- While demand for offshore marine assets remains strong, the offshore wind sector has been beset by negative sentiment in the US East Coast whereas Europe remains strong and stable, in our view.
- Our positive investment thesis for Seatrium centres around capacity constraints for quality global shipyards that can deliver offshore projects at scale, especially given the current cycle which we expect to be long in duration and resilient.
- - Read this at SGinvestors.io -
Strong demand continues to feature across all rig types.
- In particular, dayrates for deepwater semi-subs and drillships are above 5-year highs while dayrates for jack-up rigs are near 5-year highs.
- From industry sources, we note that high spec assets command a premium of between 30-70% vs aggregate rates, indicating the scarcity of such assets as well as the willingness of oil companies to spend.
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Oil prices have remained volatile
- Oil prices have remained volatile, trading at between US$72/bbl to US$97/bbl in 2023. While tail risk of a further supply shock due to Middle Eastern conflict cannot be ignored, the latest OPEC+ meeting ended in a reasonable amount of confusion, causing uncertainty at least until the next meeting in Jun 24.
- Nevertheless, we remain bullish on the energy sector given the continued lack of discovered oil.
- Note that in 1H23, only 2.6 billion boe was discovered, or 42% lower than the same period last year. Longer term, this clearly has ramifications on the world's ability to supply energy for its economic growth.
Outlook for 2024.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-12-08
More views on outlook of offshore & marine sector:
Analyst Reports on Singapore Offshore & Marine Sector
