Forced vessel sales, mergers and consolidations are on the cards for the offshore industry as assets decline in value, according to a consultancy.
VesselsValue.com (VV) expects offshore fleets will continue to spiral downwards amid the current oil price crisis and coronavirus pandemic, with the outlook “extremely testing” for everyone from oil majors to small service providers.
Using the example of Norway’s Solstad Offshore, which went into financial restructuring in March, VV expects the waters to remain troubled.
Solstad’s restructuring deal requires removal of 37 vessels from its fleet of 124, comprising 97 offshore support vessels and 27 construction ships.
This would bring the fleet value down from $1.48bn to $1.36bn, VV said, adding that it represents a “significant milestone” for the sector as it tackles oil prices which last week hit their lowest in two decades.
The firm said: “It is unknown how long this current economic situation will last, but what is known is that the Offshore industry is in retraction and the outlook will be extremely testing for everyone from oil majors to small service providers and all those in between.
“All signs points to another period of restructuring, forced vessel sales, mergers and consolidations.”