Why the OSV sector is enjoying a multi-year boom after a painful slump

Industry players are saying this is a high moment in their business.The industry in question is the offshore supply vessel (OSV) market.

OSVs are specialized ships designed to supply offshore oil and gas platforms with essential goods, personnel, and equipment.

They play a vital role in maintaining offshore operations.

- Marco Polo Marine: Its stock price has surged ~230% since the start of 2021 (from 1.8 cents to 5.9 cents).

- Atlantic Navigation: Its performance has been a stunning ~1170% in the same period (from 2.8 cents to 35.5 cents).

- Nam Cheong: Coming out of a 4-year trading suspension in March 2024, its stock price has been bogged down by the disposal of shares by major creditor RHB Bank.

Pacific Radiance CEO James Pang, in a webinar organised by Phillip Securities on 11 Jul 2024, pointed out that there is high demand for OSVs currently because oil companies are increasing their exploration and production spending.

Mr Pang highlighted the acute shortage of OSVs.

Mr Pang said: "We think this is going to be the start of a multi-year boom that will last at least three to four years because there's virtually no new supply in the next three to four years. As a result, day rates across the markets, across the asset classes, you see a very drastic U shape."