Since the offshore market was plunged into crisis in late 2014, the industry has battled to survive. Hundreds of thousands have lost their jobs, hundreds of vessels have been laid up, and ships built as recently as 2005 have been scrapped.
Industry leaders like Tidewater and Gulfmark have entered Chapter 11 to restructure their debts, others like Bourbon and Swiber have sought refuge in judicially managed processes to manage their balance sheets, often at the behest of long-suffering creditors.
The downturn has seen some of the largest mergers ever, with Solstad, Farstad and Deep Sea Supply amalgamating in Norway, creating a massive OSV behemoth with a huge presence in the North Sea and deep-water markets overseas, whilst in the rig market Ensco and Rowan combined, Transocean took over Ocean Rig, and new player Borr Drilling bought Paragon and its fleet of jack ups.
Other players, like Boskalis and James Fisher, have used the downturn to expand through the acquisition of high specification assets and smaller competitors to expand their fleets and the range of services they provide. Finally, in late 2019, it is at last possible to discern that owners, managers, seafarers, suppliers and investors are on the slow road to recovery. So, what does the future look like?
Firstly, what was an industry focused purely on offshore oil and gas is now an industry which applies its skills and expertise to a much wider range of problems, new customers and new needs. Companies have been forced to diversify into new areas and to redeploy assets and capital to service clients outside the narrow exploration and production space.
In Northern Europe, this has seen massive growth marine assets to install and maintain the offshore wind industry. Companies like Acta Marine, Bibby Marine Services and Esvagt have built innovative and technically advanced windfarm service vessels. This is a business where specialisation pays off, combining DP, lifting capacity and high-quality accommodation. Esvagt now has five different vessels purpose-built for the wind farms they operate in.
The development of "walk to work" technology with active heave compensated gangways, initially spearheaded by Ampelmann, has opened up a huge new market for conventional OSVs to perform offshore personnel transfers more safely and conveniently than ever before. The days of the Billy Pugh basket look numbered in many markets.
The market for jack up turbine installation vessels has exploded as well, along with demand for electric cable lay services from companies like Nexans. In 2010 there were just six self-propelled wind turbine units with cranes capable of lifting over three hundred tonnes and seven non self-propelled units; today there are 27 self-propelled jack-up wind turbine installation vessels in the world fleet alone, according to Kennedy Marr, and another two on order, with ever longer legs, larger deck loads and bigger cranes.
Turbines have become more powerful and are being installed in ever deeper water. The latest developments will see turbines installed not on foundations, but as floating units moored to the seabed, which can be potentially installed anywhere in the world's oceans.
The windfarm industry has also expanded far beyond its original geographic base in the North Sea and the Baltic. Asia and North America are powering ahead with new projects using the technology pioneered in Europe by Siemens, Vestas and GE Energy.
Research from global natural resources consultancy Wood Mackenzie indicates Asia-Pacific's offshore wind capacity will rise 20-fold to 43GW in 2027. Leading this will be China, which is expected to see offshore wind capacity grow from 2GW in 2017 to 31GW in the next decade.
Vessel owners in Asia, including POSH and Swire Pacific Offshore, have been chartering vessels to Taiwan's first offshore wind project as the drive for renewable energy continues in new areas.
Secondly, technology continues to advance, particularly in the subsea area. A revolution in surveying is happening, with the increasing use of autonomous underwater vehicles (AUVS), able to cover much more of the seabed much more accurately, cheaply and quickly than traditional technologies such as tow fins for hydrography, and ROV for pipeline survey.
New entrant Ocean Infinity has bought more than a dozen of these high specification units from Kongsberg and has won a long term contract for Petrobras in Brazil utilising the large Norwegian construction vessel Island Pride, as well as locating the Argentinean submarine San Juan and the sunken bulk carrier Stellar Daisy in the South Atlantic.
Other companies, like Swire Seabed and DOF Subsea have also invested in AUVs, which look set to transform both hydrography and asset and pipeline inspection.
Finally, even within the embattled offshore exploration and production space, new areas of opportunity have opened up.
First and foremost, the massive oil discoveries by ExxonMobil and its partners offshore Guyana have stimulated interest in new basins in that part of the Atlantic, where first oil from the Liza Destiny FPSO may have already occurred by the time you read this piece.
The announcement that Tullow Oil had made a discovery in its deep-water Jethro well in Guyana in August has only served to stimulate further interest in exploration in the vicinity, including in Suriname and French Guiana.
The eastern Mediterranean and Black Sea have also seen remarkable large deep-water gas discoveries being made from Egypt, through Israel and Cyprus to Romania by the super majors, and indies like Noble Energy and Energean.
The Turkish state oil company TPAO has recently invested in two state-of-the-art DP drillships out of bankruptcy, along with PSV support vessels, so that it can avoid missing out the boom, whilst Total is scheduled to drill the first ever deep-water well offshore Lebanon shortly, political tensions permitting.
In East Africa, massive new liquified natural gas plants are scheduled to be built in Mozambique, promising huge opportunities for marine logistics operations in the Indian Ocean, and in Senegal significant new deep-water discoveries by Woodside and by BP have galvanised interest in drilling in all the frontier basins between Morocco and the highly prolific, deep-water reservoirs in Ghana.
The growth areas for offshore vessel owners are more than likely to include these new areas of production, even as other frontier drilling from ENI in Pakistan has drawn a blank.
Other exciting projects include the likely final sanction for Premier Oil's Sealion field development in the Falklands with an FPSO, after years of delay, the further opening of Mexico to foreign oil companies, and other discoveries in eastern Canada.
Day rates and utilisation remain a worry today, and many OSV owners continue to bleed cash. But for the first time in five years, the entire industry can look forward to a world where business conditions are improving, rather than deteriorating, and where the innovative and the risk takers can access a wider range of opportunities made possible by new technology.
