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Just wondering if anyone had any thoughts on whether the Global downturn will have a knock-on effect on our industry? Shocked
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I'm sure this was covered recently.

I feel that the price of Oil is the only thing that affects offshore Oil and Gas industry activity. The global downturn is already having some effect on demand.

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In London, January Brent crude slid $2.53 to a new 52-week low of $45.30 on the ICE Futures exchange.

From what I have read it is not likely to make any further major falls this year, but the 1st quarter of 2009 may see a further drop in demand and bigger falls on the price of a barrel. It's not beyond the realms of possibility that later next year we may see it back in the $30 range somewhere.

It doesn't quite stand to reason that the price will quickly drop right through the floor and work will dry up overnight. In times of lower demand the likes of OPEC cut back on production, leaving less reserves on the market, which in turn helps (a little) keep the price higher than normal market forces would dictate.

Still, oil is now at a price where oil co's will already be looking more closely at trimming back on offshore budgets for contract awards for late 2009 & early 2010. Expect to see less construction work from the end of 2009 onwards followed by a slight reduction in inspection. I would suggest that 2010 will be flat and a few years after will most likely be very quiet.

I feel that this recent boom has about 12 months to run.
If you are looking at getting into this game now may not be the right time to do it. If you are in already in, but hocked up with credit debts (Mortgage, Car Loan Credit Cards, HP etc. ) sort it out ASAP because, for many, there is pain coming in about 12 months from now.

One bit of light at the end of the tunnel on the work front is 'well servicing' using specialised DP vessels designed for the job.
In looking to cut back on offshore expenses oil co's will be turning to vessel based well servicing outfits as opposed to the more traditional (aka more expensive) Semi-Sub and Jackup well servicing methods. If you are working for such a company now may be the time to hang on in there as they may well be busier than they are now.

As another alternative, the other industry to look at, once again, is Cable. After the crash, a few years back, it seems that there is now a steady demand for cable type ROV systems and crews. If you have ROV construction experience learning the ropes on PLIB and repair will be a walk in the park for you. The money is about the same as O & G. RUMIC (James Fisher RUMIC these days) were often a good source of work in the cable game. As an agency they always paid on time and were reliable / fair.

best regards
James Mc
James Mc
Site Admin
www.rovworld.com

Shocked Search First - Ask questions later Thumb Up
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Yes it will Confused
Unfortunately Sad
Put ya brain in gear before ye open thy gob !
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I doubt it, a decent sized company normally has 2 years ahead on the books. I'm glad oil is down to a realistic price as well. Again its all guesswork but i've been out the door with work since 91 and never noticed an impact on my days.
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Yeah , maybe , But you will see a knock-on effect next year as the contracts are either postponed or cancelled'
Watch this space five months from now ! Shocked
Put ya brain in gear before ye open thy gob !
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James--good points. To keep a perspective on employment opportunities in the ROV business it is a good idea to compare opportunities elsewhere. Yes, employment prospects may be less in coming months in this business but in most all other fields of endeavor a chance at a start these days is absolutely abysmal.

Your forecast for downturn after a year or so seems to hit the mark. Most projects presently committed to will keep a steady requirement for the foreseeable future. Maybe by next year we'll forget that it used to take a second mortgage to fill a tank and humvees will once again be in favor.
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Just a few headlines of today...

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TNK-BP tightens its belt
The global financial crunch has prompted Russian producer TNK-BP to slash its investment next year by between $500 million and $1 billion, according to reports.


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Fears of bloodbath escalate for Keppel
Analysts warn of more risk that further clients of Singaporean rig builder Keppel Offshore & Marine may cancel their orders and forecast that a total 26% of the outfit’s S$12.5 billion (US$8.27 billion) order book could be slashed as the financial crisis deepens.


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Aker Solutions warns of revenue drop
Norwegian engineering group Aker Solutions said today that it expected operating revenues to decline next year, though its core earnings and margins were expected to increase.


Also, the amount of news articles and press releases I can find that fit in the content of ROVworld has never been as low as the last 6 months.
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This is the million dollar question I think....I personally think that if you have a few years experience under your belt and have your head screwed on you will be able to make it thro this credit crunch....but then again you never know..I was a victim of the cable downturn last time around and no one expected that to be as brutal as it was....Lets hope its not as bad as that...but in saying that am getting offered a lot of cable work at the minute from Rumic and Sub serv Pro so maybe not all doom and gloom....Good luck.......

rovtastic.......... Shocked
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Here's a few links for all and sundry to peruse and reflect...

ME Sentiment
http://www.zawya.com/story.cfm/sidZAWYA20081125040919/lok040900081125?weeklynewsletter&zawyaemailmarketing

Qatar views
http://www.zawya.com/story.cfm/sidANA20081129T093343ZSPH43/lok093348081129?weeklynewsletter&zawyaemailmarketing

$75 would be correct?
http://www.zawya.com/story.cfm/sidZW20081129000016/lok084006081129?weeklynewsletter&zawyaemailmarketing

ME worries
http://www.zawya.com/story.cfm/sidGN_04122008_10264603/lok000000081204?weeklynewsletter&zawyaemailmarketing

Oil price up due to Russian threats
http://news.bbc.co.uk/2/hi/business/7749582.stm
I got your economic downturn right here!!!
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Snippets from the recent 'World ROV Report 2008 - 12' by DW:

.....expenditure on work-class ROV ops is likely to total $1.6bn in 2008 and the market is set to reach $2.4bn by 2012.....

....offshore utilization and ROV day rates have increased dramatically over the past five years and stand at an all time high.....

....ROV day rates have increased 42% in Africa, ME and the Caspian....shortage of skilled operators have caused personnel day rates to grow by 47-50% in these areas....

....although oil prices have fallen of late, this is likely to be a short lived phenomena......high levels of drilling activity and increased installations are to continue apace as shallow water oil reserves deplete worldwide and deepwater increasingly becomes one of the few remaining places where major oil oil finds can be made.....

......over the next five years some 655 new work class ROV's will need to be built to satisfy demands of market growth and attrition of existing fleets....


Wink
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K2,

Correct on most accounts. The demand IS still there, however, the demand for more experienced guys has been shunted by numerous compaies swayed by self-interest/ greedy / very in-experienced mid-management trying to make their mark (or doggie scent) upon the industry.
I got your economic downturn right here!!!
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Don't forget the Greedy-"I don't care what type of pilot I get in the job I get loads a money off their backs" Agencies Very Happy
Put ya brain in gear before ye open thy gob !
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indeed lost one,

then there is always the trick when you go out as super all you get is trainees and you have to do everything.....

imho if you have done 5+ years and your known (and wanted) you will be ok, but if your straight out of fort bill.......o dear......
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I decided this is a good time to retire!

The crunch is definitely taking affect. Companies are looking at costs and are trimming back.
Allseas, Acergy, Oceaneering, Fugro and others all have trainees from "cheaper" regions, Angola, Malaysia, Philippines, Scotland etc etc!

These companies will operate with 1 experienced guy on each shift, If you don't like it then pi@@ off - you will be replaced. two slightly inflated day rates but 4 grossly cheap ones. You will earn your money. Been there, done that - Good luck to you.

Hope all you guys have saved up and paid your mortgages,
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Laughing
That's a joke ......................... right ? Confused
Put ya brain in gear before ye open thy gob !

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