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Global offshore support vessels (OSV) market size was USD 16.10 billion in 2019 and is projected to reach USD 20.73 billion by 2027, exhibiting a CAGR of 7.9% during the forecast period from 2020 – 2027. Increase in offshore oil and gas decommissioning activities has increased the demand for offshore support vessels. In the U.K., the current decommissioning expenditure is around £1.5 billion annually. Several ship builders and engineering firms are planning to build advanced and innovative support vessels. These new vessels are designed to cater to the growing offshore wind market.
Rising investments in deploying renewable & non-renewable energy generation methods in unexplored water depths are anticipated to propel the global Offshore Support Vessel (OSV) market growth. An OSV is a ship used to help the mid-sea operations by delivering necessary supplies and crew members to the offshore sites. The units are also positioned to supply essential reinforcement goods & services to floating rigs, moored platforms, and production structures. Various governments are exponentially increasing the installation of offshore wind farms to curb the overall carbon discharge and serve the energy demand simultaneously.
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Increasing Exploration & Production Activities, and New Discoveries In Offshore Hydrocarbon Assets to Help Surge Growth
Different countries own a vast number of reservoirs. This coupled with a substantial presence of total proven reserves is set to favor the industry outlook. Furthermore, numerous oil & gas majors across the globe are propelling their forces to find new assets to suffice energy needs. For instance, in February 2020, the industry giant Eni declared to discover new reserve Sureste Basin, Offshore Mexico. The novel asset is estimated to hold about 200 and 300 million barrels of oil in place in a deep-water location with an output capacity of over 10,000 barrels of oil per day.
Global Health Problems Such as Covid-19 Pandemic are Likely to Shape Industry Trends
The international crisis of coronavirus or the Covid-19 pandemic is largely impacting a wide range of energy industries across the globe. Its implications on the oil & gas are more significant than other industries due to prolonged geopolitical uncertainties and trade tensions. Additionally, a rapid increase in the total number of affected people with the novel virus has also resulted in a ripple effect on the cross-country seaborne trade and oil tanker movement. In April 2020, the U.S. Energy Information Administration (EIA) projected that the global liquid fuels and petroleum consumption equaled an average of 100.7 million barrels per day (mbpd) in 2019 and is likely to decline further by 5.2 mbpd in 2020 owing to disruptions in global economic activities.
Growing Measures to Install More Sustainable Energy is Likely to Propel OSV Demand
Various regional and global organizations have introduced significant policies to encourage the deployment of low carbon power generation technologies in different locations. Furthermore, numerous administrations have set ambitious clean energy installations targets to keep a check on carbon discharges. For example, in December 2019, a meeting was held between energy ministers from various countries located near the North Sea to adjoin their forces and develop joint & hybrid offshore wind farms under their 2020 Work Programme. The ten North Seas Energy Cooperation nations have evaluated their prevailing regulatory framework to share infrastructure & assets to diminish the overall installation costs and attain climate neutrality by the year 2050.
Rapidly Rising Energy Demand Across Emerging Economies Will Boost the Industry Size
An exponential increase in energy demand and for different offshore oil & gas products & by-products is likely to augment growth of the offshore support vessel industry. Offshore Support Vessel highly aid in the building of high sea structures and laying of deepwater cables and piping lines. These ships also help in positioning Floating Production Storage and Offloading (FPSO) units in shallow, deep, and ultra-deep waters to produce hydrocarbons in bulk quantities.
Requirement Of High Capital Costs Coupled With Fluctuations In Global Crude Oil Prices May Obstruct the Market Growth
The construction of Offshore Support Vessel requires a significantly huge amount of money along with technical expertise to match the précised needs. The shipowners need to build special facilities like docking units and shipbuilding divisions to construct and store support vessels. A dry dock unit area is used to build, maintain, and repair of different capacity vessels. The International Maritime Organizations (IMO) mandates every vessel to be dry-docked at every fixed interval to maintain its components like structures, hull, machinery, and other equipment in operational conditions. Furthermore, abruptly changing international crude prices largely affects the offshore exploration & production activities. Lower crude oil prices make it non-feasible to conduct costly operations in various water depths and thereby affect the deployment of the vessels for offshore hydrocarbon structures.
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AHTS Vessel Type Is Projected To Lead the Market Due To Efficient Operations In Various Sea Depths
Based on vessel type, the market can be majorly divided into anchor handling tug supply vessel (AHTS), platform supply vessels (PSV), crew vessel, and others. Anchor Handling Tug Supply Vessel (AHTS) is anticipated to account for the dominating share during the forecast timeline. AHTS units deliver robust design along with various additional features to propel huge oil & gas structures from shore to the desired location. The vessels also help to supply huge equipment like anchors, winches, tugs, and many others to hydrocarbon E&P sites and cargo-carrying barges in addition to its uses in rescue operations.
Furthermore, platform supply vessel (PSV) offers extensive usage in transportation and logistics support for various operations. It also helps in transiting essential workforce, tools, and equipment to support the desired requirement for maintenance and construction projects in the middle of seas. Crew boats are also set to observe a significant growth due to their indispensable need for transport of working personnel and cargo deck gears to and from offshore locations like drilling rigs, production platforms, and wind farms. It is generally small in size for easy functions and is also used to carry out small modification tasks along with minor construction operations to the sites.
New High Potential Discoveries Coupled With Increasing Investments In E&P Activities Will Complement the Deepwater Segment Outlook
By water depth, the offshore support vessel market can be trifurcated into shallow water, deepwater, and ultra-deepwater. Significant oil & gas presence in continental shelves of various countries, coupled with the continuous installation of fixed platform wind farms for sustainable power generation is set to propel the demand in shallow water. The deepwater OSV industry is projected to hold a major share during the forecast timeline due to rising production from multiple bulk capacity reservoirs in water depths ranging between 305 to over 1,500 meters. Furthermore, the detection of new reserves with significant production capacities over a long interval is set to boost this segment landscape positively. Ultra-deepwater demand is propelled by increasing deployment of Floating Production Storage and Offloading (FPSO) units leading to growing needs for anchoring and mooring services, coupled with regular transit of human workforces.
Favorable Government Initiatives To Promote Clean Energy Generations Will Propel the Offshore Wind Segment
On the basis of application, the global market can be majorly segmented into oil & gas, offshore wind, patrolling, research & surveying, and others. Offshore wind application is projected to witness a considerable growth during the forecast period owing to the deployment of sustainable energy sources. Various regional governments have unveiled their medium and long-term plans to promote clean power generation to curb harmful GHG discharges. For instance, in June 2018, the Indian Ministry of New & Renewable Energy (MNRE) announced its goals to increase its offshore wind installation over the years. The government anticipated to deploy 5 GW in medium-term by 2022 and extending the goal further to 30 GW by 2030 to encourage the renewable industry in the country.
The oil & gas segment is projected to account for the highest Offshore Support Vessel market share owing to capital intensive E&P operations, along with the discovery of new reserves in various water extents. Furthermore, the positioning of new FPSO units coupled with a rising need for the transit of working personnel to and from operating locations like rigs and platforms will further favor the growth of this segment. Continuous need to report analytical and scientific findings to monitor marine life-forms, subsea oil & gas reservoirs, and other geographical anomalies will foster the research & surveying segment landscape. Consequently, the patrolling application is also anticipated to observe substantial growth during the forecast timeline owing to the need for surveillance operations to protect country borders in the marine environment along with their frequent participation in rescue operations.
Asia Pacific Offshore Support Vessel (OSV) Market, 2019 (USD Billion)
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Geographically, the OSV market has been analyzed across five major regions, including North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. Asia Pacific is likely to hold the leading position in the industry with USD 4.08 billion in 2019, due to the advantageous clean energy outlook, coupled with increasing hydrocarbon activities. Key countries operating in the region are China, India, Japan, Australia, and various Southeast Asian countries.
The uptaking of several clean energy initiatives, significant hydrocarbon reserves, and close national borders are some of the key factors propelling the European OSV industry. North Sea neighboring countries like the UK and Norway are investing heavily to explore oil & gas potential in deepwater reservoirs. Additionally, favorable targets introduced by different nations like the UK, Germany, and the Netherlands have expressed significant goals and capacity to install new offshore wind farms.
North America is projected to observe considerable growth during the forecast period owing to rising production from unconventional and conventional reservoirs. Furthermore, increasing investments from various oil & gas companies operating in the region to explore new high volume reserves is set to complement the regional landscape further. For instance, in April 2020, an energy company called Equinor announced to discover a new reservoir with a net oil pay extent of about 200 feet in the U.S. Gulf of Mexico waters. The company hasn’t yet assessed the potential for the discovery but declared the reserve to have optimistic characteristics, and the pay zone has a depth of over 10,000 meters.
The Middle East & Africa market is projected to hold a considerable share due to the availability of huge unexplored reservoirs at low capital expenditure. Consequently, the installation of advanced FPSO vessels to produce bulk volumes from different offshore reserves is set to complement the regional landscape further. In January 2020, the Nigerian Agip Exploration Ltd. announced to ink an extension agreement with BW Offshore for the Abo FPSO unit until the end of the fourth quarter of 2020. Major nations actively participating across the region are Saudi Arabia, United Arab Emirates (UAE), Qatar, and Nigeria.
Major Participants are Highly Focusing on Improving Fleet Offering for Efficient Operations
Various industry players are focusing on introducing new design and structure of the vessels to enhance their fleet integration across a new range of applications. Furthermore, the companies are focusing on fortifying their vessel offering to withstand harsher conditions and cater to specific demands across the globe. For instance, in March 2020, Damen Shipyards Group unveiled a novel vessel concept known as the offshore support vessel (OSV) 9020 to accomplish various tasks at subsea and surface-level conditions. The company aims to serve different offshore capabilities like diving, rescue, crane operations, helicopter deck, and many others required by various industry operators.
Solstad Group Is Concentrating on Company Expansion and Gaining New Contracts to Maintain its Position in Market
The positioning of the market is augmented by the substantially rising energy demand, coupled with increasing hydrocarbon production from various locations. Growing concerns to promote sustainable energy production to keep a check on overall carbon emissions is further set to boost the setup of new offshore wind farm structures. Subsequently, continuous demand to maintain maritime traffic, cross border security, and perform other duties by patrolling vessels operating under various government and public organizations will further foster the demand for these units. Furthermore, the constant need to conduct dedicated tasks like marine archaeology, seismic surveys, hydrography, and many others for analyzing subsurface characteristics are expected to grow with opportunities for the market in the coming years.
An Infographic Representation of Offshore Support Vessels Market
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The offshore support vessel market report offers qualitative and quantitative insights and a detailed market analysis of size & growth rate for all possible segments in the market.
Along with this, the report provides an elaborative analysis of market dynamics, emerging offshore support vessel market trends, and competitive landscape. Key insights offered in the report are the advancement in technology for Offshore Support Vessel types by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
Value (USD Billion)
By Vessel Type
By Water Depth
As per the Fortune Business Insights study, the global market was USD 16.10 billion in 2019.
The global market is projected to grow at a CAGR of 7.9% in the forecasted period.
The market size of the Asia-Pacific was valued at USD 4.08 billion in 2019.
Various application industries like offshore wind, oil & gas, research & surveying, patrolling, and many others are the key verticals arraying OSV in numerous operations.
The global industry size is anticipated to reach USD 20.73 billion by 2027 growing at a substantial CAGR of 7.9% during the forecast period (2020 - 2027)
Based on vessel type, anchor handling tug supply vessel (AHTS) vessel type segment is set to account for the dominating share in the industry across the globe.
Globally rising energy demand coupled with encouraging policies to explore offshore clean energy potential are the key industry drivers. However, fluctuating international crude prices along with the capital intensive nature of these units may hinder the market pace.
The top players such as Siem Offshore, Solstad Offshore ASA, BOURBON, Damen Shipyards Group, and Maersk Supply Service, among others, are the key companies operating across the industry.
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