BRAEMAR SEASCOPE OFFSHORE

MONTHLY MAGAZINE

Aug 2012 ISSUE: 54

©Braemar Seascope Offshore

MARKET NEWS &

ANALYSIS

VESSEL DAYRATE

CHARTS

RIG NEWS

Welcome to the latest edition of the

Braemar Seascope Offshore North Sea

Vessel Report. As the market moves

into the latter third of 2012 vessel day-

rates continue to remain subdued with

little sign of long-term relief.

An indication of the slack in the market

can be seen in BP Norway’s recent fix-

tures when the operator secured eight

AHTS vessels in one day to support the

Polar Pioneer and West Alpha rigs. De-

spite the quantity of vessels fixed the

rates did not go above GBP 8,000 due to

a further 12 vessels being available.

The coming weeks may provide a tem-

porary spike in spot dayrates as the

North Sea weather takes its seasonal

turn for the worse and hampers rig

move schedules and lengthens cargo

runs. However, this can not be expected

to be sustained in the long term.

Average dayrates for spot AHTS fixtures

in July were GBP 22,049 and GBP 17,955

for large and medium vessels respec-

tively. Meanwhile, PSV rates were GBP

10,552 and GBP 8,937. August average

rates are expected to come in lower

than those for July.

Sean Bate

Market Analysis Manager

research@seascope.co.uk

Click Here to go to

Online Version

Subsea

Market

Latest

For the latest on the subsea con-struction and sur-vey vessel availabili-ties please contact us for a copy of our Subsea Vessel Mar-ket Summary. We are constantly mon-itoring the require-ments, fixtures and availability of the North Sea fleet. For more information please email us.

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T he continuing influx of newbuilds on to the

North Sea sport market is continuing to sub-

due vessel dayrates in the region particularly

for PSVs. A large number of high specification

PSVs ordered primarily by Norwegian owners have de-

livered onto the market and more are set to come in

the remainder of 2012 and 2013. With many of these

vessels ordered at the peak of the market they are ex-

pensive sophisticated vessels that have breakeven lev-

els to match.

Despite the fact that there are more than a dozen medi-

um and term requirements on the market there are

also more than 20 PSVs and a further 20 AHTS vessels

currently sitting prompt on the North Sea spot market

as the report goes to press.

In addition the UT-712L designed AHTS Olympic Octo-

pus, which has previously been carrying out term work

offshore Brazil for Shell, is heading back to North Sea.

The vessel is expected to arrive before the end of Au-

gust and is currently charter free.

Siem has also just been awarded a contract for a new-

build vessel to take a up a charter with Total Norway /

MLS for four years plus four additional one year op-

tions. The VS-4410 LNG designed vessel is expected to

commence the contract upon delivery in 2014. It is un-

derstood that the order for the vessel is in the process

of being placed but the owners currently do not have a

yard selected.

The Standby market also continues to operate at almost

full capacity with the scarcity of vessels sustaining high

rates. As new vessels arrive on the market older ton-

nage is being withdrawn keeping the market tight.

Olympic Octopus

Design: UT 712 L

Owner: Olympic Shipping

LOA: 78.3m

BP: 180 tonnes

DP: 2

Deck Area: 510m³

Breadth: 17.20m

Max Draught: 7.0m

Click here for full spec

SPEC BOX

Market CommentaryMarket CommentaryMarket Commentary

The large PSV Bourbon Sapphire has been fixed for ten months firm plus additional options for 80 days with ConocoPhillips. The vessel will be replacing the North Promise which had been on long term charter with the oil company and is expected back on the North Sea spot mar-ket in the middle of September. The Bourbon Sapphire is an Ulstein P105 and is equipped with a deck area of around 990 square metres, DP2 and Oil Recovery. The dayrate was between NOK 145,000 and 155,000.

There are four outstanding long-term requirements 1 x PSV / Nexen / 1 year + 1 x 9 mnth opt / Sept-Oct 2012 1 x PSV / MOG / 1 year + 1 year opt / comm 1st Oct 2012 1 x PSV / BP N / 5 years + 5 x 1 year opts / 2013-2015 2-3 AHTS / Exxon Canada / 2 years + 3 x 1 year opts / comm 2012-2013.

The multipurpose field support vessel Olympic Electra has been fixed for a Nitrogen Pumping workrole with Centrica that could see it working for up to a month in the South-ern North Sea. The Olympic Electra proved suitable for the role which required a vessel with enough accommodation for charterers personnel and needed to be suitable to run out of Great Yarmouth. The MT6009 L designed vessel has accommodation for 40 personnel and a deck area of around 745 square metres.

There are eight outstanding medium-term requirements: 1 x PSV ConocoPhillips UK / 2 wells / comm Aug

1 x PSV / Suncor UK / 2 wells (150 days) /comm Aug-Sept

1 x PSV / ASCO / 5 months + 4 wk + 14 d/opts / Aug-Sept

1 x PSV / MLS / 100-120 days / comm Early Sept

1 x PSV / DONG / 2 wells firm 90-110 days / Sept-Oct

1-2 PSV / ENI N/ 88 days / late Sept /Oct

1 X AHTS / Saipem / Towing Castoro 7 / 55 days / Late Sept /Oct

2-3 x PSV / Statoil / 3,6 or 12 months + opt / Sept-Dec

1 x PSV/ERRV / AGR N / 1 well c 90 days / May 2013

Medium-Term Requirements

Long-Term Requirements

Nitrogen Pumping Role for Olympic Electra

Bourbon Sapphire Fixed for 10 Months

©Copyright Braemar Seascope Offshore 2012

CharteringCharteringChartering

The medium sized PSV FD Honorable has been fixed to BP until around the middle of September. The vessel was chartered for five weeks firm plus options to carry out general pool support for the super-major’s North Sea operations. The 2010-built UT-755L vessel has DP2 and a deck area of around 716 square metres. The FD Honorable is expected to rejoin the North Sea spot market at the end of the charter.

ConocoPhillips has fixed the large PSV North Truck for 18 months. The vessel will be supporting the drilling cam-paign of the Maersk Resolve rig out of Great Yarmouth. The North Truck is a 1983-built UT-705 designed vessel which is equipped with a deck area of around 893 square metres and has tanks suitable for the simultaneous car-riage of brine, liquid mud and base oil with dedicated tanks, pipelines and pumps.

The Viking Prince has been chartered to support the Maersk Guardian rig for one well plus additional options with Ross Offshore. The vessel, which was launched earli-er this year, is a VS489 PSV with DP2, standby and a deck area of around 1021 square metres. The Viking Prince was fixed at a dayrate of around GBP 19,500. The vessel could return to the North Sea spot market as soon as Septem-ber dependent on the execution of options.

The medium sized PSV FD Incomparable has been char-tered by Enquest for seven wells and will be carrying out general pool support. The vessel is UT-755 XL designed and is equipped with DP2, a deck area of around 716 square metres, oil recovery and fire fighting. The vessel also has three sister ships: FD Honorable (on charter with BP until mid Sept), FD Remarkable (also on charter to Enquest) and the FD Indomitable (on term with Taqa).

FD Incomparable Secures Enquest Work

North Truck Given 18-Month Charter

FD Honorable with BP UK Until September

©Copyright Braemar Seascope Offshore 2012

CharteringCharteringChartering

Ross Takes on the Viking Prince

North Sea vessel owners are understood to be considering potential lay-up due to continuing low day rates. The 1983-built NSO Spirit entered lay-up in the past couple weeks and other tonnage could follow. Dayrates in the supply vessel market have been low with weak demand in the North Sea. Between the 6th and 16th of August there were only 12 PSV requirements in Norwegian waters. Meanwhile, as the report goes to press there are almost 20 PSVs prompt on the spot market.

The large PSV Toisa Invincible has been fixed by GSP to support work being carried out by the pipelay vessel GSP Falcon. The pipelay vessel is currently working with Win-tershall in the Southern North Sea. The Toisa Invincible has been fixed for a period of around 15 days firm plus 15 additional daily options. The day rate for the contract is understood to be around GBP 18,000. The VS-483 de-signed Toisa Invincible is equipped with a deck area of around 936 square metres and DP2.

Chellsea’s recently acquired medium sized PSV Ma Devi (ex VOS Premier) has been fixed for its first fixture since being renamed. The UT-755 LN designed vessel will be carrying out work for Heerema until around the end of August before returning to the North Sea spot market. The Ma Devi is equipped with DP2 and a deck area of around 708 square metres. The vessel was sold for around USD 30 M.

The Gryphon FPSO is set to be re-positioned back on site in the coming weeks. The large AHTS vessels Normand Neptun, Siem Aquamarine and Siem Amethyst will tow the unit onto location and are expected to mobilise short-ly to begin the work that could last until the end of Au-gust or possibly the middle of September. Maersk Oil’s Gryphon FPSO was moved off the field after a heavy storm in October 2011 broke four of ten anchor chains.

Siem Vessels Assigned to Gryphon FPSO

Toisa Invincible Supporting GSP Falcon

Maiden Charter for Ma Devi

Vessels Consider Potential Lay-up

©Copyright Braemar Seascope Offshore 2012

CharteringCharteringChartering

ATP Oil and Gas corporation has filed a voluntary petition for reorganisation under Chapter 11 of the Bankruptcy Code in the U.S. ATP believes this will provide the compa-ny with the time and flexibility it needs to fully address its financial challenges. The company has stated that the pri-mary reason for the reorganisation is down to the mora-torium on drilling in the Gulf of Mexico following the Deepwater Macando well blowout in May 2010.

CNOOC has announced a planned USD 15.1 billion takeo-ver of Nexen. The transaction, which could be concluded before the end of 2012, would see the Chinese company take over the global operations including all of the Oil and Gas assets in the North Sea. It would also enhance CNOOC’s presence in Canada, the Gulf of Mexico and Ni-geria. CNOOC would retain the current Nexen manage-ment team and employees.

Aberdeen Harbour has recorded a year-on-year rise of 9% in the number of support vessels using the port in the first six months of the year. From January until July 2012 there were 2,814 vessels using the port compared to 2,580 in 2011. The figures have been released as work commences on a GBP 5.2 million program that will see the port wid-ened and the deepening of the navigation channel.

In a further move by Chinese-based firms into the UK North Sea, Sinopec has announced it will buy a 49% equity interest in Talisman’s UK North Sea assets. According to Talisman the USD 1.5 billion will provide additional re-sources to Talisman’s UK venture and will lead to a strong-er and more sustainable business. Talisman will continue to operate the assets although Sinopec will appoint select personnel to key positions within the organisation.

Talisman Sells 49% of North Sea Assets

CNOOC Announces Nexen Takeover Plan

Support Vessels in Aberdeen Harbour up 9%

ATP Undertakes Financial Restructuring

©Copyright Braemar Seascope Offshore 2012

CorporateCorporateCorporate

The rig market in the North Sea contin-

ues in the similarly strong vein as the

past few months. Recent market move-

ments include a pair of Dutch sector

deals. The first deal has seen the Noble

Al White extended by Total for a further

20-months for work in the region with

the extended period starting from Octo-

ber. Secondly, next year the newbuild

rig Regina Allen is due to be delivered in

the first quarter before commencing a

contract with GdF Suez in the second

quarter of 2013 also in the Dutch sector.

Perenco has just taken on the Ensco 80

for work in the Southern North Sea that

is expected to run through to January

next year. This deal has pushed Ensco’s

rig utilisation for 2012 to 100%.

Meanwhile, recent figures indicate that

there are currently 21 semisubmersible

rigs under construction. In total a third

of these are expected to come to the

North Sea with six destined for Norway

and one for the UK. The Island Innova-

tor (pictured above) has been fixed on a

12-well programme in Norway for

Lundin commencing in the second quar-

ter of 2013.

In Ireland, Providence Resources has

been offered new licensing options ad-

jacent to the Barryroe oil field. The op-

tions cover 500 square km adjacent to

the field where seismic suggests the

field may extend into. The two year

option may turn in to an exploration

licence with a commitment to drill.

Norway

Rig Ops

Costlier

Rig costs in Norway are

about 40 per cent higher

than in UK waters. A re-

port on the costs and fu-

ture availability of rigs in

Norwegian waters has

been released by the Nor-

wegian Petroleum and

Energy Ministry. The re-

port also indicates that it

is also harder to move rigs

from the UK to the Norwe-

gian Continental Shelf

than taking them the oth-

er way. According to the

report the higher costs are

down to modifications

required to meet Norwe-

gian regulations and the

higher operating costs

imposed by Norwegian

working time directives.

Norway UK/Irl Denmark Netherlands Stacked without future contract

Stacked with future contract Total

Drillship 1 1 2

Jackup 7 19 2 7 1 4 40

Semi-Sub 19 17 2 4 42

Total 27 37 2 7 3 8 84

ChartChart Rig Rig Rig

Rig Activity by Type and Country

Video Update on Providence Resources

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PricePrice Oil Oil Oil

PricePrice BunkerBunkerBunker

Price courtesy of Scandinavian Bunkering, subject to supply method, volume and market fluctuations.

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Bunker Price in Aberdeen 2011 to Present

The Standby Market remains extremely active and the fleet has effectively been fully utilised for many months. As a consequence and to ensure they have access to a vessel when required, Charterers have tended to commit several months in advance which is a typical characteristic when a market is as tight as it is at the moment. For ex-ample, Premier is presently tendering for a vessel from October to support an 18-24 month programme with the Wil Phoenix.

Atlantic Offshore Rescue Ltd have been awarded a contract by Shell UK to provide a newbuild Class A / FSV (field support vessel) from 2014 at the Anasuria FPSO / Gannet field in the Central North Sea. The Zamakona shipyard in Spain has been selected for the Havyard 820 designed unit that has been chartered for 5-10 years. Although their Norwegian parent company has been active recently in ordering newbuilds for their own market this represents the first major investment in the UK fleet which currently consists of nine vessels.

In the East Irish Sea, Centrica has chartered the VOS Emperor to support a three to five well programme with the Noble B. Welliver from early August and in the South North Sea, Perenco has fixed the VOS Patrol for one to two wells from around the same time to support a programme with the En-sco 80. The rig/vessel package transferred in direct continua-tion from the preceding charterer - namely Senergy (Dana).

North Star has recently taken delivery of their third new-building (from a series of four) from the Balenciaga shipyard in Spain. The Grampian Discovery was committed to Shell UK on a long-term basis from delivery and will initially support the Ocean Guardian which recently mobilised from Invergor-don. The final vessel Grampian Defiance, is due for delivery next month and is committed to DONG Energy for a two-well programme West of Shetland with the drillship West Naviga-tor from October.

North Star Newbuilds Committed

Atlantic Secures Shell Standby Role

Vroon Picks Up Centrica & Perenco Work

Standby Market Activity Remains High

©Copyright Braemar Seascope Offshore 2012

Standby/ERRVStandby/ERRVStandby/ERRV

For the latest on the subsea construction and survey ves-sel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email: aberdeen@seascope.co.uk

N-Sea (formerly Noordhoek) has chartered the ROV sur-vey support vessel Toisa Conqueror for 90 days to carry out survey and IRM work in the North Sea. The 2001-built vessel is a 74m DP2 vessel equipped with an inspection class ROV and diving spreads. It will undertake its first project at the end of July and will be carrying out diving and ROV based inspection operations for multiple major clients in both oil and gas and renewable markets.

The dive support and construction vessel Toisa Paladin has been chartered by a strategic partnership of Fugro and Cal Dive for three years firm plus two six month op-tions. The 2007-built DP2 vessel will be put to work on a number of subsea and construction projects commencing with work in Malaysia for Fugro TSM before moving im-mediately on to work for Cal Dive with an un-named oil company that will see the vessel utilised through to the end of 2012.

Technip has chartered a newbuild subsea construction vessel on a term charter of at least five-years. The vessel, which is being built for North Sea Shipping at Bergen Group BMV AS in Bergen, Norway, will be delivered in 2014. The charter will be for a period of five or seven years firm plus a five-year extension option, with a further purchase option. It will have an loa of 142m, a width of 27m, a 400t crane and a 2,000t carousel for storage of flexible pipe below deck.

Technip Charters Newbuild Vessel

N-Sea Charters Toisa Conqueror

Toisa Paladin Fixed for 3 Years Firm

Subsea Market Summary Latest

©Copyright Braemar Seascope Offshore 2012

SubseaSubseaSubsea

For further details of the recent movements in the renew-ables market please see the latest edition of our Renewa-bles Report which can be viewed online by clicking here. If you would like to be included on the distribution list for this report please email research@seascope.co.uk . Our brokers are dealing with an increasing amount of work in the Renewables market, please feel free to get in touch with your requirements or to discuss the market in gen-eral.

A2Sea has been awarded a contract for installation work on the Gwynt y Mor offshore wind farm. The Sea Jack and the Sea Worker will be used to install 160 Siemens 3.6 MW turbines at the RWE project which is due to start pro-ducing power in 2014. The two jack-up barges will work in conjunction with the seabreeze class construction vessel Friedrich Ernestine that will install wind turbine founda-tions in 2012 and 2013.

The Seafox 5 is has been named and is expected head to the German Sector of the North Sea soon to commence its maiden charter at the Dan Tysk offshore wind farm. The Wind Turbine Installation Vessel has been built at Keppel Fels in Singapore and has a 1,200t heavylift crane capable of installing turbines and large foundations ex-ceeding 800t in weight. The Seafox 5 will also have a deck area of around 3,600 square metres and is designed to carry up to twelve 3.6 MW turbines.

Seajacks has placed an order for a newbuild jack-up con-struction vessel. The Seajacks Hydra will be a modified Gusto MSC NG2500X self elevating self propelled jack-up and will be built at Lamprell's Hamriyah facility in the UAE for delivery in 2014. The vessel is similar to the Seajacks Kraken and Leviathan. Kraken is currently on a two year well intervention contract with Shell UK and the Leviathan is working on the Sheringham Shoal offshore wind farm.

New Jack Up For Seajacks

A2SEA Awarded

Seafox 5 Named in Singapore

Renewables Report

©Copyright Braemar Seascope Offshore 2012

RenewablesRenewablesRenewables

DayratesDayrates PSV PSV PSV

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DayratesDayrates AHTS AHTS AHTS Average North Sea Spot Average North Sea Spot Average North Sea Spot

AHTS Rates 2011/12AHTS Rates 2011/12AHTS Rates 2011/12

Average North Sea Spot Average North Sea Spot Average North Sea Spot

PSV Rates 2011/12PSV Rates 2011/12PSV Rates 2011/12

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Large - AHTS (16,000+ BHP) Medium - AHTS (12-15,999 BHP)

DayratesDayrates AHTS AHTS AHTS

Average North Sea Spot Average North Sea Spot Average North Sea Spot

AHTS Rates 2004AHTS Rates 2004AHTS Rates 2004---201220122012

Average North Sea Spot Average North Sea Spot Average North Sea Spot

PSV Rates 2004PSV Rates 2004PSV Rates 2004---201220122012

Braemar Seascope Offshore is a division of

Braemar Shipping Services PLC, a leading

integrated provider of brokering and con-

sultancy services to the shipping industry.

At Braemar Seascope Offshore our aim is

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clients' offshore programmes.

Regular advances in technology mean our

work is a direct response to constantly

changing market needs.

From offices in London, Aberdeen and Sin-

gapore we specialise in the worldwide off-

shore market.

Our services include:

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Contact

Us Sean Bate

Market Analysis

Manager

25 Carden Place

Aberdeen

AB10 1UQ

UK

Phone:

+44 (0)1224 628470

Fax:

+44 (0)1224 621444

E-mail:

research

@seascope.co.uk

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