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20101101 - The Standard OSV Developments in South East Asia - November 2010, Singapore
1. Standard Asia Offshore Forum Monday 29 November 2010The Offshore Market OSV Development in South East Asia Captain Mike Meade, MNI CEO, M3 Marine Group M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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3. M3 Marine - ExpertiseM3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
13. Vessel Suitability – Consultancy, in the main ‘Client based’M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
21. Most of the ‘commentary’ (broker reports, LL, Fairplay etc) focus on North Sea, GoM or ‘Deep’ Brazil…..butM3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
22. Geography Sphere of influence here? – half of the world ? M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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26. Current OSV fleet may not be sufficient in meeting demand as a result of charterers’ increasingly demanding requirements, and the push for younger and “greener” vessels by regulators.
27. This will benefit patient shipowners with younger and more sophisticated vessels, and OSV shipyards with the capabilities to build the “replacement” vessels.M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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29. However, oil fundamentals are improving. It is expected to see a 5% and expect a 15% y-o-y increase in E&P spending growth in 2010, and 2011, respectively.Source: M3 with Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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31. Increases in oil demand will increase oil prices, which in turn boost E&P spending.
32. This translates to higher demand for oil services assets.Source: Reuters M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
35. Note this graph predates the GFC but is still relevantSource: Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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37. The region’s demand remained resilient despite the challenging market since H2’08.
38. Expect oil and gas demand to grow in the region going forward supported by rising living standards in South East Asia.Source: BP M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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40. The global OSV space contains 2,000-2,500 other OSVs including Construction Support Vessels (CSVs), Dive Support Vessels (DSVs), Tugs, and Crew boats.Source: ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
41. Approximately 800-1,000 OSVs located in South East Asia AHT, AHTS, and PSVs in South East Asia There are nearly 400 Anchor Handling Tug Supply (AHTS), and Platform Supply Vessels (PSV) in South East Asia. The region also contains a further 500-800 other OSVs including Construction Support Vessels (CSVs), Dive Support Vessels (DSVs), Tugs, and Crew boats. This fleet represent approximately 20% of the global OSV fleet. Source: ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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43. Approximately 78% of the PSVs in South East Asia have less than 2,000 dwt capacity.Source: ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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45. Approximately 21% of the fleet lies between 20-30 years. This fleet may be considered “non-competitive” in most eyes.
46. OSV charterers are increasingly looking for younger and more sophisticated OSVs.
47. There is also a push towards younger and “greener” vessels (e.g. vessels with diesel electric engines, etc)
49. If so, what size ?Age profile of OSV fleet operating in South East Asia Source: M3 with Pareto research, ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
56. Further, 21 AHT, and 383 AHTS may become “non-competitive” in the next few years.Source: M3 with Pareto research, ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
57. OSV market has a bigger appetite for OSV newbuildings?An investment Bankers view…. Net AHT, AHTS, and PSV fleet (global) Net OSV supply should not deviate significantly from 2008 levels if we consider the “non-competitive” fleet. The OSV market was able to achieve very high utilisation in 2008 when offshore fundamentals were still good. Increasing demand for oil will only increase demand for more OSVs going forward. Bigger appetite for OSV newbuildings? Source: M3 with Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
58. Competitive landscape on OSV players in SEA / ME Size (Current + NB Fleet) Market Presence Score Source: Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
59. Competitive landscape on OSV operators based in South East Asia Great Offshore Greatship Source: Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
60. Competitive landscape on OSV operators in Middle East Source: Pareto research M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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62. Coupled with their proximity to regional shipowners, South East Asian yards are in a good position to capture orders for smaller OSV newbuildings.
63. More South East Asian yards are also increasingly able to build larger vessels at lower costs due to “technology transfer” from the European yards.
64. This provides further revenue upside for the region’s yards.Note: AHTS is used to represent the sizes of OSVs built in Asian and European yards. Vessels built in Other Asian yards may include vessels that are outsourced from yards in other regions. Source: Pareto research, ODS-Petrodata M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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66. However, yards need to be in a healthy financial position Note: Production output is computed basis the average gross tonnage of OSV vessels delivered p.a. over periods 2008 and 2009. Delivered vessels may include vessels outsourced to, and constructed from the Chinese yards. Source: M3 with Pareto research, utilising Lloyd’s register, Company data M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
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69. Increase in requirement ‘demands’ will benefit shipowners with younger and more sophisticated vessels, and OSV shipyards with the capabilities to build the “replacement” vessels.
70. A contrarian view is that the market is overbuilt, Does the Singapore anchorage tell a story ?
71. Will Asia catch a cold from the looming ‘Euro zone’ financial crisis….. The GFC brought a mere sniffle ! (note I am not an investment banker)M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.
72. Thank you Questions Questions ? M3 Marine Pte Ltd 15 Jalan Kilang Barat #06-03 Frontech Centre Singapore 159357 t: +65 6327 4606 m: mail@m3marine.com.sg w: www.m3marine.com.sg All rights reserved.