NSRV13

BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE December 2012

ISSUE: 57

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS BROKER COMMENTARY

Picture Courtesy of Michael Bates

Click Here to go to Online Version

Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. December brings with it further news of slackness in the North Sea support vessel market which is diametrically opposed to the continuing strength in the rig market. The fallout of October’s helicopter ditching continues to affect the market as vessels are taken on for crew transfers but that has done little to mitigate low rates.

Despite evidence of oversupply in the market there are still a steady stream of newbuild orders being placed and deliveries from yards. The latest arrival is the Skandi Haugen which was named last week and commences a seven-year charter with ConocoPhillips Norway.

Average dayrates for spot AHTS fixtures in November were GBP 12,224 and GBP 7,729 for large and medium vessels respectively. Meanwhile, PSV rates were GBP 7,241 and GBP 4,936. December average rates are expected to be lower again than these figures.

We hope you find the latest edition of our report useful and look forward to hearing your feedback and comments.

Enjoy the upcoming festive period. The next edition of this report will be out early in the New Year.

Sean Bate Market Analysis Manager research@seascope.co.uk

Click here to leave Feedback

For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email us.

Broker Commentary

W

hilst there has been a steady flow of spot fixtures for anchor handlers and platform supply vessels in the past weeks there remains the situation of too many ships chasing too few requirements. Poor weather also this month has delayed or cancelled operations reducing the overall number of vessel fixtures and requirements.

GRAEME RIDDELL Shipbroker - Offshore

Things remain particularly difficult on the UKCS where lay berths and anchorages have been full sending day rates falling for even the most advanced ship types.

The outlook is that this is likely to remain for some time with further vessels elsewhere expected to return to the market in the coming days / weeks.

That said in recent times the availability of approved PSV's in the Norwegian sector has started to thin out a bit sending rates to higher levels In Norway for the first time in a good while. Those Norwegian Owners on the UK side are now turning their vessels around to Norway to seek better fortunes and closely monitoring long term tenders yet to be awarded. But still for many revenues are well below or at parity with operating costs, a challenging time for all involved in the offshore market. Oversupply is also now being seen in the medium / large construction and ROV market where we are seeing multiple ships tied up alongside and on the spot market waiting to plug the gap before

better times in March April 2013.

Click Here to Email Graeme Aberdeen@seascope.co.uk Tel: +44 (0)1224 628 470

facing continued problems of Helicopter supply for phased drilling campaigns and project start ups whilst others with a mix of heli options are making do just fine.

Some feel helicopter availability will improve gradually towards the New Year, but there is evidence that shuttle vessels with SPS code, bed space and DP capability will still be called on from time to time in the coming months.

“Large OCVs with SPS Compliance Secure Charters Shuttling Personnel.�

Meanwhile some very large OCV's with SPS compliance and bed space have been fortunate enough to find charters shuttling personnel offshore. This in light of the recent grounding of Super Puma EC225 aircraft. There seems to be a mixture of fortunes amongst oil companies with some

Some Oil companies therefore see personnel transfer via ship as being a long term part of their logistics strategy evidenced by the reactivation of gangway programmes and testing operations - latest being Troms Capella for trial W2W duties with BP Unity and other locations. The challenge though remains for some Owners, particularly in the new year and Q1/Q2 when the next phase of New Build PSV's comes on stream. Some will turn to vessel conversion or specialist markets to get away from the daily supply market.

Chartering

Long-Term Requirements

There are six outstanding long-term requirements: 1 x PSV / Nexen / 1 year + 1 x 9 month opt / Dec 2012 1 x PSV / Talisman / 9 months + 2 x 6 mth opts / Dec 2012 1 x PSV / Peterson SBS / 1 year + 2 x 1yr / Jan-Feb 2013 1 x PSV / BG UK / 3 years + 2 x 1 yr/ 5 yrs + 2 x1 yr Jun 2013 1-2 AHTS / Statoil / 1, 3 or 5 yrs + opt / Jun-Dec 2013 1 x PSV / BP N / 5 yrs + 5 x 1 yr opts / comm 2013-2015

Medium-Term Requirements There are three outstanding medium-term requirements: 1 x PSV / MLS / 5 wells + 3 well opts / comm Jan-Feb 2012 1 x PSV / E.On / 3 months + 6 x 1 wks + D/D 14 / Feb 2013 1-2 PSV / Saipem / Supply Duties / 60-100 days / Q1 2013

Passenger Transfer Duties for PSVs A series of PSVs/Offshore construction vessels have been chartered in a passenger transportation role. The vessels including: Toisa Coral, Far Scotsman, Olympic Commander, Island Enforcer, North Sea Giant and the Olympic Orion have all been carrying out a level of passenger work.

This follows the continuing grounding of a large number of helicopters after the controlled ditching of a Super Puma EC 225 in the North Sea south of Shetland in October.

Sea Falcon & Sea Tantalus Secure Work The newbuild vessel Sea Tantalus has been fixed on a one year plus two one year options contract with Enquest in the North Sea. The vessel is one of four PSVs Seatankers are building in India and is expected to be delivered in the first quarter of 2013. Meanwhile the Sea Falcon has been chartered for five years by Apache to carry out general pool support in the North Sea.

ŠCopyright Braemar Seascope Offshore 2012

Chartering

FD Indomitable Goes to Taqa for 2 Years

The medium sized PSV FD Indomitable has been chartered

by Taqa to support a work programme by Transocean’s John Shaw. The vessel has been fixed for two years firm with three additional one well options. The vessel has previously been working for Taqa on another contract since around March this year. The UT-755 L designed vessel is equipped with DP2, deck area of around 716 square metres, Fifi 1 and Oilrec.

Apache Charters Blue Prosper The newbuild PX-121 designed PSV Blue Prosper which was delivered in September has been fixed on a longterm contract with Apache. The vessel has been fixed for one year firm plus an additional one-year option. Apache already has the sister ship Blue Fighter on one-year charter. The vessels are the first of six sister ships under construction at Ulstein Verft with the remaining vessels due for delivery in 2013.

Olympic Orion Chartered for Three Months The large PSV Olympic Orion has been chartered by GdF from early December for three months firm work plus additional options for an extra month and four one week options after that. The MT-6015 designed PSV is currently carrying out work for Centrica. The Olympic Orion is a 2011-built vessel equipped with DP2 and a deck area of around 1060 square metres.

Bourbon Clear Fixed to BP The large PSV Bourbon Clear has been chartered to carry out supply duties for BP UK. The vessel has been fixed for three months firm plus two one month options. The Bourbon Clear will be taking over the role that has previously been filled by the Skandi Sotra. The PX-105 designed Bourbon Clear is currently on charter with ORG and will commence the charter with BP shortly and is expected to conclude the firm part of the contract in March 2013. ŠCopyright Braemar Seascope Offshore 2012

Chartering

Troms Castor to Support Canada Work

The large PSV Troms Castor has been fixed to Chevron Canada to support a work programme with the Stena Carron. The VS-485 CD designed vessel has been fixed for 150 to 180 days. The Troms Castor is currently working for Statoil and is expected to commence its work with Chevron Canada in the first quarter of 2013. Troms is actively marketing itself as “A trustworthy seven sea operation— specialised in harsh polar conditions.”

ASCO Fixes Energy Swan ASCO Norway has fixed the large PSV Energy Swan on a one-well programme with the Maersk Giant rig. In addition to the firm period there is also a further onewell option on the vessel. The Energy Swan is an ST216 L designed vessel that was previously carrying out term work BP TENAS it is expected to return to the North Sea sport market in January 2013.

Malaviya 18 Heading to North Sea The medium sized PSV Malaviya 18 is heading back to the North Sea on completion of a long-term charter in India. The vessel will be carrying out a brief yard stay for work on her mud tanks ahead of joining the North Sea spot market. The UT-755 L designed vessel is expected to arrive on around the 23rd December and is currently charter free.

Skandi Aukra Fixed for Angola Work The PSV Skandi Aukra has now departed the North Sea to commence a two-year term charter in Angola with DOF. The fixture is for two years plus two optional years. The vessel, which was delivered earlier this year, is an STX PSV 09 vessel equipped with DP2, a deck area of around 1,000 square metres and accommodation for 26 personnel. It is also equipped with Clean Design, Oil Rec notation and methanol tanks. ©Copyright Braemar Seascope Offshore 2012

Corporate

Atlantic Takes on Blue Power Management

Blue Ship Invest and Atlantic Offshore have signed a management agreement over the newbuild PX-121 designed vessel Blue Power. Under the term of the deal, Atlantic Offshore will be responsible for the commercial and technical management of the vessel upon its delivery from the Ulstein Verft yard in February 2013. Blue Power is the third in a series of six sister ships being built for Blue Ship.

MTQ Bids for Neptune Takeover MTQ Corporation has announced a planned off-market takeover bid for Neptune Marine Services. The company already owns a substantial shareholding in Neptune via its wholly owned subsidiary Bloomsvale Investments. Meanwhile, Neptune has been awarded a contract from Modec to carry out works at the Modec Venture 11 FPSO in the Carnarvon Basin off Western Australia. A vessel supplied

by Pacific Radiance will be utilised in January 2013.

CNOOC Nexen Acquisition Continues Chinese national oil company CNOOC is continuing to tackle issues around its planned acquisition of Nexen.

CNOOC entered an agreement to acquire Nexen in July this year and has recently withdrawn and resubmitted a Joint Voluntary Notice with respect to the proposed acquisition with a view to completing a Committee on Foreign Investment in the United States review process as expeditiously as possible.

Shelf Drilling Closes Deal for 38 Rigs Shelf Drilling has completed the acquisition of 38 rigs from Transocean. The closure of the deal follows an announcement of the plan in September. Under the deal the new firm will concentrate on providing shallow water drilling services in Asia, Africa and the Middle East utilising the 37 jack-up drilling rigs and one swamp barge that it has acquired.

ŠCopyright Braemar Seascope Offshore 2012

Taqa In $1bn BP Deal

Market reports indicate that the rig market could continue to tighten in the coming months potentially pushing dayrate even higher. According to some sources rates could reach around the USD 200,000 for standard units as demand both in the North Sea and Internationally continues to gather pace with little indication that this growth could slow before 2015. Ultra-deepwater units are in particularly high demand for exploration activity.

Meanwhile, GdF has chartered the Transocean rig GSF Monarch on an 18month contract in the UK North Sea. According to Transocean the rig has been fixed at a rate of USD 162,000 and the rig’s prior dayrate was USD 95,000

indicating an uplift of over 70%. The contract is set to commence in December 2013.

The Leiv Eiriksson semisubmersible that has been drilling in the Falkland Islands for Falklands Oil & Gas and Borders & Southern Petroleum is expected to head to the North Sea in the next few weeks with and arrive before the end of January. In February this year Ocean Rig announced a three-year (15 well) programme for the rig on the Norwegian Continental Shelf were it will work for a consortium for a minimum period of 1070 days. The contract includes three option of six wells each and is expected to commence in the first quarter of 2013.

Taqa has expanded its North Sea portfolio by acquiring a number of BP assets. The Abu Dhabi company has agreed to buy a number of assets worth more than USD 1 billion. The deal include the planned acquisition of a 70% interest in Harding, 37.03% interest in Maclure and an 88.7% interest in the Devenick field in the central North Sea. Taqa will also increase its non -operated interests in the Brae area and associated transport infrastructure including the SAGE systems, Forties Brae and FortiesBraemar pipelines.

Rig Chart Rig Activity by Type and Country Norway UK/Irl

Drillship Jackup Semi-Sub Total

Denmark Netherlands

Stacked without future contract

Stacked with future contract Total

2 9

17

20

16

29

35

2 7

7

5

5

On Board Grampian Protector Last December

2

40

2

4

42

2

6

84

Bunker Price 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.

Oil

Price

2005 2005--2012

$140 $120 $100 $80 $60

$40 $20 Sep-12

May-12

Jan-12

Sep-11

May-11

Jan-11

Sep-10

May-10

Jan-10

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

Sep-07

May-07

Jan-07

Sep-06

May-06

Jan-06

Sep-05

May-05

Jan-05

$0

Standby/ERRV

Standby Market Expected to be Tight in 2013

The standby market remains very active although some pockets of availability have opened up these are likely to prove temporary with demand in 2013 generally expected to be similar to 2012 when for long periods the fleet was effectively fully utilised. Meanwhile, ADTI is tendering for a vessel to support a 5-8 well drilling programme with the Ensco 100 at the Stella field in the Central North Sea commencing in March. The firm period is estimated to be around 450 days.

Talisman Energy Requires Standby Vessel Talisman Energy is seeking a vessel to support a six to twelve month programme from the first quarter of 2013. The vessel will be utilised to support a drilling programme on the Montrose/Arbroath field in the central North Sea with the Rowan Stavanger. The jack -up is currently on charter to Talisman’s Norwegian counterpart.

Number of Contracts Being Finalised GdF Suez & SPD are believed to be close to finalising contracts for their requirements with the Noble Ronald Hoope (in the UK South North Sea) & the Transocean Prospect (Central North Sea) respectively commencing in January.

Meanwhile, CNR is thought to have fixed the Grampian Prince for one-two months work at the Lyell Field in the Northern North Sea and the Ocean Swift has been chartered

by Centrica for a similar period for ERRV support at the Mallard field in the Central North Sea. Both contracts are scheduled to commence around mid December.

Vos Challenger Sold for Recycling Vroon Offshore Services has sold their 1975 built multirole ERRV Vos Challenger to the Danish shipbreakers Fornaes. The ship has now left the ERRV fleet and will be recycled. The vessel, which was built in Groningen in Holland, has an LOA of 58.85m, a beam of 12m and a rescue craft and davit.

ŠCopyright Braemar Seascope Offshore 2012

Subsea

Subsea 7 Orders Newbuild DSV

Subsea 7 has signed a contract with Hyundai Heavy Industries for a newbuild dive support vessel which will be delivered in 2015. The vessel will join the DSVs in the Subsea fleet which currently include the 2010-built Seven Atlantic and the 2011-built Seven Havila.

Atlantic Guardian Extended Electromagnetic Geoservices has had its contract for the Atlantic Guardian vessel extended for a further six months with two additional three-month options and a flexible start-up date. The vessel has already completed the basalt mapping project in the Norwegian Sea and is currently transiting to dry dock in Bergen for class renewal and general maintenance. The vessel has a flexible start-up date for the new period and will be available for charter during the standby period.

VOS Sweet Delivered Vroon Offshore Services has taken delivery of the subsea support vessel VOS Sweet. The newbuild was delivered from Fujian Southeast Shipyard in China on November 19th and is expected to be available for charter in Europe early next year. The DP2 VOS Sweet is also equipped with four-point mooring, and is suitable for ROV survey, construction and diving jobs. The vessel also has on-board accommodation for 50 personnel.

PGS Charters Four Seismic Vessels PF Thor has ordered four newbuild seismic vessels that will be chartered to Petroleum Geo Services (PGS) on tenyear time charters. The ST204 designed vessel being built at Turkish shipyard Besiktas will be delivered from the third quarter of 2014 onwards. The vessels will be equipped with Ice Class 1A, accommodation for 60 personnel and will have efficient propulsion systems to enable up to 60 per cent fuel saving on some of the current vessels in use by PGS. ŠCopyright Braemar Seascope Offshore 2012

Renewables

Forewind Reveals First 4 Dogger Projects

Forewind has announced the project boundaries for the first four of the Dogger Bank windfarm projects. According to the firm these represent a significant step to finalising the site selection and design of the projects. Two of the projects will connect into the national grid in Yorkshire and two will connect into Teeside. The four projects are Cryeke Beck A (515 km2 131 km from shore), Cryeke Beck B (599 km2, 131 km to shore), Teesside A (560 km2, 196 km to shore) and Teesside B (595 km2 and 165 km to shore).

Alicat Workboats Buys South Boats Alicat Workboats Ltd has bought the Isle of Wight based boatbuilder South Boats. The new venture is aiming to be the leading specialist in the manufacture and service of crew transportation vessels to offshore windfarms as well as providing refit and repair facilities. South Boats had an order book of GBP 21 million and further enquiries worth up to GBP 35 million.

Energy Bill Plans to Attract GBP 110 BN The UK Government’s Department of Energy and Climate Change has introduced a new Energy Bill which aims to bring in GBP 110 billion of investment to replace and upgrade the generating capacity and the grid by 2020. The bill includes provision for Contracts for Difference - long term contracts with the aim of providing stable and predictable incentives for companies to invest in low-carbon generation.

Three Tidal Energy Sites Given Go Ahead The Crown Estate confirms further UK tidal energy sites.

The announcement includes an agreement with the Isle of Wight Council, Orkney-based Scotrenewables Tidal Power and deployment of a prototype off Northern Island by company Minesto. According to the Crown Estate the projects will play an important role in facilitating further research and development, testing and commercialisation of tidal energy technologies. ŠCopyright Braemar Seascope Offshore 2012

Sale & Purchase

Toisa Polaris Sold to Bibby

Bibby Offshore has taken ownership of the Toisa Polaris dive support vessel. The vessel was originally chartered by Bibby Offshore in January 2012 on a two-year time charter with options to extend plus an additional purchase option as part of the deal with Toisa. Bibby exercised the option and took delivery of the vessel in Stavanger at the end of October. The vessel has since been renamed Bibby Polaris and is expected to continue with operations in the North Sea.

Siem Offshore Orders Dual Fuel PSV Siem Offshore has signed a contract with Hellesoy yard in Norway for the construction of a duel fuel VD 4411 DF Designed PSV. Upon completion the vessel will begin a fouryear contract with Total Norway with a further four oneyear options. In addition, Siem Offshore will also hold an option for an additional sister vessel at the yard. The vessels will have an loa of 89m, a beam of 19m and a deck area of around 970 square metres. The vessels will be able to use marine diesel oil and LNG.

Chevalier Hotels Adds Barge Market reports indicate that Chevalier Floatels has bought an accommodation barge with imminent plans to convert it into an accommodation vessel for the offshore construction market. The 2003-built barge, which will be named Sans Vitesse, will be upgraded to include 88 cabins, en-suite bathrooms and showers. The company plans to complete the vessel by the first quarter of 2013 and target it at the offshore wind farm sector.

Prosafe Orders Second Vessel Prosafe has entered into an agreement with Jurong shipyard for construction of a second harsh environment semisubmersible accommodation rig. The vessel, which will be named Safe Zephyrus, is scheduled for delivery at the end of 2014. The GVA 3000 E designed unit will be compliant with Norwegian regulations and equipped with DP3, 12-point mooring and accommodation for 450 personnel in single cabins. There are also options for a further two units. ŠCopyright Braemar Seascope Offshore 2012

AHTS Dayrates

Average North Sea Spot AHTS Rates 2011/12

£90,000

£80,000

£70,000

Average Spot Dayrate

£60,000

£50,000

£40,000

£30,000

£20,000

£10,000

£0 Jan

Feb

Mar

Large - AHTS (16,000+ BHP) 2011

Apr

May

Jun

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

Jul

Aug

Large - AHTS (16,000+ BHP) 2012

PSV Dayrates

Sep

Oct

Nov

Dec

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

Average North Sea Spot PSV Rates 2011/12

£25,000

Average Spot Dayrate

£20,000

£15,000

£10,000

£5,000

£0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Large PSVs (700m2+ Clear Deck) 2011

Medium PSVs (500-700m2 Clear Deck) 2011

Large PSVs (700m2+ Clear Deck) 2012

Medium PSVs (500-700m2 Clear Deck) 2012

Oct

Nov

Dec

£0 Large - AHTS (16,000+ BHP)

PSV Dayrates

Large PSVs (700m2+ Clear Deck)

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-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

£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

AHTS Dayrates Average North Sea Spot AHTS Rates 2004 2004--2012

£140,000

£120,000

£100,000

£80,000

£60,000

£40,000

£20,000

Medium - AHTS (12-15,999 BHP)

Average North Sea Spot PSV Rates 2004 2004--2012

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

Medium PSVs (500-700m2 Clear Deck)

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.

Click here to leave Feedback

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

CONTACT US

B

raemar Seascope Offshore is in an ideal position to offer industry insight on all aspects of the offshore vessel market across the globe.

Our expert brokers are on call 24 hours a day and are able to offer advice, information and up-to-theminute detail on vessel rates, availability and positions.

WEBSITE Visit the Braemar Seascope Offshore website by clicking the logo below or going to: www.braemarseascope.com

ŠBraemar Seascope Offshore