Asia Shipping Media, the parent firm of this site, teamed up with Standard Chartered Bank to host an Offshore Business Breakfast on March 21 at the Fullerton Hotel in Singapore. Around 50% of the 44 people attending were vessel or rig owners leading to some frank and topical debate on the offshore markets. In the first of a two-part series SeaShip News highlights the key takeaways from the exclusive gathering.
In general, the mood from those attending was optimistic with long-term rates for rigs and OSVs looking solid despite a likely blip this year.
Nigel Anton, global head of shipping finance at Standard Chartered, related how there was no sign of owners cutting back expansion plans and calls for cash were increasing.
A sign of a confident market was the clear decline in speculative orders with yards such as Nam Cheong in attendance noting owners were increasingly signing for build to order ships.
Shale gas formed a lively plank of the debate – with many in the room doubting various bullish forecasts on potential outputs in the US and China. Shesh Venkatraman, ceo of Jaya Holdings, was among the shale gas dissenters, questioning both the cost of shale production as well as its environmental impact.
Much time was spent on China, both its energy needs and its vessel building capabilities. Panellists said the People’s Republic as a good place to build so long as owners are diligient. Quality, timing and price are all attractive in China, argued Manav Kumar, director at Dynamic Offshore Drilling, although he recommended to add in an extra couple of months for any construction project to iron out certain building wrinkles.
Quite so, agreed another panelist, James Pang, managing director of fast growing OSV specialist Pacific Radiance. Building in China requires a lot of supervision, he said, noting that his company has 30 supervisors based there alone. Pang also revealed that the days of generous 10:90 financing terms are “fast disappearing” in China.
Looking at future growth the audience was convinced that demand for oil and gas would be driven increasingly by national oil companies (NOCs) pursuing national security policies rather than the stalwart international oil companies (IOCs) which have served as the traditional production growth generator for decades.
Swire Pacific Offshore’s Rupert Bray called for a greater need for quality operators, something Abishek Pandey from Standard Chartered said was happening with many of the older players in the offshore market who had been focusing on the lower end of the offshore spectrum getting more and more into high spec operations.
Asia Shipping Media produces high-level, niche and interactive breakfasts across the world. Watch out next week for the second part of our Offshore special where Standard Chartered’s oil and gas research analyst Duke Suttikulpanich makes a convincing case that offshore has strong growth potential despite some jitters in the market.
At the event, our sister site Maritime CEO interviewed some of the regions top offshore executives. Access the articles below.