NSRV4

BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE June 2011

ISSUE: 48

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS

Picture: F.D. Honorable courtesy of Gulf Offshore ©Braemar Seascope Offshore

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How are we doing?

Welcome to the latest edition of the new look Braemar Seascope Offshore North Sea Vessel Report. This month has seen a surge in activity in the market with increase in the demand for PSVs and AHTS vessels and an associated rise in dayrates. The debate over the North Sea tax rise continues as the Government offers a sweetener in what has been welcomed by the industry as a constructive move.

Meanwhile, Providence Oil has recently completed seismic work offshore Ireland and looks set to drill using the GSF Arctic III rig in September. Norway has undertaken seismic work on the Barents Sea area freshly delineated with Russia (see Rigs page for further details). Fur-

ther afield Cairn is continuing its drilling offshore Greenland taking the occasional spot vessel to assist and the Ocean Guardian has had another well option declared for work off the Falkland Islands. There are interesting times ahead as the global activity level shows indications of building up again although in the short-term we can expect a seasonal dip in the North Sea after the summer.

We hope you enjoy this month’s report and look forward to hearing your feedback, comments and suggestions that will help to improve the experience of all of our readers further.

Sean Bate Market Analysis Manager

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Market Commentary June is the month in which the North Sea traditionally sees a flurry of fixing activity across the board as the clement weather sees the rig programme hot up and vessel demand increase. June 2011 was no exception with the market pushed to the highest levels so far this year as vessel activity soared leaving the market close to being sold-out on a number of occasions.

There have also been a series of interesting fixtures outside of the usual workscopes with the Toisa Valiant being fixed to carry out air diving support work West of Shetland for KD Marine. The large AHTS Rem Gambler has also been taken on by Saipem for 100 days and it is understood the vessels could be supporting Sakhalin work.

The arrival of new rigs to the region including Awilco’s pair; WilPhoenix and WilHunter has seen the demand for AHTS vessels shift up a gear with rates for AHTS vessels peaking at around the GBP 75,000 level. The Energy Enhancer which is currently carrying out three wells for Perenco has also taken on vessels including the Highland Champion and the VOS Warrior which will be with the rig for the duration of its around 100-day charter.

Statoil closed in on the market and fixed a number of vessels on long-term charters including taking on the VS -493 pair Viking Avant and Viking Lady for up to eight years and up to four years respectively. In addition, Statoil took on the Siem Sailor for two years. All of the fixtures were reportedly in the GBP 16,000 to GBP 18,000 range.

Once again this month has seen additional departures for Petrobras work. The Far Scotia is the latest vessel due to leave the North Sea to take up work in Brazil.

The vessel, which has been mobbed up with additional accommodation for a number of months, is expected to go into the yard prior to heading over to South America.

The ER Arendal has already departed for the region.

The last few weeks have seen rates across both the AHTS and PSV fleet pick up as demand increased. However, comparing the figures to last year we can see the peaks were some way off the rates paid 12-months ago.

The cyclical nature of the North Sea spot market seems to suggest a dip in rates could be ahead as demand for vessels falls away from the usual annual peak in June.

Spot Market

BELOW: Toisa Valiant recently fixed for air dive support work West of Shetland.

ŠCopyright Braemar Seascope Offshore 2011

New Arrivals

T

his month has seen a series of additional orders for potential North Sea tonnage as well as some completed vessels newly delivered and arriving on the North Sea to commence work.

In the latter category we can include the Fairplay 33 AHT which is now on its way to Europe and is due to join the North Sea spot market after undergoing a bollard pull test. In addition, there is K Line Offshore’s newest vessel, the KL Barentsfjord. This large PSV has been Christened in Norway and will be serving on the North Sea Spot market for around a month before commencing its long-term charter with ConocoPhillips. This is the last in the series of four sister ships ordered by KLine which includes the Brevikfjord, Brisfjord and the Brofjord.

The medium PSV F. D. Honorable is also on its way to the North Sea spot market. The UT-755 L vessel (pictured below), is travelling from Rosetti Marino in Italy with an expected arrival date of the second week of July. The vessel is currently charter free, while its sister vessel the F.D. Indomitable is continuing a term charter with Taqa.

The latest orders to be placed with the shipyards include a deal struck by John Fredrikson’s company Seatankers for four newbuild PSVs. The two firm order plus two optional Ultstein PX105 CD vessels will be expected to begin delivery in 2012 with the new arrivals expected to join Deep Sea Supply’s fleet which is controlled by Fredrikson. Meanwhile, Statoil has already signed a five year deal for a Havila 833 L vessel that is still around 18 months away from completion.

SPEC BOX F. D. Honorable Design: Built: BHP: Max Deck: DP: Fuel Oil: Drill Water: Pot Water: Mud/Brine:

UT 755 L Rosetti Marino 2011 7,842 716 square metres 2 925m³ 1,217m³ (approx.)

856m³ (approx.)

10 dual purpose tanks

F.D. Honorable

Arrivals & Departures

AHTS Arrivals on North Sea Spot Market ASSO 24 (DPI)

2001 / UT 728 / 158t

Previous: Libya

KL SANDEFJORD (DPII)

2011 / AKER AH 12 CD / 390t

Previous: MOD

NORMAND RANGER (DPII)

2010 / VS 490 / 287t

MAERSK LIFTER (DPII)

2009 / Own / 250t

Previous: Technip En-Route

AHTS Departures MAERSK ASSISTER (DPII) REM GAMBLER (DPII)

2000 / Own / 271t 2010 / AKER AH12 CD / 344t

Charterer: CTC Charterer: Saipem

PSV Arrivals on North Sea Spot Market HIGHLAND TRADER REM FORTUNE (DPII) REM PROVIDER (DPII) SBS CIRRUS (DPI) BOA FORTUNE EDDA FRIGG (DPII) TOISA CORAL (DPII)

1996 / UT 755 / 621 m2 2010 / MT 6012 / 1100 m2 2008 / UT 755 LC / 688 m2 1985 / UT 705 / 864 m2 1992 / UT 706 / 615 m2 1997 / SK60/09 / 905 m2 1999 / AP 416 / 675 m2

Previous: Peterson SBS Previous: MLS Previous: Bourbon - Black Sea Previous: Allseas Previous: Allseas Previous: Allseas Previous: Hereema

2010 / UT 755 LN / 681 m2 2002 / UP 103 / 765 m2 2009 / UT 755 LN / 680 m2 2009 / UT 755 LC / 690 m2 2006 / VS 470 mk II / 700 m2 1979 / UT 705 / 825 m2 2001 / UT 755 / 486 m2

Charterer: SPD Charterer: Fugro Charterer: BG Charterer: BP UK Charterer: Petrobras Charterer: Senergy Charterer Petrobras

PSV Departures REM SUPPLIER (DPII) NORMAND MERMAID (DPII) ER NARVIK (DP II) ASSO 30 (DPI) ER ARENDAL HIGHLAND CHAMPION FAR SCOTIA (DPII)

Chartering

Long-Term Requirements

Only three medium and long-term requirements remain outstanding on the North Sea market: 1 x PSV / BG / 6 months firm / comm. Late July 1 x PSV or AHTS / MLS / 2 wells + 2 well opts / Aug-Sept 1-2 PSVs / Nexen / 3 yrs or 18 mths + opt / comm. June-Oct

FD Honorable Heads to North Sea The newbuild medium PSV FD Honorable has left Rosetti Marino in Italy and is en-route to the North Sea. The vessel, which is a sister ship to the FD Indomitable, is currently expected to arrive in Aberdeen on July 9th where it will join the North Sea spot market. The sister vessel FD Indomitable is currently on term charter with Taqa. The UT755 L designed vessels are equipped with DP2 and a deck area of around 716 square metres.

Far Scotia to Leave North Sea for Brazil The medium PSV Far Scotia is expected to leave the North Sea spot market for the yard by around the middle of July.

The UT-755 designed vessel will undergo work until around the end of that month before heading off to Brazil to commence a 5 year plus 5 year option contract with Petrobras. The contract which was awarded last October was achieved in cooperation with Fugro Brazil who will be the ROV service provider. The Petrobras fixture is at a dayrate of around USD 31,500.

Saipem Takes on Trio Saipem has fixed the Rem Gambler, Normand Oceanic and the Energy Girl for six months, 100 days and 60 days respectively. The Rem Gambler will be carrying out trenching work at the Sakhalin development while the other vessels will be in a pipelay support role. The Rem Gambler is a large AH-12 designed AHTS vessel equipped with DP2, helideck, 250t offshore crane and a bollard pull of around 344t. The vessel is expected to rejoin the North Sea spot market in December. ŠCopyright Braemar Seascope Offshore 2011

Chartering

Three Vessels for Statoil

Statoil has taken on a trio of platform supply vessels for term work. The large PSVs Viking Lady and Siem Sailor have been fixed for two years firm plus additional options.

In addition, the VS-493 designed Viking Avant has been extended for five years firm plus options. The Viking Avant is equipped with a deck area of around 1010 metres squared. The rates are understood to be between NOK 140,000 and NOK 160,000.

Saeborg goes to Det Norske for 4 Wells Supply Service PF’s newbuild Havyard 832 L designed PSV has been fixed to Det Norske on a long term contract for 4 wells firm. The vessel is expected to be supporting the Maersk Guardian rig for between 200-300 days. The vessel, which will be named Saeborg on delivery in September, will be equipped with a deck area of around 901 square metres, DP2 and standby.

Asso 30 Fixed to BP UK The medium PSV Asso 30 has been chartered by BP UK for between 60 and 90 days. BP currently has a busy summer schedule in the UK North Sea with a lot of active work around the West of Shetland with the Schiehallion FPSO. The AHTS vessels Maersk Lancer, Maersk Laser and Maersk Traveller are currently supporting the unit. The Asso 30 is expected to be used for general pool support and could be used to assist operations.

Perenco Secures Highland Champion Perenco has fixed the large PSV Highland Champion to support work being carried out by the jack-up Energy Enhancer. The rig was originally chartered to carry out two well abandonments on the Welland Field in the Southern North Sea and has since been extended for a work programme of circa four months at a dayrate of around GBP 12,500. The Highland Champion is a UT-705 designed vessel with a deck area of around 825 square metres. ŠCopyright Braemar Seascope Offshore 2011

Newbuild

Fairplay 33 Heading to North Sea

Fairplay’s newbuild ocean going twin screw AHT vessel is on its way to North Europe. The vessel is expected to perform a bollard pull test in Norway on July 12th before heading to Bremerhaven to complete minor work. The vessel which is expected to have a bollard pull of around 105t and a speed of around 16 knots is then expected to be available on the North Sea sport market. Further details of the vessel can be found here.

KL Barentsfjord to Join the Market K Line Offshore’s latest newbuild large PSV is set to join the North Sea spot market following its Christening in Norway. The KL Barentsfjord is the last in a series of four sister vessels: including the Brevikfjord, Brisfjord and Brofjord. The PSV 06 CD designed vessel will be in Aberdeen for a CMID in early July and is expected to be available on the spot market for around a month before commencing a long-term charter with ConocoPhillips.

Deep Sea Supply Could be Set for 4 PSVs It is understood John Fredriksen’s company Seatankers has struck a deal for four newbuild PSVs under construction at the Sinpacific Shipbuilding Group in China. The USD 456 order, for two Ulstein PX105 CD vessels plus two further options, is expected to see delivery of the first vessels in 2012. Upon completion the market expects the vessels to join the Deep Sea Supply fleet, which is controlled by Fredriksen.

Statoil Charters Havyard 833 L for 5 Years Havila Shipping has secured a contract with Statoil for a newbuild PSV. The Havyard 833 L that is under construction in Leirvik has been chartered for a five-year firm period plus a further optional three years. The vessel is due to be delivered in December 2012 and has a price tag of around NOK 360 million. This is the seventh long-term charter between Statoil and Havila. The Havyard 833 L currently known as hull number 107 will have a deck area of 1100 square metres on delivery. ©Copyright Braemar Seascope Offshore 2011

Barents Seismic Starts

The newbuild rig Rowan Viking (pictured top right) has left Dundee to commence its maiden charter with Total. The Toisa Daring and Sea Lynx were fixed to move the rig to the Elgin field in the central North Sea. The Rowan Viking is fixed to Total until around January 2013.

The Maersk Resolve rig has been contracted for work in the Danish sector.

The jack-up is expected to be active with Noreco and Dong and will carry out work on one well for each of the contractors. The rig has been working for Maersk Drilling in the region.

Meanwhile, COSL Drilling Europe is understood to be close to securing a fiveyear charter with Statoil for the newbuild semi-submersible COSL Pioneer (pictured above). The rig is understood to have been awarded an acknowledgement of compliance from the Norwegian Petroleum Safety Authority. It is expected that the COSL Pioneer will undertake exploration work offshore Norway.

In the UK, a deal has been struck between seven separate companies over share-swapping that will see Encore, Nautical Petroleum and Serica Energy take a stake in Licence p218 which is currently operated by DEO, Maersk, Atlantic Petroleum and Faroe Petroleum. As part of the deal a 30% stake of Licence P1655 will be exchanged. Further details can be found here.

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The Norwegian Petroleum Directorate has announced that seismic work will start on the eastern part of the Barents Sea. The Harrier Explorer is now on its way to Jan Mayen to start seismic acquisition there. The vessel will be on charter for three months with a one-month option. This activity follows on from the recent treaty between Russia and Norway on the maritime border.

Rig Chart Rig Activity by Type and Country Denmark Norway UK/Irl Greenland Netherlands

Drillship Jackup Semi-Sub Total

Oil $140

1

1

1

6

14

5

21

15

1

28

30

7

Stacked without future contract

Stacked with future contract Total 3

7

7

Price

3

4

39

2

1

40

5

5

82

2005 2005--2011

$120 $100 $80 $60 $40

May-11

Jan-11

Mar-11

Nov-10

Jul-10

Sep-10

May-10

Jan-10

Mar-10

Nov-09

Jul-09

Sep-09

May-09

Jan-09

Mar-09

Nov-08

Jul-08

Sep-08

May-08

Jan-08

Mar-08

Nov-07

Jul-07

Sep-07

May-07

Jan-07

Mar-07

Nov-06

Jul-06

Sep-06

May-06

Jan-06

Mar-06

Nov-05

Jul-05

Sep-05

May-05

Jan-05

$0

Mar-05

$20

Standby/ERRV

VOS Vigilant Delivered

Vroon recently took delivery of the 60 metre VOS Vigilant, equipped with twin daughter craft, from the Zamakona shipyard in Spain. The final MRV vessel in the original series of 15, VOS Valiant, is scheduled to be delivered in October.

Vroon has recently announced another newbuilding programme at the Nanjing East Star shipyard in China to continue their strategy of fleet replacement. Six standard units have been ordered with delivery from the first quarter of 2013.

Putford Achiever & Vos Warrior for Perenco The conversion of the 2004-built Putford Achiever (ex Seacor Achiever) in Sunderland is scheduled to be completed by the middle of July. The vessel has been fixed by Perenco from late July for approximately four months to support the accommodation rig Seafox I in the South North Sea. Perenco has also chartered the VOS Warrior from late June to support a circa four month programme with the Energy Enhancer.

Esvagt Orders Further Vessels Esvagt has ordered a further two C Class (45 metre) newbuildings from the ASL Marine shipyard in Singapore with delivery in the first half of 2013. Esvagt has built 10 similar units at the yard between 2004 and 2010. On the chartering front, Esvagt fixed two multi-role vessels, the Esvagt Dee and the Esvagt Don to Talisman Norway on the Varg/ Ula/Gyda fields for 3 to 5 years from July. The Esvagt Connector will forerun for the Esvagt Don until November as the latter is currently on charter to Carin in Greenland.

One Deal & One Requirement for Nexen Vroon has been awarded an 18-month contract by Nexen to provide a standard vessel for the drilling programme with the Transocean Prospect rig from mid June in the Central North Sea. Nexen are also currently outstanding for a vessel to support the Buzzard field for three to five years from October. Meanwhile, Ithaca Energy has fixed the Ocean Sprite for three years plus options from October to support the FPSO BW Carmen on the Athena field in the Central North Sea. ŠCopyright Braemar Seascope Offshore 2011

Subsea

CGG Veritas Secures Bourbon Charter

CGG Veritas has announced that it has signed a five year charter with Bourbon for six new support vessels to assist its seismic operations. The new vessels will be delivered starting at the end of 2012. The chartered vessels will support CGG Veritas Seismic vessels during their survey operations around the world providing refuelling, crew changes, food and equipment delivery as well as providing additional storage.

Ullswater DSV Fixed for Pipeline Work

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Hallin Marine has been awarded a contract to carry out an urgent pipeline repair job in Angola. The diving support vessel Ullswater will be utilised to support the fixing of a 20-inch water injection pipeline offshore Malongo, Angola. The Ullswater is a 78m DSV equipped with a 15-man saturation diving system, DP2 and accommodation for up to 120 personnel. The vessel is currently positioned in West Africa to target workscopes in the region.

Saipem Secures North Sea Contracts Saipem has been awarded a series of contracts in the Norwegian and British sectors of the North Sea. The Saipem 7000 and the Castoro 7 vessels are expected to be deployed for platform transportation and installation and pipeline work. Some of the contracts include engineering, procurement, installation and construction. The vessels are expected to be deployed for the work during the summers of 2012 and 2013.

Technip Awarded East Rochelle Work Technip has secured a lump sum EUR 70 million contract for work on the East Rochelle development around 185 km North-east of Aberdeen. The contract includes project management and pre-commissioning of 30 km of pipe-inpipe flexible risers, umbilicals, valves and manifolds. It also covers tie-in spools, trenching, backfill and rockdumping work. The offshore installation work is expected to be carried out in the second half of 2012 using vessels from the Technip fleet. ŠCopyright Braemar Seascope Offshore 2011

Renewables

E.On charters MPI Discovery for 6 years

E.On Climate and Renewables and MPI-Vroon have signed a six-year charter for the MPI Discovery. The offshore jack -up windfarm installation and construction vessel is equipped with six legs and can operate in water depths of around 40 metres. The cranes can lift 1,000 tonnes and there is on board accommodation for 112. E.On is constructing the London Array wind farm using another MPI vessel the MPI Adventure.

A2SEA Signs Deal with Teekay A2SEA has announced a memorandum of understanding for a cooperation agreement with Teekay Corporation to design, deliver and operate floating transportation and installation vessels for the offshore renewables sector.

The firms plan to have a vessel that can carry preassembled windfarm foundation out to sites by 2014.

Teekay will own and operate the vessel with A2SEA providing management and operational expertise.

European Supporter Enters Service P&O Maritime Services has announced the arrival of its multipurpose DP2 cable installation vessel the European Supporter (ex Oceanic Viking) in the UK. The vessel has undergone extensive conversion work to prepare it for the inter-array cabling market. The 106m vessel will be able to carry 5,000 tonnes of power cable, a work class ROV and up to 60 personnel. P&O plans to offer turnkey cable installation, burial, maintenance and inspection services.

Oleg Strashnov at Sheringham Shoal The monohull heavy lift vessel is currently working on the Sheringham Shoal offshore wind farm. The vessel is installing monopole and transition pieces and will be making a number of consecutive trips to the wind farm construction zone during the installation period. The Oleg Strashnov will be kept steady during installation activities by eight anchors deployed by two anchor handling tugs at the site. ŠCopyright Braemar Seascope Offshore 2011

AHTS Dayrates

Average North Sea Spot AHTS Rates Feb/Mar/Apr/May/Jun 2011

Average Daily North Sea Spot Rig Move Dayrates Since February 2011 £80,000 £70,000 £60,000 £50,000

SPECS BOX

£40,000 £30,000 £20,000 £10,000 £0

PSV Dayrates

Average North Sea Spot PSV Rates Feb/Mar/Apr/May/June 2011

Average Daily North Sea Spot Cargo Run Dayrates Since February 2011 £35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

£0

AHTS Dayrates

Average North Sea Spot AHTS Rates 2010/11

£60,000

£50,000

SPECS BOX

Large - AHTS (16,000+ BHP) 2010

£40,000

Medium - AHTS (12-15,999 BHP) 2010

£30,000

Large - AHTS (16,000+ BHP) 2011

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

£20,000

£10,000

£0 January February

March

April

May

June

July

August September October NovemberDecember

PSV Dayrates

Average North Sea Spot PSV Rates 2010/11

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

£0

Large PSVs (700m2+ Clear Deck) 2010 Medium PSVs (500-700m2 Clear Deck) 2010

Large PSVs (700m2+ Clear Deck) 2011 Medium PSVs (500-700m2 Clear Deck) 2011

£0

Jan-04

Large PSVs (700m2+ Clear Deck)

Medium PSVs (500-700m2 Clear Deck)

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

Nov-09

Sep-09

Jul-09

May-09

Mar-09

Jan-09

Nov-08

Sep-08

Jul-08

May-08

PSV Dayrates

Mar-08

Large - AHTS (16,000+ BHP) May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

Nov-09

Sep-09

Jul-09

May-09

Mar-09

Jan-09

Nov-08

Sep-08

Jul-08

May-08

Mar-08

Jan-08

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Sep-05

Jul-05

May-05

Mar-05

Jan-05

Nov-04

Sep-04

Jul-04

May-04

£60,000

Jan-08

Jan-04

Mar-04

£80,000

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Sep-05

Jul-05

May-05

Mar-05

Jan-05

Nov-04

Sep-04

Jul-04

May-04

£0

Mar-04

AHTS Dayrates Average North Sea Spot AHTS Rates 2004 2004--2011

£140,000

£120,000

£100,000

SPECS BOX

£40,000

£20,000

Medium - AHTS (12-15,999 BHP)

Average North Sea Spot PSV Rates 2004 2004--2011

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

The Renewables Vessels Newsletter

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Sean Bate Market Analysis Manager 25 Carden Place Aberdeen AB10 1UQ UK Phone: +44 (0)1224 628470 Fax: +44 (0)1224 621444 E-mail: research @seascope.co.uk

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