OSV Sector Wary of Overcrowding
The offshore support vessel (OSV) segment – over-capacity driving down utlilization and charter rates
THE offshore support vessel (OSV) segment - touted as the bright spot where other traditional shipping markets are suffering - may entice tanker and bulk-carrier operators to jump ship, according to a recent Singapore Business Times article.
However, OSV operators and owners are wary of such a crossover, and warn that if the sector gets more crowded, it may derail a recovery in charter rates that is expected to come about in two to three years' time.
There are about 3,000 OSVs that support oil and gas offshore exploration - a sliver of the 70,000 merchant ships - but it is a sector that gained attention at a time when oil companies are expected to spend about US$600 billion in exploration and production activities.
It is in an overcapacity situation, which has driven utilisation rates and charter rates down in the past years.