NSRV8

BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE March 2012 ISSUE: 52

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS

©Braemar Seascope Offshore

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Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. As 2012 progresses we are seeing a turn in the market as it emerges from the low rate of the winter period. The AHTS and PSV spot markets have had an upturn in rates and activity.

With a total of 72 rigs active in the region and six stacked with future contracts the AHTS market is picking up pace. Among the highlights of the recent rig moves is the fact that Xcite Energy has announced that the Rowan Norway has departed Dundee for work on the Bentley field.

volumes and expects its acquisition of Cladhan to take place shortly and Dong CEO Anders Eldrup has stepped down.

Average dayrates for spot AHTS fixtures in February were GBP 16,842 and GBP 15,059 for large and medium vessels respectively. Meanwhile, PSV rates were GBP 9,513 and GBP 7,237. However, recent fixtures in March have shown a considerable mark-up with the PSV market close to selling out as the report goes to press.

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

In the market generally, Taqa has announced a 15% increase in production

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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

T

he market, like the weather, has begun to heat up in recent weeks and the amount of activity in the North Sea has pushed utilisation and dayrates up too. The busy start to 2012 has continued through February and in to March with the PSV market coming close to selling out several times. However, there are a number of newcomers to the market and some term boats returning. This extra tonnage could temper any potential spikes in rates for now. Among the returning vessels is the large PSV Toisa Intrepid which is set to rejoin the North Sea spot market in early April after concluding term work with AGR Guinea.

Average rates in February saw a marginal mark-up on January figures although the first few weeks of March have seen a step change in rates. There have been spikes in demand that have seen dayrates for PSVs up to around GBP 25,000 (Olympic Electra to BP for a cargo run) and as high as NOK 500,000 for AHTS vessels (Havila Venus fixed to BP Norway).

The market is preparing for what looks to be a very active April with at least 10 PSVs booked to commence term work in that month and others undertaking

drydock or in-house periods. There are also eight outstanding medium and long-term requirements. Whilst there are a number of PSVs expected to return to the market it looks as though availability could tighten.

The AHTS market is also expected to experience an upswing in activity in the next few weeks with up to 20 rig moves (including 13 semisubmersibles and 7 jack-ups) scheduled through to the middle of April. Two AHTS vessels are also set to leave the spot market in the next month too with the Normand Pioneer commencing work for Technip and the Island Valiant expected to undertake work for EMAS AMC. The Maersk Launcher, which has secured term work for Petrobras could also depart for Brazil in the coming months.

Meanwhile, rising fuel prices have also begun to be noticed on the market as the going rate moves towards GBP 690 per metric tonne. This figure indicates a 33% increase on the GBP 520 per metric tonne being paid at the start of last year and shows a marked increase of 5.5% since the start of March alone (GBP 653 per metric tonne). For full details of the fuel price rises see the chart on page 11.

Spot Market

New Arrivals

D

eep Sea Supply’s Sea Bear has travelled from Malta to rejoin the North Sea spot market where its owners hope to secure further work as the supply-demand ratio turns in their favour. The KMAR 404 designed AHTS has already picked up work assisting in the rig move of the Ocean Guardian for OMS. The Sea Bear has also been joined by the medium sized VS-470 MKII Siem Danis that has returned to the North Sea spot market following a period of absence due to an anticipated sale of the vessel.

These returning vessels will be joined by a number of newbuilds in the coming weeks including the PX-105 MACS Bourbon Front. Allseas has chartered the vessel from around the middle of April although it is expected to be available for charter from Stavanger from the end of March.

Two further PSVs are also expected shortly including the large STX PSV 06 LNG Olympic Energy which is due before the end of the month and the STX PSV 09 Brage Trader due in mid April. Both these vessels have DP2, deck areas of around 1,000 square metres and are charter free as this report goes to press.

The AHTS sister ships Skandi Atlantic and Skandi Emerald are also due on the North Sea spot market. The newbuild Skandi Atlantic will arrive in April and the Skandi Emerald could arrive before the end of March.

The Aker AH08 vessels have DP2, deck area of 495 square metres and bollard pulls of 180t and 201t respectively. The Skandi Emerald has previously carried out work for OGX in Brazil as part of a one year firm plus one optional year contract. The Odin Viking had carried out forerunner for the vessel.

SPEC BOX Bourbon Front Design: PX-105 MACS Builder: Zhejiang Shipbuilding BHP: 9,248 Max Deck: 1,017 square metres Deck Load: 2,820t DP: 2 Fresh Water: 544m³ Drill Water: 4,491m³ Speed: 15.5 Knots Click here for full spec

Bourbon Front

Chartering

Long-Term Requirements

There are three outstanding long-term requirements 1 PSV / Total / 3-5 years / March 1 PSV / Statoil / 3 to 6 years + 3 x 1 year opts / 2013-14 1 PSV / Halliburton / Well Stim / 3 months-1 year / TBC

Medium-Term Requirements There are five outstanding medium-term requirements: 1 PSV / Hess / 4 months + opts / Late March 1 PSV / Talisman / 12 or 15 months + opts / March - May 1 PSV / ConocoPhillips / 2 wells / comm Mid May 1 PSV / Centrica / 6 months + 1 x 6 months opt / April 1 AHTS / Capricorn Greenland / 8 weeks + opts / June

Far Sapphire Assists Polar Pioneer The large AHTS Far Sapphire has been chartered by BP Norway to assist the rig move of the Polar Pioneer. The UT -732 CD designed vessel will also be carrying out ROV duties. The vessel was fixed for day by day 28 at a dayrate of GBP 32,500. The vessel is currently expected to be on charter until around the end of the month. The Far Sapphire has DP2, a 20mt active heave compensated crane, a bollard pull of 232mt and accommodation for 60 personnel.

Dina Supplier Goes to Maersk for 10 Weeks The medium sized PSV Dina Supplier has been fixed for 10 weeks firm plus six additional one week options. The vessel will be carrying out general pool support duties and is expected to leave the North Sea spot market in early April and could return in July. The UT-755 LC designed vessel is equipped with DP2 and a deck area of around 680 square metres. The vessel has recently been carrying out a number of spot charters for Statoil. ŠCopyright Braemar Seascope Offshore 2011

Chartering

Stril Polar Fixed to Wintershall Norway

The newbuild large PSV Stril Polar has been chartered for a 10 well programme plus five additional well options to Wintershall Norway. The STX 09L CD has been fixed for spot work with Statoil and is set to take up a charter of around a month with MLS before commencing the Wintershall work. The DP2 vessel has large capacities including a deck area of around 1,055 square metres.

Peterson SBS Takes On Rem Star Peterson SBS has secured the services of the medium PSV Rem Star for 18 months firm plus two additional six month options. The UT-755 LC vessel will be carrying out a mix of walk to work and supply duties. The Rem Star has a deck area of around 672 square metres and accommodation for 41. This charter follows on from Peterson SBS’ recent fixture of the Skandi Waveney for one year firm plus two additional one year options.

Rem Supporter Chartered by ADTI The Rem Supporter has been fixed for one-well firm to support the programme of the Sedco 704 for ADTI. The large 2011-built STX 06 CD designed vessel is expected to return to the North Sea spot market by around May. The vessel has been working in the North Sea since late January. The Rem Supporter is equipped with DP2, a deck area of around 1075 square metres and accommodation for 24 personnel.

Siem Danis Returns to Spot Market The medium sized PSV Siem Danis has returned to the North Sea spot market following a period away due to a potential sale. The DP2, VS 470 MK II designed vessel is currently prompt in Aberdeen. Meanwhile, Siem’s other VS 470 MK II vessels Sophie Siem and Siem Louisa are working for ENI Ghana and are set to return to the North Sea in August and May respectively.

©Copyright Braemar Seascope Offshore 2011

Chartering

Quartet of Vessels For Statoil

Statoil has taken four vessels on long-term charters in the past few weeks. The Strilmøy, Sjobørg, Normand Corona and Siddis Mariner have all been taken on for six months.

The newbuild Havyard 833 Sjobørg is expected to go straight on to Statoil upon delivery from Havyard Leirvik in April. Meanwhile, the Strilmøy and Siddis Mariner have been on charter with Statoil previously. The Normand Corona had been on the spot market prior to the fixture.

Vessel rates are between NOK 145,000 and NOK 170,000.

SPD Takes on the Malaviya Seven The Malaviya Seven will be supporting the Borgsten Dolphin on a 3 well programme for SPD. The fixture also includes options for two further wells. The 1994-built UT745 designed vessel has recently completed a two well charter with Nexen and prior to that had been on a 9month fixture with ADTI supporting the Sedco 704. The Malaviya Seven is equipped with DP2, a deck area of around 920 square metres and Oilrec.

Olympic Electra Chartered by Centrica The multipurpose field support vessel Olympic Electra has been fixed for two wells to support Centrica’s work with the Noble Ton Van Langeveld rig. The medium PSV is an MT-6009 L designed vessel that had its maiden charter at the start of the year and has been working on the North Sea spot market. The vessel is currently on sublet to Total and is due to start work for Centrica towards the end of March. The Olympic Electra is expected to rejoin the spot market in May.

Highland Star Fixed to Apache Apache has chartered Gulfmark’s medium sized PSV Highland Star for one year firm plus an additional one year option. The UT-705 designed vessel is expected to be carrying out pool support until around February 2013. The Highland Star had been working on the North Sea spot market since December when it finished a long-term charter supporting E.On. The vessel has a deck area of around 880 square metres. ©Copyright Braemar Seascope Offshore 2012

Newbuild

Brage Trader to Join Spot Market

The newbuild large PSV the Brage Trader is heading to Norway via the Suez Canal and is due to join the spot market by mid-April. The STX PSV 09 is expected to be able to commence work upon arrival and is currently charter free.

The vessel is equipped with DP2, a deck area of around 1,000 square metres and has accommodation for 44 personnel.

Skandi Atlantic Heads to North Sea DOF’s newbuild anchor handler Skandi Atlantic is expected to join the North Sea spot market during April. The STX AH-08 designed vessel is equipped with 16,300 BHP, a bollard pull of 196t, deck area of 550 square metres and accommodation for 27. The Skandi Atlantic is also built to NOFO 2005 standards and has Oilrec and Fifi 2. The vessel was built at the STX yard in Vietnam and is 50% owned by DOF and 50% by Aker.

Olympic Energy Expected in April The newbuild large PSV 06 LNG designed Olympic Energy is expected to join the North Sea spot market in early April. The vessel has a deck area of 1,000 square metres, DP2 and low fuel consumption. Olympic’s previous new delivery MT-6009 L Olympic Electra which arrived on the spot market in January has since been taken on for term work with Centrica. Olympic also has two MT6015 vessels currently under construction and due for delivery in June (Olympic Orion) and November (TBN).

Bourbon Front Coming to Join Market Soon The large PSV the Bourbon Front is expected to join the North Sea spot market before the end of March. The PX105 designed vessel, which is the first of four sister ships being built at Zhejiang Shipbuilding in Ningbo China, will take up term work with Allseas from mid-April. The Bourbon Front has DP2, a deck area of around 1017 square metres and is equipped with the Multi Application Cargo Solution (MACS) which aims to increase the flexibility of cargo capacities. ©Copyright Braemar Seascope Offshore 2011

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New Rig For Statoil

GSP has been awarded its first drilling contract for one of its rigs in the North Sea. The GSP Saturn has been chartered

by Wintershall Noordzee BV under a 12month initial contract for work in the Dutch sector. The rig, which has undergone upgrading and reclassification work in Romania, is set to commence operations in May. The North Sea rig market remains strong with a further two rigs commencing contracts imminently. Awilco’s WilPhoenix rig is chartered to Hess for a six-month fixture that will take the rig through to September. Awilco’s other North Sea rig WilHunter is currently working for SPD in the North Sea and is set to switch over to a contract for Itha-

ca Energy in April. Meanwhile, Transocean’s John Shaw will now be on-hire to Taqa through to September.

The newbuild Rowan Norway rig which is working for Xcite Energy has departed Dundee harbour to undertake work on the Bentley field. The rig is currently expected to be on charter with Xcite through to the start of the fourth quarter of 2012.

Valiant Petroleum is expected to commence its charter of the Borgsten Dolphin by mid-March. The 1975-built semisubmersible will be undertaking work on the Tybalt and Causeway fields in the Northern North Sea.

Statoil is preparing an invitation to tender for a new type of drilling rig for mature fields. The tailormade category J Jack-Up rigs will be able to operate at water depths from 70 to 150 metres and drill down to 10,000 metres. It is hoped the rigs will deliver 20% reductions in cost and time per well on conventional rigs. Statoil is hoping for the new rigs to be delivered in the second half of 2015. For further details click 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

2

8

15

21

14

31

29

6

6

6

6

2

4

41

2

2

39

4

6

82

The Triton at Rowan Norway Courtesy of Iskes Towage & Salvage

Bunker Price Bunker Price in Aberdeen 2011 to Present 700

Bunker Price GBP/MT

650

600

550

500

450 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12

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

Oil

Price

2005 2005--2012

$140

$120

$100

$80

$60

$40

Jan-12

Nov-11

Jul-11

Sep-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

Standby Tonnage Availability Tightens

Although there was no discernible downturn in demand over the winter it is fair to say that activity has increased significantly over the last few weeks. As vessel availability has quickly dried up rate levels have risen steeply with several medium term fixtures of older units reportedly being concluded in the GBP 7,000 to 7,500 range. Charterers are scrambling to secure tonnage for the requirements commencing in the second quarter before any form availability is non existent.

Esvagt Capella Chartered by Enquest Enquest has returned to Esvagt for another ERRV (Esvagt Capella) to support a minimum nine month drilling programme with the Stena Spey from early March. The Esvagt Sigma is currently supporting their other drilling programme in the Central North Sea with the Ocean Princess which is likely to extend into 2013.

Grampian Citadel and Grampian Don Fixed BG has finally confirmed the fixtures of the recently delivered newbuild Grampian Don, which is equipped with twin daughter craft, for support of the Armada / Everest field and the Grampian Citadel for support of the Lomond field which is also central North Sea. Both charters are believed to be for a minimum of five years and commence at the beginning of March.

Additional Standby Market Movements Hess is believed to have chartered the Ocean West for 6 to 7 months to support a drill programme with the WilPhoenix commencing in early March. Meanwhile the Ocean Swift has been fixed by ADTI followed by Talisman for a total of 4-5 months to support the Sedco 704. CNR has fixed the Grampian Prince for 5-6 months support at the Ninian field from April and North Star’s second newbuild, the Grampian Dee, will go to SPD for a 3 to 5 well programme with the Borgsten Dolphin from March. ŠCopyright Braemar Seascope Offshore 2011

Subsea

Geoships Take Delivery of Loch Roag

Geoships has confirmed it has now taken delivery of the MPSV Loch Roag. The vessel is currently in Singapore where it is being marketed for potential work in Southeast Asia however it is possible that the vessel could depart the region for the North if nothing is confirmed. The Loch Roag could potentially be available for charter in the North Sea from early April. The Loch Roag is an MT 6009 L MKII DP2 vessel equipped with a 50t crane. The vessel is being marketed for ROV, Diving and Gangway work.

Polar Prince Gets Xcite Work The Polar Prince has been awarded work for Xcite Energy on the Bentley field. The construction support vessel will be carrying out installation of a flexible line from the Rowan Norway rig to shuttle tankers. The Polar Prince is a multifunctional DP2 vessel equipped to carry out IRM, light construction and cable lay operations. The vessel has a 150t seabed crane, work class ROV, moonpool and 100t A-Frame. The Bentley workscope is to commence in April.

GSP Falcon Secures Pipelay Role Grup Servicii Petroliere (GSP) has been awarded a contract for pipelay work with Wintershall in the North Sea. The pipelay vessel GSP Falcon will be carrying out the installation of a 10-in 30km pipeline in the Dutch sector from around June. The GSP Falcon is a DP2 flexlay and jlay pipelay vessel capable of installing rigid pipelines, flexible flowlines and umbilicals. The vessel can carry out j-lay of up to 14-in diameter pipe, has two work class ROVs and accommodation for 145 personnel.

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

Rambiz II Plans Announced

Scaldis has ordered a large USD 100M crane ship with a 4,000 tonne hoisting capacity from STX Offshore. The vessel, which has been provisionally named Rambiz II, is set for delivery in Spring 2014. It will have two Huisman cranes each with a lifting capacity of 2,000 tonnes, it will also have DP2, accommodation for 78 and a moonpool.

Scaldis plans to market the vessel for renewable installation work and decommissioning of oil and gas platform.

Fred Olsen Expands Crew Boat Fleet Fred Olsen Windcarrier has declared an option on three new crew boats. The deal follows on from a contract for four sister ships that were ordered in February 2011.

Three of the original order have been delivered with the fourth expected before Easter. All four will be working for Siemens on the London Array later this year. The three new vessels will deliver between October 2012 and February 2013.

EMEC to Support Japanese Centre The European Marine Energy Centre has announced a collaboration to develop Japan’s first marine energy test centre. EMEC in Orkney is the only accredited wave and tidal test centre for marine renewable energy and will provide advice and support on the design set up and operation of the Japanese Marine Energy Centre. EMEC has 14 fullscale test berths and also has smaller test facilities for small scale wave and tidal devices.

P&O Ferry in Renewables Role P&O Ferries has chartered one of its large freight ships on a three to four month charter with Centrica Renewable Energy. The 180-metre European Seaway will be acting as an accommodation vessel for technicians working at the Lynn and Inner Dowsing Wind Farm Array from April. The vessel, which usually acts as a freighter between Dover and Calais, will be stationed seven kilometres off Skegness. ŠCopyright Braemar Seascope Offshore 2011

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

Large - AHTS (16,000+ BHP) 2011

Mar

Apr

May

Jun

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

Jul

Aug

Sep

Large - AHTS (16,000+ BHP) 2012

PSV Dayrates

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

Jan-04

Large PSVs (700m2+ Clear Deck)

Medium PSVs (500-700m2 Clear Deck)

Jan-12

Nov-11

Sep-11

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

PSV Dayrates

Sep-08

Jul-08

Jan-12

Nov-11

Sep-11

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

May-08

Jan-04 Mar-04

£80,000

Mar-08

Large - AHTS (16,000+ BHP)

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

£0

Mar-04

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

£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--2012

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

The Renewables Vessels Newsletter

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