(WO) – Full year 2023 data points for the offshore oil and gas vessel markets have been released by Clarksons Research onto Offshore Intelligence Network. Reviewing the data, Steve Gordon, Managing Director of Clarksons Research, made the following observations.
Offshore oil and gas markets continued to strengthen in 2023, with the Clarksons Offshore Index (tracking rig, OSV and subsea dayrates) rising by a further 27% to a multi-year high of 106 points (2017: 45, 2008: 114, 2013: 101). Projections suggest the Clarksons Offshore Index will reach all-time highs in 2024.
There is a continuation of the supportive project investment environment, with $116 billion of CAPEX for offshore oil and gas projects reaching FID (up 49% on the 10-year trend). Clarkson is projecting $125 billion for 2024.
Energy security focus is supportive in the short and medium term (offshore oil and gas provides 16% of global energy supply). Energy transition trends are expected to impact the longer term.
Offshore production reached 25.5 MMbpd of oil (up 3.0% y-o-y, 27% of global oil output) and 129 Bcfgd (up 1.9% y-o-y, 32% of global gas supply).
Rig, OSV and Subsea markets remain very strong, with rates now higher than 2014 levels in the majority of sectors/regions.
Activity remains particularly robust in the Middle East, Brazilian and West Africa sectors.
Supply side constraints continue, with limited newbuilding orders (only a handful of orders, but increased interest) and ageing fleet dynamics.
Trends across the major offshore oil and gas fleet segments:
Rigs: Rig markets strengthened further, with demand growing by an additional 4% (Jack-Up: +2%, Floater: +11%) to stand at 540 units (JU: 395, FL: 145), now up 20% (91 units – JU: +56, FL:+35) since Q1-21. With supply constrained (612 units - JU: 450, FL: 162) at end-23, still 24% below 2014), overall rig utilisation firmed to a strong 88% (JU: 88%, FL: 90%). In turn, rig rates continued to strengthen; ‘leading edge’ floater rates surpassed the $500,000/day mark in Q4, while high-spec jack-up awards of >$160,000/day are becoming common. We estimate that the JU/FL newbuild orderbook has fallen to 16/19 units. Projections for Rig Supply/Demand and utilisation through to 2026 are available on request / Offshore Intelligence Network.
OSV: The OSV sector enjoyed another firm year. Demand growth continued, with the number of active units (AHTS >4,000 BHP, PSV >1,000 dwt) rising to 2,452 by end-23, up 26% (~500 units) since 2020. OSV utilisation firmed to 73%, while PSV utilisation peaked at 78% in Q4. Our OSV Rate Index rose by a further 30% to stand at 180 points at end-23, a 15-year high and, given the short orderbook (79 boats, 2% of the fleet) and the increased time/cost intensity of reactivating long-term lay-ups, previous market peaks are in sight (2008: 199). Projections for OSV Supply/Demand and utilisation through 2026 are available on request.
Subsea: Another strong year; our MSV Rate Index firmed to a seasonal peak of 104 points, a 10-year high.
MOPU: 2023 saw further steady progress (11 awards of $6.5bn), with 2024 set to see a further step-up in activity (17 awards currently projected, including 8 FPSOs and 6 FLNGs).
Offshore Intelligence Network (OIN) is a data and intelligence platform from Clarksons Research, providing comprehensive coverage of all offshore energy infrastructure including vessels, rigs, production platforms, subsea trees, pipelines, oil and gas fields, windfarms, operators, oil service companies, yards and fabricators, contracts and projects.
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