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Offshore Maritime Services Industry
The Offshore Maritime Services (OMS) Industry provides support and services to the Offshore Oil & Gas or E&P (Exploration & Production ) Industry - It comprises of
  • Offshore Drilling Industry
  • Offshore Supply Vessels Industry
  • Offshore Construction industry
Offshore Maritime Services Industry has seen a boom over the last couple of years, especially when the prices of crude oil was high and increasing rapidly. In fact, at one point of time, governments and E&P players were of the belief that the global crude oil price could reach US$150, US$175 or even US$200/barrel. This led to aggressive investments by offshore oil and gas companies. More than two thirds of these investments were a source of income for the offshore maritime services companies. The sector looked so lucrative from the investment point of view that both the regular players and speculators in the OMS industry borrowed funds and invested in new assets. However, the oil price boom did not last forever, and crude oil prices fell from a peak of US$147/barrel to less than US$ 40/barrel.

With the fall of prices due to the credit crunch and the global economic slowdown, many of the oil and gas companies deferred their offshore drilling and exploration programs, while some cancelled them.  The primary reason for these deferments and cancellations was the economics of extracting oil.  The cost of extracting crude oil varies from US$2/barrel to more than US$40/barrel, depending upon the geographical conditions, environmental conditions, etc.  Therefore, if oil prices are low, the risk associated with offshore exploration in a region where the cost of exploration is high increases several fold. Such projects become unviable or un-attractive leading to deferment of projects or scrapping of projects.

The costs associated with the exploration of oil or gas is fixed and high, but the yield is uncertain.  This factor discourages most of the oil and gas companies from taking up expensive offshore exploration ventures, if the price of crude oil is not lucrative.
 
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