New | Swire Pacific Offshore seeks consolidation given weak oil prices
Singapore-based firm open to acquisition opportunities after oil price rout challenges fragmented logistics and supply sector
Swire Pacific Offshore has revealed its desire to consolidate the offshore oilfield service sector, as challenges engulf the fragmented industry after oil prices sank to a six-year low last year.
The Swire Pacific subsidiary, which owns and operates offshore supply vessels 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 more than 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.
"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," said Glenn, who has headed the Singapore-based firm since 2011.
The offshore supply vessel sector, accounting for 4 to 5 per cent of total capital expenditure in offshore oil exploration and production, comprises about 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 increase deepwater exploration, buoying the entire supply chain. The world's offshore supply fleet, as a result, grew by 250 per cent over the last decade.