Friday, March 7, 2014

Perdana/Alam Maritim

There are worries that charter rates in the offshore support vessels (OSV) market may have already peaked.

Petronas president and chief executive officer Tan Sri Shamsul Azhar Abbas said (05 March 2014) that domestic OSV charter rates had dropped 15% below market rates. He also called on contractors in the OSV and drilling rig business to hold off their expansion plans because of the current (March 2014) softer rates outlook.

Industry observers are turning more cautious towards small- and mid-cap companies that do not have good track record and those that acquired assets to bet on the asset localisation policy.

Drilling rig utilisation rate in the South-East Asian region had dropped to 72% in early March 2014 from 78% a year ago (2013) as the number of rigs increased to 111 units from 102 previously. The number of active ones remained the same at 80.

Meanwhile, local oil and gas contractors were also expanding their OSV fleet size to take advantage of strong demand as Petronas stepped up its exploration and production spending.

Nevertheless Perdana will embark on a fleet-expansion programme in 2014 as it capitalises on the improving OSV sector outlook and balance sheet.

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