Overview   Offshore Support Vessels (Final)
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Overview Offshore Support Vessels (Final)

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    Overview   Offshore Support Vessels (Final) Overview Offshore Support Vessels (Final) Presentation Transcript

    • Sector Overview Opportunities in the offshore support vessel market Teddy H Tsai – Head of Research, Pacific Transportation Asia Pte Ltd. October 24, 2008
    • Investment View  Investment drivers  Offshore oil & gas exploration moving to deep water – High oil & gas prices makes offshore development more cost effective. Average long-term oil price assumption by E&P companies around US$55-65/bbl, lower than current levels.  E&P capex expected to grow substantially – Expect deep water E&P capex of US$20bn from 2006-2010. Although most of this would be for rigs, higher specification supply vessels would also be required.  Favorable supply side dynamics – Fleet is old for total offshore supply fleet. 45% of the fleet is over 25 years old.  JV Partner or takeover – To be determined  We require an experienced team with technical expertise operating in offshore services.  We aim for partners that have strong relationships with oil majors, or with national oil companies in Asia and Mid-East.  Broad range of offshore supply vessel expertise. We aim to build a fleet of different types of high specification multi-functional offshore vessels, including PSV, AHTS, DSV, ROV, cable laying, etc.  We are evaluating possible take private transactions of listed shipyard/offshore chartering companies. (e.g. Jaya Holdings) 2
    • Vessel Types  Anchor Handling Towing and Supply (AHTS) vessels  Fitted for deep-water anchor handling and towing operations, equipped with a winch capable to lift a barge or other offshore vessels’ anchors.  Main duty is to move rigs, tow barges, setting anchors, and provide supply support.  Equipped with large cranes, winches, and large open deck space. Winch and engine capacity determines power. Higher horsepower is used to handle heavier gear. 3
    • Vessel Types  Platform Supply Vessels (PSV)  Main purpose is to move cargoes and supplies to/from offshore installations.  Flexible platform structure, enables multiple- purpose supply cargo carrying capacity  Standard Type – UT755, a Rolls Royce designed PSV, over 100 in operations  Diving Support Vessels (DSV)  Helipad  Diving support equipment  Large Cranes  May also be used as a standby/support vessel, with fire fighting, rescue operations, or oil recovery equipment. 4
    • Vessel Types  Remote Operating Vessels (ROV) Support  Support vessel for remote operating vessels  Often equipped with a moon pool, an opening in the floor of the hull giving access to the sea, to facilitate ROV launching.  ROVs are used for underwater activities, equipped with cameras and arms for underwater duties.  Multi-Purpose Service Vessel (MPSV)  Multi-Purpose (MPP) use  Equipment for sub-sea service, large crane, winches, and/or fire fighting equipment.  May have other equipment, such as ROV support, diving support, etc.  Dynamic positioning systems 5
    • Vessel Types  Cable & Pipe Laying Vessels  Photo is of a pipe laying vessel  Used to lay underwater pipes or cables.  Pipes and cables are pre-loaded on a spool on the vessel, and conveyors and rollers move the pipe downwards into the ocean.  Standby and Rescue Vessels  Standby duties are where a vessel is waiting near offshore installations in case of emergencies, to pick up people.  Typically with helipad, fire fighting, rescue operations, or oil recovery equipment.  Typically can accommodate up a large number of passengers, up to 300 persons  Dynamic positioning (DP2) capabilities 6
    • Vessel Types  Seismic Survey Vessels  Survey vessel with seismic prospecting equipment, called seismic streamers.  Can be capable of a range of duties including survey, patrolling, fishery protection, emergency standby, pollution control, fire fighting, salvage, towing, etc.  Fast Supply Intervention Vessels (FSIV)  A type of crew boat that has high speeds enabling fast delivery of personnel and cargo.  Fitted with fuel and water cargo capabilities.  Max speeds up to 30 knots.  Can have fire fighting capabilities. 7
    • Vessel Types  Well Stimulation Vessel  Specialized vessel used to maximize oil production by creating a more efficient reservoir flow path.  Increases oil recovery with blending, pumping, and storage systems.  Well Intervention Vessel  Has specialized equipment that is used to maintain and repair oil & gas wells, down to depths of 600 meters for this (UT767) type.  Can deploy ROV for repair operations on the seabed. 8
    • Key Markets / Routes £/Day Large AHTS Spot Rates £/Day 120,000 Large PSV Spot Rates 45,000 100,000 40,000 80,533 35,000 80,000 30,000 27,225 60,000 25,000 20,000 40,000 15,000 20,000 10,000 5,000 - - ug pr ov ay p ec ct ar n l b n Ju Ja Se Fe Ju ug pr ov ay ec p ct ar n n l b O M A Ju M D N A Se Ja Ju Fe O M A M D N A 2005 2006 2007 2008 2005 2006 2007 2008  AHTS Spot Rates  PSV Spot Rates  North Sea spot rates have increased  North Sea spot rates have increased significantly since our last update, following significantly since our last update, but not as the seasonality that we saw in 2006. well as AHTS vessels.  Strong rates due to tight utilization rates in  A higher % of PSV are on term contracts, the North Sea market for larger AHTS hence the lesser volatility compared to AHTS vessels. vessels. 9
    • Market Rate Indicators 10 Source: Pareto Securities
    • Technical Specifications / Definitions  Dynamic Positioning - System that enables a vessel to stay in position without the use of cables, mooring, anchoring, or arms. There are three classes (DP, DP2, DP3), based on levels of failsafe.  BHP – Brake Horse Power, measure of power for AHTS vessels  BP – Bollard Pull, indicator of a tug’s power to pull or push  Fi-Fi – Fire Fighting Equipment  Asset prices vary quite significantly according to cost, type, and age, ranging from <US$10mn to close to US$600mn. 11
    • Demand Environment
    • Demand Drivers  High oil prices will result in more offshore development  Offshore support vessels are driven by increasing capex on offshore oil exploration.  Approximately 25% of US oil & natural gas production comes from offshore areas, and likely to increase. Internationally, the North Sea in Europe, and oil fields in SE Asia, are key areas of offshore development.  There is a trend towards more offshore development, especially in deep waters. Infield systems forecasts deepwater capex to exceed US$20bn from 2006-2010.  Daily offshore oil & gas production, currently standing at around 43 million barrels of oil equivalent (boe), is forecast to grow to 53 million boe in 2010 and drive industry annual expenditure from $193 billion in 2006 to $248 billion by 2010, according to Energy Business Reports. 13
    • Commodity Prices mbpd 120 Crude Oil Prices (1984-2008) 88 86 100 84 80 USD/barrel 82 60 80 78 40 76 20 74 0 72 1985 1986 1988 1989 1994 1995 1997 1998 2001 2004 2007 1984 1987 1990 1991 1992 1993 1996 1999 2000 2002 2003 2005 2006 2008 YTD 70 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 OPEC Supply OPEC Demand  OPEC surplus capacity is minimal  Sustained upward pressures on price encourages investment in projects previously considered uneconomic. 14
    • World Oil Supply Annual Change in Global Oil Production Million barrels per day Y-o-Y% growth 90 0.12 80 0.09 8.21% 70 3.58% 0.06 60 1.92% 50 0.03 40 0 30 0.51% -0.03 20 -4.76% -4.70% -0.06 10 0 -0.09 1965 1970 1975 1980 1985 1990 1995 2000 2005 Total W orld Oil Production Y-o-Y % growth  World oil supply is slowing, with the incremental growth coming from offshore areas. 15
    • Underlying Demand Growth World Oil Demand Vs Crude Oil Prices 90 120 85 100 Million barrels/day 80 80 USD/barrel 75 60 70 40 65 20 60 0 2008 YTD 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 World Oil Demand Crude Oil Prices  World Oil Demand has been growing steadily, despite the increase in crude oil prices. 16
    • Ship Demand Growth 1950 # of Rigs 1900 1877 1850 1800 1750 1700 1650 US Rig Count 1600 1550 14-Jul- 14-Oct- 14-Jan- 14-Apr- 14-Jul- 14-Oct- 14-Jan- 14-Apr- 06 06 07 07 07 07 08 08  US offshore rig fleet is growing, this will increase demand for AHTS, PSV, and other support vessels to operate in the US Gulf as well. We see a similar trend here in Asia, with more offshore developments, and required # of support vessels. 17
    • Supply / Demand Outlook
    • Global Fleet Summary Fleet Replacement Profile (Total) Stratification by Type (# of Ships ) OB as a 4707 Exis ting Orde rbook % of Fle e t 5000 AHTS 1562 472 30% 4000 PSV 488 196 40% 3000 2141 Supply 669 46 7% AHT 528 30 6% 2000 993 MSV 139 76 55% 1000 Standby/Resc. 327 43 13% 0 Crew Boat 263 18 7% Existing Orderbook >25 Seis. Survey 184 25 14% C,U & FP Lay 41 5 12% All All_Offshore_Supply Misc Offshore 40 0 0% Hvy Dk Cargo 47 2 4% Orderbook delivery schedule (# of Utility 184 9 5% ships) Well Stimul. 16 4 25% 500 444 (Total) Pipe Layer 14 5 36% 400 309 Diving Spt 67 8 12% 300 ROV/Sub Spt 9 8 89% 177 200 s Maintenance 47 11 23% 62 100 1 0 0  Across all types, 45% of the fleet is 2008 2009 2010 2011 2012 2013 older than 25 years, versus 21% of the existing fleet on order. All All_Offshore_Supply 19
    • Fleet Growth Historical Fleet Growth -AHT/Supply (# of Ships) His torical Fle e t Grow th -PSV/Supply (# of Ships ) 2500 Fleet % Growth 6.0% 1800 Fle e t % Grow th 7.0% 1600 6.0% 5.0% 2000 1400 5.0% 4.0% 1200 # of Ships % Growth # of Ships 1500 % Growth 1000 4.0% 3.0% 800 3.0% 1000 2.0% 600 2.0% 500 400 1.0% 1.0% 200 0 0.0% 0 0.0% 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008  For AHTS vessels -  For PSV vessels -  Average fleet growth of 2.6% per annum.  Average fleet growth of 3.8% per annum. 2008 Currently at the high end with 4.8% YoY growth is quite reasonable at 3.9%. growth in 2008 expected. 20
    • Fleet Growth (Cont.) Historical Fleet Growth -Crew/Workboat (# of Ships) Historical Fleet Growth -Other Offshore (# of Ships) 500 Fleet % Growth 6.0% 1800 Fleet % Growth 3.5% 450 1600 5.0% 3.0% 400 1400 350 2.5% 4.0% 1200 # of Ships # of Ships 300 % Growth % Growth 1000 2.0% 250 3.0% 800 1.5% 200 2.0% 600 150 1.0% 100 400 1.0% 0.5% 50 200 0 0.0% 0 0.0% 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008  For Crew boats -  For other offshore vessels -  Average fleet growth of 2.6% per annum.  Average fleet growth of 1.9% per annum. 2008 Growth in 2008 expected to be 2.1%. growth is at 2.5% YoY growth. 21
    • Age & Fleet Size Profile 2500 Fleet age profile (Total) Agewise tonnage (Total) 2141 2000 3.0 2.2 1500 2.0 2.0 1.5 1000 865 675 621 1.0 1.0 500 0.4 174 197 0.3 34 0.1 0 0.0 >25 21-25 16-20 11-15 6-10 1-5 <1 >25 21-25 16-20 11-15 6-10 1-5 <1 All All_Offshore_Supply All All_Offshore_Supply  Over 45% of the fleet is over 25 years of age, or 2.2 million dwt. This would require additional growth in fleet for replacement, as well as to fulfill growth from new demand.  As exploration moves to deeper waters, we see greater demand for larger, more complex, more powerful support vessels.  This is measures in terms of brake horse power (BHP) of the engines, winches, etc.  Also requirements for multi-functional equipment, such as fire fighting, diving support, etc. 22
    • Orderbook vs. % of existing fleet Historical Fleet Growth -AHT/Supply (# of Ships) Historical Fleet Growth -PSV/Supply (# of Ships) 2500 Fleet OB as a % of Fleet 30.0% 1800 Fleet OB as a % of Fleet 18.0% 1600 16.0% 25.0% 2000 1400 14.0% OB as a % of Fleet OB as a % of Fleet 20.0% 1200 12.0% # of Ships # of Ships 1500 1000 10.0% 15.0% 800 8.0% 1000 10.0% 600 6.0% 500 400 4.0% 5.0% 200 2.0% 0 0.0% 0 0.0% 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008  For AHTS vessels -  For PSV vessels -  Orderbook at 25% of existing fleet is quite low  Orderbook at 15.6% of existing fleet is very compared to other vessel types. low compared to other vessel types. 23
    • Orderbook vs. % of existing fleet Historical Fleet Growth -Crew/Workboat (# of Ships) Historical Fleet Growth -Other Offshore (# of Ships) 500 Fleet OB as a % of Fleet 6.0% 1800 Fleet OB as a % of Fleet 14.0% 450 1600 5.0% 12.0% 400 1400 10.0% OB as a % of Fleet OB as a % of Fleet 350 4.0% 1200 # of Ships # of Ships 300 1000 8.0% 250 3.0% 800 6.0% 200 2.0% 600 150 4.0% 100 400 1.0% 2.0% 50 200 0 0.0% 0 0.0% 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008  For Crew Boats -  For other offshore vessels -  Orderbook at 5.6% of existing fleet is similar  Orderbook at 12.4% of existing fleet is at to 1998 peak levels. Yet, this may not be historical high levels. This may be a bit enough, especially for fast intervention type misleading, considering that there are many vessels. specialized types of offshore vessels. 24
    • Supply Outlook – Fleet Replacement Profile (Table) Fle e t Re place m e nt Profile (# of Ships ) Offs hore SupplyOffs hore SupplyOffs hore SupplyOffs hore SupplyOffs hore SupplyTotal 0-1999 2000-3999 4000-5999 6000-7999 8000-9999 Exis ting 4633 808 213 43 16 5713 Ne w buildings 388 368 176 24 8 964 >25 2590 82 18 4 3 2697 >25 as a % of Exis ting 55.9% 10.1% 8.5% 9.3% 18.8% 47.2% NB as a % of Exis ting 8.4% 45.5% 82.6% 55.8% 50.0% 16.9% Fle e t Re place m e nt Profile (m ln Dw t) Offs hore SupplyOffs hore SupplyOffs hore SupplyOffs hore SupplyOffs hore SupplyTotal 0-1999 2000-3999 4000-5999 6000-7999 8000-9999 Exis ting 3.1 2.2 1.0 0.3 0.1 6.7 Ne w buildings 0.4 1.0 0.8 0.2 0.1 2.5 >25 1.5 0.2 0.1 0.0 0.0 1.9 >25 as a % of Exis ting 49.8% 9.2% 8.7% 9.2% 18.1% 27.9% NB as a % of Exis ting 13.1% 46.4% 82.0% 51.5% 49.9% 36.7%  Smallest size is most attractive in terms of fleet retirement. However, demand is focused on the larger sizes.  Fairly small orderbook provides opportunities if we can obtain the assets. 25
    • Top Players Top 50 owners as a % of Total Top 50 Average  The offshore support vessel fleet is Top 50 Others Total % of Fleet Age AHTS 967 614 1581 61% 17 quite concentrated. PSV 438 64 502 87% 8 Supply 570 512 1082 53% 21  PSV young fleet, others segments AHT 295 233 528 56% 20 are quite old. MSV 109 33 142 77% 15 Standby/Resc. 255 75 330 77% 27 Crew Boat 148 40 188 79% 23 Seis. Survey 159 51 210 76% 25 AHTS Ships PSV Ships Supply Ships STANDBY Ships CREW BOAT Ships Tidewater Marine 179 Edison Chouest 49 Tidewater Marine 150 Vroon B.V. 42 Tidewater Marine 15 Swire Group 52 Tidewater Marine 44 Trico Marine 38 Seacor Holdings Inc. 29 Miclyn Express Off. 9 Seacor Holdings Inc. 51 Bourbon 31 Seacor Holdings Inc. 35 Craig Group 27 Norsul Offshore 9 CNOOC 50 GulfMark Offshore 28 Hornbeck Offshore 29 A.P. Moller 19 Arabian Gulf Mech. 7 A.P. Moller 47 Farstad Shipping 23 Abdon Callais 24 Nomis Shipping Ltd. 13 Seacor Holdings Inc. 6 Bourbon 34 Hornbeck Offshore 19 Edison Chouest 21 Mokster Shipping 10 Kaspmornefteflot 5 Indian Govt. 31 Rigdon Marine 17 Zamil Operations 13 Al-Mojil Group 9 Lamnalco Ltd. 5 Farstad Shipping 26 DOF Management 16 ESNAAD 11 Emas Laut Sdn. Bhd. 8 Apsheron Oil Fleet 4 Kaspmornefteflot 23 Seacor Holdings Inc. 14 Aries Marine Corp. 10 CNOOC 8 Modest Maritime Serv 4 Whitesea Shpg. 22 Marine Management 12 L & M Bo-Truc Rental 9 Ocean Mainport 7 Baruna Raya Logistic 4 Maridive & Oil Serv 22 Trico Marine 11 Bumi Armada Nav. 9 Halul Offshore 6 Syarikat Borcos Shpg 4 GulfMark Offshore 21 Siem Offshore 10 NIOC 9 Thor Ltd. 5 A.A. Turki Corp 4 Edison Chouest 18 A.P. Moller 8 Odyssea Marine 9 Ajang Shipping 5 Bourbon 3 Zamil Operations 18 Island Offshore Mngt 8 TMM Grupo 8 ENI S.p.A. 4 Bambini Srl 3 Pertamina 16 Havila Shipping 8 Baruna Raya Logistic 8 Topaz Energy 4 Offshore Oil Serv. 3 26