Rates for U.S. Gulf offshore service vessels continued to slide as 2006 came to a close. In December, rates for all but one vessel category were lower. Though 2006 was still a good year for operators in terms of revenue and earnings, 2007 will likely see more erosion of day rates and utilization. Rates, however, are still well above what they were two years ago.
In December, large anchor-handling tug/supply (AHTS) vessels were the only category that posted a rate increase, moving up to an average of $75,000. The biggest losers were small supply vessels, which dropped an average of nearly $500 from November. The departure of jackup rigs from the U.S. Gulf is the primary reason for this loss. The small supply vessels were also the only vessel category to record a drop in utilization.
Average day rates for the larger supply units decreased $375. For the crewboat sector, both the small and large units’ day rates fell an average of $250 each.
One crewboat operator offered several explanations for the recent trend, but no real answers. The operator said that the end of the year, the end of the fourth quarter, and holidays all slow activity.
The biggest culprits are the rigs that continue to exit the Gulf for international markets.
ODS-Petrodata reported at the end of December that two more jackups had moved out, reducing the Gulf rig fleet to 140 units from 142. While these rig moves were not unexpected, they illustrate the challenging market that vessel operators will face during 2007 as even more jackups are scheduled to leave. Additionally, while the deepwater rig market is expected to remain strong for the next several years, vessel owners will face a volatile market as semisubmersibles and drillships move in and out of the region.