courtesy Farstad Shipping

Norway-based offshore fleet owner Farstad Shipping turned in a refreshing reversal of fortunes for the oil and gas shipping sector with a second-quarter net profit that was higher than last year.

Farstad reported late Thursday that company profit was up 60 percent to 366.8 million kroner ($60.7 million). Company cash flow was up about 100 million kroner ($16.5 million) to 421 million kroner ($69.7 million) in the quarter.

The result was higher by far that at any point over what all agree has been a four year high-water mark for the business of offshore shipping.

The news was some consolation, as yesterday fellow fleet owner DOF Subsea reported it had decided to cancel contracts with Chinese yard Tebma for the building of two offshore construction vessels. The offshore construction vessel and offshore well-intervention market was seen as the future before the credit crisis.

Platform (and rig) supply vessels, or PSVs — about half the Farstad fleet of 54 vessels — were expected to see “a bloodbath” in 2009-2010, according to a Scandoil.com source in Norway’s shipping heartland. But although the swords remain tucked away, Farstad management sees tougher times: the worldwide fleet of PSVs is seen rising 45 percent with 400 vessels on order — “80 percent are planned to be delivered from the yards before the end of 2010”.

“The activity of the rig market for (2009-2010) is expected to be adjusted considerably downward,” management warned, adding, “Based on these conditions, the rate level (for PSVs) and the utilisation level are expected to deteriorate further.”

Still, the “credit crunch” could help day rates by curbing the number of successfully financed new-builds.

Tags: DOF Management, Farstad Shipping