NSVR5

BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE July/August 2011

ISSUE: 49

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS

Picture: Viking Magne ©Braemar Seascope Offshore

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Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. The previous few weeks has seen intense market conditions as difficult weather offshore has delayed rig moves during a period when the rig move calendar was fairly hectic. High demand for anchor handling vessels and platform supply vessels has seen both the markets close to being sold out at various times.

Meanwhile, numerous vessels are leaving the North Sea to take up term work overseas with a clutch of boats heading to Brazil and a pair due to go to Australia shortly. Cairn's work in Greenland is also putting demand on North Sea tonnage and boats are being chartered to

carry out long-distance cargo runs. Cairn is currently working on the third of four wells planned in this campaign despite no reservoir sands being found so far.

The International Energy Agency is also suggesting that world oil demand growth will accelerate next year. This could put pressure on prices and see increased offshore drilling.

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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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 Weather conditions offshore conspired to see rig moves delayed at the peak of demand on AHTS vessels and tugs. With the market on the verge of being sold out each day in the last few weeks of the month. High demand and tight availability pushed rates up to peaks of around GBP 55,000 for AHTS vessels while cargo runs were routinely being carried out at the GBP 20,000 to 22,500 level.

Following a flurry of rig moves in July, activity in August looks set to be quieter with a handful of rig moves on the radar once the current work is completed. Availability across the PSV fleet also looks set to increase as vessels that have been carrying out term work return to the spot market.

August will also see the arrival of a newbuild AHTS vessel on to the spot market. The VS-4622 CD designed Magne Viking is currently charter free and will be available from the first week of August. This will be joined by the PSVs Troms Capella and the Stril Orion which are due in late August and the middle of October respectively. Further details on the following page.

There are also a number of expected changes to the available North Sea spot vessels in the coming weeks with the trio of Maersk L-Class AHTS vessels, that have been carrying out work with BP Norway’s Skarv FPSO, expected to return to the market in the middle of August. They will also be joined by the AHTS Normand Skarven and the PSV Normand Baltic which will be returning from term work in Argentina. A further series of large PSVs are also expected back from work with Allseas in the middle of August. This will include the Maersk Fetcher and Feeder as well as the Toisa Intrepid, Independent and Sonata.

Further vessels are to depart the North Sea spot market for term work in Brazil. The Olympic Elena has sailed for South America along with the AHTS Normand Master and Normand Mariner and the PSV ER Arendal. The medium PSV Olympic Promoter is expected to head off in the next week.

As vessel departures for overseas term work peak and an increasing number of term vessels are expected to return to the spot market in the coming weeks we can expect the recent over-heated market conditions to cool somewhat in the coming month.

Spot Market

BELOW: Normand Baltic heading back to the North Sea following term work for Repsol YPF in Argentina.

New Arrivals

N

ew tonnage set to join the North Sea spot market in the coming weeks includes a large AHTS and a pair of large PSVs. Meanwhile orders for future vessels seem to be concentrated on Brazilian yards. Farstad has further strengthened its Brazilian involvement by buying out 50% of its Brazilian joint venture held by Petroserv.

Meanwhile back in the North Sea, the large AHTS vessel Magne Viking is set to arrive on the spot market in the first week of August. The VS4622 CD designed vessel has been under construction at the Zamakona shipyard in Spain and is set to be equipped with a bollard pull of around 210t, a deck area of 750 square metres and DP2. The vessel has already been fixed for a spot job with Statoil for around four days.

In addition, the newbuild large PSV Troms Capella is expected to join the spot market by the end of August.

This vessel will be of STX PSV 09 design and equipped with a deck area of around 1,000 square metres and DP2. The vessel will be charter free upon delivery in Stavanger. Mokster Shipping’s newbuild PSV the Stril Orion is scheduled to be delivered by the middle to end of October. The vessel is currently charter free upon delivery.

Mosvold Supply has cancelled a third vessel under construction at Otto Marine’s yard in Batam, Indonesia.

There is a fourth vessel in the series of AHTS VS491 CD designs which is expected to be delivered from the yard at the end of July.

The standby/PSV Prosper is coming to the North Sea spot market in early August. The UT-704 vessel has a deck area of 495 square metres, is able to carry 419 cubic metres of pot water and has Fifi 1 and 2.

SPEC BOX Magne Viking Design: VS4622 CD Built: Zamakona, Spain BHP: 19050 Max Deck: 750 square metres DP: 2 Bollard Pull: 210t Chain Lockers: 4 Lockers total capacity 663m³ Full Spec Here

Magne Viking

Chartering

Long-Term Requirements

There are four outstanding Long-Term requirements : 1-2 PSVs / Nexen / 3 yrs or 18 mths + opt / comm Aug—Oct 1 x PSV / BP Norway / 1 year + 2 x 6 months opts / comm Aug—Dec 1 x PSV / Halliburton / Well Stim Duties / 3-12 months + opts / Oct 1 x PSV / Exxon Norway / 2 years + 4 x 6 month opts / comm Nov

Medium-Term Requirements There are four outstanding medium-term requirements: 1 x PSV or AHTS / MLS / 2 wells + 2 well opts / Aug-Sept 1 x PSV / Venture / 1 well / comm August 2 x PSV / AGR Falklands / 4 wells / comm Oct 1 x PSV / BP Norway / 3 months + 21 d/opts / Aug-Dec

Normand Mjolne Fixed to BP Norway The 1985-built AHTS Normand Mjolne has secured a three month charter with BP Norway. The UT-718 designed vessel has previously been working on a long-term charter with ConocoPhillips Norway. The vessel has a bollard pull of around 170t, deck area of 589 square metres and accommodation for 42. It is understood the BP Norway charter will likely see the Normand Mjolne occupied until around the end of the year. The vessel was fixed at a dayrate of circa NOK 135,000.

Rem Provider Goes to ADTI ADTI has fixed the medium PSV for a one-well charter expected to have a duration of around 90 days. The UT-755 LC designed Rem Provider will be supporting operations of the Ensco 70 rig in the Southern North Sea. The vessel is currently working on the North Sea spot market and is expected to commence work for ADTI in September until around the end of 2011.

©Copyright Braemar Seascope Offshore 2011

Chartering

Portosalvo Commences Gaz de France Job

The medium PSV Portosalvo has started a four-month charter with Gaz de France. The DP1 equipped vessel will be supporting the Galaxy II rig in the central North Sea on the Faraday well for circa 140 days and is expected to return to the North Sea spot market around the end of November. The Portosalvo is equipped with a deck area of around 688 square metres, Fifi 1 and 10 dual purpose mud and brine tanks.

Maersk N-Class Vessels Head to Australia A pair of N-Class Maersk vessels are expected to leave the North Sea to take up long-term work in Australasia. The Maersk Nexus and the Maersk Nomad will be supporting the Deepwater Frontier drillship for ExxonMobil on a multi-year charter. The large PSVs have a deck area of around 912 square metres, DP2, accommodation for 36, oil recovery and standby for up to 360 survivors.

F.D. Honorable Gets 6-month BG Charter The newbuild medium PSV F.D. Honorable has been chartered by BG for six months plus three one month options.

The medium sized PSV recently arrived in the North Sea after being delivered from the Rosetti Marino shipyard in Italy. The sister vessel FD Indomitable is currently on term charter with Taqa. The UT-755 L designed vessels are equipped with DP2 and a deck area of around 716 square metres. The F.D. Honorable is understood to have been fixed at a dayrate of around GBP 16,500.

Four More Vessels Leave for Brazil A quartet of vessels have left the North Sea spot market to commence long-term charters for Petrobras in Brazil.

The medium PSVs Olympic Elena and ER Arendal have been fixed for four years plus a four-year option at dayrates of USD 26,850 and USD 26,500 respectively. Meanwhile, the AHTS vessels Normand Mariner and Normand Master which have also recently departed for South America on ‘four plus four’ contracts were fixed at a dayrate of around USD 44,500. ©Copyright Braemar Seascope Offshore 2011

Chartering

E.On Ruhrgas Declares Malaviya 20 Option

E.On Ruhrgas has firmed up an option for the UT-755 L designed medium PSV Malaviya Twenty. The vessel, which has been supporting the Ensco 92 rig will now carry on working for the rig for a further well which is likely to see the vessel utilised until around the middle of September.

The Malaviya Twenty is a 2004-built vessel equipped with DP1 and a deck area of around 690 square metres. It is expected to re-join the North Sea spot market at the end of its current term charter.

Rem Fortune Heads to Greenland The large PSV Rem Fortune has been chartered to carry out a cargo run to Greenland for Capricorn. It is understood the fixture will take around 25 days to complete.

The Rem Fortune is an MT-6012 designed vessel equipped with a deck area of around 1,100 square metres and DP2.

The vessel is currently working for Subsea 7 ahead of the Capricorn charter and is expected to return to the spot market around late August.

Maersk Tender Could Head to North Sea The medium AHTS Maersk Tender is expected to return to the North Sea following completion of a term charter with Repsol in Spain. The VS-472 designed vessel is understood to have been fixed for towage work from Sardinia to Norway and then it could join the North Sea spot market. The Maersk Tender has 15,540 BHP, a bollard pull of around 173t continuous and is equipped with a deck area of 600 square metres.

Vidar Viking Fixed to Capricorn The large AHTS Vidar Viking has been fixed for 40 days plus options to carry out work for Capricorn in Greenland.

The MOSS 808 designed vessel will be utilised for ice management duties for the ongoing drilling campaign by the Leiv Erikson semisubmersible and Ocean Rig Corcovado drillship offshore Greenland. Cairn Energy has started work on the third well of a four well campaign in the region. The Vidar Viking is understood to have been fixed on a dayrate of circa USD 55,000. ŠCopyright Braemar Seascope Offshore 2011

Newbuild

Troms Capella Heading for Stavanger

The large PSV Troms Capella has been delivered from the Cochin shipyard in India and is now heading for Norway.

The STX PSV 09 designed vessel will be equipped with a deck area of around 1,000 square metres and DP2. The Troms Capella is expected to join the North Sea spot market from around the middle of August although it is understood the vessel has a potential term charter lined-up for later in the year with an undisclosed charterer.

Maiden Charter for Skandi Skansen The DOF newbuild Skandi Skansen has commenced its first charter since being delivered by the STX Aukra yard in Norway. The vessel is being used for 21 days plus seven daily options providing diverless decommissioning work on the Ivanhoe/Rob Roy development. The Skandi Skansen is DOF’s fourth installer multipurpose anchor handling vessel. The vessel has an LOA of 107.2m, a moonpool and a 250t offshore crane as well as two ROVs.

Magne Viking Gets First Charter The large AHTS vessel Magne Viking is due to be delivered shortly from the Zamakona shipyard in Spain. The VS-4622 CD designed vessel will have DP2, a bollard pull of around 210t and a deck area of 750 square metres. The vessel is expected to arrive on the North Sea spot market in the first week of August and is currently expected to be charter free. The vessel has already secured its maiden charter on a spot job with Statoil.

Edda Fides Accommodation Vessel The Edda Fides accommodation service vessel has been delivered and has commenced its first contract in the North Sea. The unique mono-hull designed vessel, which was built at Astillerios HJ Barreras, Vigo in Spain, has accommodation for up to 600 personnel and can operate in wave heights of up to 5 metres. The vessel is working for Shell in the North Sea until around the middle of October.

ŠCopyright Braemar Seascope Offshore 2011

DECC Nod for Breagh

Source: www.konflikty.pl

The UK Government’s Department of Energy and Climate Change (DECC) has had a busy time recently as a series of North Sea developments seek approval.

RWE had its initial plans for the Breagh field passed (For further details see - far right) and Xcite has submitted plans for the first phase of the Bentley oil field in the Northern North Sea. The publication of Xcite’s field development plan is expected shortly. It is understood that during the second stage of the production the Rowan Norway which is at the site will be replaced by a fixed drilling and accommodation platform.

Meanwhile, Awilco Drilling’s rig WilHunter (pictured above) has secured another slot with MPX. The rig, which is

currently working on Nautical’s Kraken prospect, is expected to commence work for MPX in September.

There are also additional new contracts for Ensco and Diamond Offshore. Ensco now has work for the Ensco 80 jack-up that will see it utilised through to early 2013. The rig will be working for Tullow until around September before taking up a charter with Wintershall until February 2012. Following that it will work for Dana for two months, Perenco until mid July then EOG Resources for a seven-month stint. BG has taken on Diamond Offshore’s Ocean Nomad from late October until May 2012 in direct continuation of an existing contract.

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RWE Dea UK has announced that the field development plan for the Breagh gas field has been approved by the Department of Energy and Climate Change. So far the development of Breagh has included around 100km of pipeline and the platform is due for installation in early September.

Phase two of the development will include additional wells in the east of the field and is expected to be approved next year.

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

6

21

14

1

28

29

8

Stacked without future contract

Stacked with future contract Total 3

7

7

Price

3

5

41

2

1

39

5

6

83

2005 2005--2011

$120 $100 $80 $60 $40

Jul-11

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

Teekay Petrojarl Seeking Class B Vessel

Teekay Petrojarl remains outstanding for a class B vessel from the middle of August until the end of 2014 plus additional options. The vessel will be required to support the Banff Field FPSO in the Central North Sea. A decision on any replacement for the incumbent vessel, the 1980-built Vos Mull, is expected imminently.

BG Tendering for Three Vessels BG is currently seeking three class B vessels on the basis of one to five years from the first quarter of 2012. The vessels will be required to be no older than 15 years. They will be used to support the Armada, which is currently being supported by the 1981-built Vos Patrol, and the Lomond and Everest Fields in the Central North Sea. The Lomond and Everest Fields have been supported via BP’s ‘Project Jigsaw’ since BG took over operatorship in 2009.

ADTI and Venture Looking for Vessels ADTI has circulated an enquiry for a vessel to support a one-well programme in the Central North Sea with the Ocean Princess. The vessel is expected to be required for between 30 and 60 days from around the middle of September. Meanwhile, Venture Production are also thought to still be outstanding for a vessel to support the Noble Ton Van Langeveld from Late August for approximately 50 days.

Standby Market Summary Full details of the UK and Irish Standby Market are available in the Braemar Seascope Offshore Standby Market Summary. The report, which comes out twice a year, contains an extensive commentary from our brokers who deal with the Standby market on a daily basis. There are also full fleet listings of Standby owners and an overview of the newbuild and fleet replacement programmes. For further details email: research@seascope.co.uk ©Copyright Braemar Seascope Offshore 2011

Subsea

MOA in Place for Acergy Falcon Sale

It is understood the 153-metre pipelay vessel Acergy Falcon is to be sold to Grup Servicii Petroliere. Market reports indicate that a memorandum of understanding is in place for the vessel which will satisfy Office Fair Trading conditions set after the merge of Acergy and Subsea 7.

The vessel is capable of j-lay installation of pipelines of up to 14-in diameter. The vessel also has a 64t crane, accommodation for 141 and two work class ROVs.

North Sea Giant Taken on by Technip

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Technip has chartered the large newbuild construction vessel North Sea Giant. The subsea construction specialist company has taken the vessel on a multi-year programme that will see it utilised for around 160 days a year. The North Sea Giant is a 160 metre vessel with a deck area of 2,900 square metres, two offshore cranes and a moonpool. The vessel is suitable for cable-laying, ROV support, well intervention and subsea work.

Highland Eagle Firms up GEMS Charter It is understood the Highland Eagle’s charter with GEMS has been firmed up for a further year with another year of options potentially available. The DP geotechnical vessel has been carrying out site investigation work West of Shetland. The vessel has been equipped with a sampling and wireline investigation spread. The vessel will primarily be used for oil and gas site investigation and windfarm turbine investigation work.

Subsea Market Summary Latest 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: aberdeen@seascope.co.uk

ŠCopyright Braemar Seascope Offshore 2011

Renewables

DECC Outlines Renewables Roadmap

The UK Government’s Department of Energy and Climate Change has released it Renewables Roadmap setting out the action plan for the deployment and use of renewable energy ahead of the 2020 target. The paper, which can be viewed in full here, outlines a plan for £30 million for the offshore wind industry in the next four years. In addition the study outlines plans for marine energy including wave and tidal technologies.

Galatea Working on Gwynt y Mor Trinity House’s buoy tender vessel Galatea is currently working on the Gwynt y Mor offshore wind farm carrying out navigation buoy installation. The vessel is expected to remain at the site until around the end of August. The wind farm, which will consist of around 160 turbines, will eventually cover an area of around 124 square kilometres around 15km to 20km off the coast of North Wales in the Liverpool Bay area of the Irish Sea.

Fugro Commander at Hornsea Wind Farm The geotechnical vessel Fugro Commander is chartered for work on the Hornsea wind farm. The vessel is carrying out a geotechnical investigation on the site and is expected to remain on charter until around the middle of August. Meanwhile, the Normand Mermaid is expected to be mobilised in the first week of September to carry out borehole work at the site. The multi cat Willendeavour will also be carrying out an investigation of the cable route corridor between July and September.

Diving Work at Walney 1 & 2 The dive support vessels HBC Performer and HBC Supporter have been operating at the Walney 1 and Walney 2 wind farm sites. Walney 1 wind farm has been completed and all 51 turbines are now producing energy. Meanwhile, Walney 2 is currently under construction with the wind farm installation vessels Seajack Leviathan and Seajacks Kraken continuing transit between Mostyn and the construction site on a regular basis. The Swiber Else-Marie will also be carrying out trenching work. ©Copyright Braemar Seascope Offshore 2011

AHTS Dayrates

Average North Sea Spot AHTS Rates Feb Feb--July 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 Feb--July 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

£40,000

Large - AHTS (16,000+ BHP) 2010

£30,000

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

Large - AHTS (16,000+ BHP) 2011 £20,000

£10,000

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

£0

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)

Jul-11

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

PSV Dayrates

May-08

Jul-11

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

Mar-08

Jan-04 Mar-04

£80,000

Jan-08

Large - AHTS (16,000+ BHP)

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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