Prosafe accommodation semi-submersible Safe-Caledonia (source: Prosafe)
Demand for offshore accommodation semi-submersibles will increase in the medium term, but 2023 is looking soft in the North Sea
Owners of these large support units, Prosafe and Floatel International, expect market weakness in the UK and Norway this year, but a tightening market and global undersupply from 2024 onwards.
“We believe 2023 will be weak in the North Sea with limited prospects for [accommodation semi-submersibles] Safe Caledonia and Safe Boreas,” said Prosafe chief executive Jesper Andresen.
Prosafe expects capex and mobilisation expenditure on its accommodation vessels in preparation for new contracts in Brazil and US Gulf of Mexico will negatively impact its liquidity in 2023.
“In contrast, we see increasing activity in 2024 and beyond. Based on discussions with clients, we expect several additional tenders in the North Sea and Brazil for 2024 in the coming months,” said Mr Andresen
He is even more upbeat about the market for offshore accommodation semi-submersibles for the rest of the decade.
“For the longer term, the company remains optimistic on the outlook and sees significant potential for market tightening and increasing day rates,” he said.
The board of directors of Floatel International were also positive for the long-term future, based on continuing high energy prices and a reduced global fleet, but are realistic about the 2023 market.
“The market remains partly oversupplied, resulting in modest near-term price increases,” said the Floatel board in the recent annual report.“2023 is estimated to be a soft year, especially in the North Sea, with opportunities moving to 2024 and beyond.
“We believe the demand for offshore accommodation services will increase from 2024 based on visible and predicted higher customer activity levels, evidenced by current client discussions and tender activity.”
There are 18 purpose-built, semi-submersible accommodation units worldwide and two vessels are yet to be delivered. Older vessels have been scrapped and Floatel expects remaining older vessels to exit the market in the coming years.
“The reduced supply will result in higher utilisation and, with some time lag, also prices,” the board said.
Utilisation for the worldwide fleet of semi-submersible accommodation support vessels was 77% in Q4 2022, compared with 54% in Q4 2021.
Prosafe had a contract backlog of US$332M at the end of Q4 2022, up from US$126M from the end of December 2021.
This includes a US$73M contract to provide Safe Zephyrus to Brazilian energy group Petrobras for 650 days, commencing in May 2023.
“We had high operational activity in Q4 2022. Safe Boreas, Safe Caledonia and Safe Zephyrus all completed their contracts during the period and were safely demobilised,” said Mr Andresen.
Floatel’s fleet utilisation was 60% and its contract backlog, excluding options, was around US$219M at the end of 2022
Floatel Triumph was idle in Kemaman, Malaysia in February and has departed to Australia to begin a charter with Woodside from mid-March 2023.
