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The global Offshore Support Vessel (OSV) market size was USD 13.78 billion in 2020 and is projected to grow from USD 14.46 billion in 2021 to USD 23.60 billion in 2028 at a CAGR of 7.3% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with the Offshore Support Vessel witnessing a negative demand response across all regions amid the pandemic. Based on our regional analysis, the global market exhibited a declined growth of about -14.4% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Increasing investments in the deployment of both non-renewable and renewable energy infrastructure, including offshore wind capacity in unexplored water depths, will augment the worldwide market expansion in the forthcoming years. OSV is a ship deployed to deliver crew members and necessary supplies to offshore sites to conduct mid-sea operations. These vessels carry essential reinforcement goods and services to production structures, moored platforms, and floating rigs. The respective governments are focusing on the expansion of offshore wind capacity to control the overall carbon emissions.
Investment Deficits to Amid COVID-19 Pandemic to Hinder Market Pace
The international crisis of coronavirus or the Covid-19 pandemic is largely impacting a wide range of energy industries across the globe. Due to prolonged geopolitical uncertainties and trade tensions, its implications on oil & gas are more significant than other industries. Additionally, a rapid increase in the number of people affected 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 by 5.2 mbpd in 2020 owing to disruptions in global economic activities.
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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 a 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.
The growing energy demand has to be met with different energy sources, including renewables, oil & gas, nuclear, and thermal power. According to the U.N. World Population Prospects, the world population will gradually increase 7.6 billion in 2017 to around 9.8 billion by 2050. To tackle this growing demand, discoveries of several reserves are made for well drilling and production activities, supporting the growth of this market. For instance, in August 2021, according to the International Energy Agency (IEA), wind energy of 350 GW will be added to the world energy mix annually by 2050, in which offshore capacity will be 70 G.W. for the world to obtain carbon neutrality.
Growing Measures to Install More Sustainable Energy 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 August 2021, the government of the U.K. declared to give funding of around USD 205.39 million to Siemens Gamesa under the ‘Offshore Wind Manufacturing Investment Support’ scheme. According to Siemens Gamesa, the new investment will continue economic growth in the Humber and Yorkshire region. This is expected to bolster the Offshore Support Vessel (OSV) market growth.
Rapidly Rising Energy Demand Across Emerging Economies Will Boost Industry Size
Rising energy demand will promote the growth of this market. These vessels greatly aid in the construction of high sea structures and propels the cable and pipe laying activities in various sea depths. They also help to position Floating Production Storage and Offloading (FPSO) units in deep, shallow, and ultra-deep waters for the production of hydrocarbons in bulk quantities.
For instance, in May 2021, B.W. Offshore, a Norwegian floater specialist is funding the floating offloading vessel for design, storage, and production for Santos’ Barossa gas field development offshore based in Australia. BW B.W. will finance the expenditure of around USD 2 billion for the FPSO project with equity partners and banks. The international infrastructure equity partners and B.W. will contribute 49% and 51% of the project equity.
Requirement of High Capital Costs Coupled with Fluctuations in Global Crude Oil Prices May Obstruct 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 ship-owners 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 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 offshore exploration & production activities. Lower crude oil prices make it infeasible 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 to Lead Market Due to Efficient Operations in Various Sea Depths
Based on vessel type, the market can be majorly divided into anchor handling tug supply vessels (AHTS), platform supply vessels (PSV), crew vessels, 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 and 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 vessels (PSV) offer 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 Deepwater Segment Outlook
By water depth, the market for offshore support vessel 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 expected to grow 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, detecting new reserves with significant production capacities over a long interval is set to positively boost this segment landscape. 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 Offshore Wind Segment
Based on 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 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 August 2021, National Grid, a British transmission system operator, is designing a new electricity cable connection that will connect North Sea wind farms to Norway in both countries. The high voltage ‘Continental Link’ direct current cable of 1.8 GW could connect the offshore wind capacity of 3.6 GW and provide electricity to around 1.8 million homes in the U.K.
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, 2020 (USD Billion)
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Geographically, the OSV market is divided into 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 3.57 billion in 2020 due to the advantageous clean energy outlook, coupled with increasing hydrocarbon activities. For instance, in August 2021, The National Institute of Wind Energy in India has unveiled a 1 G.W. Expression in offshore wind, while the target of 30 G.W. is set to be achieved by 2030. Additionally, other key countries operating in the region are China, India, Japan, Australia, and various Southeast Asian countries.
Growing number of clean energy initiatives and substantial hydrocarbon reserves are driving the market growth in Europe. North Sea neighboring countries such as the U.K. and Norway are investing significantly for the exploration of oil and gas potential in deep and ultradeep water reserves. In addition, ambitious goals undertaken by the respective governments in the U.K., the Netherlands, and Germany will strengthen the regional outlook.
North America will record monumental growth owing to the increasing production from conventional and unconventional reservoirs. In addition, rising investments by oil & gas players for the exploration of high-volume reserves will boost the regional landscape. Highlighting a recent instance, in April 2020, Equinor, a leading energy company, discovered a new reservoir with a net oil pay of nearly 200 feet in the U.S. Gulf of Mexico waters.
The Middle East and 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 an extension agreement with B.W. 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, UAE, Qatar, and Nigeria.
Major Participants Highly Focus on Improving Fleet Offering for Efficient Operations
Various industry players are focusing on introducing new designs and structures of the vessels to enhance their fleet integration across a new range of applications. Furthermore, the companies focus on fortifying their vessel offering to withstand harsher conditions and cater to specific global demands. 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.
An Infographic Representation of Offshore Support Vessels Market
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The report offers qualitative and quantitative insights on the Offshore Support Vessel (OSV) and a detailed analysis of market size & growth rate for all possible segments in the market. Along with this, the market research report provides an elaborative analysis of key market dynamics, emerging 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, By Application, and by Region
By Vessel Type
By Water Depth
As per the Fortune Business Insights study, the global market was USD 13.78 billion in 2020.
The global market is projected to grow at a CAGR of 7.3% in the forecasted period.
The market size of the Asia-Pacific was valued at USD 3.57 billion in 2020.
Various application industries like offshore wind, oil & gas, research & surveying, patrolling, and many others are the key verticals arraying Offshore Support Vessel in numerous operations.
The global industry size is anticipated to reach USD 23.60 billion by 2028, growing at a substantial CAGR of 7.3% during the forecast period (2021 - 2028)
Based on vessel type, the 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 is the key industry driver. 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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