. of units

Rest of the World Americas Europe Middle East/ISC Asia-Pacific

1,000 other 6% 800

Norway 8% Middle East/ ISC 6%

600 400

other Asia 11%

200

www.osjonline.com

2014

2013

2012

2011

2010

2009

Source: Clarkson Research

0 2008

Singapore 7%

China P.R. 43% 2007

South Korea 3%

future.” The oil price has dropped well below US$100/barrel, mainly as a result of increased production in the US, Russia and Libya and reduced demand from the EU and China. At the time of writing, Brent crude was at about US$88/barrel but had fallen as low as US$86.17 after the International Energy Agency (IEA) reported higher output and cut its forecast for demand growth. As of mid-October, the price of Brent had fallen by 20 per cent since the summer on concerns of oversupply, as output increases and demand wanes. “Recent price drops appear both supply and demand driven,” said the IEA. “In addition,” said the broker, “oil companies’ cash flow squeeze is gradually starting to have an effect on the OSV market. The number of active drilling rigs will not meet former predictions, and in addition to cutting exploration budgets, oil companies are cutting back on inspection, maintenance and repair. There are uncertainties about future field development decisions. Contractors see projects being postponed or, even worse, cancelled.” The Russian Arctic absorbed around 25 vessels from the North Sea fleet this summer, and the region will need more high end (and in particular ice-classed) vessels in future. The ExxonMobil-Rosneft joint venture’s recent oil discovery in Kara Sea is promising for Guide to OSV Shipbuilders I November 2014 I 15

contracts in 2014

CONTRACTING BY BUILDER REGION BY VALUE 2007-2014 US$ billion 100

Rest of the World Americas Europe Middle East/ISC Asia-Pacific

2014

2013

2012

2011

2010

2009

2008

vessels a couple of years from now. The subsea market has been a bright spot for vessel owners, but the number of vessels on order and being delivered into the market could keep a lid on rates. A number of uncommitted vessels are due to be available in the next six months – both sublet and new vessels leaving yards without contracts. This particular broker said the currently bearish market was at least having a “positive effect” in as much as it is leading to a slowdown in newbuilding contracts (and hence helping to keep a lid on possible oversupply), “but rest assured,” said the broker, “new orders will follow, and if and when the wind turns and the OSV market improves, owners, yards and designers have plenty of ideas and designs just waiting for contract approval.” OSJ

2007

continued activity in the region, but some uncertainties remain due to the sanctions on Russia enforced by the US and EU. Overall, 2014 has been a disappointing year for owners in the North Sea, southeast Asia and the Gulf of Mexico. “It is easy to be negative about the oil service industry at the moment,” the broker said, “but we do not foresee a ‘sunset’ for the offshore vessel market. On the contrary, we shouldn’t forget that we in fact are at an all-time-high offshore investment level and see all-time-high vessel demand. Some oil companies insist that they haven’t slammed on the brakes – just lifted the foot off the pedal.” According to this particular broker, we could well see oil companies returning to the market for drilling rigs and support

CONTRACTING BY BUILDER COUNTRY SHOWING DOWNWARD TREND IN 2014

China

2007

2008

2009

2010

2011

2012

2013

Aug*

This year…

347

206

237

216

222

321

113

–47%

Singapore

–46%

South Korea

–63%

Malaysia

–25%

Indonesia

–86%

Japan

313%

Vietnam

38%

Hong Kong

Other Asia

–100%

ASIA-PACIFIC

606

420

328

398

415

411

452

167

–45%

India

–81%

UAE

Sri Lanka

Saudi Arabia

Other Middle East/ISC

–41% -

200%

MIDDLE EAST/ISC

Norway

31%

The Netherlands

–54%

Spain

–44%

Poland

Russia

Finland

Germany

125%

France

–100%

23% –17%

Other Europe EUROPE

–27%

–85% -

200%

172

102

112

Brazil

–6%

United States

–64%

Mexico

Other Americas

AMERICAS

119

101

123

–46%

–19%

WORLD TOTAL

993

671

491

642

659

691

645

261

–39%

Fixed structures

190

174

185

164

170

151

119

–67%

REST OF THE WORLD

*Denotes year to date. Contracting trends based on year-to-date annualisation. Source: Clarkson Research

16 I Guide to OSV Shipbuilders I November 2014

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OSVs on order by region

China a major player in construction of offshore units REGIONAL BUILDER SHARE OF MARKET FOR OFFSHORE UNITS CONTRACTING – NO. OF UNITS 2009

DELIVERIES – NO. OF UNITS

2010

2011

2012

2013

2014

2009

2010

2011

ORDERBOOK

2012

2013

2014

No.

AHTS >16,000 bhp Norway

China

South Korea

Others

TOTAL

100%

Asia share

69%

57%

33%

50%

43%

67%

China

Chile

Others

TOTAL

China share

25%

Other share

75% 15 2

Europe share

18%

53%

69%

75%

60%

43%

100%

93%

82%

41%

15%

25%

30%

43%

67%

63%

95%

100%

13%

20%

78%

50%

81%

33%

38%

88%

80%

100%

22%

50%

19%

28 -

1 4

5 -

6 -

10 11

12 6

14 3

15 3

10 2

6 2

AHTS 12,000–16,000 bhp

AHTS 8,000–12,000 bhp China Indonesia Others

TOTAL

China share

63%

78%

20%

83%

75%

29%

32%

54%

60%

67%

65%

Other share

38%

22%

100%

80%

17%

25%

71%

68%

46%

40%

33%

25%

China India

57 2

44 5

47 -

56 2

49 2

16 -

91 5

88 5

86 10

52 5

47 1

26 -

84 5

Others

TOTAL

142

128

113

China share

72%

67%

87%

89%

86%

94%

64%

69%

76%

73%

75%

87%

89%

Other share

28%

33%

13%

11%

14%

36%

31%

24%

27%

25%

13%

11%

China US

11 6

14 6

20 27

34 23

60 6

10 7

2 8

1 4

9 3

13 9

15 13

19 18

92 37

Brazil

Others

108

215

33%

45%

26%

63%

27%

14%

11%

20%

31%

36%

39%

50%

15%

40%

19%

55%

33%

19%

China US

2 -

20 4

44 3

28 5

53 4

2 -

8 3

3 6

4 2

12 -

24 1

21 1

84 12

Brazil

Others

AHTS <8,000 bhp

PSV >4,000 dwt

TOTAL Asia share Europe share PSV 3,000–4,000 dwt

TOTAL

125

22%

48%

65%

60%

82%

40%

29%

11%

29%

46%

57%

75%

67%

10%

11%

22%

14%

10%

9 3

19 2

4 -

5 -

3 11

8 1

20 1

13 1

6 3

3 1

13 -

8 -

13 12

Others

TOTAL

Asia share

74%

58%

30%

39%

23%

50%

44%

51%

48%

30%

54%

45%

46%

Europe share

13%

37%

19%

13%

25%

China share United States share PSV <3,000 dwt China The Netherlands

Source: Clarkson Research

18 I Guide to OSV Shipbuilders I November 2014

www.osjonline.com

REGIONAL BUILDER SHARE OF MARKET FOR OFFSHORE UNITS CONTRACTING – NO. OF UNITS 2009

2010

2011

China

Norway

Indonesia

Malaysia Others

DELIVERIES – NO. OF UNITS

2012

2013

2014

2009

2010

2011

2012

ORDERBOOK

2013

2014

No.

MSV/DSV/ROV

TOTAL

75%

71%

73%

43%

29%

61%

24%

44%

63%

57%

48%

44%

54%

17%

21%

50%

41%

36%

66%

46%

30%

39%

41%

48%

28%

China

Malaysia

UAE

United States

Singapore

Asia share Europe share Other construction

Others TOTAL

Asia share

48%

65%

50%

49%

81%

74%

49%

69%

64%

52%

37%

50%

77%

Europe share

28%

26%

20%

26%

10%

16%

15%

22%

20%

26%

19%

China

South Korea

Singapore

Brazil

UAE

Others

TOTAL

FPSO

China share

10%

57%

25%

11%

22%

15%

20%

11%

25%

26%

14%

15%

40%

14%

25%

22%

15%

25%

11%

25%

23%

South Korea

Finland

Others

TOTAL

Asia share

43%

25%

33%

50%

86%

50%

25%

14%

25%

33%

29%

67%

64%

Europe share

14%

67%

50%

25%

29%

36%

South Korea

China

Others

TOTAL

China share

South Korea share Other MOPU

Shuttle tankers

South Korea share

100%

27%

14%

25%

100%

93%

100%

50%

40%

27%

86%

100%

75%

SPM Singapore

The Netherlands

Malaysia

Others

TOTAL

Asia share

26%

21%

48%

25%

31%

13%

28%

33%

32%

25%

30%

25%

Europe share

21%

14%

24%

20%

23%

20%

19%

Source: Clarkson Research

www.osjonline.com

Guide to OSV Shipbuilders I November 2014 I 19

OSVs on order by region

REGIONAL BUILDER SHARE OF MARKET FOR OFFSHORE UNITS CONTRACTING – NO. OF UNITS

DELIVERIES – NO. OF UNITS

ORDERBOOK

2009

2010

2011

2012

2013

2014

2009

2010

2011

2012

2013

2014

No.

Survey

Japan

Norway

The Netherlands

Spain

Others

TOTAL

Asia share

40%

33%

38%

18%

42%

67%

21%

25%

11%

55%

50%

23%

Europe share

53%

56%

45%

42%

33%

43%

42%

38%

61%

36%

40%

59%

China

UAE

Kazakhstan

Others

TOTAL

86%

33%

63%

100%

#DIV!

50%

63%

60%

43%

80%

50%

67%

33%

25%

#/0!

17%

13%

14%

20%

17%

50%

China

Singapore

UAE

India

Others

TOTAL

128

78%

32%

16%

44%

59%

44%

10%

36%

54%

50%

70%

33%

30%

28%

59%

53%

60%

57%

69%

64%

27%

Jack-up <300ft

China share UAE share Jack-up >300ft

China share Singapore share MDU – semi-sub China

South Korea

Brazil

Others

TOTAL

China share

67%

38%

33%

38%

20%

13%

38%

South Korea share

33%

63%

50%

100%

20%

18%

27%

38%

100%

31%

South Korea

Brazil

China

Others

TOTAL

China share

20%

100%

60%

75%

50%

85%

40%

100%

88%

80%

100%

92%

54%

The Netherlands

Norway

MDU – drillship

South Korea share Construction vessel China

Others TOTAL

Asia share

76%

77%

60%

64%

29%

71%

68%

70%

81%

80%

63%

58%

54%

Europe share

13%

15%

36%

25%

58%

29%

10%

18%

30%

25%

41%

Source: Clarkson Research

20 I Guide to OSV Shipbuilders I November 2014

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www.ulstein.com

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Guide to OSV Shipbuilders I November 2014 I 21

market data PSV builders

Large PSV segment dominated by Chinese yards U

nsurprisingly, Chinese yards hold the greatest share of the worldwide platform supply vessel (PSV) orderbook for vessels of in excess of 4,000 tonnes deadweight, with Fujian Mawei and COSCO Guangdong heading the list of builders of PSVs of this size. Japan is not well known as a builder of offshore vessels but has been picking up more orders in recent years whilst orders for Japanese yards’ staple fare – such as bulk carriers and other, larger oceangoing vessels – have been in short supply due to the effect on shipbuilding of the worldwide recession, the effects of which are still being felt. Interestingly, Japan Marine United currently has a large orderbook in the > 4,000 dwt PSV size range – this is attributable to the large number of vessels that one owner, Swire Pacific offshore, has placed with the yard, and should not be seen as indicating a long term trend to Japanese yards securing orders for significant numbers of PSVs. As highlighted elsewhere in this special supplement, Eastern Shipbuilding is building a significant number of PSVs, thanks to the boom in orders for offshore vessels in the Gulf of Mexico in the last 2-3 years. It is also recently completed a series of PSVs for Boldini in Brazil, orders that

A number of now well known shipyards in China hold the lion’s share of the orderbook for platform supply vessels, but De Hoop in the Netherlands also stands out as a builder of small PSVs

were won partly as a result small shipbuilding grants which enable it to enhance its facilities and partly as a result of it gaining access to Title XI loan guarantees. Once this yard – and others like them in the US that also received orders from Hornbeck Offshore’s massive newbuild programme – have worked their way through the recent order glut they could face a very different future, particularly as the oil price has fallen steeply recently and owners in the Gulf of Mexico are very unlikely to order many more new vessels in the foreseeable future. Polish yards have also been enjoying more success in the offshore vessels sector in recent years, among them Remontowa Shipbuilding, which is building PSVs for leading players in the market such as Siem Offshore. In the 3,000–4,000 dwt tonne category, Chinese yards such as Sinopacific Zhejiang,

Chinese yards build the bulk of the PSV orderbook but De Hoop in the Netherlands has carved out a niche for itself

Fujian Southeast, Fujian Mawei, Guangzhou Hangtong and Xiamen SB also predominate. It is interesting to note that yards within the Damen Shipbuilding Group are also enjoying a high level of success in the category of vessel, having only fairly recently entered the market for offshore vessels with its own designs. The situation is strikingly different in the <3,000 dwt segment. Here, a Dutch yard, De Hoop, holds more orders than any other yard, a situation which it testament to the company’s focus on developing and building smaller, relatively unsophisticated vessels for longstanding customers in Mexico. De Hoop’s strategy has also seen it win a significant amount of business from the Middle East – it is building a series of vessels for ADNOC, for instance. It is due to launch the first of a series of 10 65m PSVs for ADNOC by the end of this year. The small PSV segment also sees a much wide range of yards building vessels. It includes ETP Brazil, Sinopacific Zhejiang, Master Boat Builders in the US, Larsen & Toubro (India), NGV Tech (Malaysia), Zamil Offshore (Saudi Arabia), Damen Song Cam (Vietnam), Pipavav Shipyard (India), C&C Boat (US), Simek (Norway), Keppel Nantong and Fujian Mawei (both China), and Grandweld (Dubai). OSJ

PLATFORM SUPPLY VESSEL DELIVERIES AND ORDERBOOK DELIVERIES – NO. OF UNITS

2014*

ORDERBOOK AND DELIVERY SCHEDULE

2010

2011

2012

2013

No.

US$bn

No.

US$bn

2014

2015

2016

2017+

0.3

9 8 3

0.2

0.1

0.0

4 4

0.1

0.2

10 4 1 5 3 5 5 1 3 1 2 3

0.0

1.3

0.8 0.7 0.4 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 3.4

23 20 10 9 8 7 6 6 6 6 6 5 5 4 4 4 4 82

Others (79)

1 1 3 16

TOTAL

2.3

215

8.5

104

0.6 0.5 0.4 0.4 0.4 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.4

4 6 4 2 2 6 1 2 2 1 2 1

12 8 9 5

PSV >4,000 dwt Fujian Mawei COSCO Guangdong Japan Marine United Eastern Shipbuilding Huangpu Wenchong (H) Jiangsu Zhenjiang Gulf Coast Shipyard Eisa Shipyard VARD Vung Tau Bollinger Amelia Leevac Shipyard Remontowa Shipbuilding VT Halter (Pasca) Sao Miguel Shipyard Estaleiro Navship Ulstein Ulsteinvik Damen Gorinchem

PSV 3,000–4,000 dwt

Others (77)

1 26

0.1

0.2

0.1

0.0

0.2

0.1

0.3

17 16 14 11 11 8 5 4 4 4 4 2 2 2 2 2 2 15

TOTAL

1.0

125

4.1

0.1

3 3

0.1

0.0

Simek A/S

7 4 2 2 2 2 2 1 1 -

0.3 0.2 0.2 0.2 0.1 0.2 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.2

C&C Boat

1 6 1

1.8

Sinopacific Zhejiang Fujian Southeast Fujian Mawei Guangzhou Hangtong Xiamen Shipbuilding Damen Gorinchem Eisa Shipyard Jiangsu Eastern BAE Repair Jackson POET (China) Shipbuilding Paxocean Nanindah BMS BAE Repair Alabama Wilson, Sons EASA COSCO Zhoushan C&C Boat

PSV <3,000 dwt De Hoop Lobith ETP Brazil Sinopacific Zhejiang Master Boat Builders Larsen & Toubro NGV Tech Zamil Offshore Damen Song Cam Pipavav Shipyard

Others (262)

6 41

TOTAL

Keppel Nantong Fujian Mawei Arpoador SEAS Grandweld

0.0

0.3

17 12 7 6 6 4 4 4 3 3 2 2 2 2 2 2 7

0.7

Offshore builders ranked by number and value of units on order. Value based on contract value where known or able to be estimated. *Denotes year to date. Source: Clarkson Research

www.osjonline.com

Guide to OSV Shipbuilders I November 2014 I 23

market data AHTS builders Chinese yards such as Yuexin, and southeast Asia yards, continue to build a good number of smaller AHTS vessels

Anchor handler orderbook highlights disparity in demand There are still a good number of small anchor handlers on order for the Southeast Asian market, but at the upper end of the sector only a few vessels on order and fewer yards that can build them outside Europe

nlike the platform supply vessel (PSV) segment, which is dominated by low cost yards in China, the anchor handling tug supply vessel (AHTS) segment has a much wider range of yards active it in. The AHTS vessel building segment is also much smaller overall, except in the <8,000 bhp category, where a large numbers of vessels continue to be ordered for owners in southeast Asia. At the upper end of the AHTS vessel market, in the >16,000 bhp segment, there are relatively few owners and only a handful of vessels on order. According to Clarkson Research’s data, a total of 10 vessels of this size were due to be delivered in 2014, and there are only four more on order. In the last 2-3 years, examples of these larger types of AHTS have been ordered from a diverse range of yards that includes: 24 I Guide to OSV Shipbuilders I November 2014

• NorYards Fosen AS • Wuchang SB • Vard Niteroi • Amur Shipbuilding • SPP Shipbuilding • Sekwang HI • Jiangsu Zhenjiang • ST Marine • Rosetti Marino’s San Vitale yard • Vard Brattvaag. Larger numbers of vessels are on order in the 12,000–16,000 bhp segment. Here again, as in the PSV segment, Chinese yards hold the bulk of orders. These include Guangxin SB, Shanghai SY, Shanghai Zhenhua, and Sinopacific Dayang. It is interesting to note that whereas in the past, almost all of the AHTS on order in China would have been overseas designs, yards such as Sinopacific have developed – and are now building – their own designs. Other shipyards that are active in this segment of the market for AHTS vessels include ASENAV in Chile, Zhoushan Wuzhou and Wuhu Shipyard in China, Bharati Shipyard in India, SPP Shipbuilding in South Korea (one of only a few Korean yards active in the offshore vessel market), Paxocean Nanindah in Indonesia, and CCCC Bomesc Marine (also Chinese).

The 8,000–12,000 bhp segment is also dominated by Chinese yards, among them ASL Shipyard in Guangdong, Guangxin Shipbuilding, COSCO Guangdong, Nantong Tongshun and Sinopacific Zhejiang, but a number of yards in other countries have also played an important role, among them Japan Marine United, Remontowa Shipbuilding in Poland, ABG Shipyard and Bharati Shipyard in India, along of course with Edison Chouest’s North American Shipbuilding and Muhibbah Marine in Malaysia. Unsurprisingly, given the nature of the market in southeast Asia and demand there for smaller AHTS vessels, there is a much higher level of activity in the <8,000 bhp segment. A total of 55 vessels were due to be delivered into this segment of the market in 2014, with another 32 to follow in 2015. Vessels of this size and capacity are primarily built for the southeast Asian market, and Chinese yards again predominate, along with 1-2 in India. Fujian Southeast, Yuexin, Guangzhou Hangtong, Fujian Crown Ocean and Sinopacific Zhejiang once again play a leading role in this segment, along with yards such as ASL Guangdong, Nanjing East Star, Larsen & Toubro (India), Xin Yue Feng Shipbuilding, and Guangzhou Shunhai Shipyard. OSJ www.osjonline.com

ANCHOR HANDLING TUG SUPPLY VESSELS DELIVERIES AND ORDERBOOK DELIVERIES – NO. OF UNITS 2010

2011

2012

2013

2014* No.

ORDERBOOK AND DELIVERY SCHEDULE

US$bn

No. US$bn

2014

2015

2016 2017+

AHTS >16,000 bhp NorYards Fosen AS

0.1

Wuchang Shipbuilding

0.0

0.1

VARD Niteroi

0.1

Amur Shipbuilding

0.1

SPP Shipbuilding

0.1

Sekwang HI

0.1

Jiangsu Zhenjiang

0.1

ST Marine

0.1

0.0

San Vitale Yard

0.0

VARD Brattvaag

0.0

Others (47)

0.3

TOTAL

0.6

0.7

AHTS 12,000–16,000 bhp Guangxin Shipbuilding

0.2

Shanghai Shipyard

0.1

Shanghai Zhenhua

0.1

Sinopacific Dayang

0.1

ASENAV

0.2

Zhoushan Wuzhou

0.1

Wuhu Shipyard

0.1

Bharati Shipyard

0.1

SPP Shipbuilding

0.0

Paxocean Nanindah

0.0

Jaya Shipbuilding & Eng

0.1

CCCC Bomesc Marine

0.0

Others (65)

TOTAL

0.1

1.0

AHTS 8,000–12,000 bhp ASL Shipyard (Guangdong)

0.1

Marco Polo Shipyard

0.1

Guangxin Shipbuilding

0.1

COSCO Guangdong

0.1

Nantong Tongshun

0.1

Sinopacific Zhejiang

0.1

0.0

Japan Marine United

0.0

Remontowa Shipbuilding

0.0

PaxOcean Zhuhai

0.1

0.0

ABG Shipyard

0.0

Bharati Shipyard

0.0

North American

0.0

Qingdao Yangfan

0.0

Others (116)

Muhibbah Marine

TOTAL

0.2

0.6

0.4

0.0

0.3

AHTS <8,000 bhp Fujian Southeast Yuexin Shipbuilding Guangzhou Hangtong

0.1

0.2

Fujian Crown Ocean

0.2

Sinopacific Zhejiang

0.1

ASL Shipyard (Guangdong)

0.0

0.1

Nanjing East Star

0.2

Larsen & Toubro

0.1

Xin Yue Feng Shipbuilding

0.0

0.1

Guangzhou Shunhai Shipyard

0.0

0.1

Others (303) TOTAL

0.2

0.7

128

113

0.7

2.3

Offshore builders ranked by number and value of units on order. Value based on contract value where known or able to be estimated. *Denotes year to date. Source: Clarkson Research

www.osjonline.com

Guide to OSV Shipbuilders I November 2014 I 25

REMONTOWA SHIPBUILDING ONE OF THE MOST REPUTABLE SUPPLIERS OF OFFSHORE SUPPORT VESSELS We have built almost 50 advanced Offshore Support Vessels such as: • Anchor Handling Towing Supply Vessels • Platform Supply Vessels • Cable Laying Vessels • Inspection, Maintenance and Repair Vessels • Offshore Construction Vessels. Leading owners across America, Canada, Europe and Southeast Asia rely on our expertise and trust in our vessels. We are open for business and look forward to working with owners from all over the world!

REMONTOWA SHIPBUILDING ul. Swojska 8, 80-958 Gdańsk, Poland Offshore Department / Scandinavian Area – Mr Grzegorz Langowski, phone: +48 502 160 420 Offshore Department / America, Asia, West Europe – Mr Miroslaw Jasinski, phone: +48 501 022 257 www.remontowa-rsb.pl

Remontowa Shipbuilding has for many years belonged

to the group of the biggest and most appreciated world suppliers of Offshore Support Vessels. There are some key aspects of our success – says Chairman of the Board – Mr. Andrzej Wojtkiewicz. Currently, Remontowa Shipbuilding belongs to Capital Group Remontowa Holding S.A. Being part of Remontowa Holding gives an opportunity to offer comprehensive technical solutions, which greatly increase the competitiveness of the shipyard in the rapidly changing worldwide shipbuilding market. Thanks to good partnerships with companies belonging to Remontowa Holding we can take up and realise even the most demanding projects whose final products are fully equipped, ultra-modern ships. Remontowa Shipbuilding has a lot of experience in constructing vessels of different types. Each project is approached individually, closely considering the client’s demands as well as generating innovative solutions that ensure its leadership position in the European market. I would also like to emphasise – adds Mr. Andrzej Wojtkiewicz – the importance of the people working for our common success. I mean their experience, high qualification, wide knowledge and their engagement and determination in overcoming everyday problems. All these factors mean that today we are the biggest Polish shipyard, and one of the leading shipyards in Europe. Our motto is “Flexibility is our strength”. Flexibility means readiness to execute all, even the most complicated requests of our clients at every stage of construction. Nowadays, such a flexible approach to new and changing demands from our customers has become a standard in our cooperation with all key OSV industry players. Our first steps in the Offshore Support Vessels’ market ten years ago involved building a series of 23 Anchor Handling Tug Supply vessels for leading American owners such as Tidewater Marine LLC, Edison Chouest Offshore Inc. and Gulfmark Offshore Inc. as well as 2 AHTS vessels for Italian owner – Marnavi Offshore SPA. These vessels were built to handle anchors for oil rigs, tow them to their location, anchor them and serve as an Emergency Rescue and Recovery Vessel. They enjoy a good and troublefree reputation. After a successful series of AHTS vessels we have started to build Platform Supply Vessels. In 2010 we established a long– term, close cooperation with one of the largest Polish design offices – MMC Ship Design & Marine Consulting. During a period of 4 years we delivered a total of 13 vessels built according to MMC projects, not only to American owners ECO and Gulf Offshore but also to one of the biggest owners in Singapore – Emas Offshore, belonging to Ezra Holding. The vessels are well tailored to match the requirements of the owners and are designed to meet the highest operation demands with maximum attention to fuel economy, low emissions and large capacities, both above and below deck. The design office employing a professional team of engineers and naval architects offers the most cost effective and optimal use of design parameters with respect to performance and legislative requirements. With such an experienced business partner we can confidently assure clients that we are able to build any type of vessel. Any constraints result only from our

infrastructure. Presently, we can build vessels up to 130m long and 24m wide but we have already taken some steps to overcome this limitation. Today our reference list is much longer in terms of the number of clients as well as the different types of constructed vessels. With several large ongoing contracts Remontowa Shipbuilding is presently completing the construction of the dynamically positioned Cable Laying Vessel for one of the biggest Norwegian offshore fleet owners, SIEM Offshore Rederi AS. The vessel is designed for installation, repair and maintenance of medium and high voltage submarine cable systems in the offshore renewable energy and offshore oil and gas markets. The vessel has an overall length of 95.3m with cable payload of 4,250 tons will be served by a crew of 60. Most of them will be engaged in operations involving laying and connecting cables. The vessel will meet the highest standards of environmental protection and safety of navigation with “CLEAN DESIGN”. At the same time and for the same owner we are building 4 LNG-powered Platform Supply Vessels for worldwide operation, complying with standard offshore oil industry requirements for such vessels, and with the highest possible safety for personnel and best protection of the environment. Realisation of this contract is of great importance to us – explains Mr. Andrzej Wojtkiewicz – since they will be the first supply vessels powered by LNG fuelled engine. Previously this technology has been successfully implemented in carpassenger ferries, which Remontowa Shipbuilding is the world’s biggest supplier. This time our experience in building LNG-powered ships will be combined with our experience in the offshore sector. Another type of vessel which is currently under construction is an AHTS vessel destined for serving in harsh environment conditions. The vessel will be built for Canadian – Norwegian joint venture – Secunda Canada, and will be used for a charter to the largest oil company in the world – ExxonMobil. The vessel is designed to satisfy the demands of the offshore industry, primarily – ice management, including monitoring of freezing level and if necessary correcting the course of moving icebergs to protect offshore installations in the region of Labrador and Newfoundland. Furthermore, the vessel will be used for passenger transport and evacuation, oil recovery and fire-fighting protection. These tasks will be carried out around one of the biggest offshore platforms “Hibernia”. The vessel will be equipped with a water monitor, which will break the pack ice around the platform and prevent the formation of ice cover. Remontowa Shipbuilding has great experience in building offshore support vessels. During the last 10 years the yard has delivered almost 50 offshore support vessels enjoying an excellent reputation and customer recognition. Despite the strong competition in the global shipbuilding market Remontowa Shipbuilding builds about 10 modern vessels of various types each year, which gives employment to more than 1,500 people. The recognition and reliability of vessels built by Remontowa Shipbuilding is confirmed by fact that many customers are coming back with new orders.

area report Europe

Dutch yards assume leading position in Europe Karina is one of the latest deliveries by De Hoop and is the first example of a new class of seven FSIVs

As analysis of the top 10 offshore vessel builders in Europe shows that Dutch-owned yards – not Norwegian yards, as might have been expected – have the largest orderbooks currently

uropean builders generally focus on larger offshore vessels for harsher environments, and yards such as Ulstein, Vard and Hayvard – all Norwegian – also sell their designs to non-European yards to boost revenue streams. However, it is small and medium size platform supply vessels (PSVs) and smaller, less highly specified designs that have secured top spot for Dutch yard De Hoop in the table of European offshore support vessel (OSV) builders (in terms of numbers of vessels on order). De Hoop develops most of the offshore vessel designs it builds in house and focuses on vessels intended for relatively benign conditions. It has longstanding relationships with clients in Mexico and, as highlighted elsewhere in this special supplement, also recently won a 10-ship order from ADNOC. Among recent deliveries by the De Hoop group (which operates two yards in the Netherlands) is Deep Helder, a specialised subsea vessel built for Seamar Subsea and 28 I Guide to OSV Shipbuilders I November 2014

chartered to DeepOcean on a long-term contract. Seamar first announced the order in late March 2013, and construction of the vessel was completed in a remarkably quick time. Steel cutting did not begin until midSeptember 2013, with the keel laying taking place two months later. At the end of April this year, Deep Helder was launched from Shipyard De Hoop in Foxhol. Sea trials took place in June, and the vessel is now at work, demonstrating the yard’s ability to bring a design to fruition quickly.

An even more recent delivery by De Hoop is Karina, the first example of a new class of seven fast supply intervention vessels (FSIVs). The vessels were ordered in late 2012, and the first two in the series were launched in March 2014. Karina undertook sea trials in July 2014 and is now in service. The FSIVs have a conventional displacement hull – albeit a very slender one with very fine entry angle – and a stern shape designed only for maximum speed but for good seakeeping and no slamming. The vessels also have a

TOP 10 EUROPEAN OSV BUILDERS RANKED BY CURRENT ORDERBOOK company

delivery in 2014 YTD

OB OB value No. (US$ billion)

main unit on order

typical design on order

De Hoop Lobith

0.3

PSV <3,000 dwt

KISS (In house design)

Damen Gorinchem

0.4

PSV 3-4,000 dwt

Damen 3300 CD

Remontowa Shipbuilding

PSV >4,000 dwt

VS 4411 DF LNG

Ulstein Ulsteinvik

PSV >4,000 dwt

PX121

Simek A/S

PSV 2-3,000 dwt

UT 755 LC

VARD Akura

PSV >4,000 dwt

PX121

Havyard Leirvik

PSV >4,000 dwt

Hayvard 832

Besiktas Shipyard

PSV >4,000 dwt

Amur Shipbuilding

- AHTS >16,000 bhp

Baltic Shipyard

0.2

PSV >4,000 dwt

Others (9)

www.osjonline.com

bulbous bow to reduce the bow wave and improve seakeeping. The vessels, which also have a novel, hybrid propulsion system, will be described in detail in the December issue of OSJ. September saw De Hoop complete the hull for a 68.23m OSV for Awaritse Nigeria Ltd. This vessel is designed to operate in Chevron’s oil fields offshore Nigeria and is due to be launched in November 2014. Construction of a 70m PSV, Delta Admiral, for Delta Logistics is also in full swing at the yard. This vessel is intended for the oil fields offshore Trinidad and Tobago. It was due to be delivered in October. Damen Shipyards Group, which is in second place, has won a significant number of orders for PSVs in the relatively short time since the group introduced its own designs. As highlighted in the 2014 Annual Review issue of OSJ, it was only at the end of 2011 that it unveiled its now growing range of PSVs. Since then, it has won orders from many leading owners including, most recently, the first PSV 3300 for Promar, which was launched recently; Wilson, Sons in Brazil, which is building Damen PSV 5000s; and Atlantic Towing in Canada, which selected the Damen PSV 5000 for its successful tender for a 10-year firm contract in Canada earlier this year. The third-placed yard is not Norwegian either. Remontowa Shipbuilding in Poland can build vessels of up to 130m in length and a breadth of 24m. The yard builds a wide range of vessels and prides itself on being particularly flexible as regards client requirements. For the offshore oil and gas industry, it has tended to specialise in anchorhandling tug/supply (AHTS) vessels and PSVs to date. As of the end of September 2014, it had a total of six offshore vessels in its

orderbook (plus an option for another) and had delivered four in the first nine months of the year. It has a prestigious client list and has built ships for well known clients such as Edison Chouest Offshore and Gulf Mark Offshore and is currently working on VS4411 design vessels with dual-fuel engines capable of burning environmentally friendly liquefied natural gas (LNG). Apart from the VS4411 LNG design, it has specialised in building designs developed by MMC Ship Design & Marine Consulting Ltd in Poland and Remontowa’s own design agent, Remontowa Marine Design & Consulting. Four Norwegian yards – Ulstein Verft, Simek, Vard’s Aukra shipyard and Havyard – are in fourth, fifth, sixth and seventh place in terms of their orderbooks as of 1 September 2014. At that time, Ulstein Verft had five vessels in its orderbook, according to data from Clarkson Research, and Simek, Vard Aukra and Havyard each had three. All except Simek have long been designers and builders of offshore vessels. As of the end of September, Simek, which continues to win orders against intense competition from elsewhere in Europe, was fitting out a PSV for Fletcher Shipping. This vessel was due to be delivered in November 2014, followed by a sister unit for the same client in April 2015. It is also building a hull that will be towed to Flekkefjord for outfitting, the end client being Gulf Offshore. Besiktas Shipyard in Turkey, Amur Shipbuilding in Russia and Baltic Shipyard (Baltiysky Zavod), part of Russia’s United Shipbuilding Corporation, make up the other shipbuilders in the top 10, but there are a host of other yards in Europe that make regular forays into the OSV sector and others who do not have a large orderbook currently but have built numerous offshore vessels, such

Builders such as Ulstein have done good business selling their designs elsewhere as Astilleros Balenciaga, Gondan, Metalships, Zamakona and HJ Barreras in Spain. Another Dutch yard not represented in the top ten – IHC Merwede – builds fewer offshore vessels than some, but concentrates on large, high value units such as the pipelay vessels it is building for charters for Petrobras, Brazil’s state-owned oil company. Rosetti Marino in Italy has built a steady stream of offshore vessels, mostly Rolls-Royce UT designs in recent years, and Flensburger Shipyard in Germany – now owned by Siem Industries, which owns Siem Offshore – is building two well intervention units for Siem Offshore. Among Rosetti Marino’s latest deliveries is the PSV Highland Princess, which was also built for Gulf Offshore. Other Spanish yards, such as La Naval, also build highly specialised vessels – such as fallpipe vessels – and recently completed two 4,500 dwt PSVs for EDT Offshore, the first of which, EDT Jane, was subsequently converted into a remotely operated vehicle (ROV) support vessel. The second, EDT Hercules, was delivered earlier in 2014 and is understood to have been converted for ROV, survey and life of field services under the terms of a charter with Specialist Subsea Services. OSJ

Spanish yards have built up a reputation for building PSVs, ERRVs and other types of offshore vessel

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Guide to OSV Shipbuilders I November 2014 I 29

North America area report Yards in the US have benefited from orders from leading players in the market such as Hornbeck Offshore

Leading yards working their way through glut of orders A recent study* found that the offshore support vessel (OSV) sector in the US not only plays an important role in the offshore oil and gas industry but has significant benefits for the coastal communities that provide the labour and materials to build, crew and support the vessels. As the study highlighted, OSV construction in the US is heavily concentrated along the Gulf Coast of southern Louisiana and Alabama. From 2003 to 2010, a total of 429 OSVs were delivered by 35 US shipyards, valued between US$900 million and US$1,200 million per year, accounting for approximately half of the total US commercial self-propelled newbuilding industry. Of the shipyards that delivered offshore vessels, four accounted for around 40 per cent of deliveries. Louisiana captured about 70 per cent of the capital expenditures followed by Alabama (14 per cent), Florida (10 per cent), Washington (3 per cent) and Mississippi (2 per cent). Equipment is a major driver of material costs and links the OSV shipbuilding industry with the US manufacturing sector. Using US shipyard revenue per labour hour and production values, OSV construction employment in the US Gulf Coast from 2007 to 2010 was estimated at between 4,400 and 5,400 people per year. Indirect and induced impacts from OSV construction were estimated using shipbuilding average

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Yards in the US that are capable of building offshore vessels have benefited hugely from a boom in orders in the last two to three years. Some have also benefited from the longstanding Title XI Loan Guarantee Programme and small shipyard grants

multipliers between US$2.6 billion and US$3.5 billion per year. US owners are required to comply with the Jones Act. Most contract construction of vessels at non-owned yards, but one well known vessel owner, Edison Chouest, owns its own yards and designs and builds most of the vessels it operates at its own yards. These include: • North American Shipbuilding in Larose, Louisiana, which has probably built more specialised offshore service vessels than any other shipyard in the world • LaShip, Edison Chouest’s largest shipyard in the US, in Houma, Louisiana, which employs more than 1,000 workers and can accommodate a wide range of new construction projects, as well as repairs, conversions and refits • Gulf Ship, which is located in Gulfport, Mississippi, which has been operational since 2006.

Not all of Chouest’s vessels are built in its own yards, however. Remontowa Shipyard in Poland recently completed the last in a series of vessels for Chouest, and having acquired the remaining assets of vessel owner Bee Mar earlier in 2014 (another well known US owner Harvey Gulf International Marine had already acquired some of Bee Mar’s assets), Chouest acquired a number of platform supply vessels (PSVs) that Bee Mar had contracted at Bollinger Marine Fabricators in Amelia, Louisiana. The first of these vessels, Ms Charlotte, the first in a quartet of 300-class deepwater PSVs was delivered in May 2014. Apart from the quartet of 4,999 dwt 300-class units, Bollinger is also building three 270-class PSVs that were also ordered by Bee Mar. All seven vessels acquired by Chouest are due to be delivered by the end of 2015. Eastern Shipbuilding Group continues to build large numbers of offshore support vessels both for domestic owners and for export, having benefited from US Maritime Administration (MARAD) grant and financing programmes, which have enabled it to build a series of vessels for client Boldini in Brazil. Over the last five years, two MARAD grant and financing programmes have come together at Eastern Shipbuilding, which is based in Panama City, Florida, culminating in the recent launch of Bravante IX, the fifth and final PSV Guide to OSV Shipbuilders I November 2014 I 31

area report North America

ordered from Eastern Shipbuilding by Boldini. Unlike their counterparts in northwest Europe and Southeast Asia, US yards build few vessels for export, but the Eastern-built series is an exception made possible in part by a US$241 million Department of Transportation Title XI loan guarantee. Two MARAD small shipyard grants totalling US$3.4 million were also awarded to Eastern Shipbuilding, allowing for upgrades to the facilities at the yard, making the company a more attractive choice for Boldini. MARAD’s small shipyard grant programme, which fosters greater efficiency and competitiveness, enabled Eastern to purchase modern equipment, allowing them to construct vessels more quickly, making the shipyard more efficient and competitive globally with lower costs and higher levels of productivity. The shipyard credits the new federally funded equipment and the construction of the Boldini vessels with creating 350 long-term jobs. The Title XI Loan Guarantee Programme – which provides full faith and credit for loans to build vessels constructed in US yards – was the final piece needed for Eastern’s growth. Thanks in part to these programmes, Eastern Shipbuilding increased the number of people it was employing to around 1,600 and, thanks to the orders from Boldini and other companies,

Upgrades to Eastern Shipbuilding’s facility helped it win export orders in Brazil has been launching new vessels at a rate of one ship every six weeks. Since 2009, the Obama Administration has invested more than US$150 million to boost small US shipyard efficiency and productivity and increase the number of jobs for shipbuilding and repair workers and businesses that supply the industry. The vessels Eastern has now nearly completed for Boldini (the fifth, most recently launched vessel is due to be delivered in early 2015) are of the Vard SV290 design and are all ABS-classed,

AC diesel-electric powered, twin Z-drive propelled PSVs measuring 86.5m x 18.3m x 7.5m. The vessels have four Cummins QSK-60DM 16-cylinder turbocharged IMO Tier II diesel generator engines, each rated at 1,825kW at 1,800 rpm. Cummins also furnished the four Marathon Model 744 690VAC generators. Main propulsion power is provided by two 690VAC electric motors driving Schottel Combi-Drives. GE Energy provides the integrated diesel-electric package, including the thruster drives, motors, control systems, DP system,

Don’t miss out! For global vessel operators who are always eager to keep tabs on the up-to-date developments in the offshore oil and gas industry, OSJ should be a natural choice. Kelvin Teo, POSH Semco Pte Ltd

Order your personal copy today! Only subscribers get the complete package which includes: • 10 printed issues per year • Free access to the searchable archive of all the articles that have been published on our website • Access to the digital editions. • Free industry year-planner including key industry dates

With subscriptions from just £299 this represents incredible value when you consider everything you get. To order your copy today, just visit www.osjonline.com and click on subscribe or contact sally.church@rivieramm.com t: +44 20 8370 7018

32 I Guide to OSV Shipbuilders I November 2014

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switchboards, motor control centres, automation and navigation/communication electronics. Eastern was also one of the yards to benefit from the recent order boom in the Gulf of Mexico and is also building vessels for Hornbeck Offshore Services. The yard recently held a naming ceremony for and launched HOS Brass Ring in August 2014. This was followed the same day by delivery of HOS Black Rock, which was delivered 11 days early and on budget and is Eastern’s seventh out of a total of 10 vessels contracted by the well known US owner and the third of Hornbeck’s HOSMAX 310 series. HOS Black Watch, HOS Brass Ring and HOS Briarwood are the remaining three HOSMAX 310 PSVs and are all due to be delivered by early 2015. Eastern is also in full production for Hornbeck Offshore’s HOSMAX 310ES multipurpose PSVs HOS Warland and HOS Woodland, which are both on schedule to be launched by mid-2015. Eastern was also the beneficiary of an order from Harvey Gulf International Marine for construction of a Robert Allan-designed RAmpage 6400 multipurpose field support vessel. To be built at Eastern’s Panama City facility, the RAmpage 6400 will begin a 10-year charter when delivered in April 2016. A number of smaller US yards are also building OSVs currently, including Gulf Coast Shipyard Group, which launched the first of six liquefied natural gas-fuelled PSVs for Harvey Gulf Marine International earlier this year. Leevac Shipyard continues to build offshore support vessels, its latest launched being Ram Country, a sister vessel to Ram Nation, first of a new class of dieselelectric PSVs for Aries Marine. Leevac’s orderbook extends in 2016 – the yard has also won orders from Hornbeck Offshore, Tidewater and other leading operators in the last 12-18 months. VT Halter Marine is another yard building for Hornbeck. This yard was awarded contracts as part of Hornbeck’s ‘Super 320’ programme. On 10 July VT Halter Marine delivered HOS Captain; five days later, the company hosted the naming ceremony of HOS Crestview at its Pascagoula facility and launched HOS Caledonia at its Halter Moss Point facility on July 15. Delivery of HOS Clearview took place on July 28. Another yard, Thoma-Sea Shipbuilders, recently launched Regulus, a DP2 offshore supply vessel built at its Houma shipyard. The 272ft vessel is being built for GulfMark Offshore. A sistership, Polaris, was recently delivered to GulfMark. Thoma-Sea also recently launched Fugro Americas, a geotechnical survey vessel. Launched on 29 May, the owner of this vessel is Fugro America. BAE Systems in Florida delivered the first of four PSVs it is building for Jackson Offshore Operators LLC earlier this year. The vessel, Breeze, is a GPA 675J designed by Guido Perla & Associates. The remaining vessels are due to be completed in 2015. The Jackson Offshore contract is part of a continued effort by BAE Systems to increase www.osjonline.com

new construction shipbuilding workload at its facilities in Jacksonville and Mobile, Alabama. The company is also under contract to build a subsea support vessel. Breeze is now on a five-year charter with a super major in the US Gulf of Mexico. Another somewhat smaller US vessel owner, Bordelon Marine, has adopted a similar ‘build and operate’ strategy to Edison Chouest Offshore. The company completed its first PSV, Connor Bordelon, a couple of years ago, which is now in operation as a well stimulation vessel. It says it plans to complete its second DP2 vessel by the end of 2014. A third vessel, Brandon Bordelon, is due to be available in the second quarter of 2015. The second Bordelon vessel, Sheila Bordelon,

marks a new chapter in the growth of the company. Although the design remains a Stingray DP2 260-class vessel like Connor Bordelon, it will differ from Connor Bordelon in as much as the vessel will be equipped specifically to support inspection, maintenance and repair and subsea intervention work and will have a 50-tonne active heave compensated crane and will accommodate two deepwater work-class remotely operated vehicles. OSJ *Economic impacts of the offshore supply vessel shipbuilding market in the Gulf of Mexico, Mark J Kaiser and Brian F Snyder, Center for Energy Studies, Louisiana State University

When marine technology sets the course, it’s At Ingeteam, we apply the concept i+c to every project we undertake – innovation to find the best solution and commitment to provide the best service. At Ingeteam Marine Division, we offer completely integrated solutions for the marine sector. We are the company, inside Ingeteam, leading the supply of turnkey electric projects. Ingeteam is a market leader specializing in electrical engineering and the development of electrical equipment, motors, generators and frequency converters. It deploys its products in four main sectors: energy, industry, marine and railway traction. The formula of the new energy

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READY FOR YOUR CHALLENGES

Guide to OSV Shipbuilders I November 2014 I 33

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China area report

European owners build in bulk in Chinese yards European shipowners invariably turn to Chinese yards when they want to build relatively unsophisticated vessels in series – Fujian Mawei and Fujian Southeast top the list, but Sinopacific Zhejiang and COSCO Guangdong are not far behind them

he days when Chinese yards only built low cost offshore vessels are receding fast. Only Sinopacific is able to offer its own designs, but yards in the country have been only too pleased to build a growing array of more sophisticated designs developed in Europe – by the likes of Ulstein Group and Havyard in Norway – and the likes of Khiam Chuan Marine, Focal Marine and others in Singapore. Reading other sections of this special supplement – in particular, reviewing the tables of platform supply vessels (PSVs) on pages 24–25 and anchor-handling tug/supply (AHTS) vessels (pages 26–27) and the table on page 52 listing the leading offshore vessel builders by orderbook – highlights the leading role that Chinese yards play in the industry nowadays. The top four yards in the orderbook table are all Chinese, and eight of the top 10 shipyards by orderbook are also Chinese. The top 50 OSV shipbuilders list includes: • Fujian Mawei • Fujian Southeast • Sinopacific Zhejiang • COSCO Guangdong • Guangzhou Hangtong • Guangxin Shipbuilding • Xiamen Shipbuilding • Yuexin Shipbuilding • Jiangsu Zhenjiang Shipyard • Wuchang Shipbuilding • Huangpu Wenchong • ASL Shipyard (Guangdong) • Shanghai Zhenhua • POET Shipbuilding • Nantong Rainbow • Wuhu Shipyard • Fujian Crown Ocean • Sinopacific Dayang • Xin Yue Feng Shipbuilding • Nanjing East Star • Jiangsu Eastern • Shanghai Shipyard • Shanghai Waigaoqiao

www.osjonline.com

Bourbon Offshore established a precedent ordering large numbers of vessels at Sinopacific Sinopacific’s relationship with Bourbon Offshore, for whom it built – and is building – so many Bourbon Liberty vessels and subsea vessels, was undoubtedly a major breakthrough for Chinese yards. Not only did Sinopacific mass produce designs developed for Bourbon offshore by designers such as Guido Perla & Associates, it has also developed its own designs, which it is now building for owners such as Naviera Petrolera Integral SA de CV in Mexico, Vallianz Holdings Ltd in Singapore and Shenzhen Huawei Offshore Shipping Transport Co Ltd, a subsidiary of Shanghai Salvage Company in China, to name but a few. The yard isn’t exactly resting on its laurels, however. It continues to build non-Chinese designs for owners such as Deep Sea Supply, which took delivery of its latest newbuilding PSV Sea Swan, an Ulstein PX105 design, in September. Another well known European owner, Van Oord, only recently turned to Sinopacific group to build a rock installation vessel at its Ningbo yard in China. The vessel will be delivered in 2016. To get an idea of how other Chinese yards have benefited from the market for offshore vessels, take a look at Vroon Offshore’s newbuild programme. According to Vroon Offshore’s newbuilding information, 2015 will see Nanjing East Star shipyard deliver three 1,335 dwt emergency response and rescue vessels (ERRVs). 2015 will also see Fujian Southeast Shipyard deliver two more Group B field support vessels. Fujian will also deliver two more dynamic

positioning (DP2) subsea support vessels to Vroon in 2015. COSCO Guangdong will deliver four 4,200 dwt PX121 PSVs, followed by another pair in 2016. Fujian is due to deliver six Khiam Chuan Marinedesigned 3,980-tonne PSVs to the company in 2015, with another four to follow in 2016. It is also contracted to build a total of seven 6,500 bhp anchor handlers with dynamic positioning to DP2 and fire-fighting capability to Vroon in 2015–2016. The period from the end of July to late September 2014 saw Chinese yards deliver or launch numerous vessels for Vroon. These included: • an ERRV, VOS Fairness, built by Nanjing East Star Shipyard • VOS Famous, another ERRV from Nanjing East Star • VOS Glory, a 60m field support vessel built by Fujian Southeast. Of course, Bourbon and Vroon Offshore are far from being the only shipowners attracted by Chinese yards’ low cost base and increasing quality. The keel of Sentinel’s first 78m PSV, Prime Sentinel, was laid on 18 August at Xiamen Shipyard, China (this vessel is also a Focal design). The vessel was due to be launched in October 2014. Early October also saw the keellaying ceremony for another Focal 522 design PSV, Noble Sentinel, at Xiamen. This vessel is due to be launched in December this year. On 2 October, Fastnet Sentinel, the second of a quartet of 61m multirole ERRVs, was launched at Fujian Southeast. The first, Cygnus Sentinel, was due to be delivered in November 2014. OSJ Guide to OSV Shipbuilders I November 2014 I 35

area report Middle East

JVs provide access to more sophisticated designs A

s highlighted elsewhere in this special supplement, Damen Shipyards Group continues to expand operations internationally, not least in the Middle East, where it has formed joint ventures with Nakilat group in Qatar and with Albwardy Marine Engineering in Sharjah, both of which became operational earlier in 2014. Nakilat-Keppel Offshore & Marine (N-KOM), the joint venture between Nakilat and Damen Shipyards Qatar Holding BV, a wholly owned subsidiary of Damen Shipyards Group, now operates a shipyard in Port of Ras Laffan, Qatar, and secured its first contract earlier this year in the form of a liftboat for Gulf Drilling International (GDI). The keel was laid in early September, and the self-propelled liftboat is due to be delivered in 2015. Customised for operations in the Middle East and North Africa, the self-propelled, self-elevating liftboat was designed in collaboration with Bennett Offshore. It will be able to operate in water depths of up to 65m and will be equipped with

Yards in the Middle East are enhancing the vessels they offer by entering into JVs 36 I Guide to OSV Shipbuilders I November 2014

As demand grows for more high spec offshore vessels for use in the Middle East market and beyond, so shipyards there have come to see joint ventures with leading players from outside the region as the way forward

a 200-tonne leg-encircling crane and have an 800m2 deck, a helideck and accommodation for 130 people. The liftboat is N-KOM’s first newbuild project for GDI, having previously completed more than 10 jack-up rig repair and conversion projects for the company. Having already made a name for itself in the repair market, N-KOM’s strategy is to secure newbuilds in the robust regional offshore market. The N-KOM facility is capable of building all types of vessels up to 120m in length. Nakilat and Damen agreed to form a 70/30 joint venture company to manage the operation of the 15-hectare shipyard, which was built on reclaimed land in the expanded Port of Ras Laffan. Damen Shipyards Sharjah (DSS) has been open for business since January 2014 and is another Damen joint venture, this time with Albwardy Marine Engineering. The joint venture combines Damen’s expertise in newbuilds and Albwardy Marine Engineering’s expertise with conversions, drydockings and repairs. The facility is located in the Sharjah Hamriyah free zone. The yard, located on a 284,000m2 site, has direct and unrestricted access to the sea. It has a 120 x 26.5m shiplift and eight dry berths, each of which is 125m in length. It also has a fully enclosed blasting and painting shed and an undercover newbuild construction hall, along with extensive adjacent repair space, with 1,200m of quay with a water depth up to 9m. DSS has the facilities to construct and repair all types of vessels and has recently delivered tugs, workboats, support vessels, dredgers, landing craft, floating docks, barges and pontoons. The yard’s orderbook has included multicats, shoalbusters, barges, an aluminium crewboat and azimuth stern drive tugs. Another newly announced joint venture in the Middle East is that between Zamil Offshore and Fincantieri (which has an interest in

Vard, which was acquired from STX in 2012), who signed a heads of agreement at the OSJ conference in London in February 2014. The aim was to set up a joint venture company to design and build offshore support and naval vessels at Zamil’s new shipyard in the Port of Dammam in Saudi Arabia. Zamil Offshore Services is a subsidiary of Zamil Group, a Saudi blue chip company involved in industrial manufacturing, marine, petrochemical, oil and gas, steel, air conditioning, construction and many other sectors. It also owns and operates a fleet of more than 80 offshore vessels, many on charter to Saudi Aramco. Vard is, of course, well known as a designer and builder of offshore support vessels. At the time that the heads of agreement was signed, Zamil Offshore said the joint venture was intended to develop Zamil’s shipbuilding and vessel through-life support capability in the region and provide access to Fincantieri and Vard’s extensive portfolio of vessel designs, marine equipment and services. Among the most recent newbuilds from Zamil Offshore is Zamil 602, which was built in Dammam. At the time that the vessel was launched, Sufyan Al Zamil, CEO of Zamil Offshore Services, said the company “was in the final stages of constructing a world-class shipyard”. He said it was due to be completed by September 2014 and will build and repair vessels in Dammam. As highlighted elsewhere in this special supplement, another well-known Middle East shipbuilder, Grandweld, recently secured a contract to design and build two 42m crewboats for Fujairah National Shipping Agency (FNSA). The contract was signed on 24 September 2014. The vessels will be built at Grandweld’s yard in Dubai Maritime City. The company recently delivered the fifth of six seismic support vessels it is building for Bourbon Offshore. The 53.8m vessels utilise a hybrid propulsion system, which provides the flexibility to operate with high efficiency under all operating conditions. The ships have a number of modes of propulsion including diesel-mechanical, diesel-electrical and hybrid mode. The vessels will assist in seismic operations such as towing, chasing and transferring offshore personnel. OSJ www.osjonline.com

Oktan Stord, foto: Øyvind Sætre

Complexity made easy HELGELAND

Westcon Yard Ølensvåg September 2012. Rigs: «COSLPromoter», «Deepsea Bergen» and «West Alpha».Ships: «Viking Avant» and «Folgefonn.»

WESTCON is a leading provider of the best and most innovative solutions, services and products within onshore and offshore, energy and maritime industries. Yards Westcon Yards consists of four modern shipyards, each of which are equipped to carry out the most demanding vessel and rig projects. We also deliver offshore, both Top-Side and Subsea. The defining traits of Westcon Yards are efficient mobilization of personnel and resources, and the ability to always complete projects on time. Lifting Techniques Westcon Løfteteknikk is Norway’s leading provider of cranes and heavy-lift services including access techniques, control and certification, courses and training. Power and Automation Westcon Power & Automation offers solutions that are expertly tailored to each customer’s needs. We have highly qualified employees and resources within installation and commissioning.

Rig Services Westcon performs engineering, maintenance and modification of drilling rigs even when they are not in our yards. We offer complete projects on all rig systems, and all project phases and disciplines covered by Westcon Group. Our forces are good rig awareness, a strong ability to implement and advanced use of 3D methods. Geo Westcon owns and operates several seismic vessels, and will now be offering a cutting-edge subsea seismic technology.

www.westcon.no

ÅLESUND

BØMLO FLORØ

STORD ØLEN HAUGESUND KARMØY STAVANGER

POLEN

area report Southeast Asia

Chinese capacity weighs heavily on constructors

To a large extent, Chinese yards have outcompeted Southeast Asian yards’ ability to build small AHTS vessels

Yards in Southeast Asia that used to build larger numbers of small, unsophisticated anchor handlers need to have a rethink – they can’t compete with China, and the market has moved on

here are around 400 anchor-handling tug/supply (AHTS) vessels and platform supply vessels (PSVs) in Southeast Asia and a further 500–800 other offshore support vessels (OSVs) of various types, including construction vessels, dive support vessels, tugs and crewboats. Overall, this represents approximately 20 per cent of the global OSV fleet. The majority of the vessels in the OSV fleet in the region are small in size in comparison with those elsewhere. A recent study suggests that approximately 12 per cent of the OSV fleet in Southeast Asia is past its economically useful

38 I Guide to OSV Shipbuilders I November 2014

life (many vessels are older than 30 years) and approximately 21 per cent of the fleet is 20–30 years old and is useful but non-competitive as demand grows for better-quality vessels. Both facts would suggest that there is potential demand for yards in the region to exploit, but the situation is more complicated than that. Few shipyards in Singapore feature in the list of the leading 50 offshore vessel builders (see page 52, where they are ranked by orderbook), NEWBUILDING DELIVERIES 2014 other 28% Singapore 10%

USA 9%

China P.R. 35%

Norway Brazil U.A.E 6% 2% 4%

South Korea 6%

but Singapore, Malaysia and Indonesia are nevertheless home to numerous yards that build OSVs, and a glance at the orderbook by builder country in this special supplement demonstrates the region’s importance overall to the sector. Data from Clarkson Research shows that, as of 1 September 2014, Chinese yards – the leading regional competitors to yards in Singapore, Malaysia and Indonesia – held orders for 593 offshore units of all types. In the region, Singapore was in second place with 74 units, Malaysia was in third place with 32 units on order, followed by Indonesia with 21 units of all types. Deliveries of units currently on order in Singapore extend until 2017, whereas Malaysian and Indonesian orders will be completed in 2016. A glance at the pie chart reproduced here showing deliveries in 2014 demonstrates that Singapore delivered around 10 per cent of newbuilds in the year to September 2014, once again highlighting its importance in the global OSV market. Singapore, Malaysia and Indonesia www.osjonline.com

consistently deliver large numbers of offshore units, and Singapore is, of course, pre-eminent as a builder of jack-ups and home to many of the leading regional vessel-owning companies. Building offshore vessels in Southeast Asia used to be a ‘commoditised’ business. Large numbers of low cost designs were built, often speculatively, but that is changing, and shipyards in the region need to have more to offer than low price construction, particularly with Chinese yards picking up so much of that type of business. Historically, yards in the region have responded to demand by building small AHTS vessels. The lower level of capital investment needed to build this kind of vessel allowed numerous yards to build on speculation or to build to stock. There are also a number of specialist companies that build vessels for onward sale – doing so has been quite a profitable enterprise as demand grew, but as demand also grows for more sophisticated, higher quality, safer vessels that are more capital intensive, this model is less likely to be a suitable one. OSV shipbuilding in the region also differs significantly from that in some other parts of the world in that several shipowners are also shipbuilders. Whether this business model is equally suitable for construction of more sophisticated, capital-intensive vessels of the type that are increasingly required is also debatable. Owners who have gone upmarket have usually adopted European designs – not necessarily intended for use in the region – but few are building them themselves. The level of speculative construction has certainly declined, especially at smaller shipbuilders such as those in Malaysia and Indonesia. Jaya Holdings recently confirmed that it planned to stop building vessels on speculation, and in Malaysia, Shin Yang Shipbuilding is another that has spoken of the need to reduce speculative building, partly as a result of the huge number of vessels being built in Chinese yards. The period 2005–2012 saw huge growth in a series of simple Asian-designed and built ‘fit for purpose’ AHTS vessels, which came to be built in large numbers for owners in and outside the region. These vessels, from local naval architects such as Khiam Chuan Marine and Conan Wu, were about 60m long with a 15m beam. They had twin medium speed or high speed engines providing around 5,000 bhp. Latterly, CAT 3516 engines predominated, and with a total horsepower of 5,150 bhp, this type of ‘commodity’ vessel came to be known colloquially as the ‘Fifty-one Fifty’ (51-50). According to companies such as M3 Marine Group, around 300 such vessels were built, many in China, with a small selection built in Singapore and Batam, although Chinese www.osjonline.com

Build-to-stock model far from dead In an otherwise sombre third quarter of 2014, Nam Cheong bucked the downward trend in the region when it announced that it had secured letters of intent from five customers worth approximately US$186 million, with a mix of sale and charter of 12 newly launched NCA80E diesel-electric, 80-tonne bollard pull AHTS vessels. The group has also secured options for the sale of eight additional NCA80E vessels. The five customers are Bumi Armada Berhad, Geo Offshore Pte Ltd, Opstad Group, Sofield Marine & Offshore Sdn Bhd as well as Vega Offshore Group. Ultimately, this could result in the sale of 20 vessels. The NCA80E vessels are being constructed as part of Nam Cheong’s build-to-stock series at the group’s Miri shipyard in Sarawak, East Malaysia, and at subcontracted yards in China. Nam Cheong’s executive chairman, Datuk Tiong Su Kouk, said: “The launch of the NCA80E vessel is a major milestone for the group as it yards such as Fujian South East, Yuexin and Hangtong came to dominate the sector. Back in 2012, companies such as M3 Marine were noting the need for a new generation of higher spec commodity anchor handlers. As they noted, these ‘work horses,’ which are used extensively for rig and platform supply, jack-up towage, offshore construction support and barge towing duties, saw a sharp drop-off in value as they came up to their first special survey (although their value remained steady through the next five-year cycle). Two years ago, the company predicted that, although demand for these ‘fit for purpose’ and inexpensive AHTS vessels would remain high, it was its opinion that the market was in need of a revitalised vessel model to replace the 51-50. Higher horsepower, higher spec vessels certainly have been built, and demand has grown for vessels with higher bollard pull (in the 70 tonnes plus range) to support larger construction barges and jack-up rigs. Demand for more deadweight, a larger deck and DP2 dynamic positioning is growing, along with the

A number of leading owners have already ordered Nam Cheong’s new design

is based on Nam Cheong’s proprietary design and is also our first vessel launch in Singapore. Customers are increasingly demanding for such sophisticated OSVs and we have received strong interest from customers worldwide for such a vessel that is versatile to be deployed in waters globally.”

Datuk Tiong Su Kouk: “NCA80E is Nam Cheong’s first proprietary design” ability to deploy remotely operated vehicles and meet the requirements of the Special Purpose Ships (SPS) Code. Efforts are also being made by Japanese builders to break into the high end of the market in the region. As highlighted elsewhere in this special supplement, this has seen them seek out partnerships and co-operation deals with established players in the offshore industry. This strategy has been successful up to a point – an example is orders placed with Japan Marine United for series construction of newbuilds for Swire Pacific Offshore, one of the leading high end shipowners in the region. At the end of 2013, a report produced by Maybank suggested that robust rig-building activity meant that the OSV market was “poised for a cyclical rebound” as more rigs entered the market, fuelling demand for support vessels. That hasn’t really happened, and with the oil price declining by around 20 per cent since mid-2014, that looks unlikely. As a whole, 2014 has been disappointing for shipbuilders as well as speculators/investors. Brokers report that what was a flow of resale transactions reduced to a trickle earlier in the year and has declined further since. Prices are falling and profit margins are being cut. Demand for low cost AHTS vessels seems likely to fall, and prices for them will come under pressure. If it does, when it eventually returns, yards may find that demand takes the form of more sophisticated vessels rather than the cheap, commoditised units many have specialised in building for so long and that they continue to struggle to compete with Chinese yards to build them. OSJ Guide to OSV Shipbuilders I November 2014 I 39

Andrenaldo Monteiro has worked at Wilson Sons for 37 years.

Wilson Sons Shipyards. Diversify to face new challenges. Specialised in the construction and maintenance of offshore support vessels, Wilson Sons Shipyards are synonymous with quality and compliance of deadlines, with more than 75 small and medium size vessels completed since 1993. By year-end, the company will deliver one of the most specialised vessels ever built in Brazil, a ROVSV (Remotely Operated Vehicle Support Vessel). With a highly qualified team, Wilson Sons Shipyards is always ready to face new challenges.

Wilson Sons always in movement. Since 1837. www.wilsonsons.com.br

Join our LinkedIn group Offshore Support Vessel Networking Group A networking and discussion group for all stakeholders with a professional interest in the offshore support vessel market. Building on the success of the Offshore Support Journal (OSJ), this is a forum that brings together oil majors, vessel owners, operators, designers, builders, brokers, equipment manufacturers, regulators and industry associations to network and debate, to share experiences and to discuss practical solutions to the challenges faced within the offshore support industry. With more than 6,900 members, our Offshore Support Journal group on LinkedIn is by far the largest and most active group for this industry, we jealously guard access to this group to maintain the quality of discussion and ensure only the most relevant promotions are posted by our commercial partners.

SELAH MAKİNE ve GEMİCİLİK END. TİC. A.Ş. Tersaneler Cad. No:4 34940 Tuzla, İstanbul, TURKEY Tel: +90 216 581 50 00 Fax: +90 216 395 45 03 marketing@selahshipyard.com info@selahshipyard.com www.selahshipyard.com

40 I Guide to OSV Shipbuilders I November 2014

www.osjonline.com osj_linkedin_qpv.indd 1

29/10/2014 12:11

Brazil area report

Yards struggle to keep pace with demand T here are getting on for 50 yards in Brazil, with around a dozen new ones under construction and numerous existing facilities being upgraded. Together, the yards employ around 60,000 workers. The rate of expansion in Brazilian shipbuilding capacity is evident from the fact that, in 2000, there were only 1,900 people employed at Brazilian yards and a comparatively small number (in today’s terms) of 19,000 in 2006. OSVs account for a large proportion of vessels on order in the country, but inevitably, the large number of domestically constructed vessels required to work for Petrobras, Brazil’s stateowned oil major, has put a strain on existing yards, and new yards that are being built or are entering service have inevitably experienced teething problems, not least Vard Promar. The problems at one of the best known new Brazilian yards that will build OSVs, Vard Promar, seem at last to be being resolved, according to a statement released by the board of Vard Holdings Ltd at the end of September, but the facility is not yet operating at the kind of tempo its parent company needs to see. The statement referred to the company’s secondquarter 2014 financial results announcement for the period ended 30 June 2014, in which Vard highlighted the importance of improved throughput and productivity development at Vard Promar shipyard in Brazil. In the second-quarter statement, the company said operations in Brazil “remained challenging”. Two vessels were delivered from Vard Niterói in the second quarter of 2014 –Skandi Urca, an anchor-handling tug/supply (AHTS) vessel for DOF, which was delivered on 8 April 2014, and Siem Giant, a platform supply vessel (PSV) for Siem Offshore that was delivered on 15 May – and two delayed vessels remained to be delivered from the original Niterói orderbook. At the same time, with the arrival of two LPG tankers undergoing outfitting only at the Niterói yard, operations were being “recalibrated” to reflect a changing production profile. Construction of Vard Promar was only recently completed, and the facility is growing rapidly, adding more than 500 employees to its headcount in recent months. Additional resources from Europe have also been mobilised to strengthen the organisation and implement productivity improvement measures, which the company said were “critical” to reaching

www.osjonline.com

Brazil needs more shipyards if it is to meet ambitious targets for domestically constructed offshore support vessels (OSVs), but not all existing yards are performing well

production targets at Vard Promar during the ramp-up phase. “In Brazil,” said Vard in the more recent statement, “significant investments have been made in strengthening the organization in order to reach production targets at Vard Promar. However, slower-than-expected improvements in throughput and productivity at the new shipyard are impacting profitability during the ramp-up phase.” Vard said that “additional cost” was also incurred for the two vessels in Promar’s orderbook that were built at a third-party yard and are currently undergoing outfitting at Vard Niterói. As of June 2014, the company’s Brazilian shipyards had a total of 12 vessels on order. The two vessels from the original Niterói orderbook are also AHTS vessels for DOF and are now due to be delivered in the fourth quarter of 2014 and second quarter of 2015, respectively

As highlighted in the November 2014 issue of OSJ, other Brazilian yards that focus on building OSVs are not without their problems either. The situation in Brazilian yards is by no means universally bleak, but the situation in some is highlighted by the kind of delays experienced at Estaleiro Ilha (Eisa) shipyard, which recently launched Brasil Supply’s latest PSV, BS Itamaraca, more than 12 months late. The PSV 4500 was the third of 11 vessels Brasil Supply (also known as BSCO) has ordered at Brazilian shipyards on the back of longterm contracts signed with Petrobras, the statecontrolled oil company in Brazil, nearly three years ago. A sistership is due to be delivered by the end of 2014, but Eisa has been plagued by strikes – and enforced holidays without pay for its staff – for several months. One thing in Brazilian yards’ favour is that demand is clearly visible for the next 10 years and beyond, based on the demand of high value projects such as drilling rigs, production platforms, OSVs and tankers, but labour relations have been an issue, and there are numerous challenges that need to be addressed by the industry, working closely with government departments to develop sustainable solutions. OSJ

New yards are being built, but concerns have been raised about Brazil’s ability to build sufficient vessels for Petrobras

Guide to OSV Shipbuilders I November 2014 I 41

area report India

Uncertainty sees yards in precarious situation D

elivery in September 2014 of Deep Sea Supply’s last STX 05 L platform supply vessel (PSV) from Cochin Shipyard, Sea Triumph, sees Indian offshore vessel builders with a dearth of orders of all types and few offshore support vessels. In June, Larsen & Toubro subsidiary L&T Shipbuilding delivered the first of six PSVs it is building for Halul at the Kattupalli Shipyard near Chennai, India, and ABG is building a number of anchor handlers, but it no longer has a customer for the ships after Shipping Corporation of India (SCI) cancelled the order earlier this year. Halul Offshore has become an important client for Indian yards. The vessel delivered in June, Halul 42, is a multipurpose unit equipped for fire-fighting, standby and rescue, offshore supply and oil recovery operations. The 3,450 dwt, 78m vessel has a deck area of 725m2 and station-keeping capabilities. It has twin azimuth thrusters and twin bow thrusters for dynamic positioning (DP). Six other newbuildings for Halul are due to enter service through the second half of this year and into 2015. Halul Offshore Services Co and its parent company Milaha took delivery of another offshore vessel, the diving support vessel Shaddad, from another Indian yard at the end of May 2014. Built by ABG Shipyard, the DP2 vessel has a dive spread and equipment to support remotely operated vehicles. The vessel was chartered for five years by Qatar Petroleum as part of a diving services agreement. ABG Shipyard, which was restructured recently, has vowed to complete and find new buyers for six long-delayed anchor-handling tug/

In recent years, Indian shipyards have built large numbers of offshore support vessels, but there are few on order in the country currently and uncertainty about subsidies handed out by the government

supply vessels that SCI cancelled. A consortium of banks recently restructured US$415 million of long-term loans and more than US$1 billion of working capital loans in order to keep ABG Shipyard operating. Speaking to Business Standard, ABG’s chief financial officer Dhananjay Datar said the yard “does not see any dearth of buyers for these offshore supply ships”. Pipavav Defence & Offshore Engineering Company, another well known Indian builder that builds offshore vessels and warships, delivered its last offshore supply vessel, to ONGC, back in October 2013. The vessel was a DP1 dynamic positioning unit intended to transport bulk cargo to offshore platforms, provide fire-fighting capability and act as an emergency response and rescue vessel. Indian yards have faced a great deal of uncertainty in recent months despite the Indian Government’s desire to promote shipbuilding in the country. “The shipbuilding sector has a huge multiplier effect on the economy,” said shipping minister Arun Jaitley in a speech in July, noting that a “comprehensive policy to promote Indian shipbuilding” will be announced soon. The country’s prime minister, Narendra Modi, is also keen to see shipbuilding promoted

Indian yards have built significant numbers of offshore vessels, but there is a dearth of orders currently

and has cited examples of countries in which shipbuilding plays a major role in the economy, such as South Korea. In an Independence Day speech, which had as its theme ‘Come, make in India’, Mr Modi said that his government would encourage foreign investment in shipbuilding. Indian yards are notorious for their inability to build ships on schedule. Mr Modi also mentioned that the government is planning to start a “shipbuilding development corporation”, which would aggregate ship orders in the public sector “and bargain for best pricing to bring costs down”. The finance ministry has also reportedly been in talks with Infrastructure Finance Corporation of India and Industrial Development Bank of India to set up a low cost loan scheme for Indian shipbuilders. An existing shipbuilding subsidy came to an end in March 2014, and there has been a great deal of uncertainty about whether there would be another. Approval in principle was granted recently for construction of a new drydock at Cochin Shipyard, which is a public sector yard, even though the yard has no orders to fulfil once it completes work on an aircraft carrier for the Indian Navy. The drydock would enable Cochin Shipyard to bid for repair work on rigs and semisubmersibles and build larger vessels such as liquefied natural gas carriers and warships. “Shipbuilding is a big opportunity today,” said Mr Modi in a recent speech. “India’s contribution to global shipbuilding has been very low,” he said. “South Korea … has a 40 per cent share of global shipbuilding. We want to encourage shipbuilding in India.” OSJ

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Guide to OSV Shipbuilders I November 2014 I 43

Delivery of high advanced and efficient vessels of superior quality to shipowners worldwide.

Noryards AS is a Norwegian-based entity that has emerged from establishment of a strategic partnership between Shipbuilding division of Bergen Group in Norway and Zaliv group of companies in Ukraine which operate under the common international ownership. Noryards AS provides the ship owners with the full package of high level services in construction of complex vessels starting from concept design development, complete engineering package, hull construction and up to complete outfitting of the vessel and its delivery “turn-key” to the owner that should enable the company to be a highly competitive global player on the market. The newly formed company includes the following assets, all of them with an extensive track record of high quality and high-end deliveries to the international ship- and offshore industry: • Noryards Fosen which is specialised in construction of sophisticated offshore ships, seismic vessels, diving support vessels, Ro-Pax and specialised cruise ships. The yard is able to handle new buildings, repairs and conversions of all kinds of ships; • Noryards BMV which is specialised in construction of advanced offshore ships, seismic vessels, diving support vessels and research vessels. The yard is able to handle new buildings and conversions of all kinds of ships; • Noryards Ship Design & Engineering department will combine the design facilities of Bergen Group Fosen and Zaliv Ship Design from Nikolaev, Ukraine into a new company – Noryards Design & Engineering. The strategy is to further develop the competence within advanced maritime design, a highly scalable business model, to include design and engineering serviced towards both RoPax and offshore vessels. Also there are plans to expand existing design business within conversion to LNG powered vessels and new LNG powered ship designs.

Noryards AS will continue to invest in design and further development through dedicated focus on engineering and new inventions in order to keep the highest competence level. Noryards Design & Engineering will emphasize on optimizing the construction process from hull yard to complete vessel, as well as further develop competitive and energy efficiency vessels prepared for the future market requirements.

Noryards AS Box 1913 Damsgård, Bergen NO-5828, Norway

t: +47 55 94 66 00 e: yuriy.dovgiy@noryards.com www.noryards.com

rising stars A number of Turkish yards have benefited from demand for offshore vessels

Turkey, Romania and Vietnam gaining market share W ell known offshore vessel builders such as Vard and Damen Shipyards Group have long used eastern European yards – primarily those in Romania and Poland – to build the hulls of offshore support vessels (OSVs) that they than complete in Norway and the Netherlands. The construction of hulls in countries such as Romania and in the Ukraine is nothing new for a number of Norwegian owners, but as brokers point out, several owners have begun to turn their attention towards complete construction at eastern European facilities. Two liquefied natural gas-fuelled platform supply vessels (PSVs) are being built at Polish shipyard Remontowa Shipbuilding (see elsewhere in this special supplement), which regularly builds vessels for leading owners such as Gulf Offshore and Edison Chouest Offshore, and Vard subcontracts construction of large numbers of vessels to its yard at Braila in Romania, but some Turkish yards – long known as hull builders for their counterparts in Norway – are also being entrusted with turnkey projects that see them

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Yards in eastern Europe that began by building hulls for completion elsewhere and purpose-built facilities in countries such as Vietnam are picking up more and more OSV orders

complete vessels in their entirety. In 2013, Tersan Shipyard in Turkey delivered Sayan Princess, the first PSV delivered from a yard in Turkey on what the yard describes as “a turnkey basis”. In fact, the story of the vessel is a little more complicated than that, and the hull was actually built at Zaliv Shipyard in Crimea (Ukraine) on behalf of another owner before being acquired and completed by Tersan for Hoyland Offshore in Norway. Earlier this year, another important deal for Tersan came into effect when financing was agreed for construction of a Skipsteknisk ST-259 design subsea vessel for Volstad Shipping. The deal to build the vessel was actually struck in

2013 but only came into effect when the financing was arranged. The inspection, maintenance and repair/construction vessel is due to be delivered in the fourth quarter of 2015 and follows on from a number of fishing vessels and a factory trawler that Volstad had entrusted to Tersan Shipyard. Late 2012 saw another well known Turkish yard, Besiktas, secure an agreement to build a new class of seismic support ships (also of Skipsteknisk design) for PF Thor. The agreement included an initial four vessels with options for four more. Construction of the first two vessels got underway in July 2013, with delivery of the first unit due shortly. Turkish yards have done well from demand for seismic support ships. Another well known yard, Cemre Shipyard, is building two 69.8m seismic support vessels for delivery to Vestland Offshore in Norway in mid-2015. The vessels are of the SALT 450 SSV design. Cemre Shipyard first entered the offshore vessel market in 2005 when it built the hulls for two anchor-handling tug/supply vessels Havila Mars and Havila Mercury for Havyard Guide to OSV Shipbuilders I November 2014 I 45

rising stars

Group in Norway. In 2008, Cemre established its own shipyard in Altinova/Yalova, where it now undertakes turnkey and hull-building projects. Its relationship with Havyard has been a very successful one, with 29 projects completed over an eight-year period and another six projects underway at the yard. As highlighted recently in OSJ, recent projects completed by Cemre for Havyard include the hull of the first Havyard Wave Edition designs developed by the well known Norwegian designer/builder. Another Turkish yard to have built offshore vessels is Gelibolu Shipyard. Recent contracts there include an accommodation barge and a 50m dynamic positioning class 2 (DP2) firefighting class 1 (FiFi 1) diesel-electric supply vessel. Ada Shipyard is yet another Turkish

yard to have enjoyed success in the offshore vessel market. Among its latest projects were the hulls of PSVs for Vestland Offshore in Norway. Sanmar, which is best known as a tug builder, is also planning to move into construction of larger units such as PSVs and related vessel types. Selah Shipbuilding Industry Inc recently launched the hull of a multipurpose PSV with DP2 dynamic positioning. Selah also recently laid the keel of two 83.83m multipurpose PSVs. Romanian yards’ ability to build hulls has been central to the success of Vard Group’s Norwegian yards, but Damen Shipyards Galati in Romania is now well established not just a hull builder but as a yard able to outfit and complete a wide range of vessels. It has done so for a number of leading owners in the last 12–18 months, not

least World Wide Supply, for whom it completed World Diamond, the first PSV 3300. Damen’s Romanian yard continues to expand the range of vessel types it can build, among them a Damen Offshore Carrier DOC 8500 that DeepOcean UK is to charter from Maersk Supply Service. Among the latest contracts awarded to Vard Tulcea in Romania is the hull of a large subsea construction vessel for Solstad. The vessel, which is due for delivery in the second quarter of 2016, is a VARD 3 19 design, developed by Vard Design in Ålesund, which will be towed to Vard Brattvaag in Norway to be completed. Vard Tulcea is also building the hull of a VARD 2 06 design, a construction/anchorhandling vessel for Rem Offshore. Delivery is scheduled from Vard Brattvaag in Norway in the first quarter of 2016. OSJ

Growing number of newbuilds from Vietnam Established European yards such as Vard and Piriou also own yards in Vietnam, as does Australia-based Strategic Marine. Among the most recent deliveries from Piriou’s yard in Vietnam is a 53m fast support and intervention vessel (FSIV) for Suisse Outremer AG. The vessel, Kacey, was the first of a series of three units ordered by Suisse Outremer, which will be operated by ABC Maritime AG. Late 2013 saw Piriou’s Vietnamese shipyard deliver the fourth DP2 FSIV of a four-ship order for Bourbon. The vessel, Bourbon Norte, is a sister unit to Bourbon Sirocco, delivered in October 2012, Bourbon Shamal in (January 2013) and Bourbon Harmattan (March 2013). Among recent vessels assigned to Vard Vung Tau are two VARD 1 08 PSVs already under construction there that were recently acquired by Troms Offshore. The vessels have a length overall of 81.70m and a breadth of 18.00m with a deck area of 830m2. The two ships will primarily be positioned for operations in the North Sea and Arctic waters and will be managed by the Troms team in Norway. Delivery dates are expected in January and April 2015. Vard Vung Tau is also building a VARD 1 08 PSV for Carlotta Offshore Ltd. This multifunctional PSV has a length of 81m, beam of 18m and a cargo deck area of 830m2 and will be prepared for standby, rescue, fire-fighting and oil recovery operations. Delivery from Vard Vung Tau is anticipated in the third quarter of 2015. Vard’s yard in Vietnam was also recently contracted to build two PSVs for new customer for the group, Mermaid Marine Australia. The vessels will be delivered by Vard Vung Tau in Vietnam

46 I Guide to OSV Shipbuilders I November 2014

Damen Shipyards Group recently opened a joint venture shipyard in Vietnam in the fourth quarter of 2015 and first quarter of 2016 respectively. The vessels are multifunctional PSVs of VARD 1 08 design with a total length of 81.7m, beam of 18m and a cargo deck area of 810m2. The 4,000 dwt vessels will be prepared for standby, rescue, fire-fighting and remotely operated vehicle operations. In March 2014, Damen Shipyards Group added further to its portfolio with the opening of a joint venture shipyard in Vietnam, Damen Song Cam. At the time

that the yard was formally opened, Damen said Damen Song Cam “brings a western shipyard designed to meet European health, safety and environmental standards into a Vietnamese environment”. The yard will be capable of building around 40 ships annually. With direct access to open sea, the new yard is based on a 43-hectare site, of which 500m is directly alongside the River Cam. The yard has a 120 m long x 85 m wide outfitting hall plus extensive paint and carpentry workshops.

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Richardson Devine Marine Specialists in Aluminium Ship Construction Offshore Support Vessels, Workboats

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www.rdm.com.au - rdm@rdm.com.au - Ph +61 3 6272 7800

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Guide to OSV Shipbuilders I November 2014 I 47

market data OSV builders

Top 50 OSV builders ranked by orderbook ORDERBOOK DELIVERY SCHEDULE company

current orderbook

2014

2015

2016

2017+

orderbook value (US$bn)

deliveries in the year to date

Fujian Mawei

1.3

Fujian Southeast

1.1

Sinopacific Zhejiang

0.9

COSCO Guangdong

0.8

De Hoop Lobith

0.3

Guangzhou Hangtong

0.5

Guangxin Shipbuilding

0.4

Xiamen Shipbuilding

0.4

Yuexin Shipbuilding

0.3

Damen Gorinchem

0.4

1 2

ETP Brazil

0.2

Eisa Shipyard

0.4

Larsen & Toubro

0.3

Japan Marine United

0.4

Eastern Shipbuilding

0.4

Jiangsu Zhenjiang Shipyard

0.3

Wuchang Shipbuilding

0.3

Huangpu Wenchong (H)

0.3

ASL Shipyard (Guangdong)

0.2

Leevac Shipyard

0.2

ABG Shipyard

0.1

Gulf Coast Shipyard

0.3

Estaleiro Navship

0.3

Remontowa Shipbuilding

0.3

VARD Vung Tau

0.2

Shanghai Zhenhua

0.2

Bollinger Amelia

0.2

1 4

POET (China) Shipbuilding

0.2

Nantong Rainbow

0.2

Wuhu Shipyard

0.2

2 4

Master Boat Builders

0.2

Fujian Crown Ocean

0.2

Sao Miguel Shipyard

0.3

VT Halter (Pasca)

0.2

Wilson, Sons

0.2

Sinopacific Dayang

0.1

Paxocean Nanindah

0.1

C&C Boat

0.1

Xin Yue Feng Shipbuilding

0.1

Alianca Shipyard

0.2

Bharati Shipyard

0.2

Nanjing East Star

0.2

BAE Repair Alabama

0.2

NGV Tech

0.2

Jiangsu Eastern

0.2

BAE Repair Jackson

0.2

Ulstein Ulsteinvik

0.2

Detroit Brasil

0.1

Shanghai Shipyard

0.1

Shanghai Waigaoqiao

Others (626)

158

Total

616

221

296

0.1

5.1

19.9

211

Source: Clarkson Research

48 I Guide to OSV Shipbuilders I November 2014

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D Y N A M I C â&#x20AC;˘ D I S T I N C T I V E â&#x20AC;˘ D E D I C AT E D

BH 450 Lift boat, 105m working depth, 250 men accomodation

Lewek Avior PSV, FIFI 1, 6,800 BHP/DP2

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Lewek Teal AHTS/FIFI 1/21,456 BHP/DP2

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