Denmark-headquartered Maersk Supply Service is to let 400 of its 1450 offshore workers go by the end of September as it responds to “unprecedented” market conditions driven by the “new oil reality”.
The AP Moller-Maersk Group subsidiary also plans to reduce its fleet by up to 20 vessels within 18 months, the first 10 of which are expected to scrapped or sold for conversion by the end of the year.
“We are facing unprecedented market conditions and regrettably we have to further adjust our crew pool. It is an unfortunate but necessary step to safeguard the future of our company,” Maersk Supply Service ceo Jørn Madsen said of the decision to cull 27% of the company’s offshore workforce.
Madsen said the divestment plan was a response to vessels in lay-up, limited trading opportunities and the global over-supply of offshore supply vessels in the industry.
“One of Maersk Supply Service’s prime objectives is to attempt to restore the supply demand balance in the offshore supply market. This is why the vast majority of the divested vessels will be recycled or modified by their new owners to compete outside their present segments,” he said.
In Thursday’s statement, Maersk Supply Service said it would flag its four ‘Stingray’ Subsea Support Vessel new-buildings to the Isle of Man registry.
“A commercial hub will be established in the UK consolidating ownership and operation of the company’s project vessels. This includes the ‘Stingray’ vessels and five existing project vessels that will also be flagged to the Isle of Man registry.”
Maersk Supply Service provides marine services to the oil and gas industry worldwide, including anchor handling in ultra-deep water, mooring installations, rig moves and transport of equipment to drilling rigs and production units.
Its workforce before today’s announcement numbered around 1450 offshore and 260 onshore staff. The 400 redundancies “covering all nationalities” are expected to be finalised by the end of September.
Headquartered in Lyngby, Denmark, Maersk Supply Service is represented globally with offices in Aberdeen, St. John’s, Rio de Janeiro, Lagos, Luanda and Perth. It belongs to the Maersk Group’s fifth core business, APM Shipping Services, which apart from Maersk Supply Service consists of Damco, Maersk Tankers and Svitzer.
In 2015, Maersk Supply Service delivered a profit (NOPAT) of $147m.
However, it reported a net loss of $106m in Q2 and the lay up of 13 vessels after flagging a $2m loss in the first quarter of 2016.
In its Q2 statement Maersk Supply Service said the global oversupply of OSVs and a margins “below what is sustainable for the industry in the long run” showed no signs of improvement in the near future.
It noted the disposal of one vessel, the Finder (pictured), as part of its on-going fleet renewal programme and said its total new-build order book stood at 10 vessels with six Anchor Handling Tug Supply vessels (AHTS) and four Subsea Support Vessels (SSV) due for delivery in January 2017 and January 2018.
“Maersk Supply Service has installed and in depth industry study in co-operation with customers and suppliers to define an operating model that accommodates the new oil reality. Simultaneously the company is exploring new revenue streams, investigating ways to take advantage of the distressed markets and actively preparing for new buildings entering the fleet,” the Q2 report said.
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