Dubai-based Topaz Energy and Marine chief executive René Kofod-Olsen said he is “cautiously optimistic” about the market for offshore support vessels in the Middle East and “more bullish” about 2019-20.
In an exclusive interview with OSJ, Mr Kofod-Olsen said discussions with potential clients suggested that development activity is being planned on the Saudi and United Arab Emirates side of the Gulf, although he agrees with analysis by other industry leaders that there are too many vessels – and too many owners – in the Middle East market.
Mr Kofod-Olsen believes the fact that several oil companies have been locking-in to term contracts suggests they don’t expect rates for vessels to fall further.
Asked what might drive higher utilisation and rates, Mr Kofod-Olsen highlighted increased activity by national oil companies and engineering, procurement, construction and installation contractors, for which offshore support will also be required. Now, when costs have come down, is a good time for companies to change-out equipment, he suggested. Development activity by international oil companies and NOCs, in countries such as Saudi Arabia and the United Arab Emirates, will also help drive demand, he said.
Mr Kofod-Olsen said he sees growing demand for anchor handlers – it has recently acquired two diesel-electric vessels of this type to bring into the region – and fast crewboats, which he anticipates will win a growing share of crew transfer work from helicopters. The anchor handlers will be phased in to the Topaz fleet in mid-2018.
Mr Kofod-Olsen said DP2 vessels “have become the baseline” for vessels in the Middle East market. He said oil companies are also placing age restrictions on vessels but expects enforcement of age restrictions to depend on the condition of a vessel, the duration of a contract and on the state of the market.
Another factor that could influence vessel selection is how long ships have been in layup. “Some oil companies say they don’t want vessels that have been in layup for more than six months,” he explained.
Mr Kofod-Olsen will be a key speaker at Riviera Maritime Media's Middle East Offshore Support Journal Conference in Dubai, UAE 7-8 May.