NSRV15

Braemar Seascope Offshore - North Sea Vessel Report North Sea Vessel Report - Issue 59: February 2013

MARKET NEWS & ANALYSIS

February 2013

VESSEL DAYRATE CHARTS

ISSUE: 59

RIG NEWS MARKET COMMENTARY

Picture Courtesy of Vroon Offshore Services Dry Cargo

Email: aberdeen@seascope.co.uk

Tankers

Containers

Tel: London +44 (0)20 7903 2700

Offshore

Aberdeen: +44 (0)1224 628 470

LNG - Specialist - LPG

Singapore: +65 6410 9013

Sale & Purchase

www.braemarseascope.com

Click Here to go to Online Version

Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. The past few weeks have seen a burst of activity and a number of term requirements on the market point to an active market although the sheer numbers of vessels around could limit the impact this has on rates.

From a sold-out AHTS spot market to the spectre of vessel lay ups, the past month has it all. There is never a dull moment in the offshore market and the fickle North Sea weather has thrown another factor into the mix.

As this report goes to press there are currently 17 medium and long-term requirements on the market which cov-

er up to 22 PSVs and 4 AHTS vessels.

Average dayrates for spot AHTS fixtures in January were GBP 20,685 and GBP 18,656 for large and medium vessels respectively. Meanwhile, PSV rates were GBP 8,250 and GBP 6,719. It is anticipated that rates could stablise at these levels throughout February.

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

The next edition of this report will be out on March the 7th.

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.

Market Commentary

T

he North Sea offshore vessel market has seen a substantial increase in demand in the past few weeks. Poor weather has delayed a number of rig moves offshore and seen vessels tied-up for longer than anticipated. This has led to a bottleneck particularly in the anchor handling market where the spot market was temporarily sold-out at one point. Dayrates rapidly accelerated to around the GBP 100,000 mark up from around the mid-teens level that charterers have expected to pay in the last few months. A bit of stability has returned however owners rate expectations were still around the GBP 35,000 to GBP 60,000 levels as this report goes to press.

There are also a large number of long and medium term requirements out on the market mainly for PSVs to cover rigs for periods of three to six months with many commencing in the second quarter of the year. The platform supply vessel market has been a bit more slack than the anchor handling side of things and rates have really ranged between GBP 6,000 ad GBP 20,000. There are also a further five PSVs expected to arrive on the North Sea spot market in the next six weeks or so which should prevent any tightness in the short-term. In fact, lay ups are being considered by a number of owners.

SEAN BATE

(MICS)

Offshore Market Analysis Manager

Click Here to Email Sean Research@seascope.co.uk Tel: +44 (0)20 7903 2736

Meanwhile the 1985-built UT705 PSV EnThe rig market continues to be “The market will ergy Girl is understood to have been sold active and there will shortly be the addition of the Eirik Raude which continue to move with to Hind Offshore for circa USD 6 million and has departed Aberdeen to head to will be drilling offshore Ireland for the unpredictable India to commence term work for ONGC. ExxonMobil although four Bourbon whims of the vessels including two from outwith The expectations for the coming weeks the North Sea spot market have North Sea weather.� are for further activity in the term market been selected to support this rig with charterers seeking to secure vessels during its 120 day programme. Providence Refor the summer period. A number of medium sources is also indicating that there could be future term fixtures will likely be concluded shortly altwork on its acreage offshore in the region. hough the vessels will continue to trade the spot market until around April when the bulk of work programmes kick-off.

In the meantime the market will continue to move with the unpredictable whim of the North Sea weather and the past few weeks have shown the speed with which rates can accelerate as rigs are delayed and vessels dry-up. This highlights the importance of keeping an informed eye on the market activity.

Chartering

Long-Term Requirements

There are seven outstanding long-term requirements: 1 x PSV / BG UK / 3 years + 2 x 1 yr/ 5yrs + 2 x1 yr Feb 2013 1 x PSV / Peterson SBS / 1 year + 2 x 1yr / Mar-Apr 2013 1-2 AHTS / Statoil / 1, 3 or 5 yrs + opt / Jun-Dec 2013 4-7 PSVs / BP UK / Various Durations / comm 2013 & 2014 1 x PSV / Halliburton / Well Stim / 9 mnths+opt / Mar 2013 2 x PSV / BP N / 2 yrs + 2 x 1 yr opt / comm May 2013 2 x PSV / Lundin / 12wells +3x4wks +3x1 wk opts /May-Aug

Medium-Term Requirements 1x PSV / GDF /1 well (c90-100 days) / comm Early-Mid Feb 1x PSV / Team / 1 well (Stena Carron) / comm Feb-Mar 1x PSV / Premier Oil / 1,4 or 5 wells / comm Feb-April 1x PSV /Team / 1 well (GA3)/comm March 1 x PSV / Team / 180,400, or 950 days (WilHunter) April 1 x PSV / Nexen / 6 months / comm April-May 1 x AHTS / ConocoPhillips Alaska/ Ice / 100 days+D/D 30 /2014 1 x PSV / E.On / 3 months + 6 x 1 weeks + D/D 14 / May 2013 1 x AHTS / EOG / 30 days + 30 d/opt / comm April 2013 1 x PSV / EOG / 5 wells firm (250 days) / comm May 2013

Surge in AHTS Spot Rates Due to Weather The North Sea AHTS spot market sold out for the first time in a number of months as demand for vessels reached a peak. The surge was caused primarily by poor weather offshore delaying moves and saw rates spike to around GBP 100,000 before settling at the GBP 35,000 to GBP 60,000 level. However, improvements in the weather offshore are likely to see a number of rig moves conclude simultaneously and a large number of vessels return to the spot market.

Owners Consider Vessel Lay Ups A number of vessel owners are actively considering laying up vessels due to the continuing supply and demand in-balance in the North Sea Vessel market. Siem is expected to lay up the large AHTS vessel Siem Garnet once it concludes its charter carrying out heading control for Maersk Oil. In addition, the field and subsea support vessel Maersk Responder, which has just completed drydock in Denmark, is uncommitted until May and could go into lay up if work is not forthcoming. ŠCopyright Braemar Seascope Offshore 2013

Chartering

FD Honorable with E.On for 2 Wells

The medium sized PSV FD Honorable has been chartered

by E.On to cover a multi-well programme with the Maersk Resolve rig. The fixture, which is due to commence imminently, covers two wells firm (of around 90 days each) plus an additional one well option. The FD Honorable is expected to return to the North Sea spot market on completion of the charter in around August. The vessel is a UT -755 L designed vessel equipped with DP2 and a deck area of 716 square metres.

5 Newbuild PSVs Coming to North Sea Soon There are a further five newbuild PSVs due to arrive on the North Sea spot market in the next couple of months.

These include four that are expected to arrive on or before the beginning of March. The vessels include the STX 09 CD Lundstrom Tide, the VS-485 MKII Energy Insula, the Havyard 832 CD Sayan Princess and the PX 121 Blue Power. In addition the FD Unbeatable is currently expected to join the spot market in March.

ExxonMobil Fixes Bourbon Boats for Ireland ExxonMobil’s drilling programme offshore Ireland will be supported by four Bourbon vessels which have each been fixed for a period of one well firm or around 120 days. The vessels, which include the Bourbon Topaz, Bourbon Tampen, Bourbon Rainbow and Bourbon Calm will be supporting the Eirik Raude rig which is expected to commence work in the second quarter of 2013 following completion of a contract in West Africa.

Project Jigsaw Deals for BP Market Reports indicate that Bibby Ship Management will manage six units covering BP’s Project Jigsaw work. The deal is understood to include four regional support vessels and two newbuild platform supply vessels which are currently being built for BP at the Hyundai Mipo yard in South Korea. The Project Jigsaw vessels will carry out support work at the Clair, Schiehallion and Foinaven field in the West of Shetland area and Magnus in the East of Shetland as well as Bruce, Etap and Andrew in the central North Sea. ©Copyright Braemar Seascope Offshore 2013

Chartering

North Promise Supporting Ocean Nomad

The large platform supply vessel North Promise has been taken on by Senergy for a period of one well firm plus options that cover two additional wells. The Clean Comfort class Gulfmark Offshore vessel will be supporting the programme of the Ocean Nomad and will be commencing the charter in the middle of February. The North Promise is equipped with a deck area of around 1,000 square metres and accommodation for up to 26 personnel.

KL Brofjord Goes to ConocoPhillips ConocoPhillips has chartered the large PSV for pool support for five months firm plus three further one month options. The STX 06 CD designed vessel is expected to commence the charter in March or April this year. It is understood the vessel was fixed at a dayrate of GBP 16,000. The KL Brofjord has a deck area of around 1,100 square metres and a deadweight of 5,166 MT.

Durga Devi Fixed to RWE for 3 Wells In an extension of it existing contract, the medium sized PSV Durga Devi has been chartered by RWE to provide coverage for three wells firm plus two additional optional wells to support the Ensco 70. The UT-755 LN designed vessel is equipped with DP2, a deck area of around 708 square metres and total accommodation for 22. Meanwhile, Chellsea’s other vessel Ma Devi is currently working on the North Sea spot market where she is carrying out in house work until early February when she is expected to be free in Aberdeen.

BP Norway Takes Saeborg for 5 Years The Skansi Offshore vessel has been fixed by BP Norway on a five year charter with five additional one year options. The Saeborg is a Havyard 832 L designed vessel with DP, Standby, NOFO 2009 and a deck area of 901 square metres. The vessel is expected to commence the charter in the first quarter of 2013 and will be expected to carry out supply, standby and NOFO duties. ŠCopyright Braemar Seascope Offshore 2013

Corporate

Deep Sea Supply & BTG JV in Brazil

Deep Sea Supply (DESS) and BTG Pactual Oil & Gas have announced a joint venture for the ownership and operation of PSVs and AHTS vessels in Brazil. The 50/50 joint venture will initially own and operate 15 vessels and will also acquire six large PSVs currently under construction with Sinopacific Shipbuilding Group. DESS will transfer 9 AHTS and 5 PSVs to the joint venture in exchange the joint venture will make a cash payment equal to the equity value of the vessels and will take over the current financing.

Fincantieri STX OSV Acquisition Complete Fincantieri has announced that it has successfully completed the acquisition of 0.7 of STX OSV from STX Europe for a total of around EUR 455 million. The deal will see Fincantieri double in size to become the fifth largest shipbuilder worldwide. STX OSV has ten shipyards around the world which include five in Norway, two in Romania, one in Vietnam and two in Brazil one of which is currently under construction.

30-day Extension for Nexen CNOOC Deal Nexen has announced that there will be a 30-day extension of the arrangement agreement outside date for the deal with CNOOC. In connection with the extension, Nexen also announced that it will postpone the release of its 2012 fourth quarter and annual operating and financial results. Completion of the deal remains subject to approvals from the United States.

Talisman Energy (UK) has officially changed its name to Talisman Sinopec Energy UK Limited following Sinopec’s purchase of 49% of the shares in a USD 1.5 billion transaction.

Sinopec will now fund 49% of the UK capital programme which the company hopes will increase overall investment in the assets and lead to improved operational performance and a stronger UK North Sea business. ŠCopyright Braemar Seascope Offshore 2013

New Norway Awards

Image courtesy of Ocean Rig

North Sea Rig activity levels are continuing to remain strong and there are further units expected to be active in the region throughout the year. Four additional rigs are expected to commence work on the Norwegian continental shelf this year and at least one additional rig on the UK side.

Prosafe has been awarded a contract extension from BG for the accommodation rig Safe Bristolia. The unit will be supporting the Everest platform in the UK North Sea for two firm periods in 2014 and 2015 for 197 days from April each year.

Hess has signed a letter of intent with Awilco Drilling that will see the semisub-

mersible WilHunter fixed for an additional 550 to 950 days on top of its existing contract of 400 days. In addition the new USD 212 million deal will include options for a further 275 days.

The rig will be carrying out well abandonment work in the central North Sea. Meanwhile, Providence Resources has confirmed significant potential oil in the Rathlin Basin off Northern Ireland. Potential surface well locations are currently being evaluated for a 2014 drilling programme. In the same region, the semisubmersible Eirik Raude which will be carrying out drilling for ExxonMobil off Ireland has secured a four-well contract in West Africa for African Petroleum from the second half of 2013.

The Norwegian Ministry of Petroleum and Energy has awarded 51 new production licences to 40 companies. The new licences include 34 in the North Sea, 14 in the Norwegian Sea and three in the Barents Sea. In total 23 operatorships have been awarded including seven for Statoil and four for Norske Shell and a further four for Total E&P Norge. A full map of the awards can be found by clicking here.

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 10

18

24

16

34

36

2 7

7

5

5

1

41

2

3

45

2

4

88

North Sea Giant Charter Free Mid Feb to 11th March & May

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 $140 $120 $100 $80 $60 $40

$20 $0

Price

2005 2005--2013

Standby/ERRV

Atlantic Offshore Gets 5-10 Year Deal

Atlantic Offshore has been awarded a second five to ten year contract by Shell UK for the provision of a newbuilding Class A ERRV with a tanker assist facility (65 tonne bollard pull). The Havyard 820 designed vessel (LOA 66.80 metres and two daughter craft) will support a converted FPSO, which is being leased from SBM, on the Fram field in the UK Central North Sea from 2014. A shipyard is yet to be nominated. As previously announced, Atlantic are building a sister vessel at the Zamakona shipyard in Spain for support of Shell's Anasuria FPSO which is also located in the UK Central North Sea.

BP Tendering for Multiple Standby Vessels BP is tendering for multiple vessels to support most or all of their platforms and rigs that are not covered by Project Jigsaw. It is understood the contract duration is 3 to 5 years and could comprise up to 6 or 8 vessels for support of installations in the UK Central North Sea and Northern North Sea as well as West of Shetland which are currently supported by vessels operated by North Star and Vroon.

Hess & Enquest Seeking Vessels Several other long term requirements have recently been circulated including Hess for a vessel for 180-950 days plus options from April in support of the Wilhunter. The rig is currently under contract to Suncor being supported by the VOS Sentinel. In addition, Enquest is also tendering for a vessel for 3 to 5 years plus options from July to support their Central North Sea operations.

South North Sea Standby Activity In the South North Sea, RWE has chartered the VOS Trapper to support a 60-90 day well with the Ensco 92 from March. RWE currently have the VOS Siren and VOS Tiree on long term charter in the Southern basin. E.ON has fixed the VOS Searcher to support a minimum two well (circa 180 days total) drilling programme with the Maersk Resolve that commences around mid February and the Grampian Dee is due to commence a one well (circa 90 days) contract imminently in support of the Noble Ronald Hoope on GDF's Juliet field. ŠCopyright Braemar Seascope Offshore 2013

Subsea

Rem Orders Subsea Vessel from Kleven

Rem Offshore has ordered a subsea construction vessel from Kleven in a deal worth around NOK 580 million. The MT6022 L designed vessel will have a length of around 117 metres and a width of 22 metres and is expected to be delivered in the second quarter of 2014. Rem already has one MT 6022 designed vessel in its fleet Rem Forza.

The 2008-built vessel has a 250t crane, deck area of 1120 square metres, moonpool and hangars for two work and two observation rovs.

Subsea Company Harkand Launched A new subsea company has launched with the aim of growing into a USD 1 billion turnover business in the next five years. Harkand will be focussed on underwater inspection repair and maintenance. This follows investment

by Oaktree Capital Management in Iremis, Integrated Subsea Services (ISS) and their sister company Andrews Survey last year. The three names have merged to form one group. The group has 23 ROVs and the DSVs Harkand Atlantis and Harkand Da Vinci.

Seven Viking Naming Ahead of Term Role The newbuild inspection repair and maintenance vessel Seven Viking was to be named in Stavanger at the end of January before being delivered to commence term work for Statoil. The SX-148 X-Bow designed vessel has a moonpool, accommodation for 90 personnel and is capable of carrying out light diving support services in addition to IRM work. The vessel also has Clean Design and a Green Passport.

Seven Borealis Secures Pemex Work Subsea 7 has been awarded a USD 140 million contract with Pemex for work offshore Mexico via its joint venture in the country. The deal will see the pipelay/heavy lift vessel Seven Borealis installing 16km of pipe in the third quarter of 2013. The contract also covers engineering and fabrication as well as the installation of two slug catchers and two cantilever structures in addition to the pipe at the Line 60 Project in the Bay of Campeche. ŠCopyright Braemar Seascope Offshore 2013

Renewables

Up To GBP20M for UK Wave & Tide Projects

The Crown Estate has announced it is looking to invest in wave and tidal energy array projects in the UK to encourage growth of the emerging industry. According to the Crown Estate there is potential for tens of gigawatts of wave and tidal projects around the UK and they are considering investing up to GBP 20 million in two wave and/or tidal stream projects. The deadline for responses is February 15th.

Aeolus to Install 43 Turbines at Luchterduinen Van Oord is expected to utilise the wind turbine installation vessel Aeolus to install 43 turbines at Luchterduinen after being awarded a contract by EnecoMitsubishi Corporation. The construction will commence in July 2013 and is due for completion by the summer of 2015. The EPC deal covers monopiles, electrical infrastructure, offshore transformer station and installation of the turbines.

Havila Phoenix at Humber Gateway The DP2 subsea support vessel Havila Phoenix has been carrying out cable trenching and burial trials including ROV survey operations 10 miles from Spurn Head on the Yorkshire coastline. The trial operations include mechanical cutting and jetting by tracked vehicle via umbilical feed. The vessel may also be used to carry out remedial work to an existing Met-Mast in the area too. The workscope was expected to keep the vessel busy until around the beginning of February.

20 Windfarm Vessels Needed by 2020 This year will see the start of large expansion in the windfarm construction market with at least 20 further installation vessels required by 2020 according to a recent presentation by DNV. The company sees an average growth of annual installation of 28% from 1GW in 2011 to 6.9GW in 2020. DNV regional manager for India and the Middle East Jorgen Traun sees the growth in vessel orders doubling every two years. ŠCopyright Braemar Seascope Offshore 2013

Sale & Purchase

Energy Girl Sold for Circa USD 6 Million

The 1985-built UT-705 designed PSV Energy Girl has been sold to Hind Offshore. The vessel, which had been operating in the North Sea, has sailed for India where she will undertake a contract with ONGC. It is understood that the sale price was around USD 6 million. The vessel, formerly Aries Girl, has a deck area of around 855 square metres and accommodation for 26 personnel.

GC Rieber Sells Polar Explorer GC Rieber Shipping has announced it has agreed to sell the 2D seismic vessel the Polar Explorer. According to the company the vessel has been sold at book value and the transaction will have a positive cash effect of approximately NOK 45 million. The vessel, which was previously Geo Explorer, was originally acquired by GC Rieber Shipping in June 2008. The vessel will soon conclude a 12-month charter with Dolphin Geophysical.

Tidewater Acquires Three PSVs STX has struck a deal with Tidewater that will see the latter acquire three PSVs currently under construction. The agreement with STX Pan Ocean covers three STX OSV PSV 09 designed PSVs which are expected to be delivered in the first quarter of 2013 and the second and third quarters of 2013. The Romanian-built hulls are from STX OSV Tulcea in Romania, two of the vessels will be delivered from STX OSV Soviknes with the third being delivered from STX OSV Aukra in Norway.

Vroon Orders Pair of PX-121 PSVs Vroon Offshore Services has ordered a pair of newbuild vessels from Cosco Guangdon Shipyard in China. The PX-121 designed vessels will be delivered in early 2015 and are intended for operation in European waters by Vroon in Den Helder. The vessels will have an LOA of 83.4m, deadweight of 4,200t, ABS Green Passport and a cargo deck area of 850 square metres. Cosco is also currently constructing four livestock carriers at the same shipyard. ŠCopyright Braemar Seascope Offshore 2013

AHTS Dayrates

Average North Sea Spot AHTS Rates 2011/12/13

£90,000 £80,000

Average Spot Dayrate

£70,000 £60,000 £50,000

£40,000 £30,000

£20,000 £10,000 £0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Large - AHTS (16,000+ BHP) 2011

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

Large - AHTS (16,000+ BHP) 2012

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

Large - AHTS (16,000+ BHP) 2013

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

PSV Dayrates

Dec

Average North Sea Spot PSV Rates 2011/12/13

£25,000

Average Spot Dayrate

£20,000

£15,000

£10,000

£5,000

£0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

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

Large PSVs (700m2+ Clear Deck) 2013

Medium PSVs (500-700m2 Clear Deck) 2013

Nov

Dec

£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

Jan-04

£0

Large - AHTS (16,000+ BHP)

Large PSVs (700m2+ Clear Deck)

PSV Dayrates

Medium PSVs (500-700m2 Clear Deck) Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Jan-08

Oct-07

Jul-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

Oct-05

Jul-05

Apr-05

Jan-05

Oct-04

Jul-04

Apr-04

AHTS Dayrates Average North Sea Spot AHTS Rates 2004 2004--2013

£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--2013

£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 Braemar Shipping Services PLC, a leading integrated provider of brokering and consultancy services to the shipping industry.

Our services include: Spot and period chartering

At Braemar Seascope Offshore our aim is to provide cost effective solutions to our clients' offshore programmes.

Newbuild and second hand sale & purchase

Regular advances in technology mean our work is a direct response to constantly changing market needs.

From offices in London, Aberdeen and Singapore we specialise in the worldwide offshore market.

Short sea and ocean towage

Bespoke research and reports Corporate mergers, acquisitions & fleet sales Valuation services

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