Covid-19 to worsen condition of the global offshore market

Yoana Cholteeva 28 April 2020 (Last Updated April 28th, 2020 15:53)

VesselsValue (VV), the market intelligence service, has predicted that offshore fleets will face more losses amid the oil price crisis as a result of Covid-19, following the news from March that Norway’s Solstad offshore company will undergo financial restructuring.

Covid-19 to worsen condition of the global offshore market
Source: Bernard Spragg

VesselsValue (VV), the market intelligence service, has predicted that offshore fleets will face more losses amid the oil price crisis as a result of Covid-19, following the news from March that Norway’s Solstad offshore company will undergo financial restructuring.

Using its VesselsValue fleet search, the company was able to filter 34 vessels within the Solstad fleet that have been inactive for one week or more, signalling that Solstad is most likely preparing to suspend the 34 vessels as part of the financial restructuring process.

Providing that the company removes the 34 outlined vessels from its fleet, that would bring the Solstad’s value down from USD $1,483.9bn to USD $1,362.8bn, according to the analyst. Considering that the big offshore vessel owner is facing such a big impact from Covid-19, this signals a high possibility of upcoming struggles for the whole offshore sector, according to VV.

With unclear projections for the future economic situation, this points to another period of restructuring, forced vessel sales, mergers and consolidations, and, therefore, declining asset values which will be “extremely testing” for everyone in the oil industry, VV says.