MARCH 2003 NEWSLETTER
by
JOHN GRIFFITHS

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Contact details for news, views, inclusions etc: e.mail: ddraigmor@aol.com

The News.

In term of news, February saw the arrival, in Aberdeen , of Atlantic Towing’s Atlantic Kingfisher, one of the ever popular UT722L types. She was taken up by Global Santa Fe for a rig move of their Glomar Arctic IV. A sister ship, the Atlantic Osprey joins the Atlantic fleet summer 2003. Gulfmark Offshore’s Highland Patriot secured a three well fixture with Seaforth supporting the same rig.

Maersk’s Maersk Achiever also arrived in February, one of a series of six in total ‘A’ class vessels of 23400 BHP. She was snapped up by Agip on the 17th March to rig move the Ocean Nomad.  What is it about Maersk ships looking so purposeful? You’ve heard of ‘Bend it like Beckham’? Maybe Maersk should be marketing something similar along the lines of ‘Make them like Maersk’!

Solstad’s Normand Tonjer  is on contract to Deep Ocean AS on a 2 x 300 day charter believed to be valued at some 65m NKr.  Solstad’s Normand Pioneer has been extended by Technip Offshore for a further 540 days spread over three years. Technip have also the option to keep the vessel for a further 2 x 180 day periods during 2007 / 2008.

Skandi Marsein has been extended on her current Shell charter for a further year until July 2004. She has been kept busy by Shell (no change there, then!) supporting the pipe lay project with the Solitaire on Shell’s Cleaver Bank High Project. She is expected to return to the Shell pool when the project is complete. Staying with Shell, they have also extended the charter on the Gargano for another year, remaining with them until March 2004.

Havtrade have ordered a VS470 MkII PSV from Vik Sandvik, as have Sira Offshore. Havtrade’s is under construction in Malta with Sira’s in Lithuania .

Simon Mokster’s new FSV, under construction at Langsten, is to receive an FRDC, a rescue boat and tug via Maritime Partners of Norway. The tug itself is some 7m in length, built for the towing and manoeuvering of oil containment booms in bad weather. The FSV for Simon Mokster is due to be delivered mid 2003.

Grampian Explorer, a UT755L design, was christened in Aberdeen by Isobel Craig wife of the director on the 7th of March. The multi-role ROV and PSV together with sister ship Grampian Surveyor represents a £24mn investment for the group.

Bits and pieces.

The phenomenal success of  Rolls Royce Ulstein  is almost landmark in offshore shipping circles. Building on their initial success with the venerable UT704 AHTS in the mid '70‘s amongst others, Ulstein seem to go from strength to strength. Other standard designs abound in the industry - but there is something about the Ulstein ‘touch’ that makes many owners place great store in what they’re getting for their money - no doubt the Rolls Royce tag helps! 47 of the design are on order and under construction throughout the world with yards in nine countries having the UT design on their books.

Of these 47 designs, 35 will be delivered before the end of 2003 and the remaining twelve will make an appearance in 2004. 17 of these will be UT755‘s in various guises - the most popular (currently) of the type and 7 will be the UT722‘s. This news gave rise to a comment in February’s Sea Breeze, the in-house market report put out by Seabrokers, who said:

" One observation we’ve noted recently is that the number of anchor handlers has fallen (albeit by only one or two) in the North Sea spot market, in spite of nearly 30 newbuilds arriving in the worldwide market last year. With another 30 or so AHTS due off the production line this year - will we be saying the same thing next year?”

Farstad, in their latest financial statement, also suggest that over capacity could be a problem, anticipating that demand for OSV’s in the North Sea will likely run at the same level as in 2002. They also predict that the large number of newbuilds will continue to stress charter rates and that the only solution was ‘...net departure of tonnage....needed to restore market balance’.

Memories of the over capacity situation keenly felt of the late '70‘s and again towards the end of '82 spring to mind. Then, rates fell so sharply that what had once been a $7000 a day charter rate for the typical OSV fell to as low as $1350 with many ships laid up awaiting work. Not good days for all concerned.

Notwithstanding over capacity - which may well be an issue, time will tell - the Rolls Royce Ulstein design has spawned some  interesting  facsimiles which, whilst never claiming to be copies, stand out as owing their heritage to one or other of the UT designs without any doubts. A good example is the Halul 20, a 61m AHTS recently built in India for Middle Eastern owners. It looks something like a modernised UT704 in its layout and whilst they say that copying is the sincerest form of flattery it also goes to show just how much impact the UT series has had on designs throughout the industry. Says something, doesn’t it?

Comment.

I am informed, by a source of mine, that the future of the ERRV as we know it is in a period of unrest. Not only are lay ups and the inevitable redundancies an issue due to the prevailing economic conditions offshore, but it seems speculation regarding the future of the current ERRV  is also a discussion point. Once characterised by trawler conversions, this sector has come on by leaps and bounds over the years to produce vessels that are better equipped for the job than their predecessors ever were. Nowadays, new buildings specifically designed for this market are slowly but surely overtaking the old OSV conversion - although many of them still remain and are likely to for the near future. However, recent trends in this area do deserve a closer look and with one eye on the past, the debate it will produce is liable to be quite a lively one.

A quick history lesson. When the more powerful AHTS’s began to hit the market in large numbers, no-one was happier than the operators offshore who were able to charter high power ships more than able to undertake the many  tasks required of them. As exploration began to move further north and west into the Atlantic, the AHTS got bigger and more muscular, ensuring they were more than capable of keeping pace with deep water work.

One particular group of shipowners, however, were far from happy with the flood of high horsepower tonnage on the market - and with good reason. As downturns offshore occurred (as they do) the AHTS moved in to an area that was once the preserve of the deep sea tug - decimating many fleets in the process by successfully competing for any work that was available. Some tug owners, seeing what was happening, ensured that their vessels were able to compete offshore whilst still being capable of maintaining their traditional role - owners like Wijsmuller building vessels such as the Typhoon  and Tempest  for example - whilst others stoically remained ‘traditional’ in their outlook and beliefs. Unable to effectively compete with the new kid on the block however, many owners faded into history or merged to form new alliances. The upshot of it was the rapid demise of the old deep sea towage market, the sale of ships no longer considered viable in the face of this new competition - and the introduction of vessels able to work not only in the towage and salvage niche but also to work offshore. An indirect result of this is that most newbuildings nowadays are dual purpose. Take, for example,  Klyne’s Anglian Princess which is owned and operated as a tug but also has AHT capability. This vessel, if ever no longer gainfully employed, will have to compete with the plethora of AHT’s available for charter on the market, something her owners undoubtedly accounted for when they chose the design - an Ulstein, by way of comment!

So to ERRV’s. Traditionally, these were all ex trawlers, put to good use by owners who heard the death knell sounding for the fishing industry and acted accordingly. Whilst they were fine ships in their day, they were overtaken by constant new demands and many owners purchased and converted supply ships  - vessels that had more deck space and were ripe for revival in the role over and above that once enjoyed by the ex trawlers. They could, for example, be used for inter field transfers, releasing the all important OSV for other roles of high priority to the installation. Hop along a few more years and we start to see ERRV’s with firefighting capabilities on top of their stand by role, then some ERRV’s with a limited towage ability. The niche was changing to suit demand -and nowhere is as demanding and liable to change as the offshore industry.

Now we come to the next bit - something that I believe will blow winds of significant change right through the industry. Havila have won a 10 year contract for the Troll and Oseberg fields run by Norsk Hydro and will fill it with a brand new Rolls Royce Ulstein design, the UT527. This vessel will be able not just to carry out the duties of an ERRV but will also be able to act as a control and command centre, a firefighting vessel, an oil spill recovery vessel, a tug - the list is not exhaustive. Equipped to FiFi I &II, she is designated a ‘first line emergency vessel’ with a speed of 20 knots, a towing capacity of 100 tonnes BP and a towing winch brake load of 250 tonnes. She carries a crew of 12 and has a survivor capacity of 320. A stern ramp will allow for a tug / workboat to be launched and recovered - a craft able to handle booms - as well as having two other craft aboard for FRC and workboat duties. She will be fitted with side stations to port and starboard for the recovery of survivors. A heli deck fitted aft of the accommodation will allow for transfers to be carried out. No doubt she will also be utilised in other ways, such as for inter-field transfers - all in all making for a multi-functional vessel that, in essence, performs a wide variety of roles offshore and whose capabilities will surely set the trend for ERRV / FSV’s in the future. The vessel is not the only one. Other owners are looking to this future and ordering vessels that will perform similar roles.

As long ago as 1983, an article written by A.J. Ambrose for ‘Janes Merchant Shipping Review’ (‘The Changing face of Offshore Vessel Types’) forecast the rapid changes taking place in both the OSV and ERRV markets. Ambrose looked ahead to the future using the vessels then making an appearance in the ERRV domain - ships like the Sentinel Maria and sister ship Sentinel Cathinka, both up to the minute vessels with the latest trends covered by their designers and owners. Small at 499 tons, they nonetheless hosted facilities for 310 survivors, had a 16 bed sick bay and a three bed intensive care unit, were fitted for firefighting, carried spray booms for oil dispersant / pollution control and were able to work small helo’s on the heli-pad, although larger units could  only winch down on the forward deck. What we are seeing now, in the newbuildings such as Havila’s UT527 and Simon Mokster’s FSV, is the natural progression to this type of vessel -updated and equipped accordingly into what Ambrose called a ‘specialist attendance vessel’. Progress has dictated some natural alterations, such as the fitting of a tug type craft to tow booms in pollution control but, essentially, the concept is the same - although on a much larger scale.

In my mind, it stands to reason that vessels of this type will be a more cost effective option for operators offshore by virtue of their availability to rapid role change as circumstances and conditions demand. A ‘one stop’ concept capable of providing the very important first response to anything that may occur offshore. How many current ERRV’s can honestly claim to be as resourceful or adaptable to each situation that may arise offshore? It is, of course, no reflection on the vital work done by current ERRV’s - but as thinking gets directed towards the ‘one stop’ concept, the question must be how long they can compete against vessels such as these?

It is also no surprise that the country leading this is Norway - where so many innovative and almost perfectly balanced marine packages stem from. Is it just me or am I seeing a sort of Viking renaissance in all of this? The phenomenal success of the earlier UT series of ships set examples that many others imitated but, some would argue, never bettered. Even under the Rolls Royce label, there is no mistaking the ancestry of the majority of OSV’s sailing the world’s oceans nowadays.

Will this spell the end for the ERRV as we know it? Who can tell - but one thing is certain. As ships like this one become established and more and more multi-capable, the role of the older ERRV is surely in doubt. Like the deep sea tug / AHTS lesson before it, this type of ship comes as an incomer into an established trade - and unless the trade changes to suit, who can say it may not be a case of history repeating itself?

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