The accommodation vessel market is one of those seen by many in the offshore business as one of the rarer types that has managed to retain some of its relative strength compared to other sectors decimated by the oil price downturn, such as drilling rigs.

In fact, according to analyst Douglas-Westwood in the latest version of its “World Offshore Accommodation Market Forecast 2015-20,” there is even likely to be modest growth in the market over the longer term despite a decrease in forecast offshore capex over the period. Demand for flotels will average almost 42,000 personnel on board (PoB) per year, the report stated, equating to an increase of 14% compared to the preceding six-year period.

That trend continues one that emerged for this market over the previous five-year period, which experienced significant growth in PoB requirements.

Field life-cycle factor
A key factor is that offshore accommodation units are used throughout the life cycle of a field, in both the opex and capex stages, Douglas-Westwood pointed out. Opex-driven life-of-field support, therefore, will continue to largely dominate PoB requirements, accounting for 73% of demand, driven simply by the large number of existing fixed platforms.

Operators also will demand temporary accommodation support to minimize platform downtime during maintenance and modification work to ensure continuity of production—a major consideration with the industry’s increased focus on production and operational efficiency.

More susceptible to the oil price decline are accommodation units used to support capex-related activity such as the hookup and installation of platforms and subsea infrastructure. These will account for 27% of PoB requirements over the period, continued Douglas-Westwood.

Regionally, it is Asia that will produce the largest share of flotel demand over the period (26%) due to the large number of installed platforms in that region. The large tonnage of platforms in Western Europe, substantial small fixed platform population in the Gulf of Mexico and increasing deepwater production in Africa also are significant factors.

Challenging near term
One of the largest players in the market is Norway’s Prosafe, whose CEO Karl Ronny Klungtvedt confirmed in the company’s latest webcast that near term the market “remains challenging” as projects are temporarily postponed but that he expects an increase in activity, in particular from 2018 onward after the industry’s cost levels have been reduced, especially in the North Sea.

Prosafe said in its presentation that it had assumed a peak cost level for the industry in 2014 and by 2019 that cost level would be reduced by 25%. “What’s important is the ongoing cost reduction in the North Sea,” Klungtvedt said. “We believe this is very important to increase the long-term competitiveness of North Sea oil, and we are seeing clear cost-cutting initiatives within the E&P companies targeting quickly 20% to 25% cost reductions for new projects—and for some even more—and this now appears to be achievable.

“What we are saying is that the near-term cost focus is having an impact on the near-term activity level, but it’s having a positive impact on the long-term activity level, particularly from 2018 and onward.”

Positive long-term outlook
In the other markets where its vessels are working, mainly Mexico and Brazil, it again stressed it expected short-term uncertainty but more positive long-term outlooks for activity such as maintenance, modification, refurbishment and refitting work as well as the use of high-end vessels such as those in its semisubmersible fleet of accommodation units.

Klungtvedt also went on to point out that one thing the company is very focused on in the upcoming period is how it continues to look at managing its accommodation fleet.

“We have an asset integrity and maintenance department that has been in operation for, let’s say, two years or so. Their objective is on long-term planning for the fleet as a whole but also for each individual vessel to make sure that we optimize the capital allocation for the fleet for each vessel, both short- and long-term. So this is something that we’ve progressed with quite fine, but the benefits of that will be in the coming years,” he said.

Newbuilds
Perhaps more of an indication of its faith in the long-term strength of the market, Prosafe has three newbuilds already under construction and contracted: the Safe Zephyrus, Safe Notos and Safe Eurus. The latter two are being built at the COSCO Quidong yard in China and are expected to be ready for operations during 2016. The Safe Eurus will work for Brazil’s Petrobras for three years from first-quarter 2017, while Safe Notos will be deployed on an eight-month contract in the U.K. Continental Shelf (UKCS) from second-quarter 2016.

For the Safe Zephyrus, Prosafe recently agreed to a more flexible delivery date for the semisubmersible unit being built at the Jurong Shipyard in Singapore to better align with its contract portfolio. Although complete and built on budget, the vessel’s delivery has been essentially deferred into this year from its original planned date in fourth-quarter 2015. It will first help out the Safe Notos for a short period in the UKCS in second-quarter 2016.

Safe Boreas
The Zephyrus’ sister ship Safe Boreas was delivered from the same yard in January 2015 and has been working for Lundin Petroleum on the Martin Linge Field in the Norwegian North Sea, recently having its contract extended into 2016.

Prosafe’s newest vessel, it is one of the new breed of advanced harsh environment accommodation vessels and the most advanced yet available, according to the company.

Built to the GVA 3000E design, it has a DP3 (dynamic positioning) system, six 4.0-MW azimuth thrusters and a 12-point mooring arrangement, maximizing its flexibility and cost efficiency.

Able to house up to 450 persons in single-occupant cabins, the layout of this unit is unique, with two large internal glass atriums allowing natural daylight into the central cabins, mess room and recreational areas. Reflecting today’s expectations, it also has a cinema, gymnasium, sauna, golf simulator and Internet café as well as 50 offices.

Named after the Greek god of the north wind and the bringer of cold winter air, the flotel is designed specifically for global operations in harsh environments such as the North Sea. It has a working open deck area of about 1,000 sq m (10,764 sq ft), two 50-tonne Liebherr cranes and a 38-m (125-ft) telescopic hydraulic gangway.

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