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Braemar Seascope Offshore - International Vessel Report International Vessel Report - June 2013

MARKET NEWS & ANALYSIS

June 2013

VESSEL DAYRATE CHARTS

RIG NEWS MARKET COMMENTARY

Dry Cargo

Tankers

Email: offshore.aberdeen@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


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New Trainee Broker

Welcome to the latest edition of the Braemar Seascope Offshore International Vessel Report. The global offshore market has seen a series of lively movements that have kept the market relatively tight. The North Sea market has been particularly active in the past few weeks and rig demand around the world is expected to remain consistently buoyant in the coming months. A further licencing round in Brazil will see even more work there and Mexico is expected to pick-up with further funds for the country’s offshore industry. Please ensure that you have our updated contact 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.


Brazil

New Brazilian Pre-Salt Bidding Round

Dates for the next round of bids for production sharing contracts offshore Brazil are understood to have been set for October this year. The deals will cover pres-salt areas in the Libra block in the Santos basin. The area is 15,000 square kilometres and could hold up to 12 billion barrels of oil equivalent. This will be the first bidding round since 2008 when 142 covering 100,300 square kilometres were awarded.

Two Vega Newbuilds Chartered by Petrobras Vega Offshore has had two of its newbuild AHTS vessels chartered by Petrobras. The Vega Challenger and Vega Chaser have been fixed on contracts for four years firm plus options for a further four years for operations in Brazil. The dayrate is understood to be USD 22,500. The vessels are expected to deliver from the yard later this year.

Ultrapetrol Sells Seven Barges Ultrapetrol has announced the sale of seven tank barges to a company in Colombia. In addition Ultrapetrol has entered into a four-year charter with Petrobas for three Brazilianflagged PSVs at a dayrate of USD 35,380. The firm has also agreed a four-year charter with Petrobas for a non Brazilianflagged PSV with an agreed rate of USD 26,200 and another four-year charter for two Indian-built PSVs with a rate of USD 32,950. The vessels are: UP Agua-Marinha, UP Diamante, UP Topazio, UP Esmeralda, UP Amber & UP Pearl.

Cidade de Paraty FPSO Begins Production The BG Group has deployed a second unit in the Lula discovery which is located 300 km off the coast of Brazil. The newbuild FPSO Cidade de Paraty which has started production, has the capacity to process 120,000 bopd and can store up to 1,600,000 bbls. This is the third FPSO BG Group has deployed in the Santos Basin. Twelve more FPSO vessels are expected to be put in to production for the first phase of the programme with a total expected production of 500,000 boed by 2020. ŠCopyright Braemar Seascope Offshore 2013


Mexico

USD 1bn Loan for Pemex

Pemex is expected to invest in a large fleet renewal programme of offshore vessels and equipment including rigs after agreeing a loan deal with China. Under the terms of the arrangement, the Mexican company will receive a USD 1bn line of credit from the Export-Import Bank of China. The deal was struck during a visit of the Chinese President Xi Jinping to Mexico. In addition, the Mexican President has recently revealed plans to potentially end Pemex’s oil & gas monopoly.

Falkland Oil & Gas Completes 3D Seismic

Falkland Islands

Falkland Oil & Gas Limited (FOGL) has completed its 3D seismic acquisition in its licence areas to the South and East of the Falkland Islands. The Ramform Sterling carried out the work covering 1,018 square kilometres designed to target potential prospects near to the Darwin gas-condensate discovery. The survey was operated by Noble Energy on behalf of the joint venture which includes Edison International Spa. The final processed data is expected to available in Q4 2013.

Mediterranean

Mediterranean Oil & Gas Malta Campaign

Mediterranean Oil and Gas and Genel Energy are to drill an exploration well offshore Malta in Area4 in the fourth quarter of 2013. The semisubmersible drilling rig Paul Romano will be utilised for the campaign. The rig is capable of drilling to a depth of 7,500 metres and will be fitted with a fifth ram to the blow out in order to comply with the latest best practice guidance for deep water operations. The rig is currently undergoing a five year class survey in Malta.

Prirazlomnoye Startup in September

Arctic

It is understood the Gazprom Arctic project in the Pechora Sea, Prirazlomnoye, is due to start up in September or October 2013. The platform was towed from a yard in Murmansk last year and has been on-site ever since. Meanwhile, the company plans to drill another two wells inSakhalin water and is upgrading reserves in the area on the back of 3,000 square km of 3D seismic mapping that took place in the region between 2011 and 2012.

ŠCopyright Braemar Seascope Offshore 2013


USA / Canada

Statoil Strikes Oil Offshore Canada

Statoil has struck oil offshore Newfoundland, Canada. The light, high-quality oil was encountered in the Flemish Pass Basin while drilling the Harpoon prospect which was drilled by the semisubmersible rig West Aquarius in approximately 1,100 metres of water. The Harpoon prospect is located around 10km south-east of Statoil’s Mizzen discovery which holds around 100-200 millions of barrels of oil.

Sea Trials for HOS Red Dawn Eastern Shipbuilding Group has completed the latest sea trials for the newbuild vessel Red Dawn in Panama. This is the first of ten offshore vessels to be delivered to Hornbeck Offshore. The HOS Red Dawn will have an LOA of 89m and a beam of 19.5m. It will also be fitted with DP2 and Fifi 1. The delivery date for the vessel is scheduled for later this year.

Harvey Gulf Expands GOM Fleet Harvey Gulf is expanding its offshore fleet with a new multipurpose Offshore Supply Vessel MPSV. The vessel is the first in a series of three being built for Harvey by Eastern Shipbuilding Group. The engines will be supplied by Wartsila under a contract that also includes a long-term service agreement for six LNG fuelled offshore supply vessels and up to three multipurpose support vessels. The new vessel will operate in the offshore fields in the Gulf of Mexico and is expected to commence operations before the end of 2015.

GOM Pipelay Contract for Seven Borealis Anadarko has awarded a contract to Subsea 7 for the Heidelberg development in the Gulf of Mexico. The 2012 -built vessel Seven Borealis will carry out the pipelay work in the fourth quarter of 2014. The vessel can lay up to 46-inch diameter pipe (S-lay) and 24-inch diameter pipe (J-lay). The vessel also has a 2,800t pipe storage capacity and accommodation for 399.

ŠCopyright Braemar Seascope Offshore 2013


Australia / New Zealand

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.

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 north-west 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.

Southeast Asia

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.

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.

ŠCopyright Braemar Seascope Offshore 2013


North Sea

Peterson SBS Fixes Island Endeavour

The medium sized PSV Island Endeavour has been chartered by Peterson SBS on a one year contract with additional options. The UT-755 LN designed vessel will be carrying out pool support duties in the Southern North Sea. The 2008-built vessel is equipped with DP2 and a deck area of around 715 square metres.

Far Server Goes to Nexen Until September Nexen has fixed the Havyard 832 CD designed PSV Far Server for three months firm plus further options for up to an additional six weeks. The vessel commenced the term work around the middle of June and is expected to next be available for charter in September. The 2010-built Far Server is equipped with DP2, Oilrec, Clean Design and a deck area of around 800 square metres.

Maersk Oil Gryphon FPSO Back in Production The Maersk Oil Gryphon FPSO has recommenced production in the North after undergoing a major overhaul following storm damage. During the repair period, Maersk Oil took the opportunity to further explore the area with a 4D seismic programme, gained operatorship of the Maclure field and carried out a drilling campaign on the Tullich field in the area. The Gryphon, North and South Gryphon, Tullich and Maclure fields are all tied back to the Gryphon Alpha FPSO.

Allseas Pipehaul Charter for Fanning Tide Allseas UK has fixed Tidewater's Fanning Tide 4,700 dwt PSV on a term charter lasting approximately two months firm. The contract, which started in early-June will be based in the UK sector of the North Sea. This is the first term fixture for the STX PSV-09 CD designed Fanning Tide since its delivery from the Vard Soviknes shipyard. The vessel will be carrying out pipehaul duties.

ŠCopyright Braemar Seascope Offshore 2013


North Sea

Forties Alpha Satellite Topside Towed

The topside of the Forties Alpha Satellite Platform (FASP) will be towed down the Tyne to the North Sea Forties Field. This is the final part of a GBP 400M construction project which was awarded to the UK Company OGN Group, in 2010. The FASP is expected to come on stream in autumn 2013 and is designed to produce up to 25,000 bpd from the field which lies 110 miles offshore Aberdeen.

Rem Supplier Goes to ADTI for 1 Well ADTI has chartered the medium sized PSV Rem Supplier for one-well to support operations being carried out by the jack-up rig Energy Endeavour. The vessel commenced the work at the end of May and is expected to be on charter for a total of between 50 and 80 days. The Rem Supplier is a 2010-built vessel from Dry Docks World equipped with DP2, and a deck area of around 680 square metres.

Shell Norway Takes on KL Brofjord The K Line owned large PSV, KL Brofjord has been picked up by Shell Norway for Supply Duties in the North Sea. The vessel has been fixed for one month firm with a further five by one week options. The KL Brofjord is of AKER PSV 09 CD design and was built in 2010. The vessel has DP 2, a BHP of 1,1796 and large deck area of around 1,100m2.

Centrica Fixes Mana for 2 Months Centrica has fixed the Mana 3,289 dwt PSV on a supply duties charter lasting two months firm. The 2008-built medium sized PSV, of UT-755LN design, was expected to commence the charter in early June. It has previously been trading the North Sea spot market and will likely return on completion of its term work for Centrica. The rate is understood to be around GBP 11,500 with the period being one well plus four additional one well options or circa 443 days. ŠCopyright Braemar Seascope Offshore 2013


Africa

Reef Despina Gets Angola Work

Reef Subsea has been awarded a contract for the ROV vessel Reef Despina offshore Angola. The vessel will be assisting cable lay duties on the Palanca Cable Lay Campaign in Block 3 for Stapem Offshore. The Reef Despina will transit to West Africa for the 30 day charter equipped with a cable lay spread and ROV. The vessel will be joining its sister vessel Reef Larissa which transited to West Africa earlier this year where it has been undertaking ROV and survey operations.

Shell Takes Havila Fortune to West Africa Shell International has picked up the medium sized PSV Havila Fortune to carry out support duties for the Noble Globetrotter II off Benin West Africa. The Havila Fortune left the North Sea on the 6th of June and is not expected to finish her duties with the Noble Globetrotter II until August, although Shell does hold further options on the vessel. The Havila Fortune was built in 2009 and is equipped with DP 2 and has a deck area of 683 square metres.

New FPSO Plans for Ghana The Tullow Oil Tweneboa Enyenra Ntomme (TEN) Development Project has been officially approved by the Ghanaian Government. Twenty four development wells will be connected through subsea infrastructure to an FPSO 60 km off the coast with oil expected to deliver by 2016. Major contracts covering the FPSO, subsea facilities and development wells are expected to be finalised and awarded in the coming months.

Chariot Secures Namibian Licence Chariot Oil & Gas has been granted a new licence covering block 2714B offshore Namibia. The new deal entitles Chariot to the whole of the original area of the block which it previously relinquished a 50% portion of when entering the First Renewal Phase in 2010. Under the licence Chariot must acquire 2,000 km of 2D or 250km2 of 3D seismic in the next four years. A programme is expected to commence in the second quarter of 2014. ŠCopyright Braemar Seascope Offshore 2013


Newbuilds

Polar Onyx Hull Delivered

The SX121 designed offshore construction and well intervention vessel Polar Onyx has been launched at the Zaliv Shipyard. The vessel, which is being built for Ulstein Hull AS, has an loa of 130m and a 25m beam. The vessel will now be towed to Norway for the final completion and outfitting. Over the past six years Zaliv and Ulstein Hull AS have worked on 14 oil and gas vessels together.

Vroon Launches Vos Fabulous Vroon has launched the Emergency Response and Rescue Vessel (ERRV) Vos Fabulous at Nanjing East Star Shipyard in China. The vessel has an LOA of 50m and a beam of 13.2m. The ABS classified vessel is Class-B. The Vos Fabulous is expected to be delivered in early summer 2013 and will be operational in the North Sea later this year.

Siem Sign Dual Fuel PSV Deal with Shell N Siem Offshore and Norske Shell have signed a contract for a newbuild large dual fuel PSV. Siem is currently in discussion with a number of shipyards for construction of the VS-4411 DF designed vessel which is due to commence the contract in the first quarter of 2015. The vessel will be fixed for three years firm with two additional one-year options. It will be supporting offshore activities at Draugen and Ormen Lange. The vessel, which will have a deck area of 970m2 will be capable of using either Marine Diesel Oil or LNG.

Simek Shipyard Launches North Pomor PSV The North Pomor PSV has been launched by Simek Shipyard. The ST-216 Arctic designed PSV, which is owned by Gulf Rederi, is winterised basic with ICE-1B and has been designed for operating under harsh conditions. The North Pomor has an LOA of 90.6 metres and a beam of 19.2 metres. The vessel has a top speed of 16 knots and can accommodate 40 people. The delivery date is scheduled for July 2013.

ŠCopyright Braemar Seascope Offshore 2013


Subsea

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.

Harkand to Acquire Veolia Harkand has expanded its fleet and reach with the acquisition of Veolia Marine Services. The deal will add 150 staff, three vessels and six work class ROVs to Harkand. Houston-based Veolia has an established presence in the deepwater inspection, repair and maintenance market in the Gulf of Mexico. The vessels included in the deal are the DSV Swordfish, Viking Poseidon and the Normand Pacific. The deal is expected to complete in June 2013.

SOV Ullswater Starts Pipeline Installation The Hallin Marine vessel SOV Ullswater is to commence a 30-day contract in June carrying out work on the Natuna gas field located 1,100 km north of Jakarta. The vessel, which is fully equipped for wellhead servicing, inspection and construction diving, will be used for recommissioning of the pipelines. The SOV Ullswater has an LOA of 78m, beam of 20.4m and can accommodate up to 120. The vessel is also equipped with a 15-man saturation diving system.

Subsea Market Summary For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. The list is put together weekly by Graeme Riddell who is based in our Aberdeen office. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email us.

ŠCopyright Braemar Seascope Offshore 2013


Standby/ERRV

Tight ERRV Market Conditions to Continue

Although not unexpected, vessel availability is almost nonexistent at the moment and is expected to remain so for the rest of the summer. The tight market conditions will persist through the autumn and winter as well given the number of requirements now being quoted commencing in the fourth quarter so any respite from a Charterers perspective is unlikely for the foreseeable future.

Fresh Standby Requirements on Market Dana is out for a vessel from the first half of August for 9-12 wells in support of a development drilling programme with the Ocean Nomad in the Northern North Sea. GDF Suez is tendering for a vessel for 3-5 wells from mid to late October to support the GSF Monarch in the South North Sea. Nexen is also thought to be out for a vessel for 10-21 wells from late 2013 in support of the newbuild Jack-Up Ensco 120 which has been chartered for the Golden Eagle development in the Central North Sea.

Talisman & Enquest Fix Vessels Talisman Energy has chartered the Sea Sailor for 6 to 12 months from early June for support of the Rowan Stavanger in the Central North Sea. In addition, Enquest has secured the Grampian Orcades on a multi-year basis from late June for support of the Stena Spey. Meanwhile, Total is out for a vessel for 60 days from early July at the Elgin field in the Central North Sea but it is difficult to see much (or any) clear vessel availability for this programme.

Additional Vessels to Enter ERRV Market Against this background it is encouraging to see vessels entering the market so it does not become increasingly overheated or more out of balance than it already is as work may get postponed which is not in anyone's interest, Owners or Charterers alike. Atlantic Offshore recently completed the GBP 2 million conversion of the 1984-built / 12,560 bhp Ocean Troll in Hull into a Class A tanker assist / ERRV unit & Dutch based Glomar Ship Management are converting a recently acquired 1975 unit in Poland (to be named Glomar Patriot) which will be ready for the UK market in August. ŠCopyright Braemar Seascope Offshore 2013


Renewables

Gwynt y Mor Windfarm Work Underway

A fleet of vessels are currently on site at the Gwynt y Mor offshore windfarm site 15km to 20km off the coast of North Wales. The accommodation vessel the Wind Solution is to be anchored at the site and will make monthly port visits with a series of crew transfer vessels taking personnel to various locations at the site. The Stanislav Yudin heavy lift vessel will be carrying out the installation of around 160 foundation monopoles whilst deploying its eight-point anchor spread.

Statoil Expects Renewables Surge by 2040 Statoil has released its latest Energy Perspective long-term Market Outlook document and expects renewables to grow to 8% of the market by 2040 from a base level of just over 1%. According to the report wind power generation capacity grew on average by 16.5% a year and solar capacity by 67 a year between 2002 and 2012. In 2012, wind solar, hydro, biomass and geothermal capacity made up 40% of the total European power generation capacity.

Piriou Enters Renewables Market Piriou Shipbuilding has entered into the offshore renewables market with a series of wind farm support ships. The company’s first deal is with BMT Nigel Gee for two units that will be available for operation in Europe at the end of 2013. The company is also set to take part in the Seawork 2013 exhibition in Southampton later in June to showcase its projects in the Marine Renewables Sector.

Pelamis Celebrates Year of Testing The Pelamis P2 wave energy converter has completed a year of testing at the European Marine Energy Centre in Orkney. The P2 test programme has accumulated 5,000 grid connected operating hours and exported 160MWh of electricity to the national grid. According to the company the proven average output capability of the device is now around 100kW.

ŠCopyright Braemar Seascope Offshore 2013


Sale & Purchase

UOS Atlantis Sold to GO Marine

The UOS Atlantis AHTS vessel has been sold to GO Marine. The MOSS 424-type vessel was the first of the series of 12 originally ordered by Hartmann Offshore from Fincantieri Shipyard. United Offshore Support (UOS) has also taken over commercial management of the first of four World Wide Supply vessels of PSV 3300 E3 design with the further three to follow. All of the vessels are on long-term charter to Petrobras.

Far Statesman Sold & Bareboated Back The Far Statesman AHTS, has been delivered to Farstad Supply by Vard Langsten shipyard. The UT 731 CD designed vessel, has a bollard pull of 265t and 24,371 bhp. Farstad Supply has sold the vessel to Ocean Yield and leased it back on a 12-year bareboat charter with the additional option of buying the vessel at the end of the contract. The Far Statesman will operate in the North Sea spot market.

Corporate

Fredriksen Predicts Strong Rig Market

Owner of Seadrill, John Fredriksen is predicting that the oil rig market will remain strong for at least the next three to five years. The company is currently in the process of taking on a further 19 new rigs. However, he indicated that the short-term future for the crude tanker market looked bleak although the dry bulk shipping and oil products markets appeared to show some strength.

Taqa Buys BP North Sea Assets Taqa has acquired UK North Sea oil and gas assets from BP. The Company will take over the Harding field and the production platform in the Central North Sea. The assets were acquired for USD 1bn of which USD 632M were deposited on the day of the agreement. With these additions, Taqa's oil production is expected to increase by 20,000 boed.

ŠCopyright Braemar Seascope Offshore 2013


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Bunker Price GBP/MT

700

Bunker Price in Aberdeen 2011 to Present

650

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

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£90,000

Large - AHTS (16 ,000+ BHP) 2011 Large - AHTS (16 ,000+ BHP) 2012 Large - AHTS (16 ,000+ BHP) 2013

£80,000

Medium - AHTS (12-15,999 BHP) 2011 Medium - AHTS (12-15,999 BHP) 2012 Medium - AHTS (12-15,999 BHP) 2013

£70,000 £60,000 £50,000 £40,000 £30,000 £20,000 £10,000 £0 Jan

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£25,000

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£15,000

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Large PSVs (700m2+ Clear Deck) 2011

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£0 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

£140,000

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Medium - AHTS (12-15,999 BHP)

£40,000

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£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


CONTACT US London:

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London Office Andrew Williams Charles Cundall Mark Chesterfield Mark Malvisi Tobi Menzies Jack Richards Kevin Morrin Robbie Cook Sean Bate Michael Bates Candice Wu Sam Beynon

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