Abstract
With the rapidly increasing global energy needs, offshore oil production has become an attractive source of energy. Supplying offshore oil production installations is a complex logistics problem that hinges on many factors with significant uncertainties. So, it is critical to provide the necessary supplies and services without interruption. In a typical offshore oil production effort, oil companies charter most or all drilling units as well as offshore supply vessels (OSV). The type and duration of charter contract has direct impact on the project budget as vessels market is closely correlated with the world market crude oil price which can have daily significant fluctuations. As the region of West Africa is one of the world’s busiest offshore exploration and oil production markets employing 12% of the world’s fleet, exploring its issues, was taken to study the relations between daily OSV rates and crude oil price. The research results presented in this paper show correlation between OSV daily rates and crude oil price with broader fluctuations in crude oil price.
Highlights
Today’s offshore oil and gas industry is one of the most important industries in the world with direct impact on economies worldwide
Supplying offshore oil production installations is a complex logistics problem that hinges on many factors with significant uncertainties
The research results presented in this paper show correlation between offshore supply vessels (OSV) daily rates and crude oil price with broader fluctuations in crude oil price
Summary
Today’s offshore oil and gas industry is one of the most important industries in the world with direct impact on economies worldwide. Responsibilities for rigs and vessels scheduling lie on the charterers, and as daily rates can be very high, even up to $400,000 per day, it is in the best interest of the charterers to keep drills supplied 100% of the time. Because it can take a significant amount of time to hire a vessel on long-term charter the charterers must plan for future supply requirements and make sure that it has on charter a fleet capable of meeting any expected and unexpected demand. This paper presents research on offshore oil and gas vessel market in a West Africa region and logic of logistics decisions for bonding drilling and production project budgeting
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