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The Assignment / Client’s Problem

  • To provide a detailed assessment of the North Sea SAT diving sector to aid the company’s internal planning and support financial processes
  • Collate stakeholder views (i.e. E&P companies, competitors) regarding anticipated recovery of the North Sea IRM market

Westwood’s Approach & Analysis

  • Comprehensive macro-economic review encompassing oil price scenarios that form the foundation of the reference, high and low cases for outputs
  • Use of proprietary in-house offshore and subsea database to build a bottom up demand model, isolating SAT DSV requirements based on select criterion such as water depth, operating conditions and operator preferences
  • Tracking of North Sea DSV supply by vessel, capturing asset mobilization in and out of the region in order to provide a holistic view of supply dynamics
  • Outlook on utilisation & dayrates by oil price scenario, taking into consideration total supply-led, and competitive supply-led utilisation
  • Leverage past North Sea subsea vessel engagements with leading contractors, enabling the delivery of unparalleled commercial and operational insight on demand/supply balance as well as rates and utilisation
  • Fleet benchmarking based on key specifications such as age, number of SAT divers, accommodation capacity, crane size and NORSOK compliance,

The Outcome & Benefit

  • Concluded that exposure to the growing North Sea decommissioning sector in addition to its traditional O&G offering provided an upside to the business
  • Highlighted the shift in market dynamics towards a buyer centric market, resulting in the anticipated decoupling of dayrates from utilisation
  • Recent lay-ups and market exits have helped to “right-size” the market. However, soft market conditions, coupled with spare supply capacity will continue to keep utilisation and dayrates suppressed