Offshore Support Vessel Market

[292 Pages Report] The global Offshore support vessel market is estimated to grow from USD 22.6 billion in 2023 to USD 31.4 billion by 2028; it is expected to record a CAGR of 6.7% during the forecast period. Recently regions has witnessed a rapid growth in offshore support vessel demand in recent years due to the increased exploration and production activities in offshore areas. The market for offshore support vessels is projected to benefit greatly from rising deepwater activities and the decommissioning of outdated offshore infrastructure.

To know about the assumptions considered for the study, Request for Free Sample Report

To know about the assumptions considered for the study, download the pdf brochure

Offshore Support Vessel Market Dynamics

Driver: Increasing investments in offshore wind and oil & gas projects

The global energy demand is significantly influenced by the growth of the human population. According to the UN World Population Prospects, the world population is projected to reach 8.5 billion by 2030, driving the need for diverse energy sources including oil & gas, renewables, thermal, and nuclear power. The presence of substantial unexplored oil reserves, estimated at 1,729.7 billion barrels as per the BP Statistical Review of 2019, creates demand for drilling and production activities. This demand, in turn, supports the growth of the offshore support vessel market. According to the BP Outlook 2023, the share of renewables in global primary energy increased from around 10% in 2019 to 35–65% by 2050. The main objective is to reduce carbon emissions by 36% by 2040 compared to 2017. The International Energy Agency (IEA) predicts that the global renewable generation capacity will grow by 75% or 2,400 GW between 2022 and 2027. Upon completion, a 1,400 MW offshore wind farm in Sofia, developed in the shallow central area of the North Sea known as Dogger Bank, would be the world’s largest offshore wind farm. Offshore wind farms are an integral part of renewables-based power generation. The growing investments in building offshore wind farms will positively impact the OSV market

Restraint: Supply-demand gap in offshore support vessels

The rise in the supply of offshore support vessels has resulted in a supply-demand gap in the market. There are more OSVs available than the users demand. This is leading to intense competition among OSV companies, pricing pressures, and reduced profitability for many players in the market. The OSV market is highly dependent on the oil and gas industry, which has experienced significant fluctuations in demand and supply over the years. During high oil prices, there was a surge in demand for OSVs, leading to an increase in the number of new builds entering the market. However, with the sharp decline in oil prices in 2014, the demand for OSVs also fell sharply, leaving many companies with excess capacity. The overcapacity problem has led to intense competition among OSV companies, with many players undercutting each other to secure contracts. This has put pressure on pricing, which has impacted profitability and financial stability in the industry. To address the overcapacity problem, some OSV companies have taken steps to reduce their fleet sizes by scrapping or selling vessels or delaying the delivery of newbuilds. Tidewater, Hermitage Offshore Services, BOURBON, Seacor Marine, and POSH Terasea sold their 22, 12, 11, 8, and 8 OSVs, respectively, in 2020, with a combined worth of USD 180 million. All these factors have resulted in the oversupply of offshore support vessels, which will hinder the growth of the market.

Opportunities: Decommissioning and replacement of aging offshore infrastructure

With oil and gas companies cutting down on their capital expenditure and operating costs due to the pandemic, decommissioning work is likely to see increased spending. The aging offshore infrastructure in the North Sea is expected to provide new growth opportunities for the offshore support vessel market. Clyde and Co. Oil & Gas UK, in its 2019 Decommissioning Insight report, estimated about 12 platforms to be removed per year in the UK North Sea and 150 wells to be abandoned annually over the next decade. Approximately twice as many wells are now being abandoned each year, and this ratio is likely to increase following the decreased demand and surplus in supply post-2020, which will lead to an inevitable decrease in capital expenditure. In the next 30 years, the North Sea region’s 475 platforms, 10,000 km of pipeline, and 5,000 wells are expected to be decommissioned. This is mainly due to the maturing of oil fields in the region; the decommissioning is anticipated to cost USD 41 billion. There are approximately 7,000 offshore structures along the Gulf of Mexico and the North Sea—the largest regions for offshore decommissioning. Each oil & gas field has a life cycle of 30–40 years, which can be divided into primary and secondary phases. The primary phase involves the extraction of hydrocarbon reserves using natural processes. The secondary phase includes modern technologies such as enhanced oil recovery (EOR), artificial lifts, and injecting water to improve the reservoir output. Operating companies use these technologies over time to increase production, though production volumes are higher in the primary phase. An oil & gas field is considered mature when production declines significantly following primary recovery methods. Maturing oil & gas fields are expected to provide new revenue-making opportunities for the OSV market players.

Challenges: Stringent regulations for offshore activities

Government regulations related to oil & gas field developments are becoming more stringent day by day. The OSV market is fragmented and dominated by local players. Cabotage is a law regulating shipping and offshore activities in a country’s waters. It recognizes that a country is authorized to limit the activities of foreign vessels operating within its waters. Every country has its own cabotage law to encourage more local players' participation. The cabotage legislation in the Bahamas focuses on generating employment opportunities for the local population. Brazil has implemented several cabotage laws to support the local industry. Although the local regulations are in place, the offshore industry in Brazil is struggling to meet Petrobras’ E&P plans. According to the Petroleum Development Act and Petroleum Regulations in Malaysia, all offshore support vessel service providers should have a valid license issued by Petronas Malaysia. Since 2016, Indonesia has been planning to restrict foreign vessels and the transportation of domestic products in Indonesian waters to encourage the growth of domestic players. Such requirements sometimes force companies to purchase equipment from local players even if it is being sold at a lesser cost by an international player.

Offshore support vessel Market Ecosystem

Prominent companies in this market include well-established, financially stable manufacturers of Offshore support vessel systems and components. These companies have been operating in the market for several years and possess a diversified product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include DOF ASA (Norway), Solstad Offshore ASA (Norway), Tidewater Inc. (US), A.P. Moller – Maersk (Denmark), Siem Offshore (Norway), BOURBON (France), and Vroon (Netherlands).

The standby & rescue vessels segment, by feedstock, is expected to be the second-fastest growing market during the forecast period.

This report segments the offshore support vessel market based on type into different types: AHTS, PSVs, MPSVs, crew vessels; standby & rescue vessels; chase vessels; seismic vessels; and other vessels (diving support vessels, remotely operated vessels, cable- and pipe-laying vessels, well-stimulation vessels, and well-intervention vessels). The standby & rescue vessels segment is expected to be the second fastest growing market during the forecast period. The emergency preparation of an offshore installation includes a standby vessel, which is situated there and picks up people in an emergency. They have a helipad, firefighting gear, oil recovery gear, and tanker assistance. These ships can carry many passengers and are designed and outfitted to temporarily house everyone from the offshore facility or drilling ship, remove personnel from the water, and give first aid.

By application, the shallow water segment is expected to be the fastest growing during the forecast period

This report segments the offshore support vessel market based on application into two segments: shallow water and deepwater. The shallow segment is expected to be the fastest growing segment during the forecast period. Shallow water operations are less expensive than deepwater operations. Thus, recovering oil prices will lead to a faster increase in offshore activities in shallow-water basins than the deepwater ones. Further, investments in offshore wind farming have been concentrated in the shallow water regions. All such investments will drive the market growth for shallow water applications.

“North America”: The fastest in the offshore support vessel market”

North America is expected to fastest growing region in the offshore support vessel market between 2023–2028, followed by the Asia Pacific, Europe, and Middle East. The North American region witnessed an increase in oil production by 2.5% on a y-o-y basis in 2022. However, there has been an increase in offshore activities in the US Gulf of Mexico, with new offshore projects under progress. Such factors are likely to boost the demand for offshore support vessels in the region.

Key Market Players

The market is dominated by a few major players that have a wide regional presence. The major players in the offshore support vessel market include DOF ASA (Norway), Solstad Offshore ASA (Norway), Tidewater Inc. (US), A.P. Moller – Maersk (Denmark), Siem Offshore (Norway), BOURBON (France), and Vroon (Netherlands). Between 2018 and 2022, Strategies such as contracts, agreements, partnership, merger, acquisitions, and expansions are followed by these companies to capture a larger share of the market.

Get online access to the report on the World's First Market Intelligence Cloud

• Easy to Download Historical Data & Forecast Numbers
• Company Analysis Dashboard for high growth potential opportunities
• Research Analyst Access for customization & queries
• Competitor Analysis with Interactive dashboard
• Latest News, Updates & Trend analysis

Request Sample

Click on image to enlarge

Scope of the Report

This research report categorizes the market by material, fuel type, type, application, end-user industry and region.

On the basis of by material, the offshore support vessel market has been segmented as follows:

• Offshore Support Vessel Materials
  • Steel
  • Aluminum
  • Fiberglass
  • Composite Materials
  • Wood
• Cladding Materials
  • Stainless Steel
  • Aluminum
  • Copper-Nickel Alloys
  • Titanium
  • Inconel

On the basis of fuel type, the market has been segmented as follows:

• Fuel Oil
• LNG

On the basis of type, the market has been segmented as follows:

• Anchor-handling Tug Supply Vessels
• Platform Support Vessels
• Multipurpose Support Vessels
• Standby and Rescue Vessels
• Crew Vessels
• Seismic Vessels
• Chase Vessels
• Other Vessels

On the basis of application, the market has been segmented as follows:

• Deepwater
• Shallow Water

On the basis of end-user industry, the market has been segmented as follows:

• Offshore Oil & Gas
• Offshore Wind

On the basis of region, the market has been segmented as follows:

• Asia Pacific
• Europe
• North America
• Middle East & Africa
• South America

Recent Developments

• In April 2023, Bourbon Marine & Logistics announced its partnership with the Guyanese company— Tethys Marine & Logistics, which will become a 51% shareholder of the Bourbon Guyana Joint Venture. With 75% Guyanese Directors, Bourbon Guyana will become the first indigenous offshore support vessel operator, fully compliant with the most recent local content regulations.
• In March 2023, Maersk entered into a three-year contract with Petrobras, a state-owned Brazilian multinational corporation in the petroleum industry, to use three L-class anchor handlers to carry out a range of anchor handling activities and rig movements. This move is part of Maersk’s efforts to strengthen its position in the Brazilian market for supply chain services and become a respected integrated solutions provider in the region. Maersk Supply Services has already secured several contracts, including a series of solutions contracts for the FPSO Fluminense on behalf of Shell and the Mero 2 contract for.
• In March 2023, Tidewater Inc. announced a definitive agreement to purchase 37 of Solstad Offshore ASA’s (SOFF) platform supply vessels (PSVs).
• In January 2023, Maersk entered into an assignment agreement with TechnipFMC for the comprehensive towing and mooring campaign of Petrobras's Búzios 6 Project, the seventh module of Búzios, offshore Brazil. The scope of work includes the pre-installation of the mooring system and hook-up of the FPSO P-78, which will be the seventh FPSO in the Búzios field, located in the Santos Basin, Brazil. The project is expected to take nearly two years to complete, with onshore work already underway, including engineering, procurement, and project management.

Frequently Asked Questions (FAQ):

To speak to our analyst for a discussion on the above findings, click Speak to Analyst