Languishing oil prices have pushed oil exploration and production companies to drastically reduce rig counts. And that has dealt a heavy blow to the offshore supply vessels that support drilling platforms by offering everything from resupply to rescue services. To survive, vessel operators will need new ways to navigate these choppy waters.
At a glance
- Even as demand for offshore supply vessels shrinks, global vessel counts have increased—raising the vessel-to-rig-count ratio, and shrinking vessel operators’ margins and contract prices.
- The outlook for this energy-industry subsector varies across regions—including Brazil, the Middle East, and Southeast Asia—depending on factors such as state oil producers’ performance, degree of vessel oversupply, and rules governing competition in the subsector.
- Many offshore supply vessel companies are at risk of bankruptcy. To avoid it, they’ll need to make aggressive moves. For instance, they’ll have to cut operating expenses and capital expenditures, maximize fleet utilization, and negotiate better rates from their own service providers.