Solstad Farstad: Market situation improving across all segments

Solstad Farstad, a Norwegian offshore vessel juggernaut created last year, expects a pick-up in offshore vessel chartering in 2018 after several years of the depression in the sector.

“Low demand and too many available vessels have had a significant negative effect on the global offshore vessel market during the past years, resulting in low rates, low utilization and a large number of vessels in lay-up,” Solstad Farstad said in its fourth quarter report released late on Thursday.
It added: “However, the recent increase in the tender activity level gives reason to believe that the market has bottomed out, and that the activity level will continue to grow going forward”

The company, created last year through a merger between Solstad Offshore ASA, Farstad Shipping ASA and Deep Sea Supply, feels that the present oil price – US$66 a barrel for Brent crude on Friday- combined with reduced cost, will increase investments in the oil & gas sector.

Higher rig activity – increased OSV demand

“Already in 2018 this might give a higher rig activity compared to what has been seen the last years. This is expected to be positive for the demand for AHTS and PSVs,” the vessel owner said.

Within subsea installation, several large projects have been sanctioned lately, which is, the company says, expected to lead to increased offshore activity from 2019 and onwards, while in subsea maintenance, it is expected that the activity picks up already in 2018.

“In combination with a steady, high activity in the Offshore wind sector, this is expected to grow the demand for CSVs,” Solstad Farstad said.

Solstad Farstad signed several new contracts during the fourth quarter, within all vessel segments the company operates in, the majority of which were with clients in Norway, UK, Brazil and Australia. The company’s backlog for 2018 is 3 billion Norwegian Crowns

At the end of the quarter, the Solstad Farstad fleet comprised of 146 offshore vessels. The fleet had the following composition: 33 CSVs, 52 AHTS and 63 PSVs.

The Group has four wellboats and one harvest vessel under construction in the Aquaculture segment. Long term contracts for all newbuilding vessels have been entered into, with commencement directly upon delivery from shipyard. Of the five vessels, two wellboats and the harvest vessel are scheduled to be delivered in the first half of 2018, while the last two wellboats have a delivery date in 2019.

Offshore Energy Today Staff