Solstad focuses on renewables amid challenging OSV market

Solstad Offshore has joined the list of offshore vessel providers in Norway that are turning to alternative markets to overcome the challenging circumstances in the offshore support vessel market. 

Namely, the company informed on Friday it has entered into a contract with Dong Energy Wind Power for hire of the 2013-built construction support vessel (CSV) Rem Installer for a period of 23 months firm.

The contract also includes further 6 months option and an additional CSV from the Solstad fleet, to be nominated at a later stage, for a period of 7 months firm with further 8 months option. The commercial terms are confidential between the parties.

Rem Installer, that will be renamed Normand Jarl, will start the contract in February 2017, while the contract for vessel number two will start on April 1, 2018.

Solstad explained that this contract with DONG Energy Power is strategically important for the company in its ‘continued commitment to the renewable energy segments.’

‘Fragmented’ OSV industry

As part of its efforts to weather the storm in the offshore market caused by low oil prices, Solstad in 2016 merged with another offshore service vessel company, Rem Offshore. The merger was completed in December 2016. Solstad said the merger would contribute to the “much needed” consolidation of the fragmented OSV industry.

When it comes to the Danish energy giant Dong Energy, the company in November last year confirmed its exit from the oil and gas business to focus on renewables as it was no longer considering oil and gas as a long-term strategic commitment.

Diversification

Other companies that are looking at alternative markets include Farstad Shipping, Olympic Ship, and Deep Sea Supply.

Farstad turned to offshore fish farming market in December with a contract for the installation of Ocean Farming’s new fish farm. Up until recently, Farstad was trying to find a solution for its debt problems with Siem acting as a key equity investor. However, the pair failed to find a solution for restructuring and therefore the term sheet between Farstad and Siem had terminated leaving Farstad to try and find a different solution.

Farstad’s compatriot, the financially strained shipowner Olympic Ship, has also been trying its luck in renewables sector where it sees increasing demand for its subsea and construction vessels. The company’s subsea construction support vessel Olympic Ares was hired by Bibby Offshore for the installation of MeyGen tidal turbines in the Pentland Firth, off Scotland.

Furthermore, the Oslo-listed owner of offshore support vessels, Deep Sea Supply, also looked to diversify its offering due to oversupply in the OSV market. In June 2016, the company made a shift into fisheries by entering a joint venture with Marine Harvest to build, own, and operate aquaculture vessels.

Offshore Energy Today Staff