– The efforts in renewable energy are accelerating among offshore shipping companies, driven by political signals from most European shipping nations, including here at home in Norway. Keywords are sustainability, new energy mix and reduced emissions moving to zero emissions. We’re also seeing the heavy-hitters in finance increasingly allocating their capital to renewable efforts in shipping.
– For that reason, it’s important that we are well positioned in the effort to realise greener, emissions-free or low-emission ships. It’s going to be a competitive advantage for years to come, says CEO Kenneth Walland and CFO Ervin Horn when asked to give us a peek into their market assessments of the year barely just entered, 2021.
UNCERTAIN OF THE GREEN TEMPO
Ervin Horn is pensive with regards to the tempo with which the green shift progresses in their market in the time to come. The company still believe that the oil and gas companies’ demand for their services will return, but are uncertain to the level of the demand. Nonetheless, they both think that forging ahead with the work on green innovations in the company is important, and that together with their partners they’ll be able to produce the first emissions-free hydrogen offshore vessels in the next 3-5 years.
– The reason why Østensjø has attained our position within offshore wind, is that we spotted early on that the renewable market was coming into its own, and that we needed to spread our eggs among more baskets, says Walland. A few more of these eggs are set to arrive in 2022 from two shipyards in Spain.
BETTER THIS AUTUMN
– Going into 2020, things were looking good for the offshore market. Then Covid-19 hit us and every other maritime service supplier, says Kenneth Walland, and continues:
– The activity in the company’s markets has improved since late summer and during autumn. Our entire fleet has been utilised since August, except from Edda Fides. Edda Fides has however secured a contract with commencement mid-January 2021. The winter market is always difficult, but the level of utilisation is looking good, depending on what we achieve in the spot market, he says, speaking in general about the outlooks toward next year.
TOWAGE: STABLE WITHIN TERMINAL SERVICES
Regarding the tug business, contracts with Norwegian and English terminals are long term, and none are expiring in 2021. Three of the tugs, on the other hand, are periodically in the spot market for the North Sea. The spot market is volatile and has been slow lately, mirroring the activity in the offshore market at large.
OFFSHORE WIND A GOOD ALTERNATIVE
The PSV market is slow and affected by over-activity. The company currently only has one ship in the spotmarket, and as such, little spot exposure.
Regarding the construction ships participating in subsea operations, the level of overcapacity is a bit lower. They are in full activity, and the company believes they will keep them busy throughout 2021. For this tonnage, offshore wind has become a viable alternative.
– This is why we’re optimistic about new orders for these vessels, both within the traditional oil and gas-related offshore market, but also within offshore wind.
They point out, however, that the rates are still too low to completely defend the investments in the ship, but otherwise it’s going well, says Walland.
As a result of reduced activity and more capacity in the market, this segment has gone from a fairy tale a few years back to a full stop. We decided to relocate Edda Fides from Malaysia to Norway in March, both for Covid-19 concerns and reasoning that the job opportunities were larger in the Atlantic. And as a good start to the new year, Edda Accommodation has now secured a new contract for Edda Fides. We cannot disclose the client yet, but commencement is this week and for a period of a minimum of 45 days with options for another 45 days.
Østensjø, represented by Kenneth Walland and Ervin Horn, are satisified with the company’s operation and new orders, and the fact that the company has embarked upon the green wave. In the background, a capricious virus is lurking, but like everyone else they hope the world eventually returns to normal, and that the bright spot we expected in 2020 comes around some time during this year of 2021.