Over the past decade the number of offshore accommodation units has increased by 125%. At present, Floating Accommodation units (Vessels and Semi-Submersibles) account for just 18% of the total 225 active offshore accommodation units, whereas Accommodation Jack-ups and Barges account for 10% and 62% respectively. However, Floating Accommodation vessels represent 75% of the current orderbook for this fleet. So what are the reasons behind this counter-composition in the offshore accommodation sector?
The Graph of the Month displays the size of the orderbook relative to the active fleet and also average berth capacities for each structure type. In all cases, average berths are higher for units on order compared to those in service, illustrating the current demand for high capacity units.
Move to Deep Water
Barges and Jack Ups are limited to shallow-water operations and are typically capable of accommodating up to 300 people. Both structure types feature relatively small orderbooks compared to the active fleet size, with the Barges orderbook representing just 6% of the active fleet. Meanwhile, the Floating Accommodation sector includes the largest average berth capacities (400+ passengers) and features an orderbook that represents 51% of active units. Vessels and Semi-Subs are relatively expensive to construct and operate, but are capable of operating in deep-water, harsh environment settings.
Contracting for Barges peaked in 2007, when 27 units were ordered. This was followed by a sharp decline in activity with the onset of the economic downturn in 2008. During the period 2005-08 an average of 17 contracts per year were placed for Accommodation Barges, compared to just 4 per year in 2009-12. Conversely, the floating sector saw contracting increase from an average of 3 units per year for 2005-08 to 4 per year in 2009-12, with 9 placed in 2012 and 5 in 2013 to date. The introduction of specialist offshore accommodation operators in recent years has changed the nature of contracting for Floating Accommodation units. Prior to 2011 all floating units had been converted from other offshore structure types. However, companies such as Prosafe, Floatel International and Edda Accommodation have since invested in newbuild units, with the aim of developing high-specification fleets, capable of operating in all conditions. At present newbuilds make up 86% of units on order in the Floating Accommodation sector.
Accommodating Further Demand
The accommodation unit orderbook is now heavily weighted towards floating units, since steady demand for shallow-water units is satisfied by the existing fleet. Consequently, there has been minimal need to order Jack-up or Barge units in any numbers. On the other hand, demand for deeper water floating accommodation solutions has increased. Utilisation of existing floating units is high and charter rates in the North Sea have increased by 50% or more in the last three years. Accordingly, operators have contracted high-specification deep-water units in response, leaving this offshore structure type primed for rapid fleet expansion.