Rates and utilization up

Supply vessel operators now have something to really celebrate on New Year’s as vessel utilization and day rates continue their upward climb. Rates and utilization posted another strong increase during November. The current strong market is expected to spill well into 2005, helped along by demand from Hurricane Ivan-related damage and repairs. 

But more important is the sustained deepwater market that has emerged as operators become more active in deepwater and ultra-deepwater. As a result of the anticipated increase in deepwater exploration and production activity, operators are holding onto the vessels they currently have under contract. In several instances they have awarded longer-term charters for vessels, particularly the larger suppliers and crewboats.

Healthy utilization and rate gains were posted across the board during November. For example, average day rates for anchor-handlers up to 6,000 horsepower rose nearly $1,500 and utilization was up 9 percent. Higher horsepower AHTSes posted increases of more than $1,700 and 8 percent.

Supply vessel operators reported an average increase of just over $400 a day in November for standard OSVs with a 5 percent rise in utilization. Operators of large supply boats gained more than $900 a day and saw utilization increase 4 percent. Vessel owners are reporting a wide day-rate range of between $6,000 and $15,000 for larger supply vessels.

Crewboat operators weren’t left behind. Rates for small crewboats rose $250 and utilization was up 6 percent. The large crewboat fleet posted gains of nearly $550 and 3 percent.

For the first time in months, several OSV operators are reporting that not only is their entire fleet on contract, but many are on term charters. Others are reporting significant rate increases on the spot market. 

Analysts at CIBC World Markets in Houston are also reporting that longer-term contracts are beginning to materialize and that some supply vessel owners are turning down spot work in favor of these longer-term commitments.

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