Due to the weak market, Solstad Offshore will have up to 13 vessels laid up, in addition to reducing its workforce by approximately 300 positions, the Norwegian offshore service company announced in its 1H 2015 report.
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The Normand Pacific. From Solstad. |
An overcapacity in the North Sea market for both platform supply vessels (PSV) and anchor handling tug supply vessels (AHTS) is resulting in approximately 50 vessels to be laid up for Solstad.
The activity in the construction support vessel (CSV) segment has been higher in the North Sea as well as worldwide. However, the general market outlooks are still weak and have not changed during the summer. In addition to low oil price, the uncertainty in Brazil and the sanctions between EU/USA and Russia have not changed to the better for the market. The company expect that the market will continue to be weak in the remaining part of the year and also in 2016, Solstad said.
As a result, the company will lay-up an additional 10 vessels, mainly PSVs and AHTSs segments by the end of the year, which will cause a reduction its workforce by approximately 300 positions.
At the end of 2Q, Solstad’s fleet included 46 wholly owned or partly owned vessels, of which one is a newbuild CSV to be delivered in 2Q 2016: 20 CSV, including one derrick lay barge (DLB), 17 AHTSs, and nine PSVs. Six of the vessels are operating offshore Brazil, seven in the Gulf of Mexico, one off Australia, six off Asia, two off West Africa, two in the Mediterranean Sea, two in the Barents, and 16 in the North Sea. Three vessels, two PSV and 1 AHTS, are in lay up.
Solstad’s operating revenue in 2Q 2015 was US$128 million, an impressive 76.6% increase from 1Q 2015’s $110 million that the company attributed to the start-up of the DLB Norce Endeavor project offshore Thailand, and higher utilization in the CSV segment.
The Norce Endeavor project also attributed to an increase in the period’s operating costs at $139 million for 1H 2015, compared to $125 million year-over-year. The 11.2% increase was also due to the contracting of ROV equipment, ROV personnel, and fuel related costs due to several longer transits following changes in contracts, Solstad said.
The company’s PSV segment saw a reduction of about $3.6 million due to low utilization.
The company has fixed contracts at about $205 million for 2H 2015, including some charter options.
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