09 February 2011
MUSCAT: Renaissance Group, one among the top ten offshore support vessel operators in the world, is seriously considering deploying its vessels to extend support services to oil giants engaged in offshore exploration in the deep waters of Brazil and West Africa.
The company wants to stick to long-term contract model in potential markets where national oil companies are active, said a research note prepared by BankMuscat.
Brazil's national oil company Petrobras outlined its five-year capital expenditure plan whereby 95 per cent of the planned expenditure of $224 billion will be spent in Brazil and 53 per cent ($119 billion) of the total expenditure is for exploration. "This outlay is likely to double the vessel requirement through 2010. The company would require 237 vessels through 2015 creating opportunities for offshore supply vessel operators. The requirement would be for high specification vessels with platform supply vessels (PSVs) powered upwards of 3000-4500 DWT and tugs powered upwards of 15,000 BHP," it added.
Renaissance's marine division has a fleet strength of 107 vessels -- a wide mix of barges, anchor handling tug supply vessels(AHTSVs), PSVs, crew boats and multipurpose vessels. Geographically, the deployment of vessels is split between Caspian and the Middle East, six to seven vessels are deployed outside these geographies.
"It (Renaissance) deployed its first vessel (Topaz Captain) in Gulf of Mexico in the fourth quarter of 2010 on a four-month long spot contract which would later on move to work with Petrobras in Brazil fetching the company roughly $50,000 per day."
Petrobras' spending
"Our numbers assume 15-16 per cent of incremental fleet to be deployed in Brazil over the next two years," it further said.
However, the report noted there could be risk emanating from new market entry and equipment being moved from other markets, that is, Gulf of Mexico and North Sea as companies vie for Petrobras' aggressive spending programme.
BankMuscat report said in 2010, two low profile (barges) vessels have joined Kazakhstan fleet and two vessels have joined the Azerbaijan fleet. The top up was to come from the non-Caspian fleet where six to seven vessels were underutilised at the beginning of 2010. In line with management guidance of better utilisation in the second half of 2010, the utilisation levels inched up closer to 90 per cent for large part of the second half of 2010.
Out of six vessels meant for non-Caspian fleet 4 AHTSVs directed at Saudi market do not have contracts lined up, therefore just two vessels on non-Caspian side have been deployed (Vietnam and Gulf of Mexico) in 2010.
BankMuscat also expects the company to dispose of one to two vessels every year. "We expect that there could be six to seven vessels that the company could be looking to dispose of from the current fleet. The profit from sales on these depreciated vessels could be significant as noticed in the fourth quarter of 2009, when it reported a gain of RO5.9 million on a vessel sale valued of RO11.3 million."
Renaissance Services has spent $660 million between 2006 and 2009. The company has guided for a three-year capital expenditure of $1.4 billion directed at offshore vessel. "We envisage a growth in offshore fleet from 107 to 150, to be funded by tier I and tier II capital. The recent subordinated debt issue (tier II capital) of RO40 million at a cost of 8.5 per cent has freed up capacity to raise conventional debt and has taken care of funding requirements for this capital expenditure plan. Given its track record the entire $1.4 billion capital expenditure may not be organic."
BankMuscat expects Renaissance's marine division to improve utilisation on Middle East fleet and an increase in number of revenue generating vessels to 112 from 92 last year.
Renaissance reported a 6.3 per cent growth in marine revenues in for the first nine months of 2010, implying better performance of Caspian fleet as year-on-year under utilisation continued to play on the Mena fleet, though utilisation has inched closer to 90 per cent in the fourth quarter of 2010.
MUSCAT: Renaissance Group, one among the top ten offshore support vessel operators in the world, is seriously considering deploying its vessels to extend support services to oil giants engaged in offshore exploration in the deep waters of Brazil and West Africa.
The company wants to stick to long-term contract model in potential markets where national oil companies are active, said a research note prepared by BankMuscat.
Brazil's national oil company Petrobras outlined its five-year capital expenditure plan whereby 95 per cent of the planned expenditure of $224 billion will be spent in Brazil and 53 per cent ($119 billion) of the total expenditure is for exploration. "This outlay is likely to double the vessel requirement through 2010. The company would require 237 vessels through 2015 creating opportunities for offshore supply vessel operators. The requirement would be for high specification vessels with platform supply vessels (PSVs) powered upwards of 3000-4500 DWT and tugs powered upwards of 15,000 BHP," it added.
Renaissance's marine division has a fleet strength of 107 vessels -- a wide mix of barges, anchor handling tug supply vessels(AHTSVs), PSVs, crew boats and multipurpose vessels. Geographically, the deployment of vessels is split between Caspian and the Middle East, six to seven vessels are deployed outside these geographies.
"It (Renaissance) deployed its first vessel (Topaz Captain) in Gulf of Mexico in the fourth quarter of 2010 on a four-month long spot contract which would later on move to work with Petrobras in Brazil fetching the company roughly $50,000 per day."
Petrobras' spending
"Our numbers assume 15-16 per cent of incremental fleet to be deployed in Brazil over the next two years," it further said.
However, the report noted there could be risk emanating from new market entry and equipment being moved from other markets, that is, Gulf of Mexico and North Sea as companies vie for Petrobras' aggressive spending programme.
BankMuscat report said in 2010, two low profile (barges) vessels have joined Kazakhstan fleet and two vessels have joined the Azerbaijan fleet. The top up was to come from the non-Caspian fleet where six to seven vessels were underutilised at the beginning of 2010. In line with management guidance of better utilisation in the second half of 2010, the utilisation levels inched up closer to 90 per cent for large part of the second half of 2010.
Out of six vessels meant for non-Caspian fleet 4 AHTSVs directed at Saudi market do not have contracts lined up, therefore just two vessels on non-Caspian side have been deployed (Vietnam and Gulf of Mexico) in 2010.
BankMuscat also expects the company to dispose of one to two vessels every year. "We expect that there could be six to seven vessels that the company could be looking to dispose of from the current fleet. The profit from sales on these depreciated vessels could be significant as noticed in the fourth quarter of 2009, when it reported a gain of RO5.9 million on a vessel sale valued of RO11.3 million."
Renaissance Services has spent $660 million between 2006 and 2009. The company has guided for a three-year capital expenditure of $1.4 billion directed at offshore vessel. "We envisage a growth in offshore fleet from 107 to 150, to be funded by tier I and tier II capital. The recent subordinated debt issue (tier II capital) of RO40 million at a cost of 8.5 per cent has freed up capacity to raise conventional debt and has taken care of funding requirements for this capital expenditure plan. Given its track record the entire $1.4 billion capital expenditure may not be organic."
BankMuscat expects Renaissance's marine division to improve utilisation on Middle East fleet and an increase in number of revenue generating vessels to 112 from 92 last year.
Renaissance reported a 6.3 per cent growth in marine revenues in for the first nine months of 2010, implying better performance of Caspian fleet as year-on-year under utilisation continued to play on the Mena fleet, though utilisation has inched closer to 90 per cent in the fourth quarter of 2010.
© Times of Oman 2011
