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MARKETS OFFSHORE SUPPORT VESSELS (OSV) market forces saw the newbuild orderbook bloated even More to that point there are also severe supply chain compared to the then peak activity demand. constraints presently impacting the industry, especially

Could our current market cycle really be any different; concerning people and a wide range of equipment includ- have the market players burnt their fngers enough times ing diesel generators and engines. As a result of this, the that this time they do not repeat themselves? We certainly build time for offshore vessels is currently between 24 and hope so, but either way there are a number of important 36 months depending on the asset type. This, in combi- reasons why we do not believe there will be another new- nation with the abovementioned factors, all contribute to build boom akin to what we have seen previously. increased costs as well.

However voluntary or not the current newbuild ordering, Finally, there is inherent technological risk associated or lack thereof, matters not, but what does matter is the cost with ordering a newbuild at this point in time, especially and lack of available capital towards this end. It is a fact that so when ordering on a speculative basis. While there are the majority of the largest fnancial institutions that fuelled many good arguments for switching to low- and zero emis- the previous ordering sprees have either exited entirely or sion fuel alternatives, there is currently no market consen- signifcantly reduced their exposure to oil and gas. sus towards just what fuel will be widely adopted by the

The same is true for the availability of yard slots suitable industry. Choosing the wrong fuel today could have a neg- for OSVs. On one end, the total capacity of such shipyards ative impact on the vessels’ operability in the future, and has been heavily reduced since the last run-up, especially there are different preferences, not just amongst operators in the Far East. But even more so, in the absence of OSV and charterers, but also in between regions.

orders, the shipyards that are in operation have certainly All in all, we fnd it diffcult to imagine another new- not idly waited for the return of the market. build boom on the horizon from where we are stand-

Other vessel segments, such as support vessels for off- ing, at least one similar to what we have seen before. In shore wind and commercial fsheries and aquaculture are light of this, we remain frm in our upbeat expectations all built at yards that used to build PSVs and AHTS. As for the OSV market going forward, where both dayrates such, there is currently a very limited number of slots left and vessel activity are expected to continue to rise for for anyone looking to place an OSV newbuild. years to come.

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