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Braemar Seascope Offshore - Asia & Australia Report Asia & Australia Report - August 2013

MARKET NEWS & ANALYSIS

August 2013 Issue 64

VESSEL DAYRATE CHARTS

RIG NEWS MARKET COMMENTARY

Dry Cargo

Tankers

Email: offshore.singapore@braemar.com

Containers

Tel: London +44 (0)20 7903 2700

Offshore

Aberdeen: +44 (0)1224 628 470

LNG - Specialist - LPG

Sale & Purchase

Singapore: +65 6410 9013 www.braemarseascope.com

Click Here to go to Online Version

New Trainee Broker Welcome to the latest edition of the Braemar Seascope Offshore Asia & Australia Report.

Globally the offshore vessel market is going from strength to strength led primarily by a strong oil price which keeps exploration and production economical.

With oil rigs in high demand we are experiencing a surge in requirements for AHTS vessels and PSVs to support these operations. All vessel types in Southeast Asia & Australia have been kept busy in recent times with some companies struggling to secure high specification tonnage.

The newbuild and sale and purchase markets are also active. In the latest moves COSL has recently just bought two new PSVs for Xiamen and Otto Marine has carried out a USD 170M sale and leaseback of two AHTS vessels.

Please check you have our new details: Aberdeen: offshore.aberdeen@braemar.com London: offshore.london@braemar.com Singapore: offshore.singapore@braemar.com Perth: offshore.perth@braemar.com Research: offshore.research@braemar.com We hope you find the latest edition of our report useful and look forward to hearing your feedback and comments.

Sean Bate Market Analysis Manager offshore.research@braemar.com

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Braemar Seascope Offshore is pleased to advise that Douglas Rickman (24) has joined our office in Aberdeen in the role of Trainee Shipbroker. Douglas has a Degree in Business Management having studied at Leeds Metropolitan University, and has also previously worked in Kenya as a teacher.

Market Commentary

T

he market in South East Asia continues to tighten across all sectors as the region hits its peak activity in the middle of the year. Utilisation has been good for the small 5,000bhp AHTS but there has been little change in the rates.

JAMES SHERRARD

Demand for the larger 8,000bhp to 12,000bhp AHTS has at times outweighed the supply leaving no availability. The 8,000bhp has been the strongest performer of the AHTS with rates up as much as 30% from early 2012. This rate drive is due to an elongated period of limited availability and in some cases, Operators have needed to secure larger vessels than they required because of this.

The 10,000bhp market has also been tight in parts and some Owners have been able to secure attractive rates but without the consistency of the 8,000bhp AHTS. The 12,000bhp looked at the beginning of the year as if it would be the strongest performer with many requirements out in the market but towards

the second quarter this petered out leaving vessels available for Operators when needed. There have been some good contracts for the 16,000bhp AHTS however as ever in SE Asia it remains difficult to keep the boats work

Click Here to Email James offshore.singapore@braemar.com Tel: +65 6410 9013

“We expect both the AHTS & PSV markets to continue to strengthen through the third quarter”

ing consistently if not on long term contracts.

The PSV market has remained buoyant throughout the region however rates have remained constant in both medium and large boats. The newly strengthened cabotage in Indonesia and Malaysia’s established cabotage is playing a large role in the PSV market as foreign vessels are reflagging to get long term contracts and better rates.

We expect both the AHTS and PSV market to continue to strengthen through the third quarter with an inevitable downturn during the monsoon period at the end of the year but it is unclear at this stage how much it will weaken.

©Copyright Braemar Seascope Offshore 2013

Southeast Asia

Pair of Vessels Supporting Ensco 107

The pair of AHTS vessels Sea Commanche and the Sea Cherokee are currently working for Mitra Energy and will continue supporting the Ensco 107 when it switches across to work with ENI Vietnam. Both vessels are equipped with 10,700 BHP AHTS with a bollard pull of 142 and DP2. The vessels are operated by Gulfmark Offshore.

Teras Bethel Heads for Indonesia Cheoy Lee Shipyards has handed over the second AHTS in a series of five vessels for Teras Offshore in Singapore. The Teras Bethel has headed straight to Batam in Indonesia where it will commence work. The vessels will each have bollard pulls of 69t and accommodation for up to 24 personnel. The principal dimensions of the vessels are LOA 50m, beam 12.60m and a draft of 4.5m.

Lewek Petrel & SK Line 203 for Talisman Talisman Malaysia has chartered the AHTS vessel Lewek Petrel and the SK Line 203 to support work with Seadrill’s West Vigilant jack-up rig. The rig is expected to shortly commence work for Petronas before heading back to work for Talisman later in the year. The Lewek Petrel is a 10,800 BHP AHTS equipped with DP2.

Lady Caroline Working for Shell Brunei Shell Brunei has fixed the Lady Caroline for two months plus additional options. The vessel is a UT-712 designed AHTS built in 2003. It is equipped with DP2, Fifi 1 and a bollard pull of 166t. Brunei Shell Petroleum is the largest oil and gas producer in Brunei Darussalam. The company has over 200 offshore structures and more than 800 wells.

ŠCopyright Braemar Seascope Offshore 2013

Southeast Asia

Three Vessels for Five Months in Philippines

The Galoc Production Company in the Philippines has fixed a trio of vessels for five months. The vessels, which are the Pacific Battler, Maersk Supplier and the Executive Valour have all commenced the workscope from the middle of June. A decision to invest in phase two of the development of the Galoc field was taken in September last year. The plan involves increasing production to more than 12,000 BOPD from the current levels of 5,000 BOPD.

Sea Choctaw Fixed by Origin Vietnam The 10,700 BHP AHTS Sea Choctaw has been fixed to carry out work for Origin Energy offshore Vietnam. The vessel has also been joined by the Go Canopus for the duration of the 60-day workscope. Both vessels will be supporting the Ocean General rig. The Go Canopus is a DP2 AHTS vessel with 10,872 BHP and a bollard pull of around 149t. The Sea Choctaw has a deck area of around 515 square metres and a bollard pull of 142t.

Two Contracts for Voyager Explorer SeaBird Exploration has been awarded a pair of contracts for its vessel the Voyager Explorer. The work, in the Asia Pacific region, is worth a total of around USD 10M. The Voyager Explorer is a 2D/3D shallow water seismic vessel, built in 2005. The contract duration is expected to be 60 days and will commence within the next few days.

Harkand Picks Up Newbuild ROV Vessel Harkand has invested in a newbuild ROV support vessel which will be delivered in August. The 65m vessel, the Harkand Harmony, will be utilised in an IRM role in the Asia Pacific Region. It has been secured on a three-year hire purchase deal. The vessel will be equipped with one Comanche workclass ROV and will also have air diving capabilities as well as a 580 square metre deck and DP2.

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Southeast Asia

Vietnam Work for Vessels

Con Son Joc Vietnam has fixed the Ena Commander and the Pacific Excellent for 100 days starting July. The Pacific Richfield Marine AHTS vessel Pacific Excellent has a bollard pull of 147t and the Ena Commander is a 10,800 BHP twin screw AHTS vessel equipped with a bollard pull of 141t and DP2. Meanwhile, PVD II will be finishing with JVPC Vietnam shortly and will no longer go on to Hoang Long Joc but straight to Lamson JOC. The Jaya Confidence will support the rig.

Nam Cheong Sells Three Newbuilds Market reports indicate that Nam Cheong has sold three vessels for a total of around USD 70.5 million.

The vessels include two 3,000 DWT PSVs one of which has been bought by EDT Offshore. In addition, an accommodation work barge has been bought by Perdana Petroleum. The vessels are expected to be delivered to their new owners next year.

Pacific Hawk Renewed by Murphy The large PSV Pacific Hawk has a new contract with Murphy Oil that will see it working with the company through to June next year. In addition Murphy Oil is currently understood to have a tender outstanding for a second long-term PSV with a minimum deck area of around 600 square metres. This vessel is expected to be required for around 14 months starting in September or October.

Coastal Energy Fixes Lanpan 26 & 28 Coastal Energy has fixed the Lanpan 26 and 28 to tow the Pacific Class jackup rig Atwood Manta from Thailand to Malaysia. The Lanpan AHTS vessels are sister ships built in 2012 and 2013 respectively. They are equipped with 8,160 BHP and bollard pulls of 116t as well as DP1. Coastal Energy has assets in both Thailand and Malaysia.

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Australia /New Zealand

Mermaid Vessels Active Offshore Australia

Woodside currently has the two 5,150 BHP AHTS vessels Mermaid Vantage and Mermaid Voyager carrying out work offshore Australia. The vessels are expected to continue with the operator until at least the end of August. Meanwhile, the Mermaid Vision has been chartered by Origin Energy until the end of July at least. The Mermaid Vision is a 2009-built AHTS with DP2 and a bollard pull of 105t.

Australia Launches New Licencing Round Australia will offer 20 blocks in November this year and 11 more in May 2014. Acreage is spread across six basins: Bonaparte off the Northern Territory; the Ashmore and Cartier area off the Timor Sea; Browse off northwest Australia; northern Carnarvon and northern Perth off Western Australia; and in the Gippsland and Otway off Victoria. All of the acreage is supported by open-file data from Geoscience Australia.

Far Scimitar Supporting Apache Rig The UT-712L designed AHTS Far Scimitar is currently working offshore Australia on a contract for Apache.

The vessel is supporting the semi-submersible rig Atwood Eagle. The Far Scimitar is a 2008-built vessel equipped with DP2, Fifi 1 and a bollard pull of around 180t. The vessel also has a deck area of 540 square metres and four chain lockers that can take 98 cubic metres each.

Nexus Energy FLNG off Western Australia Nexus Energy could use two Floating Liquefied Natural Gas (FLNG) units to develop its Echuca Shoals and Crux field discoveries off the west coast of Australia. The first discovery is estimated to hold up to 150 billion cubic metres of gas and can support a 15-year FLNG operation. The Crux field discovery has been estimated to hold 70 billion cubic metres of gas and 88 million barrels of condensate.

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Australia/New Zealand

Nor Captain Working for Benthic Geotech

Benthic Geotech has chartered the Nor Captain to carry out an ROV workscope for the end client Woodside Energy offshore Australia. The 10,800 BHP AHTS has been fixed for one-month firm plus additional options. The 2007-built Solstad Offshore vessel has a bollard pull of 143t and a deck area of around 462 square metres. The vessel will be mobilising from Singapore to undertake the work from the end of August.

Inpex Tendering for Ichthys Vessels Inpex is understood to be currently tendering for a large PSV and two AHTS vessels to support operations on the Ichthys project in the Timor Sea offshore Australia. The vessel will be required for a period of 40 months from around the middle of 2014. The AHTS vessels will be required to have minimum bollard pulls of around 150t.

Go Capella Working for Petronas Carigali Petronas Carigali has the AHTS Go Capella on charter in Australia until the end of September. The charterer is also understood to have a potential four-month extension in hand that could see the vessel working until the end of the year. The 2009-built Go Capella is a 10,872 BHP AHTS equipped with DP2, a deck area of around 420 square metres and a bollard pull of 142t.

Far Grip Supporting Ensco 104 The UT-722 designed AHTS vessel Far Grip is currently working for Eni offshore Australia where it is understood to be supporting work being carried out by the jackup rig Ensco 104 on the Evan Shoal gas field. The Farstad vessel was built in 1993 and is equipped with DP2, Ice-C, Fifi 2 and has a deck area of around 570 square metres and a bollard pull of 150t. ŠCopyright Braemar Seascope Offshore 2013

Rigs

Kan Tan IV to Drill off New Zealand

Market reports indicate the Kan Tan IV rig is set to drill at least one exploration well offshore Taranaki, New Zealand next year. It is understood plans are being made to redrill near the Ruru-1 well which was suspended following bad weather during a campaign in 2011. Shell Exploration, which holds an 83.75% share of the licence is understood to also hold an option for at least one more well should the results for the first warrant it.

Ezion Holdings Gets USD 82.1 M Rig Deal

Ezion Holdings has received a Letter of Intent that will see it provide a service rig to support a south-east Asian based national oil company. The deal, which is worth approximately USD 82.1 million over 5-years will see the company order an additional service rig which is due for deployment in the first quarter of 2015. The unit will be working in Southeast Asian waters.

Songa Mercur to Drill in Block 120 Vietnam Neon Energy has conducted seismic surveys within Block 120 off the coast of Vietnam, which indicated significant oil and gas reserves. The Songa Mercur rig will be used for drilling the exploration well starting in September 2013. The F&G 9500 designed rig was built in 1989 and upgraded in 1999 and 2006-07. It can operate in water depths up to 365m and drill up to 7,700m. The cost of the contract is expected to be approximately USD 20M.

PVEP Charters Key Gibraltar It is understood PVEP POC has chartered the jackup rig Key Gibraltar for a five well drilling campaign off Vietnam. The Shelf Drilling unit is expected to commence operations in the third quarter of this year and could last as long as a year with a further five possible wells potentially extending the charter period by an additional year.

The rig is a 300-ft jackup of MLT 84-C design which has been modified to 116C.

International

Subsea Template for Asgard Sails from Yard

The 1800-tonne subsea template for Statoil’s Asgard subsea gas compression project is now en route from the shipyard in Egersund to the field. The system is expected to increase recovery from the field by around 280 million barrels of oil equivalent when it comes on stream in 2015.

The work installing the 22 module compressor units is expected to take place next year.

Bahamas Drilling Set to Take Place The Bahamas Petroleum Company has secured new licence terms that will see them retain the licence for a further three years with an obligation to commence drilling of an exploration well by 2015. The company expects to meet the obligation, subject to financing via a farm-out agreement, with an exploration anticipated in the second half of 2014.

Hornbeck Offshore Sells Tug & Barge Fleet Hornbeck Offshore has announced an agreement to sell its tug and barge fleet to Genesis Marine LLC for USD 230 million. The deal includes Hornbeck’s active fleet of nine ocean-going tugs and nine double-hulled tank barges.

Talking about the transaction CEO Todd Hornbeck said “We believe that the timing is right to divest of our noncore Downstream segment in order to strategically focus our energies on our Upstream core business.

North Sea Vessel Spot Market Cools Off After a prolonged period of high activity on the North Sea spot market both in Norway and the UK, utilisation has begun to calm down in recent days. Over the past few weeks high demand for both AHTS vessels and PSVs had seen dayrates accelerating upwards.

However, as this report goes to press there are currently 22 AHTS vessels prompt.

©Copyright Braemar Seascope Offshore 2013

Bunker Price in Aberdeen 2011 to Present 700

Bunker Price GBP/MT

650

600

550

500

450

Price courtesy of Scandinavian Bunkering, subject to supply method, volume and market fluctuations.

$140 $120

$100 $80 $60

$40 $20

May-13

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$0

£0

Jan-04

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Large PSVs (700m2+ Clear Deck)

Jan-09

Medium PSVs (500-700m2 Clear Deck)

Jul-13

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Large - AHTS (16,000+ BHP)

Oct-08

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Jul-13

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£0

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£140,000

£120,000

£100,000

£80,000

£60,000

£40,000

£20,000

Medium - AHTS (12-15,999 BHP)

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

Contact Us Braemar Seascope Offshore is a division of Our services include: Braemar Shipping Services PLC, a leading Spot and period chartering integrated provider of brokering and consultancy services to the shipping industry. Short sea and ocean towage At Braemar Seascope Offshore our aim is Newbuild and second hand sale & to provide cost effective solutions to our purchase clients' offshore programmes.

Regular advances in technology mean our Bespoke research and reports work is a direct response to constantly Corporate mergers, acquisitions & changing market needs.

fleet sales

From offices in London, Aberdeen and Singapore we specialise in the worldwide off- Valuation services shore market.

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Sean Bate Market Analysis Manager 35 Cosway Street London NW1 5BT UK Phone: +44 (0)20 7903 2736 E-mail: offshore.research @braemar.com

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