OSLO, Aug 31 – Newly created oil services firm Solstad Farstad expects demand for its vessels to rise, with offshore wind turbine installations and well boats transporting farmed fish playing a bigger role.
After three years of falling oil firm investments, there are now also signs of more contract tenders and activity in its core business, the company added.
“We believe a stable or increased oil price, combined with the cost cuts (among oil firm), will increase investment levels,” Chief Executive Officer Lars Peder Solstad said while presenting second-quarter earnings on Thursday.
“Renewable is also important when we look at demand … Out of 152 vessels, somewhere between 5-10 boats are engaged in this segment. It’s important for the total demand that we get a new segment requesting the same boats as oil service,” he added.
Of the three vessel types in its fleet – platform supply (PSV), anchor handling (AHTS) and construction supply (CSV) – the latter is used for building offshore wind parks.
Solstad Farstad, the result of mergers and restructuring in Rem Offshore, Farstad Shipping, Solstad Offshore and Deep Sea Supply, has Norwegian billionaires John Fredriksen and Kjell Inge Roekke as its main owners.
The firm was officially created on June 22, with pro forma April-June earnings before interest, tax, depreciation and amortisation (EBITDA) of 148 million Norwegian crowns ($18.89 million) out of revenues of 1.44 billion.
With 54 vessels currently in lay-up, the CEO expects a gradual improvement in utilisation and that day rates will increase from current low levels.
“We expect the market to improve in 2019-2020, so we are reluctant to fix boats on long-term contracts,” Solstad said.
Solstad Farstad is also targeting the growing fish farming industry through a 50/50 joint venture with the world’s biggest salmon farmer Marine Harvest.
Called Dess Aquaculture Shipping, the venture has five boats under construction, of which four are for well boats for transporting the fish, and one is a harvest vessel.
“Aqua is a new leg for us and together with renewable it’s important, as it’s independent of the oil price,” Solstad said. ($1 = 7.8367 Norwegian crowns)