The offshore orderbook is in good health, according to Barry Luthwaite, ceo and owner, BRL Shipping Consultants. According to BRL data, over 1,200 vessels including drilliships and rigs are currently on order; of those, 734 fall under the umbrella term OSV, with 137 versatile OSVs, 175 AHTS vessels and 413 PSVs.
Currently the orderbook is dominated by Chinese yards, with 35% of orders being fulfilled in China. The US is second with 13% followed closely by Brazil, spurred by local content rules, with 11%. Europe’s largest player Norway ranks sixth with 6% of orders and shipbuilding giants Korea claim just 2% of the backlog.
Those orders are being placed predominantly by the US, which accounts for 18% of orders placed, followed by Singapore with 15% and Norway with 10% ownership of the orderbook.
Changes may come in the geographic placement of orders, Korea and Singapore are being drawn to the offshore market as vessel sizes increase, spurred by favourable workloads in time and cgt terms. Japan is also becoming a more attractive country to place orders in as the Yen weakens and Japanese shipbuilding quality and slot availability remains high according to Luthwaite.
"Market trends include a reduction in speculative construction,” Luthwaite said, “which is good for the market. Private equity is also entering the offshore market… gaining some ground in the OSV sector because of the sheer expense of vessels and the number of banks that dropped off the radar and got cold feet when the market turned sour.
"The problem with banks is that they may want to stay in the offshore market, but if they are doing business with a company with a mixed fleet, including tankers for example where until recently markets have been dire, there are repercussions on covenants and cashflows.”
Luthwaite added that despite the strength of the offshore market, employment should be found for vessels before orders are even made.
Caterpillar’s offshore segment manager Alexander Kohse added further indicator of the market’s strength, stating that the engine manufacturer’s orderbook for offshore currently exceeds that of its merchant marine segment.