Brazilian Offshore Uptick Could Tighten US OSV Fleet
Increased activity in the Brazilian offshore oil and gas sector could help strengthen the market recovery for offshore supply vessels (OSV) in the U.S. Gulf of Mexico.
In early October, Brazilian state-owned oil company Petrobras issued requests for quotations (RFQ) for up to 20 OSVs ranging from 3,000 to over 4,500 deadweight tons to support upcoming drilling and production activities. The value of all of these potential long-term charters could approach $1 billion.
While Petrobras typically prefers to use Brazilian-flagged vessels, it will utilize foreign-flagged vessels to fill additional requirements as necessary, creating more potential opportunities for an already tightening U.S. fleet.
"Brazil is now showing signs of sustained recovery and a long-term up cycle which further underscores the strength of the recovery here in the U.S. Gulf of Mexico," said Matthew Rigdon, executive VP and COO at Jackson Offshore Operators, a Louisiana-based OSV owner and operator. "U.S.-based companies participating in this bidding could result in further tightness in the U.S.-flagged OSV fleet domestically."
Brazil and the U.S. Gulf of Mexico, together with West Africa, make up the so-called "golden triangle", where increasing exploration and production activities for oil and gas is propelling OSV market growth after a yearslong downturn
"All three corners of the golden triangle are seeing significant and sustained increases in OSV demand," Rigdon said. "Owners need to take advantage of a market that is finally favoring them but at the same time be preparing for the next downturn. We know from experience that it will no doubt arrive at some point in the future and will inevitably surprise all market participants."