News

Bengal Tiger Line: Taking the chartering route

Bengal Tiger Line: Taking the chartering route

Singapore: Feeder operator Bengal Tiger Line (BTL) defines the very essence of niche marketing. As a common feeder facilitator, it has managed to remain neutral in the industry, only carrying boxes belonging to the mainlines and NVOs, and operating only on feeder sectors.

Harrison Brothers Dry Dock & Repair: On to pastures new

Harrison Brothers Dry Dock & Repair: On to pastures newMobile: After 117 years one of America’s grand old shipyard names is to close. William Harrison, the president of Harrison Brothers Dry Dock & Repair Yard, explains why. He has no successor and is not keen to let a third party run...

Knud E. Hansen: At the forefront of the LNG revolution

Knud E. Hansen: At the forefront of the LNG revolutionHelsingør: Despite the current drop in oil prices, the trend to shift towards LNG as a fuel for ships is something that will continue in the years ahead, argues a leading ship designer in today’s Maritime CEO interview.

Lade: Harnessing the power of wind

Lade: Harnessing the power of windOslo: Oil prices might be falling fast, but environmental regulations continue to tighten meaning the rush to develop innovative green ship designs continues. One amazing looking vessel design making waves lately, including on CN...

Viking Line: Grappling with ECAs

Viking Line: Grappling with ECAsHelsinki: For Jan Hanses 2015 is all about getting used to operating within an emissions control area, The ceo of ferry firm, Viking Line, has six of his seven vessels sailing in the new Baltic ECA which came into being on January 1...

Österreichischer Lloyd: Gap widens between dry bulk and containers

Österreichischer Lloyd: Gap widens between dry bulk and containersLimassol: The fortunes of dry bulk and container shipping look to be headed in very different directions, according to the veteran head of one of Cyprus’s top names in shipping. Captain Eberhard Koch, a German national, is chai...

Ningbo Port: Shipping hub in the making

Ningbo Port: Shipping hub in the makingNingbo: Ningbo Port, one of China’s leading ports in terms of cargo throughput, is ramping up for a new round of growth. Ningbo Port’s cargo throughput and container throughput exceeded 500m tons and 20m teu respectively for ...

ISSA: 60th anniversary year

ISSA: 60th anniversary yearSingapore: The new president of the International Shipsuppliers & Services Association (ISSA), Abdul Hameed Hajah, has outlined his priorities for the year ahead with innovation and cross industry co-operation sitting at the top of...

E. A. Gibson: Going it alone

E. A. Gibson: Going it aloneLondon: Last week it was announced that after more than 120 years of association, E. A. Gibson Shipbrokers will split from its parent company, Hunting, the FTSE 250 international oil services group. The transition will, subject ...

GIGS: Bringing shipping up to speed

GIGS: Bringing shipping up to speedGöteborg: With shipping at heart, Lena Gothberg is developing her own company with a bunch of free-floating projects, consultancies and part-time bits and pieces – GIGS. After four years with the Institute of Shipping Analysis...

Nobu Su: Inventions and court cases

Nobu Su: Inventions and court casesTaipei: One of shipping’s most enigmatic figures returns to Maritime CEO. At a time when he still faces a number of court cases, with some suggesting he keep a low profile, Nobu Su, the chairman of TMT, is back in the limelight, t...

Global Navigation Systems: New man at the helm

London: This week it was announced that Paul Stanley was taking over from Mike Robinson as chief executive of Global Navigation Systems (GNS), the private equity backed navigation service provider. GNS has created a global, one-stop shop approach to ...

DME-EUMT: Efficiency solutions

Svendborg: A fully integrated partnership between Dan-Marine Europe (DME) and European Marine Technology (EUMT) has been established, announced just yesterday. The new venture has been possible after SeaMall’s founder and CEO, Per Nykjaer Jensen...

AAL: Fleet set to surpass 500,000 dwt

Singapore: The multipurpose (MPP) sector continues to face ever growing pressure from the container and bulker trades, squeezing freight rates, admits the boss of one of the leading names in the MPP segment. However, Kyriacos Panayides, managing dire...

Hapag-Lloyd: Climbing the ranks

Hamburg: Our most recent cover star on Maritime CEO magazine, Rolf Habben Jansen, is back in the new year outlining significant expansion plans. The new Hapag-Lloyd, which officially completed the merger with Chile's CSAV in early December, will orde...

Future of Shipping Poll returns

Singapore: Maritime CEO positions itself as the thought leadership vehicle for the shipping industry and with this in mind over the festive period we are launching our regular annual Future of Shipping Poll, the results of which will be released in t...

Maritime CEO: The year in review

Singapore: As 2014 draws to a close shipowners are in no better state than a year ago. Indeed, many shipping lines’ balance sheets are even more stretched than at the end of 2013. What has been remarkable about this protracted downturn has been how...

Dagfinn Lunde: Overcapacity concerns

Athens: Today we catch up with one of the most famous names in ship finance, Dagfinn Lunde, who, since leaving DVB Bank, has taken on a range of roles including becoming this title’s regular finance columnist.

Rajaish Bajpaee: Shipmanagement veteran on a changing industry

Hong Kong: On Monday it was announced that one of the most famous names in shipmanagement was handing over the reins of day-to-day business at Bernhard Schulte Shipmanagement (BSM). Rajaish Bajpaee will hand over ceo responsibility to his current ...

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2014 Issue 4
Singapore 14

In Focus

Cheaper oil puts brakes on OSVs

Kohe Hasan from law firm Oon & Bazul on the offshore outlook for 2015

Cheaper oil puts brakes on OSVs

The offshore supply vessel (OSV) industry has seen significant growth in recent years. However, the steep fall in oil prices of late could put a spanner in the works for the OSV industry.

At present, global oil prices are in the middle of one of its steepest selloffs since the financial crisis of 2008/2009.  World oil prices, which were hovering in the region of $110 per barrel from January 2010 until mid-2014, have taken a nose dive since June, more than halving in the past six months.

Whilst the decline in oil prices is likely to be a boon for consumers, the same cannot be said for the OSV industry. This is because oil majors are likely to cancel or delay their drilling operations and big-ticket production projects which are predicated on high oil prices. Evidence of this can already be seen in the recent announcement by ConocoPhillips that it would be cutting investment spending in 2015 by 20%.

The potential reduction in drilling operations and production projects would be of particular significance to OSV operators (both owners and charterers). This is so as drilling operations are a key driver in the demand for the use of OSVs such as platform supply and anchor handling tug vessels. OSV operators are therefore expected to experience a fall in the demand for OSVs.

One possible repercussion of the fall in the prices of oil and the expected fall in demand for OSVs is that charterers may seek to discharge themselves from charterparties which they had concluded prior to this decline. Such a trend was seen from the collapse of the freight market in 2008 which saw many charterers in the dry bulk industry attempt to discharge themselves from unprofitable charters. Similarly, this trend is likely to be seen in the context of the OSV industry as charterers would find that their charterparties have become significantly less profitable if the OSVs are unutilised as a result of the fall in demand. The need to discharge  ...   More>>