GC Rieber Shipping: Seismic market to remain weak in 2016

GC Rieber Shipping, a Norwegian company owning subsea, seismic and ice-support vessels, expects the market for its seismic fleet to be difficult in 2016.

The company owns and operates four seismic vessels: «Polar Duke», «Polar Duchess», «Polar Marquis» and the «Polar Empress».

The Polar Duke has recently been returned from Dolphin Geophysical and been cold-stacked, while the remaining three vessels are still chartered to Dolphin Geophysical. Following a new agreement entered at the beginning of October, the contracts expire in October 2018, May 2019 and May 2020, respectively.

Providing the outlook for the seismic division the company said the sector is experiencing a considerable pressure on prices and reduced earnings, and the assumption is that the market will continue to remain weak into 2016, as the company’s are scaling back their exploration efforts, due to low oil prices.

As for its subsea and ice support vessels fleets, the company feels that, while the Inspection, Maintenance and Repair segment is generally less exposed to reduced investments by oil companies compared with the part of the subsea industry that is directed at new projects, the oil majors are now postponing their maintenance projects as well.

The company has three subsea vessels, one of which is without a contract. GC Rieber said that due to the current market situatuion, it would aim for shorter contracts in order to maintain a satisfactory level of activities in the segment.

The ice/support segment is stable and activities unchanged, but also subject to any potential sanctions against Russia due to the crisis in Ukraine.

“In light of the uncertainty in the market, GC Rieber Shipping will continue to work actively to adapt operations of vessels and the organisation to a lower cost level in order to maintain the company’s competitiveness,” GC Rieber shipping said in its third quarter results presentation.

Revealing the 3Q results, the company posted a drop in net profit, and a rise in operating income.

GC Rieber Shipping had an operating income of NOK 336.6 million in the third quarter 2015, compared with NOK 240.7 million in the corresponding quarter 2014. This 39.8 percent increase is wholly due to the agreement with the Administrators of Ceona for the payment of cash deposit of approximately $16.3 million.

The company’s net profit fell to NOK 25.3 million in the third quarter 2015, compared with a profit of NOK 47.0 million.

Offshore Energy Today Staff