For OSV operators, the future can be extremely bright


July 20, 2021

Red Dawn OSV
The Hornbeck OSV Red Dawn. East Shipbuilding photo

All shipping companies suffer from the double burden of high risk and high cost, and the offshore service vessel industry does not suffer the least in this regard, given the demands placed on VSOs by companies. oil companies and the challenges their owners face in the current regulatory environment.

And like all parts of the offshore energy industry, workboat owners know that with every boom comes a collapse – almost directly linked to global oil supply and demand. Thus, any investment in the business, especially for expansion, must be carefully weighed against the foreseeable future of the market.

There is no doubt that the past two years have been difficult for OSV operators, especially in the Gulf of the United States. Work boat Energy writer and blogger Jim Redden wrote in a November 2020 blog post “Distressed Gulf of Mexico looks in mid-2021,” that 2020 has been “a chaotic year that saw budgets cut. , postponed projects, more bankruptcies and shelved offshore service vessels at its highest clip in two years.

But what a difference a year makes. As oil prices skyrocket and are expected to remain high, and in a world eager to recover from the Covid-19 pandemic, OSV operators now have reason to be optimistic and renew their investments.

In addition to the continued surge in oil prices, the recovery in the global economy has pushed up shipping rates as residential and commercial construction starts approach historic highs. All of this indicates a growing demand for oil. This financial incentive, coupled with tremendous advancements in drilling technology and new discoveries in previously untapped areas like the waters of Guyana and Suriname, means that OSV operators can feel more comfortable with investments in new technologies and new vessels that will keep them competitive in the future. And this is in addition to the continued need for work boats to maintain, repair and upgrade existing facilities and pipelines, especially in mature fields.

These investments will be considerable: a new DP-2 offshore workboat can cost up to $ 20 million, and the cost of basing ships in distant and sometimes primitive ports must also be considered. But the future of petroleum’s role in the world is assured: to date, no energy source has matched its caloric production, portability and versatility as a fuel and as a chemical and manufacturing feedstock.

Despite the current craze for wind farms, they are problematic at best: bird mortality, cost of construction and installation (ironically, fossil fuels have so far provided most of their structural components), their relatively short lifespan, and the negative visual impact on their natural environment. Solar panels also suffer from some of the same issues, such as the need for exotic components and producing significant power only in strong direct sunlight, which many parts of the world do not experience.

Although nuclear power still offers the brightest hope of independence from fossil fuels, its turbulent history, the question of the contribution to global warming of its cooling waters and the thorny question of knowing. how to store spent fuel rods safely and in perpetuity, all of which means that the public’s opinions will remain divided on their use. And even when (or if) they become acceptable enough to shoulder the burden of global power grids, oil will still be needed for all the other purposes to which the modern world has devoted it.

Fortunately, it doesn’t look like we’re running out of oil anytime soon. Contrary to fears of the last century, new discoveries like those on the north coast of South America and new drilling technologies seem to guarantee an adequate supply of black gold for the foreseeable future, regardless of the cost involved.

So, for OSV operators still grappling with the recent industry downturn, the future may be so bright that they will have to wear sunglasses.

Captain Max Hardberger is a maritime lawyer, consultant, correspondent and blogger for WorkBoat.

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