Market Trends of Persian Gulf Offshore Support Vessels (OSV) Industry
This section covers the major market trends shaping the Persian Gulf Offshore Support Vessels OSV Market according to our research experts:
Platform Supply Vessels (PSVs) Segment Expected to Dominate the Market
- Platform Supply Vessels (PSVs) are the offshore vessels used for transferring equipment, crew, and other goods to the offshore drilling platform. In 2014, after falling in oil prices, the offshore support vessel market slowed down, but as the oil prices began to rise, the offshore support vessel market also gained its pace.
- The increasing number of offshore activities by the region's countries is expected to drive the OSV market. Moreover, the Persian Gulf is the world's busiest water body to deal with such an extensive amount of oil and gas transportation, making Strait of Hormuz the single most crucial passageway in the world.
- In June 2020, the rig count of the offshore rig count in the Persian Gulf was approximately 37 units, which in January 2020 were 49 units. The slowdown in offshore activities is due to the two factors in the region, firstly, due to the COVID-19 situation and secondly due to the agreement of the OPEC countries to cut down the production.
- In 2019, Kuwait Oil Company (KOC) and Halliburton signed an integrated offshore drilling services contract for six high-pressure high-temperature (HPHT) exploration wells on two jack-up rigs Persian Gulf. The company is expected to provide and manage drilling, fluids, wireline and perforating, well testing, coring, cementing, coiled tubing, and offshore logistical services. Additionally, Halliburton is likely to provide the offshore rigs and supply vessels for the project.
- Therefore, owing to the above points, platform supply vessels (PSVs) are expected to dominate the Persian Gulf OSV market during the forecast period.
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Saudi Arabia Expected to Dominate the Market
- Saudi Arabia, due to its rapid increase in energy demand and industrialization, is likely to be the largest market for offshore support vessels (OSV) in the Persian Gulf. The primary sources of electricity generation in the country are oil and natural gas. In 2019, about 99.5% of the country's electricity was produced from oil and natural gas.
- Moreover, hydrocarbons are the primary source of economy in the country. The COVID-19 situation has affected the oil and gas business for the country, but the increase in the unlock-down process in the countries importing oil and gas from Saudi Arabia is expected to drive the OSV market in the country.
- In Saudi Arabia, in 2019, gas production was 113.6 billion cubic meters (bcm), which was higher than its production in 2018, 112.1 bcm. Moreover, Saudi Aramco has set a target of doubling its natural gas production by 2030. This is expected to provide a vast opportunity for the offshore support vessel (OSV) market.
- In 2019, Subsea 7 announced three contracts, together representing a sizeable award for Subsea 7, by state-owned company Saudi Aramco under the long term agreement between the parties for execution offshore Saudi Arabia. The engineering, procurement, construction, and installation (EPCI) contracts were awarded for execution in consortium with Larsen & Toubro Hydrocarbon Engineering (LTHE), a subsidiary of Larsen & Toubro. The projects are expected to use several OSVs for the laying of the pipelines in the Persian Gulf.
- Hence, owing to the above points, Saudi Arabia is expected to dominate the Persian Gulf offshore support vessels (OSV) market during the forecast period.
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