Malaysia's offshore support vessel (OSV) industry is expected to grow by 10 per cent in the next three years, driven by the increase in drilling activities by the oil and gas (O&G) companies.
Icon Offshore Bhd chief executive officer, Dr Jamal Yusof, said the exploration and production expenditures of Petroliam Nasional Bhd (Petronas) as well as other O&G companies will help boost demand for OSVs.
He said other factors included the normal production activities, deepwater segment, enhanced oil recovery projects, which currently received a big push from Petronas, the marginal fields' production, where Petronas was expected to award 23 of them soon, and pipeline installation, maintenance and repair jobs.
"These are the key drivers that are pushing the OSV market. All these (activities) require OSVs to work," he told Bernama in an interview.
Jamal, who is also President of Malaysia OSV Owners' Association, said Malaysian companies, like other global players, faced a shortage of oil rigs due to the increase in drilling activities.
"There are not enough drilling rigs worldwide. There are market reports that 20-25 per cent of the world's jack-up rigs are going to reach 40-45 years old in the next couple of years and all these need to be replaced.
"Whenever a rig is delivered, you need at least two OSVs to support it," he said.
He said Icon Offshore, which aimed to list on the Main Market of Bursa Malaysia next year, aimed to raise the fund for new ships to tap the growing markets in Indonesia, Australia and the Middle East.
"Probably because of the age of most anchor handlers or OSVs. About 30 per cent (of OSVs) are 35 years and above and all these old tonnages need to be replaced," he said.
He said O&G players also needed bigger vessels as they moved towards deepwater segment due to the declining sources in the shallow waters.
On the development of green vessels, he said, debates were still continuing, on whether to use either diesel electric combustion or liquefied natural gas combustion.
"The charterers are not sure whether the user are willing to pay higher premiums to charter them althouth they (green vessels) are better for the environment," he said.
Currently, he said, 95 per cent of the world's OSV players still used the the conventional mechanical engines.
Icon Offshore, ranked among the top three OSV providers in Malaysia, recorded an annual turnover of RM270 million last year and employed almost 1,000 staff including 800 marine crew.-- Bernama