Another challenging year for offshore contractors, says Skuld’s Kobro

In Skuld’s latest The Field, its publication for Skuld Offshore Services, Skuld Global Head of Offshore Christofer Kobro said that 2017 had been “another challenging year” for offshore contractors. He noted that the lay-up ratio of vessels and units entered with Skuld hit an all-time high around the middle of the year, which was when operational activity was typically at its peak. By contrast, the fourth quarter saw a steady increase globally of drilling and production project tenders, which had a positive knock-on effect for the servicing industry. “At the same time, a number of players seem to be positioning themselves for a market upturn, as mergers and takeovers hit the headlines”, Kobro said.

Although market conditions had an impact on the contractual climate, Kobro said that Skuld had not generally seen a fundamental change in contracting principles. He felt that for the long run this was a positive sign, as a clear and fair allocation of risk and reward had “the twin advantage of fostering sustainable conditions for all players and reducing the overall insurance costs for any project”.

Although Skuld had seen some significant casualties in the past year, Kobro said that it had not been an unusually intensive claims year from an offshore perspective. The majority of claims continued to be people claims, but this year there had been an increase in the number of collision incidents and indemnity claims. Kobro also said that Skuld had responded to incidents protecting its assureds’ interests following a collision between stacked jack-up drilling rigs, which underlined the importance of proper lay-up planning.

Looking ahead, Kobro said that Skuld saw more offshore projects going live during 2018. Skuld had seen a slight increase in activities in “new” geographical areas, and also a change in operational focus, with companies moving into fields such as specialized decommissioning projects, or vessel owners refitting their vessels to become attractive for alternative employment.