Daily rates in the offshore market hit an 8-year high in 2022

Dayrates for rigs, OSVs and subsea support vessels hit their highest levels since 2014 last year, according to Clarksons.

In its review of its full-year 2022 data, Clarksons Research said its Clarksons Offshore Dayrate Index rose 32% in 2022 to 84, compared to 100 in 2014 and 45 in 2017.

“Energy markets supported increased offshore activity with strong oil prices (Brent averaging $99/bbl driven by the Russia-Ukraine conflict and post-Covid demand recovery) and a renewed focus on energy security (offshore oil and gas still makes up 16% of the world’s oil and gas from energy supplies, but only 3% of offshore production is Russian),” said Steve Gordon, managing director of Clarksons Research.

Clarksons said the improved market was the result of a prolonged period of consolidation, normalization of post-pandemic activity, accelerated financial investment decisions by national oil companies and record investments in mobile offshore production units.

“The beneficial effects of multi-year fleet consolidation and shrinkage, both 2014-19, and the immediate impact of Covid-19 continued. However, 2022 saw fewer demolitions and more S&P activity (amid rising asset prices) and reactivation from decommissioning and legacy delivery as markets improved. There is more talk of new build projects for rigs and OSVs (charterer projects/low emissions) but with current cash flow, new build prices, financier attitudes, concerns over residual value and shipyard availability this may be starting to come through.” said Gordon.

OSV demand increased by 7% in 2022, increasing occupancy by 4 points year-on-year to 70%.

“Our index of daily OSV rates rose 29% to 138 points (still 18% below the 2014 peak). In the significant large PSV North Sea futures market, rates ended the year up 74% to £16,000/day,” said Gordon.

Rig markets also improved as an 11 percent growth in demand led to a 7 point increase in occupancy. Broken down by sector, jack-ups saw a 10% increase in demand and an 87% occupancy rate, while floaters saw a 15% increase in demand and an 84% occupancy rate.

Clarkson forecasts that rig utilization will reach 93% in the coming years, with more information available on its Offshore Intelligence Network.

Source: News Network