OSLO, Feb 24 (Reuters) – Offshore provide vessel homeowners should type bigger firms so as to restore profitability to an business battered by plunging demand from oil corporations, the top of Norway’s Solstad Offshore mentioned on Wednesday.

With crude costs down greater than 70 % since mid-2014, power corporations have sharply reduce their investments and thus hire much less tools from suppliers.

So far about 100 vessels have been faraway from Solstad’s predominant North Sea market, however with solely restricted impact on charges for its anchor dealing with ships and no impact for its platform provide ships, the place charges stays under crew prices.

“Something has to happen on a structural level because even though boats are taken out of operations and laid up, the owner side is so fragmented that the path to reaching sustainable rate levels is far too long,” Chief Executive Officer Lars Peder Solstad instructed Reuters.

According to Solstad there are at present some 70 to 80 vessels working within the spot market within the North Sea and as much as 30 completely different homeowners.

“I think the industry will look different a couple of years from now. There will be bigger units, either at the company level or within segments. Maybe both. We believe this is coming and we want to be a part of this,” he added.

So far, Solstad has mothballed 13 vessels and initiated value saving initiatives of as much as 500 million Norwegian crowns ($57.35 million) on an annualised foundation to organize for weak markets lasting for an extended interval.

It has additionally began discussions with banks and collectors to give you a plan for regulate to a brand new exercise degree that not one of the gamers within the business had ready for.

“It will be weak into 2018. There may be rays of lights, the oil price might rise and things can happen, but we must be careful about being too optimistic. We have to be realistic and take into account that it might even get worse,” Solstad mentioned.

The agency mentioned nevertheless that the subsea phase was nonetheless a vibrant spot, regardless of strain on charges, and that it had ongoing discussions with purchasers relating to new contracts and contract extensions.

Late on Tuesday, Solstad reported an operation lack of 1.1 billion Norwegian crowns for the fourth quarter, hit by vessel impairments of 1.35 billion, in comparison with a revenue of 273 million in the identical quarter final yr.

Solstad additionally mentioned the board would suggest that no dividend was paid for 2015. ($1 = 8.7178 Norwegian crowns) (Reporting by Henrik Stolen, enhancing by Terje Solsvik)

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