Clarksons Offshore Index hits nine-year high

Brent crude average $80 over the first half of the year, Clarkson said in its Half Year Review, up 14% on the ten-year trend. Firmer prices underpinned higher capital expenditure with $68 billion of offshore oil and gas projects reaching final investment decisions over the first half, up 57% year on year and 41% on the ten-year trend.

Offshore oil and gas accounts for 16% of the world’s energy, forty times more than the rapidly expanding offshore wind sector.

FPSO activity is up, with live projects under development in Brazil, Guyana and West Africa: 13 FPSO contract awards are expected over the course of 2023, an 11-year high, Clarkson said.

Meanwhile, the firm’s  Rig Rate Index has climbed by 74% since the beginning of 2021 with utilisation of jack-up units and floaters is now at 85%. High-spec jack-ups are earning more than $150,000 a day, while the firm’s Offshore Supply Vessel index has climbed 17% over the first half to hit 161, the highest level since late 2014.

Although there is still nominally spare OSV capacity, with a significant number of laid-up units potentially available, Clarkson points out that its OSV utilisation figure of 72% at the start of July could actually be tighter than this. Vessels laid up for long periods are likely to prove difficult to reactivate and about 43% of the currently idle fleet has been laid up for five years or more.

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Other supply constraints are evident, Clarkson said, with only small numbers of legacy newbuildings from the ‘stranded inventory’ delivering. Finance for new projects is a challenge as banks have a greater focus on ESG issues, newbuilding prices are high, and uncertainty over future fuels remains an issue.