Deep Sea Supply: Pioneering Offshore Vessel Operations
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Deep Sea Supply is an offshore supply company with a modern fleet of anchor handling tug supply vessels (AHTS) and platform supply vessels (PSVs).
Deep Sea Supply focuses on the following main strategic areas:
- Chartering
- Business development
- Finance/accounting
- Investor relations
- Monitoring of external suppliers
The company’s ambition is to maintain an organisation of qualified staff engaged in these activities, and to become one of the world’s leading offshore supply companies. It aims to achieve this by being an active player and consolidator in this segment. The strategy is furthermore to be shareholder friendly with the aim of securing good return and dividend distributions to its shareholders.
The ships of Deep Sea Supply’s current fleet are based in locations across the globe and are utilised by many of the industry’s blue-chip corporations. For example, the company has ships in the North Sea and quite a few in the Mediterranean, as well as in the Congo, Malaysia and Indonesia, in addition to the Caribbean, Brazil and Australia. They are positioned to work for major organisations in this industry such as Shell, BP, Total, ENI, Exxon and Statoil.
Deep Sea Supply ASA was established in 2005 for the purpose of building up an offshore support vessel business. In July 2005, the company acquired six AHTS vessels from Tidewater Marine Inc. of the KMAR 404 design, while in April 2006 Deep Sea Supply ASA entered into a contract with Sea Tankers Management Co. Ltd., to purchase 22 new building contracts at a price of $394 million. Since that time, it has bought a number of further vessels and taken delivery of new constructions. In all, it has a fleet of 21 vessels that are currently sailing the seas, with another eight being built.
Today the company’s main shareholder is Hemen Holding Ltd., which increased its shareholding in 2006 to approximately 35 per cent. The background to this was quite complex, with various changes occurring during 2006/7. A company called Deep Sea Supply Plc was established on 7 November 2006 for the purpose of acquiring all shares of Deep Sea Supply ASA. The Board of Deep Sea Supply ASA concluded in 2006 that the tax regime in Cyprus is expected to afford more stable, attractive and competitive conditions over time compared to the Norwegian regime under which Deep Sea Supply ASA operated. During the end of 2006 and the beginning of 2007, Deep Sea Supply Plc, throughout a voluntary exchange offer of 4 December 2006, and both a mandatory offer and a compulsory acquisition of 4 January 2007, became a 100 per cent owner of all the issued and outstanding shares in Deep Sea Supply ASA. Consequently Deep Sea Supply Plc became a new parent company of the Group.
Following these changes, the company has gone from strength to strength, winning significant contracts and commissioning several new build vessels. For example, in October 2009, Deep Sea Supply entered into a contract to build a platform supply vessel (PSV) at STX Brazil Offshore SA in Rio. In Brazil, the demand for offshore supply vessels is large and expected to grow considerably in the years to come. Offshore supply vessels built in Brazil are given priority ahead of international vessels when tendering for long-term employment in Brazil. This should provide good opportunities for securing long term charters for the new vessel.
The STX Europe yard in Rio is one of the few yards in Brazil with a proven track record in building offshore supply vessels, and Deep Sea Supply has secured the earliest available delivery slot for this type of vessel at the yard.
A further advantage to Deep Sea Supply in constructing offshore supply vessels in Brazil is the access to the local Brazilian market for three to four of its existing international vessels during construction period of the vessel. Such imported vessels can compete on local terms, commencing second half 2010.
Deep Sea Supply has, as a consequence of the above mentioned newbuilding contract and market opportunities, established a Brazilian subsidiary, Deep Sea Supply Navegação Marítima Ltda. The company plans to gradually increase its presence in the Brazilian market from second half of 2010 with an ambition to have an operation covering six to eight ships in Brazil, including ships from its international fleet.
The newbuild is scheduled for delivery to Deep Sea Supply early 2012 and will be financed with a combination of cash and a Brazilian financing scheme. This contract brings Deep Sea Supply’s fleet to a total of 29 offshore supply vessels, including newbuildings.
Deep Sea Supply’s CEO, Odd Brevik said in a comment to the deal: “We are very pleased with having reached an agreement with STX for this early delivery slot that will give us a head start in one of the most interesting markets for offshore supply vessels. We are confident that increased presence in this market will give opportunities for long term employment, which will benefit our fleet utilisation and cash flow in the years to come.”
Deep Sea Supply PLC
Services: Offshore supply vessels