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Energy transition and security concerns underpin offshore uplift

Photo: Edison Chouest Offshore Edison Chouest.jpg
This year’s upturn in the offshore market looks ‘more entrenched and broader-based’ than the last short recovery of 2018/19 prior to the onset of the pandemic.

In the previous recovery the Clarkson’s Offshore Index, which covers day rates for rigs, offshore support, and subsea vessels, at 47.7 points, was only just above its ten-year low of 44 points (2017). Today, the index has recovered to 80, a seven-year high.

Clarkson Research noted in its most recent market report that attendees will have plenty of reasons to be cheerful as they attend Offshore Northern Seas (ONS) in Stavanger this week. Vessel utilisation rates are substantially higher than four years ago; capital expenditure is likely to hit $86bn this year compared with $65bn in 2018; and anchor handlers in the North Sea are earning more than five times the rate then - £105,000 per day compared with just £17,000.

The firm said that energy security is sharply up the agenda as a result of the Ukraine conflict and the energy transition is also likely to be widely discussed at ONS this week. The 53.7 GW of active offshore wind now contributes 0.3% of global energy supplies but ambitious targets across Europe, parts of Asia, and now the US, are likely to see this number rise significantly in the years ahead.

Meanwhile, pressure on oil service companies to ‘go green’ is becoming more urgent and efforts are being redoubled on carbon capture, and to reduce platform emissions, the analyst said.