Archives for posts with tag: AHTS

The AHTS spot market in the North Sea is notable for the speed in which rates can shift, responding rapidly to supply and demand pressures. In 2014 alone the spot charter rate for an AHTS 18,000+ bhp fluctuated dramatically from a high of £170,165/day in August to a low of £5,819/day in the last week of the year.

Blame It On The Weatherman

Rig moves are the key AHTS demand driver in the North Sea. Pressures that affect the volume of these, along with the supply of units in the North Sea, dictate the number of available units, which in turn determine AHTS spot fixtures rates.

The largest peak in spot rates in the last three years occurred in August and September 2014. It was the result of a temporary removal of some North Sea units for work on exploration campaigns in the Russian Arctic. This caused a drop in the supply of vessels, that was eventually compounded by numerous rig moves, dropping availability and lifting spot rates.

Conversely, during December, a short three months after the September peak, AHTS spot rates in the region had fallen below £10,000/day for the first time since 2010. During the month, North West Europe was battered by a large weather depression resulting in strong winds and high seas, suspending many rig moves and forcing AHTSs to compete with PSVs for supply duty charters, bringing down the spot rates for both AHTSs and PSVs.


The price of Brent crude has fallen over 50% since June 2014 to below $50/barrel at the time of writing. As oil companies seek to rebalance their budgets in a new oil price world, exploration budgets have been cut. One of the ways in which drill rigs are utilised is the drilling of exploration and appraisal wells, demand for which has suffered in Q4 2014, negatively impacting AHTS demand in this period.

The drop in oil price has also damaged hope that exploration campaigns in expensive, harsh, Arctic environments will take place. Previously, these campaigns have taken vessels from the North Sea fleet, protecting the market from oversupply. Notably, Statoil has handed back three licenses offshore Greenland and announced that it will slow Arctic and Barents exploration to control CAPEX.

Oversupply in the North Sea can be demonstrated by the increase in the average number of vessels available. This rose steadily in 2012 and 2013, and by 39% in 2014 to an average of 13.1 vessels. This increase in supply has contributed to poorly performing spot rates in most of 2014, aside from the late summer spike. Increasing levels of supply and weaker demand indicators have forced some vessel owners to lay-up more ships in an effort to prevent oversupply impacting spot rates further, even laying-up units built as recently as 2014.

C’est La Vie

Clearly the volatile North Sea AHTS market is highly susceptible to short term demand pressures such as the weather and the whim of oil companies that dictate when rig moves occur. However, there are longer-term supply and demand forces at work, which although often obscured by dramatic short-term changes, can influence spot rates just as strongly.


The global AHTS and AHT fleet varies in power output greatly from a diminutive 850 bhp to a substantial 35,024 bhp. The range in size may be over 34,000 bhp, but 93% of the fleet falls between 2,500 and 16,500 bhp. Throughout this publication we divide the AHTS and AHT fleet into six subsectors based on power and supply capability. August’s Graph of the Month splits the fleet down into 16 categories revealing a more detailed profile of the AHTS and AHT fleet.

Shack To Chateau

When the fleet is broken down into 1,000 bhp sectors one of the trends visible is the dominance of vessels with between 4,500 and 5,499 bhp in the current fleet. These vessels account for 24% of the current fleet (703 units) of 2,895 vessels. Some of this peak can be attributed to a few AHTS designs. For example, there are 398 vessels with between 5,150 and 5,250 bhp. All but 90 of these are Chinese built and the majority in yards within China’s Fujian province, in particular Fujian Southeast. The vessels are primarily Conan Wu and Khiam Chuan’s 59m designs. Most are powered by two Caterpillar 3516B engines, providing c.5,200 bhp.

Location, Location, Location

The AHTS fleet is skewed in its deployment as well as its size. NW Europe is a key area for AHTS deployment. However, in overall number terms, the region accounts for only 6.3% of the world’s AHTS fleet deployment, mostly the largest sized vessels. The Asia Pacific region and the Middle East/Indian Sub Continent account for 32% and 22% of deployment respectively, totalling 1,597 vessels. These regions are the primary areas of deployment for Asian built and designed small AHTSs, such as those c.5,200 bhp, reflecting the benign environments in these regions.

AHTS Under The Hammer

The current orderbook stands at 188 vessels as of the 1st of August (6.5% of the fleet), 101 of which are slated for delivery within the rest of this year. Significantly, 89% of the orderbook is to be built at Asian yards, including many of the largest units. The remaining vessels are built at yards in Europe, South America, India and the United States. The >16,500 bhp category contains 17 units on the orderbook, nine of which are to be built in Asia. This category contains the largest share of orders at non-Asian yards (67%).

The shape of the orderbook profile indicates the trend in demand for larger AHTSs, not only in the very largest vessels but also in the small to medium sized vessels. The 4,500 to 5,500 bhp size range remains the largest in the orderbook; however the curve has shifted along the axis indicating a newer preference for larger vessels c.6,500 bhp. For example, 85% of the existing AHTS fleet built at Fujian Southeast is 6,000 bhp.

Splitting the AHTS fleet to a greater extent reveals the key trends affecting the fleet today. Though the largest units get much of the limelight, units suited to benign environments in Asia are far more numerous. Meanwhile, upsizing is occurring across many parts of the fleet, both amongst the largest units and the smaller ‘commodity’ AHTS vessels.