Offshore drilling also results in demand of MSVs. There are specialized vessels used during field development and skills where multiple tasks are required. They are used to carry out seismic surveys, laying underwater pipelines, well intervention, fire fighting, etc.
The offshore vessel industry is a specialised industry. OSV markets are largely dictated by oil price. That’s the single factor that could tilt the demand and supply in the OSV market either ways. However, offshore vessel industry is less cyclical compared to shipping industry. Earlier, offshore vessel industry was characterized by a fragmented ownership (large number of players with few boats) and low barriers to entry. But with increasing asset price, complexity in the performance of vessels due to multitasking, technologically sound needs for these vessels, the entry barriers for newer players have become high. The daily charter rates of these boats involved in offshore drilling are determined primarily by oil prices, and then supply/demand, the kind of boat, the type of contract (spot or long term) and the region of operation (harsh conditions in regions like North Sea are secondary criteria depending on which the day rates are shaped.
New vessels with deep water capability have a distinctive advantage over older ones; they command higher day rates and higher utilization rate.