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BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE January/February 2012

ISSUE: 51

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS

©Braemar Seascope Offshore


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Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. The past few weeks have seen an increased level of North Sea activity compared with previous starts to the year. The market has remained buoyant with dayrates for both AHTS vessels and PSVs retaining a surprising resilience for this time of year. A number of term fixtures have been concluded and there remain 13 period requirements outstanding. However, newbuilds are continuing to trickle on to the market and a further four vessels are expected to join the North Sea spot market in the coming weeks. Average dayrates for spot AHTS fixtures last month were GBP 28,662 and GBP

20,057 for large and medium vessels respectively. Meanwhile, PSV rates were GBP 8,905 and GBP 7,873 although rates have dropped a touch in recent days. Meanwhile, the UK Department of Energy and Climate Change has awarded 144 licences to extract oil and gas from UK waters as part of the 26th licensing round. There has also been increased merger and acquisition activity with Premier’s buyout of Encore being completed and Ithaca now being the focus of third-party interest. Sean Bate Market Analysis Manager

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For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email us.


Market Commentary It has been an active start to 2012 for the North Sea vessel markets. The usual seasonal dip in rates has failed to materialise to the same extent as previous years and charter rates have retained some strength in the first few weeks of the year despite turbulent conditions offshore. In anticipation of increased rig activity throughout this season a number of vessels have already secured charter work for the summer period although with newbuilds contining to join the market in the coming weeks and months it is expected that owners will be open to negotiations for term work right up until the market gets into full swing around March and April. A number of vessels have already left the spot market for work elsewhere. The Sophie Siem and Siem Louisa departed a number of weeks ago for term work in Ghana. Meanwhile, the Maersk Logger and Maersk Traveller have left the North Sea for BP Brazil. The Rem Fortune is also expected to depart the region and head for Nigeria following its recent sale. Rates for AHTS vessels have remained relatively high for January with advanced anchor handlers carrying out ROV work being able to demand around GBP 33,000

and rig moves being carried out in the mid to high teens. Average rates for cargo Runs for medium and large PSVs have been around the GBP 6,000 and GBP 10,000 level respectively. This compares with average rates in December of GBP 7,873 and GBP 8,905. Both the North Sea AHTS and PSV spot markets have had sufficient liquidity in recent weeks to ensure adequate tonnage for charterer’s demands although there have been brief periods of tightness in the PSV market. As we move into February, market conditions are expected to remain similar although with four newbuild PSVs due to join the spot market we could see this greater level of supply serving the same level of demand. There are a total of thirteen outstanding medium and long-term requirements which could start to be filled in the forthcoming weeks as charterers seek to secure tonnage for the spring/summer window however with over 50 platform supply vessels currently working or expected to return to the spot market we do not expect the market to tighten imminently.

Spot Market BELOW: The Siem Louisa is one of a number of vessels departing the North Sea


New Arrivals

W

e have had a number of newbuilds recently join the North Sea vessel market and the next wave of new tonnage is expected on the spot market shortly. In the last few months the AHTS Brage Viking and the PSVs Olympic Electra and Blue Fighter have joined the market. In addition to this tonnage we can now expect the Olympic Commander, FD Remarkable, Rem Supporter and the Ocean Pride in the coming weeks and months. The large PSV Olympic Commander is understood to have been recently fixed to Team from delivery for 28 days firm plus six one-week options. The vessel is an MT -6015 design equipped with DP2 and a deck area of around 1060 square metres. The medium sized UT-755L FD Remarkable is the next newbuild PSV expected on to the market. The vessel is expected to be prompt and awaiting its maiden charter in Aberdeen by the very end of January. The FD Remarkable will have DP2 and a deck area of around 716 square metres. The Rem Supporter is also expected on the spot market in very late January. This STX PSV 06 CD Designed PSV

will have DP2 and a large deck area of 1075 square metres. Finally the Ocean Pride which was launched in July last year before undergoing completion in Leirvik is now expected to be delivered in early February. The Havyard 832L DP2 vessel will have a deck area of 901 square metres.

SPEC BOX FD Remarkable Design: UT-755L Builder: Rosetti Marino BHP: 7843 Max Deck: 716 square metres DP: 2 Fresh Water: 856m続 Fuel Oil: 925m続 Oil Based Mud: 6,247 bbls Base Oil: 279m続 Accommodation: 20

F.D. Remarkable


Chartering

Long-Term Requirements

There are six outstanding long-term requirements 1 PSV / Halliburton / Well Stim / 3 months-1 year / Feb 1 PSV / Enquest / 9 months + 2 x 3 months / Feb 1 PSV / Apache / 1,2 or 3 years / Feb 1 PSV / ADTI / 1 well (est 6 months) / Feb 1 PSV / Total / 3-5 years / March 1 PSV / Peterson SBS / 180 days or 18 months / April

Medium-Term Requirements There are seven outstanding medium-term requirements: 1 PSV / Centrica / 2 wells / Late Jan 1 PSV /BP UK / 2 months + opts / mid-late Feb 1 PSV / E.On / 1+1 well or 3 wells + opt / comm late sFeb 1 PSV / Statoil Faroes / 1 well (est 130 days) / Feb - May 1 PSV / Marathon N / 2 wells firm + 2 well opts / March 1 x PSV / Maersk Oil / 150 days + opts / mid March 1 X PSV / SPD / 3 wells + 2 opts / March-April

Total Takes Solvik Supplier The large PSV Solvik Supplier has been chartered by Total for its 45 day requirement with two one week options and a further 14 daily options. The vessel was fixed for around GBP 15,000 and it will be carrying out general pool support duties. The vessel is a VS-485 PSV that was delivered at the end of October last year. The Solvik Supplier is currently continuing a charter with Senergy which commenced at the end of 2011 it will then go straight over to Total until at least the middle of March.

Durga Devi Fixed for 4 Wells Firm The medium UT-755LN designed PSV Durga Devi has been chartered by RWE for four wells firm plus five additional one well options. The vessel which was formerly the VOS Prevail was bought by Singapore-based shipowner Chellsea Pte last year. The DP2, 2010-built boat had previously been on a long-term charter with PA Resources until early October when the vessel was switched to its new owners and joined the North Sea spot market. ŠCopyright Braemar Seascope Offshore 2011


Chartering

Four Vessels in Lay-Up

A quartet of PSVs are currently off the North Sea spot market in various stages of lay-up. The Ocean Scout, Ocean Mainport and the NSO Spirit are currently in Norway where they have been off the market for between six and twelve weeks. The North Truck is currently in Sunderland where she has a reduced crew although she can be easily primed for work.

Peterson SBS Takes On Skandi Waveney Peterson SBS has signed a new contract with DOF that will see the Skandi Waveney fixed for one year firm plus two additional one year options. The contract, for the medium sized PSV, commenced in January 2012. The vessel had previously been working for StatoilHydro Petroleo Brazil on a two year contract since the fourth quarter of 2009. The Skandi Waveney will be carrying out pool support duties for Peterson SBS.

Maersk AHTS Pair Extended at Nord Stream The Maersk Tackler and the Maersk Tracer have had their existing contracts with Saipem extended by a further sixmonths. The vessels have been supporting work on the Nord Stream pipeline since March 2010 and are now expected to remain on the project until around the middle of this year. The VS-472 designed AHTS vessels are due to return to the North Sea spot market on completion of the pipeline work around July 2012.

Siem Vessels Leave North Sea for Ghana Sophie Siem and Siem Louisa have been fixed for mediumterm work with ENI Ghana. The vessels, which had previously been working in the North Sea, left for Africa at the start of January. The vessels are both 2006-built VS 470 MK II vessels. The Sophie Siem has been chartered for 180 days at USD 27,000 and is expected to return to the North Sea in early August with the Siem Louisa fixed for 100 days at USD 28,000 and due back in early May. ŠCopyright Braemar Seascope Offshore 2011


Chartering

Prosper Chartered for 8-Wells

The small AHTS Prosper has been chartered for eight wells firm with MLS. The UT-704 designed vessel is expected to be carrying out standby and possibly cargo run supply duties. The versatile Simon Møkster Shipping vessel was built in 1983 and has a bollard pull of 88t and a deck area of 495 square metres. The vessel is expected to rejoin the North Sea spot market in early September this year.

Nexen Takes Malaviya 7 for Two Months Nexen has fixed the large PSV for two months work carrying out pool support work. The Great Offshore vessel is expected to continue the charter until around the end of February when it will rejoin the North Sea spot market. The UT-745 designed vessel is equipped with DP2 and has a deck area of 920 square metres. Last year the vessel carried out a prolonged period charter for ADTI when it was fixed for nine months supporting the Sedco 704.

BB Troll Supporting Scarabeo 8 Work The BB Troll AHTS has been chartered by the Norwegian yard Westcon to assist with the Scarabeo 8 rig. The rig was taken into the yard last year to undergo repair work, winterisation and have commissioning activities carried out. It is understood the main body of the work has been completed and the BB Troll has been assisting in the commissioning work phase. The vessel began working early January and is expected to have completed the work by mid to late February.

Statoil Secures Vessels Including LNG PSV Statoil fixed two vessels for three months plus an additional five months worth of options. The Normand Arctic and the Troms Artemis have been snapped up by the Norwegian charterer for around NOK 165,000 and NOK 145,000 respectively. The fixture is the maiden charter of the newbuild large PSV 12 LNG Normand Arctic. Both vessels are currently expected to return to the North Sea spot market at some point between April and September this year. ŠCopyright Braemar Seascope Offshore 2012


Newbuild

Brage Viking to Join Spot Market

Viking Supply's newbuild AHTS Brage Viking is expected to arrive on the North Sea spot market before the beginning of February. The large VS4622 CD designed vessel will be equipped with DP2 and will boast 19,000 BHP and a bollard pull of 230t. The vessel will be initially positioned in Stavanger. The Brage Viking is a sister ship to the Loke Viking and the Magne Viking which are also both currently working the North Sea spot market.

FD Remarkable Heads to North Sea The newbuild medium sized PSV the FD Remarkable is expected to arrive on the North Sea spot market in early February. The UT-755L designed vessel is currently charter free and will be initially based in Aberdeen. The vessel will have DP2 and a clear deck area of around 716 square metres. The similarly designed FD Reliable (UT-755L) is currently on charter with Peterson SBS and is expected to remain so until at least the end of February.

Maiden Charter for Olympic Electra The newbuild PSV Olympic Electra has been fixed for its first spot job in the North Sea. The MT-6009 L designed vessel was delivered from the Myklebust Yard with a naming ceremony taking place at the end of November last year. Olympic describes the vessel as a multipurpose field support vessel with diesel electric propulsion, low fuel consumption and high flexibility. The vessel is expected to be charter free on completion of its BP work.

Blue Fighter Newbuild Arrives The newbuild large PSV Blue Fighter joined the North Sea spot market in the middle of January. The PX-121 designed vessel arrived on the market charter free in Bergen. The vessel is equipped with DP2, deck area of 850 square metres and 6,340 BHP. The vessel is the first of two PSVs of the new design that are to be delivered from Ulstein Verft for Blue Ship Invest which is a shipping company in Ulstein. Blue Fighter's sister vessel Blue Warrior is set to be delivered in August 2012. ŠCopyright Braemar Seascope Offshore 2011


Click Here For More Details on Providence

Big Oil Stakes Claim

Providence Resources is continuing to use the GSF Arctic III offshore Ireland for its appraisal drilling programme at Barryroe. The project in the North Celtic Sea Basin commenced towards the end of 2011 and is now expected to continue in to February. Upon completion of the workscope with Providence, the rig will commence a charter with Nexen which has also chartered the jack-up Galaxy III until January 2013. Staying around Ireland, Centrica has taken on the jack-up Noble Byron Welliver for a three well programme in the East Irish Sea which is due to being in April and is currently expected to con-

tinue through to late July 2012. Rig activity over all remains strong with early indications for 2012 pointing to high levels of North Sea utilisation with almost all rigs chartered. The three exceptions being the jack-up GSF Galaxy I and the semisubmersibles JW McLean and Sedco 712 which are undergoing work in Invergordon. Meanwhile, the Leiv Eriksson rig which had been working in Greenland is due to arrive in the Falkland Islands before the end of January. The Ocean Guardian, which had been working in the region is on its way back to the North Sea where it is understood maintenance will be carried out.

There has a been a lot of market movement in recent weeks with smaller oil companies seeing a lot of interest from some of the large firms looking to secure extra resources. Premier Oil has completed its acquisition of Encore Oil. Meanwhile, Ithaca has announced that it is the target of a potential takeover. Further afield Statoil has taken a stake in Cairn’s Greenland acreage and there is increased interest in the Falkland Islands.


Jan-05

$0

Jul-08

Jan-09

Jul-09

Jul-10

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Stacked without future contract

May-10

Mar-10

Jan-10

Nov-09

6

Sep-09

6

May-09

Mar-09

Denmark Netherlands

Nov-08

Sep-08

Price

May-08

6

Jan-08

6

Mar-08

27

Nov-07

31

Jul-07

12

Sep-07

22

May-07

14

Jan-07

8

Mar-07

1

Nov-06

Norway UK/Irl

Sep-06

1

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Oil

Jul-05

Drillship Jackup Semi-Sub Total

Sep-05

$140

May-05

Mar-05

Rig Chart Rig Activity by Type and Country

Stacked with future contract Total 2

1 4 39

2 2 38

3 6 79

2005 2005--2011

$120

$100

$80

$60

$40

$20


Standby/ERRV

Series of Standby Tenders on the Market

SPD has tendered for a vessel from March for a three well programme (min 100 days) in the Northern North Sea with the Borgstein Dolphin and Nexen has circulated an enquiry for circa six months. Enquest are tendering for a vessel to support a drilling programme with the Stena Spey for a minimum of nine months from mid February. Total is thought to have finalised a 3-5 year charter of the VOS Valiant for support of a programme on the Laggan-Tormore fields West of Shetlands with the West Phoenix from the first half Feb.

Enquest Extends Esvagt Sigma Enquest has continued its existing charter of the standby vessel Esvagt Sigma to support operations with the Ocean Princess rig from early Janaury. The rig will be working on the development programme on the Alma /Galia fields (formerly known as Argyll / Ardmore). The vessel had previously been supporting enquest's drilling programme with the Transocean John Shaw since May 2010.

ADTI Takes VOS Defender for Six Months ADTI has chartered the VOS Defender to support a circa six month programme on the Bentley field, operated by Xcite Energy, in the Northern North Sea. The high specification newbuild jack-up Rowan Norway, which is currently moored in Dundee, is scheduled to mobilise to location in the middle of February. Another Vroon vessel, namely VOS Sentinel, has also been chartered by ADTI to support a one well programme with the Wilhunter in the Central North Sea commencing around March.

Standby Vessel Fleet Movements The 2007 built VOS Tracker has recently transferred from the Dutch sector to UK waters on completion of a three year charter with Total. The sister vessel, namely VOS Trapper, has been retained by Total for another six months or so. On the debit side two older vessels have been retired from the UK ERRV fleet. The 1973 built VOS Pilot and the 1969 built Nova operated by Vroon Offshore and Boston Putfords respectively. ŠCopyright Braemar Seascope Offshore 2011


Subsea

Apache II & Orelia to Work at Golden Eagle

Nexen has awarded a USD 135 subsea construction contract on its Golden Eagle development to Technip. The programme, which will include export, production, gas lift and water injection lines as well as control umbilicals is expected to be carried out by the Apache II pipelay vessel and the DSV Orelia. The workscope is due to be completed during the second or third quarter of 2014.

Normand Tonjer Gets 20 Day Rhum Job The ISS vessel Normand Tonjer has secured a contract to carry out inspection work on the Rhum field for BP. The vessel is due to commence the work around January 16th and continue until early February. The Normand Tonjer is currently equipped with a HiPap 500 acoustic tracking system for sub surface positioning and has a a built in air dive control room and ROV onboard. In addition the vessel has a 50 tonne crane and a helideck.

Technip Keep North Sea Giant to End 2013 The large offshore construction support vessel North Sea Giant has had its current contract with Technip Norge AS extended until around the end of 2013. The vessel will be working on flex-lay duties at the Goliat project in the Barents Sea. Technip still hold options on the vessel for 2014 and 2015. The North Sea Giant is equipped with a 400t offshore crane, DP3 and a deck area of around 2,900 square metres. It is capable of carrying out cable lay, pipelay, dredging and ROV support duties.

Subsea Market Summary Latest For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email: aberdeen@seascope.co.uk

ŠCopyright Braemar Seascope Offshore 2011


Renewables

MPI Adventure at London Array

The Wind Turbine Installation Vessel MPI Adventure is currently working on the London Array Offshore Windfarm. The vessel is currently installing foundation pieces for phase one of the project which will consist of 175 wind turbine, installed on two sandbanks. The Stemat Spirit is also at the site carrying out cable installation from around January 20th.

JB-114 Carries Out Construction at Lincs The monohull jack-up barge JB-114 is carrying out drilling works for foundations at the Lincs Offshore Windfarm. The MPI Resolution is also at the site performing foundation installations. The vessels are being supported by the Marineco Toomai and the Union Fighter. Guard vessels are also currently on site along the route of the export cable.

Last Export Cable for Greater Gabbard Cable lay barge ASV pioneer is performing the installation of the third and final export cable at the Greater Gabbard offshore wind farm. The barge is being supported by the tugs Thorax, EMS and Zwerver 3. A number of construction vessels including the Topaz Commander, Deep Cygnus, Relume, Seajacks Leviathan and Polar Prince have also been working on the project.

Swiber Else Marie in Renewables Role The Swiber Else Marie AHTS is currently working on the Walney 1 and 2 offshore wind farms. The vessel is understood to have recently completed burial of the infield and inter-array cables at the site and has carried out survey and mattress laying work. It is shortly expected to demobilise from the project before joining the Ormonde wind farm where work on the export cable route is scheduled to start in mid February. ŠCopyright Braemar Seascope Offshore 2011


AHTS Dayrates

Average North Sea Spot AHTS Rates 2010/2011 By Quarter

Average North Sea AHTS Spot Rates by Quarter £45,000 £41,273

£42,534

£40,000

£40,070

SPECS BOX

£35,000 £30,000

£28,265

£28,017

£28,429

£26,189

£25,000

£20,000 £15,000 £10,000

£20,029

£18,667 £15,833

£8,164

£10,436 £8,434

£8,392 £7,250

£7,187

£5,000 £0

Q1-2010

Q2-2010

Q3-2010

Q4-2010

Large - AHTS (16,000+ BHP)

Q1-2011

Q2-2011

Q3-2011

Q4-2011

Medium - AHTS (12-15,999 BHP)

PSV Dayrates

Average North Sea Spot PSV Rates 2010/2011 By Quarter

Average North Sea PSV Spot Rates by Quarter £30,000

£25,000

£24,375 £23,008 £20,701

£20,000

£18,314

£15,000

£15,833

£15,406

£15,218

£14,070

£11,743

£10,000

£10,335 £8,852

£8,465 £6,950

£6,764

£5,000

£0

Q1-2010

Q2-2010

Q3-2010

Q4-2010

Large PSVs (700m2+ Clear Deck)

£6,941 £5,980

Q1-2011

Q2-2011

Q3-2011

Medium PSVs (500-700m2 Clear Deck)

Q4-2011


AHTS Dayrates

Average North Sea Spot AHTS Rates 2010/11

£90,000

£80,000

£70,000

£60,000

£50,000

£40,000

Large - AHTS (16,000+ BHP) 2010 Medium - AHTS (12-15,999 BHP) 2010

Large - AHTS (16,000+ BHP) 2011 £30,000

£20,000

Medium - AHTS (12-15,999 BHP) 2011

£10,000

£0

PSV Dayrates

Average North Sea Spot PSV Rates 2010/11

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

£0

Large PSVs (700m2+ Clear Deck) 2010 Medium PSVs (500-700m2 Clear Deck) 2010

Large PSVs (700m2+ Clear Deck) 2011 Medium PSVs (500-700m2 Clear Deck) 2011


£0

Jan-04

Large PSVs (700m2+ Clear Deck)

Medium PSVs (500-700m2 Clear Deck)

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

Nov-09

Sep-09

Jul-09

May-09

Mar-09

Jan-09

Nov-08

PSV Dayrates

Sep-08

Jul-08

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

Nov-09

Sep-09

Jul-09

May-09

Mar-09

Jan-09

Nov-08

Sep-08

Jul-08

May-08

Mar-08

Jan-08

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Sep-05

Jul-05

May-05

Mar-05

Jan-05

Nov-04

Sep-04

Jul-04

May-04

£60,000

May-08

Jan-04

Mar-04

£80,000

Mar-08

Large - AHTS (16,000+ BHP)

Jan-08

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Sep-05

Jul-05

May-05

Mar-05

Jan-05

Nov-04

Sep-04

Jul-04

May-04

£0

Mar-04

AHTS Dayrates Average North Sea Spot AHTS Rates 2004 2004--2011

£140,000

£120,000

£100,000

SPECS BOX

£40,000

£20,000

Medium - AHTS (12-15,999 BHP)

Average North Sea Spot PSV Rates 2004 2004--2011

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000


The Renewables Vessels Newsletter

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Sean Bate Market Analysis Manager 25 Carden Place Aberdeen AB10 1UQ UK Phone: +44 (0)1224 628470 Fax: +44 (0)1224 621444 E-mail: research @seascope.co.uk


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