Though the major international offshore oil and gas markets do not have a direct bearing on the US GOM, I do follow activity in those markets closely. Recent broker reports that cover other major regions have highlighted the aging fleet of OSVs and the lack of new OSVs contracted to be built to replace older vessels. Though the global fleet of OSVs is, on average, older than the Jones Act qualified vessels, the US GOM deepwater market is beginning to face the same crunch of aging vessels that the international markets are experiencing.

During the mid-2000’s, new charter requirements for OSVs in the US GOM limited the age of vessels to ten years of age at the beginning of the charter. More recently, the age limitation for OSVs on long-term charters in the deepwater US GOM have been relaxed to twelve years. In actuality, there have been a meaningful number of OSVs chartered on shorter term basis that exceed the twelve year limitation. The dynamics of the aging OSV fleet and the fact there are effectively zero new OSVs under construction in the US GOM needs further consideration.

The Jones Act qualified fleet of deepwater capable OSVs (greater than 4,000 ton deadweight) is currently at 108 vessels with an average age of eleven years. More revealing, is there is a total of 34 deepwater capable OSVs that are twelve years of age or older, making up 31% of the fleet. However, this percentage begins to accelerate next year and, by 2025, there will be a total of 54 deepwater capable OSVs that are twelve years of age or older, totaling a 50% share of the fleet. This will present a serious challenge as the current market charter rates are very far away from supporting the cost a building new deepwater OSVs which will cost around $50M per unit.

JOO has one of the youngest fleets of deepwater OSVs in the US GOM with an average age of eight years, allowing us to continue to be a preferred provider of marine services.