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OSV market needs major consolidation, Topaz chief warns

OSV market needs major consolidation, Topaz chief warns
Topaz Energy and Marine ceo René Kofod-Olsen is “very upbeat” about the Offshore Support Vessel (OSV) market in the medium term but only if the troubled sector undertakes major consolidation now.

"Too many players are competing for the same business,” said Kofod-Olsen, who has helmed the Dubai-headquartered company since August 2012. “Consolidation would be good for the whole industry."

His comments come as contagion spreads across the global OSV sector following the Swiber collapse in Singapore, the merger of Solstad and Rem Offshore in Norway, and a growing number of distressed assets without employment in other key offshore locations including the Arabian Gulf and the Gulf of Mexico.

Topaz itself took an impairment charge of $71m on vessels last year leading to a loss of $64.4m. Although he would not rule out further writedowns, Kofod-Olsen does not believe that vessel values can sink much lower.

In the medium term, he is "very upbeat". Kofod-Olsen believes that energy companies, whose strategy of slashing E&P spending has led to the sector's crisis, will start spending again only when oil prices have stabilised over a period of at least six months.

Topaz Installer D2 cable layer 600

A combination of energy demand growth and the fact that the world is not replacing the hydrocarbons it is currently using is not sustainable for long although he does foresee a further time lag for the OSV sector even when energy firms put substantial E&P budgets back in place.

Prior to joining Topaz, Kofod-Olsen served as ceo of SVITZER Asia, Middle East & Africa for three years following more than a decade in various roles for the AP Moller-Maersk Group.

He received an Advanced Management qualification from Harvard Business School in 2011.

Topaz, a wholly owned subsidiary of Renaissance Services, operates a fleet of more than 90 OSVs serving the global energy industry with primary focus on the Caspian, Middle East, West Africa and Subsea operations in the North Sea and Gulf of Mexico.