In the July issue of broker JLT’s The Link there is an update on the offshore market.
With oil prices staying at a low of around $48 a barrel in June, only a few new offshore oil and gas installations are going ahead this year.
Operators in some cases are bidding at cost, while at other times they are putting vessels into lay up. JLT Specialty said that it was stepping up to support marine clients, with flexibility on conditions around lay up and by obtaining significant returns on premiums.
“We have a very big book of offshore supply boats that supply the rigs, and they are suffering because the rigs are unemployed,” said Nick Berry, Senior Partner in the Marine Division at JLT Specialty. “A lot of our owners are having to lay up vessels, because the daily hire rate doesn’t support the cost of running the ship. We are being very proactive and trying to get the best insurance solutions for them.” This includes introducing ‘very generous’ lay up returns on a lot of policies, as well as potentially obtaining deals to lay up vessels in certain areas. “That should help a lot. Some owners reduce their values accordingly, and where they can’t, because of their loan requirements, they tend to reduce their loss of hire insurances, which saves a lot of money, because there are so few charters — until the market returns.”