Since the start of the year, average offshore rig utilisation, a proxy for oil and gas (O&G) production activity, remains high at 80%, Kande and Lim point out. This is forecast to reach 88% by 2028. Offshore wind capacity is also expanding in Taiwan, Japan and South Korea to meet their combined targets of 37.4 gigawatts (GW) by 2030.
CGS International has rated the offshore and marine (O&M) sector “overweight” after observing that the market for O&M vessels is facing a shortage. It has singled out Marco Polo Marine (SGX:5LY
) and Pacific Radiance (SGX:RXS) , both of which operate yards and charter vessels, as the stocks to ride the industry upturn.
In their report on Dec 12, analysts Meghana Kande and Lim Siew Khee point out that with end demand coming from offshore energy exploration and production, charter rates for support vessels have increased by as much as 145% since 2021 following the multi-year downturn from 2014. “With the number of active yards at a 24-year low globally, shipyards are well-positioned to command higher rates for offshore support vessel repair works and order prices for newbuild vessels, in our view.”
