Hunt for oil fuels India’s building boom and DNV’s increasing share of offshore supply and service vessels.
With over 300 Offshore Support Vessels (OSV) of various types on order worldwide, DNV has secured the lion’s share in this rapidly expanding market. One particular area of recent growth for DNV has been in the Middle East and India Subcontinent.
“The offshore sector in India is booming,” says Eivind Grostad, DNV’s senior vice president and regional manager for DNV Maritime. “We have 125 offshore service vessels being built there to DNV class for owners from all over the world. We also have a large number of OSV owners operating in the gulf countries, such as ESNAARD, Irshad, Zami, Zakhair Marine, Valetine, Emdad, Al Mansoury, Abraag, KBM, KOC. The yards we are working with include APG, Hindustan, Bhrati, Mazagon.”
The OSV market has experienced several years of sustained growth on the strength of high global demand for exploration and development. Limited vessel availability and high day rates has led to an unprecedented orderbook with over 600 offshore support vessels of various types on order worldwide.
“The high oil price has created a boom market for such vessels and we expect the oil market will remain high for the foreseeable future. Indeed some market sources are predicting that the day rates for such vessels could well remain at or near historically high levels, weakening in the short term but staying at medium-high levels to 2015,” says Grostad.
Commenting on market developments at the recent Middle East Workboats conference in Abu Dhabi, DNV’s newbuilding manager in Dubai Scott Jervis said that the thrust on exploration and development by oil companies operating in the Middle East and India will create more opportunities for DNV. “Stronger balance sheets, improved oil company cash flows and new regulatory regimes with a strong focus on robust ship designs and environmental protection would support this business.”
He added, “Indian yards are winning more newbuilding orders and are moving up in vessel size and complexity, thanks to the strong demand for new ships and lack of capacity at Far Eastern yards. With the advent of DNV’s eApproval system, owners can choose the design of vessels from Europe, and our approval support centre is set up locally to help the client, beit the shipyards or the owners in the region. This solution is a new business arrangement which is proving popular with the local clients.”
Separate to the OSV market, DNV can boast an impressive 50 per cent market share when it comes to newbuildings on order or under construction in the region. Recent orders from local owners include the VLCCs for Vela International, chemical carriers for United Arab Chemical Company and bulk carriers for Shipping Cooperation of India. ADNATCO has also ordered several aframax tankers. DNV also enjoys the lion’s share of the market in terms of tonnage volume with 39 per cent of the ships in operation business.