The appetite for new platform supply vessel (PSV orders) in the US Gulf has abated, but there remains a hefty backlog of newbuild vessel orders that originated in 2012 and 2013. How did we get to the current situation of too many vessels and insufficient demand?
It goes back to the Deepwater Horizon drilling moratorium, which created pent up demand for deepwater rig projects which coincided with an insufficient supply of deepwater PSVs in the US. About 50 PSVs had left the US Gulf in 2010-2011 for long term jobs in Brazil, Mexico and West Africa. Dayrates and utilization of PSVs with dynamic positioning went up in 2012/2013 which generated large orders for US-built PSVs.
A few years ago Edison Chouest Offshore, Hornbeck Offshore Services and Harvey Gulf International Marine built aggressively to capture the growing deepwater market, but they have overbuilt and saturated the US market with too many high-spec PSVs. Rig and vessel companies alike anticipated greater offshore exploration and production activity, but low oil prices changed everything. Unfortunate timing has aligned a contraction of offshore E&P activity with a growing fleet of offshore supply vessels.
Today, term dayrates for large PSV are down below USD 30,000 and many vessels have been cold stacked for lack of work (including newbuilds). Large PSVs in the US Gulf had been trading between USD 34,000-43,000 just a year ago. OSV owners are reducing costs and protecting existing jobs. We are likely to see consolidation in the US vessel market, and among OSV shipyards.
[QUOTE=St@nley68;162582]Come on Cap…thought you were smarter than that…
Jeaux’s daily outlay for payroll etc. is in the $12000 - $14,000 / day
He’s still smiling ![/QUOTE]
Gues you buy your own groceries? Every one in the office works for free? The crew change trucks run on hope and dreams and never need maintenance? The boat never breaks and needs expensive parts for repairs? The bank will just take an IOU for each month the company can’t make enough to pay the note?
Yea easily half the day rate is eaten up by crew, we are the most expensive thing on the boat and for good reason, but don’t forget all the little things that need to happen to make sure you get your pay check.
Ok then who’s going to bid the boats on contract, administer your benefits, run payroll, and bill the customer so there is actually some money to pay you?
Also the dirty little truth for those of us that work at a publicly traded company there has to be some profit made, the board of directors is legally obligated to do their best to make a profit every quarter. And don’t think those the owners of private companies are any better. They seem to cut pay more deeply and lay off sooner, or more accurately find a reason to fire you, then any public company I’ve seen.
I guess I’m one of the lucky ones that does not have to drive his truck to the dock and worry every time the boat switches ports how I’m going to get back to my truck after crew change or gets nervous every time a hurricane enters the gulf.
I assure you , I am intimately familiar with all of the overhead required to operate a business.
I also understand that Jeaux Boss must make a profit or it’s not worth his time and investment.
[QUOTE=St@nley68;162715]I assure you , I am intimately familiar with all of the overhead required to operate a business.
I also understand that Jeaux Boss must make a profit or it’s not worth his time and investment.[/QUOTE]
I checked a little over 4 years ago on the margin for supply boats as I was considering investing as partner in a new company. The margin is about 30% profit after all expenses including set aside for yard periods, repairs etc., is a pretty good return on investment. Outside the USA I would imagine the margin is even higher. Of course if you have no contract your margin is -100%. Certain costs keep on coming in contract or not. Most wise business people plan on downturns or have an exit plan on the shelf. Exit =bankruptcy. With a 30% margin during good times you can declare bankruptcy during slow times and be quite wealthy, go fish, take a world cruise or enjoy an African safari.
[QUOTE=c.captain;162815]It always amazed me how certain operators could go belly up in the offshore, erase all their debts the come right back and do it all over again.
I bet Jeaukx Bawss would have been one of them if he really was a vessel owner which he ain’t[/QUOTE]
Jeaux Bawss is really not all that different from some of the sons of bitches I work for. I have one more day to deal with one of the biggest, moodiest divas I have met here and I cannot wait to be quit of this ship. We are bunkering tomorrow, (yes tomorrow, Memorial Day, after being here all week or I’d leave now) This person is practically bulletproof, from a disciplinary/firing point of view. There is favoritism and backstabbing here in this agency that would make Jeaux Bawss jealous.
And you want to talk about debt? Each Dyson class is a 200 million dollar battery, rotting away bit by bit every day. One of them may finally make a science mission after sitting in San Diego two years post delivery.
[QUOTE=c.captain;162815]It always amazed me how certain operators could go belly up in the offshore, erase all their debts the come right back and do it all over again.
I bet Jeaukx Bawss would have been one of them if he really was a vessel owner which he ain’t[/QUOTE]
ahhh, C. Captain it is not the operator that goes belly up it is a piece of paper called a corporation. The corporation goes belly up, negotiates settlements with his debtors via bankruptcy court, finds another group of investors and convinces them this time will be different. After all he made himself rich so he must know what he is doing, it is not his fault the market went down the tubes. Rinse and repeat.
Several of the early leaders in the USA were against allowing corporations to exist at all. One of them said he could not hang a piece of paper by its neck so he’d prefer humans own businesses.
[QUOTE=catherder;162816]Jeaux Bawss is really not all that different from some of the sons of bitches I work for. I have one more day to deal with one of the biggest, moodiest divas I have met here and I cannot wait to be quit of this ship. We are bunkering tomorrow, (yes tomorrow, Memorial Day, after being here all week or I’d leave now) This person is practically bulletproof, from a disciplinary/firing point of view. There is favoritism and backstabbing here in this agency that would make Jeaux Bawss jealous.
And you want to talk about debt? Each Dyson class is a 200 million dollar battery, rotting away bit by bit every day. One of them may finally make a science mission after sitting in San Diego two years post delivery.[/QUOTE]
Halter Marine built a ship that is rotting away? Explain. Who designed it ? Why is it rotting, I am guessing electrolysis since you mentioned battery?
[QUOTE=z-drive;162840]I run into the Henry bigelow enough to think it operates regularly, same class?[/QUOTE]
Yes. The Bigelow, Shimada and Dyson stay pretty busy. Pisces had some downtime until recently and Lasker is the one I’m referring to as never being on a mission.
