Offshore Market Improvements Across 2021
Full year 2021 data points for the offshore market have been released by Clarksons Research, profiling encouraging progress and a sense of cautious optimism across offshore oil and gas besides a continuation of an exciting growth phase for offshore wind.. Reviewing the data (see below), Steve Gordon, Managing Director of Clarksons Research commented:
- Offshore markets made good progress in 2021, benefiting from the improving oil price, increasing offshore activity and the impacts on fleet supply of further restructuring and consolidation.
- Our Clarksons Offshore Index (covering Rigs, OSVs and Subsea day rates) was up an encouraging 28% across 2021 rebounding from Covid-19 disruption to reach its highest level since 2015 by year end (63.6 points, Jan 2007=100).
- Energy market rebalancing and improving pricing (Brent > $80/bbl at start-22, up 57% over the year) also saw operators progress projects delayed by the pandemic ($85bn worth of offshore oil and gas project CAPEX reached FID in 2021, up 72% y-o-y). See Offshore Intelligence Network for 2022 FID forecast.
- Global rig demand grew by 6% across 2021, reaching 479 units at end-21 (still 6% below start-20 though more significant improvement may materialise in 2022 – 9% growth projected). Positivity emerged in the floater market: rates rose by a notable 32% across 2021 (although rates in both sectors are still c.50% below start-14). See Offshore Drilling Rig Monthly for 2022 and 2023 projections.
- Rig utilisation rose to 79% at end-21, up 6pp and 2pp on start-21 and start-20 levels respectively, as elevated scrapping activity depleted supply further (85 jack-ups/floaters removed since the start of 2020, equivalent to 12% of start-20 active supply).
- The Clarksons OSV Rate Index increased by 30% across 2021 (the strongest rate of annual improvement since 2008), reaching 107 points at end-year (up 9% on pre-Covid levels though still 37% below start-14) as global OSV utilisation rose 8pp y-o-y to 65% at end-21, up 2pp on start-2020. See Offshore Support Vessel Monthly for 2022 and 2023 projections.
- Subsea support vessel markets tightened in 2021 as IMR work previously delayed by the pandemic returned to the fore in 2021 (wind & decommissioning requirements continued to support). Global MSV demand was up 12% y-o-y at end-21, while North Sea rates for 250t vessels (inc. 2 WROVs) jumped 44% across the year.
- The size of the offshore fleet contracted for the 4th year in a row in 2021, reaching 12,810 units at end-21, as stronger scrap prices and persisting market pressures saw removal pick up (226 units, up 21% y-o-y). Deliveries (207, +34%) also rose but remained historically low (2010: 784 units).
- Offshore newbuild investment remained weak, although last year saw a sharp uptick in MOPU ordering (16 units of $6.3bn contracted, up from $1.5bn last year).
- A record 18.5 GW of offshore wind capacity started-up in 2021 supported by Chinese start-ups in Q4 (12.9 GW), as developers rushed to meet a subsidy deadline. $43.2bn of project CAPEX was committed in 2021, the 2nd highest total on record. Overall global offshore wind capacity up 58% to 50.6 GW involving 251 active farms. A record number of orders for WTIVs (17) and C/SOVs (15) were also placed at yards. See Renewables Intelligence Network for more details.
Clarksons Research – Clarksons Research, the data and analytics arm of Clarksons, are market leaders in the provision of independent data and intelligence around shipping, trade, offshore and energy. Millions of data points are processed and analysed each day to provide trusted and insightful intelligence to stakeholders across maritime.
Offshore Intelligence Network (OIN) – provides detailed data and intelligence on all offshore oil and gas fields, investment projects and production platforms besides analysis of utilisation, day rates, market supply / demand of the offshore fleet including rigs, OSVs, subsea and floating production.
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Submitted By: Clarkson Research Services Limited
