Established in 2007, the firm operated four OSVs with a further two on order at a cost of £17m. However, Fletcher Shipping folded after oil plummeted and North Sea spot rates fell by 83% and it was no longer able to pay its debts.
Following the announcement, administrators PriceWaterhouseCoopers have stepped in, organising the sale of the company to FS Shipping Ltd.
“The drop in oil price from $110 to a low of $45 a barrel, before rallying at $60 has undoubtedly impacted business confidence across the North Sea basin with the result that the daily vessel supply spot rate has been squeezed down from around £18,000 a day to nearer £3,000,” said Alan Brown, director and joint administrator of PwC.
The sale would secure the future of the contractors employed on Fletcher’s vessels, said Brown. “Following our appointment, we are delighted to have achieved immediate completion of an accelerated sales process of the business and assets of Fletcher Shipping Ltd to FS Shipping Ltd, ensuring continued stability for the self-managed crew, suppliers and clients across the oil and gas industry.”
Hampered even before the halving of the oil price by the highest production costs in the world combined with a steady decline in oil and gas yields since 1999, the North Sea has become an increasingly difficult area for offshore operators. North Sea production costs average $40 per barrel, compared with $5 in Iraq. With oil at current prices, as many as a third of oil and gas fields could now be unprofitable.
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