Preparing for the Next Generation of Vessels for the Offshore Sector

The offshore industry is entering a new decisive phase in its development bringing both challenges and opportunities to shipbuilders. The fact is that while spending on exploration and production (E&P) hit record levels in 2013, at around $ 650 billion, the rate of growth in expenditure is starting to slow and may even at some point begin to fall. Meanwhile the E&P cost per barrel is continuing to rise, having more than tripled to $ 20 per barrel over the last ten years. This, combined with more remote operations offshore, asks for increased complex vessels and generates sharply higher costs.

There is no escaping the fact that deep water E&P is a very expensive business. A number of oil majors, including Shell, Statoil and Chevron, have already announced reductions in their capital expenditure, cost reduction is essential. Yet the continuous drive looking for new oil and gas reserves has led to a surge in new OSVs orders. With an eye on the future, operators are shifting towards a new generation of multipurpose vessels delivering cost savings through higher utilisation rates and lower running cost.

In line with the cost factor, operators order vessels being more capable, more versatile and more cost efficient. Longer periods at sea plus new regulations are a driving demand for a larger comfortable accommodation, housing greater numbers of personnel. Though more powerful cranes, enhanced ROV capabilities and integrated power- and control systems are also seen as vital for the new, multipurpose OSVs. The latter is important for delivering more efficient ship’s systems and minimal fuel consumption.

With the demand for advanced vessels expected to grow for some time, the sector is being targeted by yards around the world. Norway, with its decades of experience in building ships for the most challenging conditions, remains the leading nation for delivering these ships. However China is a major supplier as well, having built a significant number of OSVs.

Positioning itself in this market, Damen has long worked with owners and operators to optimise its designs to meet their evolving needs. Its repair and conversion operations have also been a valuable source of insights as to the improvements customers look for. Driven by the changing market, Damen has, next to performance, also been targeting other factors that feed into the overall OSV cost profile. For example reduced fuel consumption through more efficient hull forms and enhanced DP station keeping capabilities. Using modular building techniques makes it quicker and cheaper to convert a vessel for new functions and increases residual values. Improving logistical work flows on board to make operations more efficient and safe. This solutions-based approach and culture of continuous improvement has allowed Damen to successfully compete in the sector, a sector which will keep challenging the ship designers and shipbuilders in the years to come.

Sybrand Boschma
Business Development Manager Offshore
Damen Shipyards B.V