UpdateSwire Pacific Offshore seeks consolidation given weak oil prices
“There may be assets or operating businesses for sale. We would certainly be open and alert to those opportunities that come along. If something becomes available which we think is a good long term fit, we will be interested” - managing director Neil Glenn
Swire Pacific Offshore (SPO) has revealed its desire to consolidate the offshore oilfield service sector, as challenges engulf the fragmented industry after oil prices sank to a 6-year low last year.
The Swire Pacific subsidiary, which owns and operates offshore supply vessels (OSV) providing logistics support in offshore oil and gas fields, said consolidation was much needed after a period of indulgence caused by oil prices running at over US$100 a barrel which swelled both the industry’s size and costs.
“There may be assets or operating businesses for sale. We would certainly be open and alert to those opportunities that come along. If something becomes available which we think is a good long term fit, we will be interested,” managing director Neil Glenn said in a recent interview.
“We will have the resources to do so being part of a large group. But we don’t have any specific acquisitions in mind now,” added Glenn, who has been heading the Singapore-based firm since 2011.
The OSV sector, accounting for 4 to 5 per cent in the total capital expenditure in offshore oil exploration and production, is composed of around 1,300 firms competing for jobs in drilling sites around the globe.
A five-year oil price rally that ended last year had seen energy majors ratchet up deepwater exploration, buoying the entire supply chain. The world’s OSV fleet, as a result, grew by 250 per cent over the last decade.