The offshore engineering market welcomes a 'source of living water', with transaction volume hitting an 8-year high

This Month's Focus: The "Source of Life" Driving Market Recovery from Shipowner Investments

From the perspective of shipowner countries and regions, China, Europe, and the Americas are the absolute main forces in global offshore engineering equipment ordering. Chinese shipowners maintain an absolute leading advantage in the number of orders, having ordered a total of 40 vessels, accounting for 40% globally; the order value is US$4.1 billion, accounting for 21% globally. In recent years, China's offshore wind power industry has shown a booming trend. Most of the offshore engineering equipment ordered by Chinese shipowners this year are offshore wind power-related vessels. A large number of offshore wind power companies have entered the market to place orders, mainly central SOEs and local state-owned enterprises, including China Three Gorges Corporation, China Communications Construction Company (CCCC), Shandong Marine Group, etc. Specific vessel types include offshore wind installation platforms, crane vessels, cable layers, etc., while new orders for oil and gas related equipment are extremely rare.

European shipowners ordered 33 units/vessels, accounting for 40% globally; the value is US$4.8 billion, accounting for 21% globally, and the ordered vessel types are also mainly offshore wind power-related vessels. In the offshore wind power sector, Europe has established a first-mover advantage, and a number of rising stars have emerged among European shipowners in recent years, with shareholders often having backgrounds in traditional shipping companies and oilfield service companies, such as Edda Wind, founded in 2018 (shareholders include the Norwegian ship management company Wilh. Wilhelmsen Group); and Integrated Wind Solutions, founded in 2020 (controlling shareholder Awilco AS has extensive experience in oil tankers, LNG, offshore drilling, and other fields). As a long-established powerhouse in offshore oil and gas development, Europe boasts many internationally renowned offshore engineering equipment shipowners, such as the Dutch shipowner SBM Offshore, which has frequently placed orders for FPSOs in China in recent years, and this year again ordered 1 FPSO hull from Shanghai Waigaoqiao Shipbuilding.

American shipowners ordered 10 units/vessels, accounting for 10% globally; the value is US$4.8 billion, accounting for 53% globally. Although the number of orders was not large, the wealthy Brazilian state-owned oil company Petrobras invested heavily in ordering 3 FPSOs, totaling approximately US$8.8 billion, supporting half of this year's offshore market. Since the outbreak of the pandemic, international oil prices have generally remained high, leading to significant increases in oil company profits, which in turn has given them the confidence to continue investing in increased production. It is foreseeable that with ample cash flow, orders from oil companies worldwide will continue to be anticipated in the coming period. In addition, U.S. shipowners who placed orders this year were also mainly oil and gas related companies, including Chevron, New Fortress Energy, Excelerate Energy, etc., with specific equipment types ordered including floating production platforms, floating LNG, and FSRUs.

Although shipowners' orders exhibit different characteristics, the commonality behind them is the driving force of capital. Capital always favors the rich and dislikes the poor, constantly pursuing excess profits. With international oil prices running high, oil companies and oilfield service companies have repeatedly achieved record-high profitability, and a continuous stream of cash is pouring in. Under the premise of maintaining optimistic expectations for the future market, shipowners have strong reasons and capabilities to order more offshore oil and gas equipment to expand reproduction. Furthermore, green and low-carbon has become the "common language" under universal global values. Offshore wind power, with its advantages of cleanliness and renewability, has become a "gathering place" for green capital, gaining favor from the capital market and attracting traditional shipowners to transition into the sector, while new shipowner forces are rapidly rising. The continuous inflow of "real money" from the oil and gas, shipping, and offshore wind power sectors is becoming the "source of life" nurturing the recovery of the offshore engineering market.

Data Sources

Unless otherwise specified, the data in this article are from statistical and information channels such as China Association of the National Shipbuilding Industry (CANSI), Clarkson, and official releases from relevant companies.