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Oil Price Crash News

31 Aug 2023

The Resurgence of the OSV Industry: From Trough to Triumph

Photo Copyright: Arlid/AdobeStock

The offshore supply vessel industry has weathered a tumultuous decade characterized by a prolonged trough that tested the resilience of vessel owners. However, the tides have turned, and the industry is now experiencing a strong and much-awaited revival.The offshore supply vessel industry has weathered a tumultuous decade characterized by a prolonged trough that tested the resilience of vessel owners. However, the tides have turned, and the industry is now experiencing a strong and much-awaited revival.While long seen as a derelict industry by investors…

03 Jan 2023

2023 Outlook: The Offshore Service Vessel Market

Copyright Ramon Cliff/AdobeStock

The market for offshore support vessels has been through a rather rough few years since offshore exploration and production activity took a nose-dive in 2015 following the oil price crash the year before.The newbuild order boom that came with the ever-greener pastures imagined in the industry ensured that not only was the supply- and demand balance off by an insurmountable degree in the years that followed, but at its peak, in 2017, the oversupply of anchor handling tug supply…

01 Mar 2021

One-third of Hin Leong Founder's Ships Sold to Pay Down Debt

About one third of the roughly 150 ships owned by companies controlled by Singapore tycoon Lim Oon Kuin and his family have been sold as part of efforts to repay billions of dollars of debt owed to creditors, two sources told Reuters.Accounting firm Grant Thornton, court-appointed supervisor of Xihe Holdings, put up several vessels for sale through shipbrokers in September last year. Xihe Holdings is owned by the Lim family and held the bulk of their fleet.The rest of the ships are majority-owned by Xihe Capital - currently under liquidation according to Singapore business registry records - and 10 single purpose companies.The ships…

03 Feb 2021

Valaris Drillship Goes Adrift off Scotland

A Valaris drillship went adrift on Tuesday evening, breaking free from moorings near the port at Hunterston, North Ayrshire, Scotland.According to BBC, which was the first to report on the incident on Wednesday, "a major rescue operation has been ongoing overnight," when the 228 meters drillship, Valaris DS4, broke free and started drifting without power.According to the news agency, coastguard rescue teams, vessels, and a helicopter were dispatched to the scene, and no injuries have been reported.Offshore Engineer has reached out to Valaris and Maritime and Coastguard Agency, seeking more info. Valaris did not immediately respond. A…

25 Jan 2021

Why Are Pirates Attacking Ships in the Gulf of Guinea?

© Venera / Adobe Stock

Pirates are stepping up attacks on ships in West Africa’s Gulf of Guinea, defying regional navies. On Saturday, pirates off Nigeria kidnapped 15 sailors from a Turkish container ship and killed one.Pirates in the Gulf of Guinea kidnapped 130 seafarers in 22 separate incidents last year, accounting for all but five of those seized at sea worldwide.Who are the pirates and why are the attacking?The pirates come from Nigeria’s turbulent Niger Delta, experts say. The region produces the bulk of the nation’s petroleum…

17 Sep 2020

Report: Seven Xihe Holdings Tankers Up for Sale

The supervisor of Singaporean shipping group Xihe Holdings Pte Ltd has put seven oil tankers controlled by the company up for sale as part of efforts to recoup funds owed to creditors, three sources said on Wednesday. Xihe Holdings is part of the Lim family business empire, which also includes oil trader Hin Leong Trading and fleet manager Ocean Tankers (Pte) Ltd, both of which were placed under court-appointed supervisors earlier this year.The sale includes three crude oil supertankers and is expected to get fully underway in the coming days, the sources said.The ships were valued at a total of just over $196 million, according to vessel…

02 Jul 2020

Spring Oil Flood Causes Summer Queues in Chinese Ports

© Igor Groshev / Adobe Stock

Chinese ports are struggling to unload record volumes of crude with storage tanks full after the country rushed to buy extra barrels during April's oil price crash, according to traders and shipping data seen by Reuters.More than 80 million barrels of crude oil are currently waiting to be discharged from tankers in Chinese ports, Refinitiv Eikon data showed.Half of those are at the Qingdao port area in Shandong province, where the waiting time is two-three weeks or sometimes even longer…

12 Jun 2020

Pandemic Forces Ship Owners to Shelve Scrubber Installs

Ship owners are postponing or canceling the installation of “scrubbers” that extract harmful sulphur emissions from their vessels as the coronavirus pandemic tightens finances.Regulations from United Nations agency the International Maritime Organization (IMO), which took effect in January, were viewed by the oil and shipping industries as one of the first worldwide efforts to enforce environmental change.The rules aimed to make ships use fuel with a sulphur content of 0.5%, compared with 3.5% previously. Operators had the alternative option to install devices - scrubbers - to strip out the pollutant, which causes lung problems among humans and contributes to acidification of oceans and acid rain…

07 May 2020

US Barging Industry Navigating Black Swan Events

(Photo: Campbell Transportation Company)

The combination of the coronavirus pandemic and oil price freefall have affected most maritime markets, including inland waterway shipping. Looking at U.S. river transport in particular, the impacts of these two black swan events vary greatly depending on the type of cargo being carried.David Grzebinski, CEO of the America’s largest tank barge operator, Kirby Corp., said in a March conference call that petrochemical customers have driven the market higher as plants and refineries look to shore up their supply chains amid current market upheavals…

30 Apr 2020

Valaris Says Rigs May Be Idle for Up to Two Years

Offshore drilling contactor Valaris, which is exploring a bankruptcy restructuring, on Thursday said it could take up to two years to reactivate idle equipment as contracts dry up during a historic rout in oil prices.Global oil markets have collapsed since the beginning of March as the coronavirus pandemic has crushed fuel demand. Expensive offshore drilling projects have been halted or delayed, creating an uncertain outlook for service firms that had hardly recovered from the last oil price crash.London-based Valaris, the result of the 2019 merger of Ensco Plc and Rowan Companies, posted a $2.81 billion asset impairment charge in the first quarter.

15 Apr 2020

Offshore Drilling: It’s Going to Get Worse Before It Gets Better

Copyright Mike Mareen/AdobeStock

The Offshore Rig Market – At $30 Oil Offshore Drillers May Be Out of OptionsCOVID-19 and low oil prices are already having an impact on the offshore rig market as contractors face crew and logistical challenges and E&Ps attempt to prioritize drilling campaigns.Contract scrutiny has already led to a few contract cancellations and the first claims of force majeure.However, contract options are at most risk. Over $1.6 billion in contract value is at stake for options that are due to be exercised this year.

20 Mar 2020

No Need for a Jones Act Waiver -AMP

© Cliff W Estes / Adobe Stock

America's maritime industry has hit back at a recent request by U.S. shale drillers to waive the Jones Act, a law requiring goods transported between U.S. ports to be carried on ships that are built, owned and operated by Americans.The American Exploration and Production Council, which represents independent oil firms that have been thrashed by an oil price war between Saudi Arabia and Russia and the fallout from the global coronavirus outbreak, sent a letter to congressional…

30 Jul 2018

Singapore's Offshore Industry Recovering

© ligados / Adobe Stock

A big drag on Singapore's growth in recent years, the embattled offshore and marine industry, has broken a three-year losing streak. Yet industry executives aren't betting on a return to the glory days anytime soon.The industry, along with a top-class finance sector, has been a key pillar of Singapore's economic transformation into a first world economy since independence from British colonial rule in 1965 and a source of national pride. But a 2014 collapse in oil prices has resulted in thousands jobs lost…

05 Apr 2018

Oil Firms Must Pay More for Service Vessels -Norway Ship Owners

Harald Solberg  (Photo: NSA)

Oil companies should be prepared to pay higher rates for renting offshore service vessels, in order to secure the long-term survival of a key part of the industry's supply chain, the Norwegian Shipowners' Association said on Thursday. Energy firms sharply curtailed investments in the wake of the 2014 oil price crash, idling many service vessels and driving down market rates to unsustainable levels, Chief Executive Harald Solberg of the Norwegian lobby group said. At the peak last year…

21 Jan 2018

Keppel Explores Sale of Jack-up Rigs to Borr Drilling

Singapore yard Keppel Corporation is considering a sale of jack-up rigs to Norwegian offshore drilling contractor Borr Drilling, reports The Business Times. The world’s biggest builder of oil rigs is seeking to offload six jack-up rigs for up to US$960 million to the Oslo-listed drilling firm headed by Tor Olav Trøim, said the report. BT also reported that Keppel Capital has already hooked up with structured finance provider Clifford Capital to potentially extend a sale-and-lease-back arrangement for at least one jack-up contracted by Grupo R. The global offshore oil drilling sector is slowly trying to emerge from an industry downturn since the oil price crash.

04 Oct 2017

Offshore Rig Firms See End to Historic Downturn

Aker BP recently awarded a contract worth up to $68 million to Odfjell Drilling for the lease of the semi-submersible drilling rig Deepsea Stavanger in the Norwegian Sea and the Barnts Sea (Photo: Aker BP)

Demand for offshore rig rental globally is starting to recover from its worst ever downturn, led by oil firms' growing demand for harsh-environment exploration and triggering multi-billion dollar tie-ups among drillers hoping to profit, executives said. While the 2014-2016 oil price crash caused firms to cut exploration budgets, ending a boom in rig demand and bankrupting many owners, energy companies are now seeking to replenish their hydrocarbon reserves. The nascent demand for harsh-environment rigs…

18 Apr 2017

Sovcomflot Holds PDVSA Oil Hostage over Debts

Venezuela's state-run oil company, PDVSA, sent a tanker in October to the Caribbean with the expectation that its cargo of crude would fetch about $20 million - money the crisis-stricken nation desperately needs. Instead, the owner of the tanker, the Russian state-owned shipping conglomerate Sovcomflot, held the oil in hopes of collecting partial payment on $30 million that it says PDVSA owes for unpaid shipping fees. Despite a longstanding alliance between Venezuela and Russia, Sovcomflot sued PDVSA in St. Maarten, a Dutch island on the northeast end of the Caribbean. "The ship owners ... imposed garnishment on the aforementioned oil cargo," reads a March decision by the St. Maarten court.

13 Feb 2015

LNG Tankers Idled as Gas Downturn Widens

Combined tanker capacity of at least 2.25 mcm LNG lies unused. Over a dozen liquefied natural gas (LNG) tankers are parked, many idle, in and around Singapore - one of the world's biggest trading hubs for the fuel - in a sign that the slowdown engulfing world gas markets may be worsening into a crisis. With Asian spot LNG prices down by almost two-thirds since February 2014 as slowing demand combines with rising output, shippers are parking their tankers close to ports like Singapore where unused ships can be easily maintained and serviced until new orders come in. Leading ship brokers estimate over one-tenth of the global fleet of 400 LNG tankers is currently unused because of slowing growth in Asia's biggest economies. The impact just in Singapore suggests the problem could be worse.

27 Mar 2015

Advanced Drillships a Burden for Owners as Business Slows

Not so long ago, advanced drillships costing more than half a billion dollars each and capable of operating in ever-deeper waters practically guaranteed big profits for oil-rig operators. Now, with oil prices down by half since June, many have become a burden on their owners as drilling activity slows. Drillship operators face a more brutal hit to margins than they did after the oil-price crash of 2008 because of the huge cost of maintaining the more than $10 billion worth of state-of-the-art vessels that have been idled at sea, analysts say. Noble Corp Plc, Ensco Plc and Transocean Ltd are among companies that have invested in advanced rigs which, unlike older jack-up rigs that attach to the ocean floor, rely on dynamic positioning systems using thrusters to keep them in position.

16 May 2016

Oil prices up on Nigeria outages, Goldman Forecast

Unrest cuts Nigerian output to lowest in decades; U.S., China output also down sharply. Oil prices jumped over 2 percent on Monday to their highest since November 2015 on growing Nigerian oil output disruptions and after long-time bear Goldman Sachs said the market had ended almost two years of oversupply and flipped to a deficit. Brent crude futures were trading at $48.83 per barrel at 1118 GMT, up $1 or 2.05 percent. U.S. crude futures were up 98 cents, or 2.08 percent, at $47.19 a barrel. Supply disruptions around the world of as much as 3.75 million barrels per day (bpd) have wiped out a glut that pulled down oil prices by as much as 70 percent between 2014 and early 2016.

02 Sep 2016

How Can the Marine Industry Counteract Its Aging Workforce?

File photo: Brian Cronk

It’s been widely reported over recent years that the maritime industry is facing a workforce crisis. A lack of newly trained candidates to fill the gaps caused by retirement of an aging workforce, now compounded even further by the oil price crash, means marine companies are beginning to feel the pressure of staff shortages. The U.K. Department for Transport (DFT) predicts a shortfall of around 3,500 deck and engineering officers by 2021 in the U.K. alone, and the BIMCO / ICS Manpower Report predicts the global shortfall of 147,500 officers by 2025.

07 Nov 2016

Canada Oil Spill Program Hit by Cheap Crude

The two-year oil price crash has hurt a Canadian government program that funds research on oil spill cleanups, resulting in fewer applicants than expected, a senior federal official said. As a result, the government will expand the scope of its Oil Spill Response Science Program and open a second call for applications this month, Marc Wickham, Natural Resources Canada's director of energy science and technology programs, said in an interview late last week. The program funds research that improves cleanup methods for marine oil spills. Those eligible include production, pipeline and shipping companies in the energy sector. Wickham spoke with Reuters after it obtained details of the program's amendment through an access-to-information request.

09 Feb 2015

Diamond Offshore Scraps Special Dividend on Weak Market

Ocean Endeavor (Photo:  Diamond Offshore)

Rig contractor Diamond Offshore Drilling Inc said it expected a significant number of ultra-deepwater rigs to be idled across the industry by year-end as oil producers' capital budget is likely to be lowered by a fifth this year. The company also said it would not pay a special dividend as it had been doing since 2006 to save cash to take advantage of opportunities in a distressed market. "...This action saves the company about $415 million over the next year, potentially equivalent to the cost of an ultra-deepwater asset," Evercore ISI analyst James West wrote in a note.