News

Tok Bali to expand bunkering facility

Tok Bali to expand bunkering facility

Kuala Lumpur: Ahmad Zaki Resources Bhd (AZRB) is investing $7.4m to expand its bunkering facilities at the Tok Bali Port in Malaysia. The company will invest $3.3million for two diesel tanks and $4.1m for a water tank, which will be completed over the next two to three months.

Falcon Energy picks up small slice of CH Offshore

Falcon Energy picks up small slice of CH OffshoreSingapore: Falcon Energy's subsidiary Energian today purchased another 0.008% stake in CH Offshore (CHO), the offshore company that has so far rebuffed Falcon's buyout offer.

Pipeline to China opens

Pipeline to China opensBeijing: The giant oil pipeline from Myanmar to China started trial operations on Wednesday. The 771 km pipeline will connect China with a deepwater port in western Myanmar and reduce China's dependence on oil transported through the...

Tanjung Offshore suspends three execs with links to failed Bourbon deal

Tanjung Offshore suspends three execs with links to failed Bourbon dealKuala Lumpur: Three members of Tanjung Offshore’s executive board have been suspended for alleged misconduct that could have contributed to the cancellation of Tanjung’s takeover of Bourbon Offshore Asia Pacific.

Pelindo I to issue $24m bond for Kula Tanjung development

Pelindo I to issue $24m bond for Kula Tanjung developmentJakarta: Pelindo I, the state run port operator in Indonesia, will issue bond worth $24m in the second half of 2015 to develop Kula Tanjung Port as part of its plan to expand and modernize five of its ports this year. The five por...

San Miguel brews another tanker deal

San Miguel brews another tanker dealManila: SMC Shipping & Lighterage Corp, a division of Southeast Asia’s largest food and beverage firm, San Miguel Corporation, has returned to Kegoya Dock in Japan for a 3,500 cu m pressurized vessel for delivery in mid-2016, accor...

Tech investor buys out two shipping firms

Tech investor buys out two shipping firms Kuala Lumpur: An investment firm has moved to buy out two Southeast Asian tanker firms. Asia Bioenergy Technologies, a Malaysian investment holdings company that operates as a technology incubator, signed a heads of agreement with Ho...

‘Criminal gangs becoming more violent’: Dryad Maritime

‘Criminal gangs becoming more violent’: Dryad Maritime Singapore: Figures compiled by UK risk analysis firm Dryad Maritime show how Southeast Asia dominated the piracy scene last year. Piracy incidents in the region grew 21% year-on-year, Dryad reported. Dryad’s figures show a total of...

Yinson Holdings awarded FPSO contract

Yinson Holdings awarded FPSO contractKuala Lumpur: Yinson Holdings has announced that the consortium of Yinson Production (West Africa) Pte and Yinson Production West Africa Limited have been awarded a contract for the chartering, operation and maintenance of an FPSO fa...

Petronas expanding Bintulu LNG complex

Petronas expanding Bintulu LNG complexKuala Lumpur: Japan’s JGC Corporation has been awarded a contract by Malaysian energy giant Petronas for the engineering, procurement, construction and commissioning (EPCC) of an LNG complex Bintulu, Sarawak. The contract, valued a...

TAS Offshore sells three offshore support vessels

TAS Offshore sells three offshore support vesselsKuala Lumpur: TAS Offshore has sold an offshore construction vessel and two anchor handling tug supply vessels for RM143.24m ($39.76m). The three vessels were sold to one of its “new foreign customers”, an exchange filing from...

JES International raises S$6.59m through new share subscription

Singapore: JES International Holdings has placed 183m new ordinary shares to two new subscribers, which will add a total of S$6.59m ($4.91m) to the Singapore-listed company’s issued and paid-up share capital. The new shares were priced at S$0.03...

Manila port congestion delays Shell upgrade project

Manila: The continuing congestion at Manila port has allegedly delayed Shell's refinery upgrade project in Batangas. Energy undersecretary Zenaida Monsada said the completion of Shell’s upgrade had been delayed by one quarter due to the port con...

PTT hints it might pull out of Myanmar projects

Bangkok: In line with recent indications that Thailand is looking to diversify its energy supplies away from neighbour Myanmar, state energy firm PTT has said if oil prices remain low it will suspend its investment in Myanmar’s offshore project, M-...

Hanoi courts private investors

Hanoi: Vietnam’s Minister of Transportation Dinh La Thang has called on the private sector to support planned maritime infrastructure projects. A total of 41 projects have been outlined in the coming five years that will need some $2bn in invest...

Coastguard training essential to tackle piracy in SE Asia

Singapore: Effective training and mentoring for coastguards in southeast Asia is essential in order to have control over territorial waters and economic zones, maritime security company Maritime Asset Security & Training (MAST) says.

Falcon Energy still serious about CH Offshore buyout

Singapore: Falcon Energy is still interested in buying out offshore support service provider CH Offshore (CHO) and has extended the closing date of its offer by another two weeks, in spite of having its bid rejected previously by CHO shareholders. ...

Fire on Indonesian general cargo ship injures three

Jakarta: Three people have been injured in a fire onboard the MV Mentari Pratama (5,300 dwt, built 2005) while docked in a ship repair yard in Surabaya, Indonesia. A gas cylinder is thought to have exploded during welding work, causing the fire on...

Indonesia’s Pelindo I to further develop five ports

Jakarta: Indonesian state-run port operator Pelindo I said it will modernize and expand five of its ports this year. The five ports included Malahayati port, Belawan port, Kuala Tanjung, Dumai port and Batam port.

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In Focus

Cheaper oil puts brakes on OSVs

Kohe Hasan from law firm Oon & Bazul on the offshore outlook for 2015

Cheaper oil puts brakes on OSVs

The offshore supply vessel (OSV) industry has seen significant growth in recent years. However, the steep fall in oil prices of late could put a spanner in the works for the OSV industry.

At present, global oil prices are in the middle of one of its steepest selloffs since the financial crisis of 2008/2009.  World oil prices, which were hovering in the region of $110 per barrel from January 2010 until mid-2014, have taken a nose dive since June, more than halving in the past six months.

Whilst the decline in oil prices is likely to be a boon for consumers, the same cannot be said for the OSV industry. This is because oil majors are likely to cancel or delay their drilling operations and big-ticket production projects which are predicated on high oil prices. Evidence of this can already be seen in the recent announcement by ConocoPhillips that it would be cutting investment spending in 2015 by 20%.

The potential reduction in drilling operations and production projects would be of particular significance to OSV operators (both owners and charterers). This is so as drilling operations are a key driver in the demand for the use of OSVs such as platform supply and anchor handling tug vessels. OSV operators are therefore expected to experience a fall in the demand for OSVs.

One possible repercussion of the fall in the prices of oil and the expected fall in demand for OSVs is that charterers may seek to discharge themselves from charterparties which they had concluded prior to this decline. Such a trend was seen from the collapse of the freight market in 2008 which saw many charterers in the dry bulk industry attempt to discharge themselves from unprofitable charters. Similarly, this trend is likely to be seen in the context of the OSV industry as charterers would find that their charterparties have become significantly less profitable if the OSVs are unutilised as a result of the fall in demand. The need to discharge  ...   More>>