But new legislation requiring a level of local content is likely to change the backdrop where rates for offshore support vessels (OSVs) command a premium of up to 20% over other regions.
“Africa’s time has come,” declared Knut Mathiassen, head of shipping at Standard Chartered Bank, one of the few global lenders active in the region. Speaking at Seatrade’s Middle East Workboat and Offshore Marine event in Abu Dhabi, Mathiassen told delegates that a wide range of offshore vessels, including high-spec DP2 craft, are needed off the West African coast.
Anchor handlers, platform supply ships, subsea construction vessels, pipe-layers, accommodation units and seismic research ships are all in demand. Larger and more powerful vessels are already enjoying higher utilisation rates, he said, and have better prospects for long-term employment with international oil companies. Overall, prospects are promising.
But in Nigeria, for example, the Local Content Act strongly favours indigenous firms and foreign oil companies will now have to favour locally owned or operated vessels. This has significant implications for international OSV operators which will now need a local joint venture partner if they wish to close long-term contracts in the region.
A lack of finance remains a barrier to growth, however. Mathiassen said that most international lenders would not accept the security associated with West African flags, including Nigeria, Ghana and Angola, although Standard Chartered had done its own due diligence and has loans in the region. Local banks, meanwhile, would lend on a high loan-to-value basis but on short tenors, making debt service difficult if not impossible.
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