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Five offshore trends to watch in 2021

offshore trends

Five offshore trends to watch in 2021

Shipping valuation heavyweight VesselsValue dishes five trends to watch in coming year

Global Offshore Supply Vessel (OSV) market is reportedly looking up. From the entry of new players to business recovery, the industry can also expect a consolidation. The leaner landscape essentially suggests smaller market with more challenges. VesselsValue lists the following trends expected in 2021.

United States Offshore Wind
The US Offshore Wind industry is anticipated to power up the next 10 years, subject to market uncertainties including timings. VesselsValue expects to witness the increase of players in the renewables sector, from both offshore and non-offshore background. With the growing sector of US offshore windfarm, the region’s portfolio development to adapt to the country political changes will be something to observe.

Return of the heavyweights
COVID-19’s destruction has placed many OSV owners in financial distress – among the listed are Bourbon, Solsta, Havilla and Hornbeck. Thankfully, these companies managed to recover and are now in a stronger position to map out their future business strategies. Being able to rebound while others went through Chapter 11 or restructuring in the previous years is not an easy feat.

Mobile Offshore Drilling Unit Consolidation
Mobile Offshore Drilling Unit (MODU) players were not exempted from the pandemic’s impact. It makes financial sense for suffering companies to combine their operations and streamline their offerings. Though the new market landscape allows several companies to leverage internal competencies, doubt is cast on companies affiliated with Seadrill that went through bankruptcy. Its second go at Chapter 11 protection is a formidable alarm bell that warrants close attention in 2021.

OSV and MODU Scrapping
2020 sent many companies scrambling in debt restructuring, cash flow provision and managing fleet size. The OSV sector reportedly had a significant oversupply and the next natural move is pruning to manage the costs in keeping the fleet operation-ready. Dominating the spotlight is the crisis-stricken French offshore carrier Bourbon, which has to rid around 100 vessels possibly at loss-incurring prices. The company recently came to an agreement that apart from ridding the excess vessels, its fleet is to be less than 350 by end of 2021.

Sales and purchase hike
More lucrative than scrapping, 2021 is expected to see substantial sales volume. Solstad Offshore’s creditors concurred that 37 older vessels have to be sold or scrapped, leaving the remaining fleet at about 90. Values have been under pressure due to Covid-19, which dented values across all vessel types – OSV, OCV and MODU. Many companies experienced minimal to zero decrease in fleet size, but suffered a sharp dip in asset value.


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