The North Sea vessel market is badly overstocked and needs more M&A activity to help lower inflated prices, a new report shows.
Three more anchor handling tug supply (AHTS) vessels and 15 platform supply vessels (PSVs) went into layup during October amid a dearth of contracting opportunities, according to the latest Navigator report by Westshore Shipbrokers.
It means about 150 AHTSs or PSVs are laid up while just 100 are left trading on the spot market.
Thirty-seven percent of the total fleet – which includes vessels working on term charter, as well as those on the spot market – was laid up that month as more owners took tonnage out of the market
Report author Inger-Louise Molvær, an offshore analyst at Westshore, said the problem was partly caused by the fact vessel numbers have increased by nearly 75% in the last decade, while the amount of owner companies has also risen.
Ms Molvær said: “The main change from a decade ago is primarily the growth in the fleet as a result of the last boom in newbuilds.
“But what we need to see happen now is that the spread of owners is reduced to cope with the challenge of having so many vessels and in the current environment – too many vessels.
“It’s difficult to say which company will be next to announce it will emerge from this crisis in a different form from that which it went into it with.
“But with nearly all the offshore owners declaring financial troubles, restructuring plans, further laid up tonnage, it’s a fairly safe bet that we will see more consolidation before we see the light at the end of this tunnel.”