Fall in demand for N. Sea accommodation vessels drags Prosafe profits down by 10%

Prosafe – a major supplier of offshore accommodation platforms for the oil industry – has warned that its North Sea business is facing a downturn as demand drops from oil explorers, who in turn are responding to a 50% fall in crude prices since last summer.

Newly-announced net profits for 2014 fell by more than 10% ($20.3 million) to $278.8 million, compared to $199.1 million the previous year.

Karl Ronny Klungtvedt, Chief Executive, explained that increasingly over the past 12 to 18 months, oil companies have announced reduction of spending and cost cutting programmes.

He said: “Consequently this has resulted in lower demand for assets and services related to exploration, development and production of oil and gas resources.

“In the accommodation support market, the reduction in demand has been particularly visible in the North Sea segment.

“However, although the outlook has weakened relative to earlier expectations, opportunities still exist which could lead to new contracts being awarded over the coming year.”

The outlook for 2015

Prosafe owns 11 semi-submersible accommodation vessels and in addition has two NORSOK-compliant harsh environment semi-submersible accommodation vessels under construction that will be ready for operations this summer

Prosafe’s Safe Scandinavia will work at the Solan field west of Shetland for Premier Oil throughout February. Thereafter works will commence at a yard in Norway to convert the unit to a tender support vessel in preparation for the long-term contract with Statoil at Oseberg Øst in Norway.

The Regalia is under contract with Talisman UK until November, while the Safe Caledonia is under contract with Nexen until April. In July it will commence a 13-month contract with BP for work at the ETAP field in UK.

Meanwhile, the Safe Bristolia is scheduled to commence the contract with BG in the second quarter of 2015.