U.S. Offshore Support Vessels Market Size, Share & COVID-19 Impact Analysis, By Vessel Type (Anchor Handling Tug Supply Vessel, Platform Supply Vessels, Crew Vessel, and Others), By Water Depth (Shallow Water, Deepwater, and Ultra-Deepwater), By Application (Oil & Gas, Offshore Wind, Patrolling, Research & Surveying, and Others), and Country Forecast, 2023-2030

The U.S. offshore support vessels market size was valued at USD 2.43 billion in 2022 and is projected to grow at a CAGR of 7.7% during the forecast period.

Offshore Support Vessels (OSVs) are deployed to transport crew and necessary supplies to offshore locations to conduct various operations. They are primarily used across the exploratory and developmental drilling rig production facilities and support offshore & subsea construction, installation, inspection, repair & maintenance (IRM), and decommissioning activities. These vessels differ from ship to ship mainly due to their cargo-carrying flexibility and capacity.

Among North American countries, the U.S. dominates the offshore support vessels market and is expected to continue its dominance during the forecast period. This dominance is attributed to government initiatives focusing on expanding offshore wind capacity to control the overall carbon emissions. An increased investment in deploying non-renewable and renewable energy infrastructure, including offshore wind capacity in unexplored deep water areas, may increase the likelihood of the U.S. market expansion.

The COVID-19 pandemic’s effect was remarkable on oil and gas sectors due to persistent geopolitical uncertainties and trade tensions. The COVID-19 outbreak forced the U.S. governments to implement strict lockdown measures and ban the import and export of crucial raw materials. Additionally, the nationwide lockdowns forced component manufacturing factories to partially or entirely stop their activities leading to supply chain disruptions and delay in production schedules. However, increased vaccination drives and reduced number of deaths have improved the shipbuilding and renovation market scenario.

U.S. Offshore Support Vessels Market Trends

Rising Deepwater Exploration Activities and Projects in U.S. Gulf of Mexico

The U.S. is the world's largest offshore support vessel market, and this trend is expected to continue over the forecast period of 2023-2030. The growing demand for power resources, offshore exploration, and production activities in the U.S. has created the need for a diverse fleet of offshore support vessels. This demand has increased investment in the construction, improvement, and modernization of these vessels.

The U.S. has enormous offshore energy resources, especially in the Gulf of Mexico. Exploration and production activities in this region require robust support infrastructure, including offshore vessels. These vessels enable efficient operations and logistics, contributing to the overall development of offshore energy resources. Technological advancements have influenced the development of OSVs in the ship design, propulsion, navigation, and communications systems of the U.S. Modern offshore support vessels have advanced equipment and technologies, ensuring safety, efficiency, and environmental friendliness.

For instance, based on estimates from Platt’s Analytics 2021, the U.S. Gulf oil output was 1.769 million barrels per day, which increased by up to 125,000 b/d, reaching 2 million b/d by the end of 2022. The ongoing development of deepwater hydrocarbons is creating significant potential for oil and gas producers, equipment suppliers, and service providers along the value chain. Investors are exploring and developing opportunities for offshore support vessels’ building at record sea depths (now 3,500 m) and distances (up to 650 km) from the coast. In the U.S., there is a growing emphasis on developing environmentally sustainable ships. The industry is exploring cleaner propulsion technologies, such as Liquefied Natural Gas (LNG), ammonia, and hybrid power systems to reduce emissions and improve energy efficiency.

U.S. Offshore Support Vessels Market Growth Factors

Growth in Installation of Offshore Wind Energy Generating Capacity to Boost OSV Demand

In the U.S., wind generation capacity has grown rapidly, with an average annual growth rate of 24% over the past five years. With this growth, more states are investing in this form of renewable energy. Wind energy installations currently exist in about half of the U.S. states.

Increased government commitments and advancements in innovative technologies will create a positive outlook for established and emerging markets for offshore wind energy. As more industries focus on transitioning to sustainable energy, there is a growing need for infrastructure development in the offshore renewable energy sector. This infrastructure includes installing & maintaining offshore wind turbines and requiring offshore supply vessels to transport staff equipment and supplies to and from new installation sites. Offshore support vessels are also essential for logistics and support during construction and operation, and for successfully implementing and operating offshore renewable energy projects, thereby increasing their demand.

The Biden-Harris administration extended the scope of offshore wind planning beyond the North and Mid-Atlantic regions. This planning included auctioning five new lease areas off the coast of California. This was the first time an offshore wind lease sale had taken place on the Pacific Coast and the first to allow floating offshore wind on a commercial scale. Plans call for the first-ever auction of three additional wind energy regions in the Gulf of Mexico. With a combined energy capacity of more than 20,000 MW, New Jersey and New York lead the way in the U.S. offshore wind energy pipeline, followed by Massachusetts (8,189 MW) and California (6,102 MW). By 2050, 13 state programs hope to acquire 112,286 MW of offshore wind energy.

Growing Demand for Anchor-Handling Tug Supply Vessels to Drive Market Growth

Anchor Handling Tug Supply (AHTS) vessels are widely used to support offshore drilling operations by positioning towing rigs and moorings. These vessels also transport and launch equipment, such as remotely operated underwater vehicles for well drilling & maintenance, installations, and transporting supplies and equipment from coastal bases to drilling platforms.

The demand for AHTS vessels is constantly increasing due to their excellent physical characteristics, such as strength, bollard pulling force, brake holding capacity, cargo capacity, and cables. They are also equipped with firefighting and energy saving capabilities. As more floating wind turbines are installed in the coming years, they will eventually use AHTS vessels and put pressure on the available vessels serving offshore oil and gas exploration activities. The increase in offshore drilling activities will drive the demand for Anchors Handling Tug Supply (AHTS) vessels. This factor is expected to improve the overall utilization of these vessels in the coming years.

The energy & power sector is receiving more deepwater exploration project sanctions in the U.S. Gulf of Mexico. Near-field exploration is the primary approach as it enhances the financial viability of novel discoveries and can expedite development, considering the current infrastructure and the anticipated brief tieback cycle. Therefore, with the increasing number of offshore exploration and production activities in the region, the demand for Anchor Handling Tug Supply (AHTS) vessels is expected to grow significantly during the forecast period.

RESTRAINING FACTORS

High Costs Coupled with Fluctuations in Global Crude Oil Prices to Hamper Market Progress

Construction of offshore support vessels requires significant financial investment and technical expertise to meet exacting requirements. Ship owners must build special facilities, such as mooring units and shipbuilding departments to build and store offshore support vessels. For big-scale projects, such as offshore wind farms or oil drilling operations, the upfront costs associated with them can be substantial. They typically include costs related to acquisition, construction, maintenance, and upkeep of the ship's workforce.

These high investment costs pose a challenge as they can delay investment decisions. The dry dock area is used for building, maintaining, and repairing ships of various tonnage. The International Maritime Organization requires all ships to dry dock regularly to keep ship components, such as structures, hulls, machinery, and other equipment in good condition.

Furthermore, sudden changes in international crude oil prices significantly affect offshore exploration and production activities. Falling crude oil prices make it impossible to carry out costly operations at different water depths, affecting the deployment of offshore support vessels for offshore hydrocarbon installations. These price fluctuations can significantly impact the financial viability and profitability of oil projects, such as offshore drilling or exploration operations. Additionally, if oil prices remain low for an extended period, this could affect the profitability of current operations.

Long-term cost reductions are demonstrated for fixed-bottom wind turbines through 2035. According to Westwood Global Energy Group 2023, the estimated average levelized cost of energy for a project carrying out fixed-bottom operation in 2022 increased by 6%, from 84 USD/megawatt-hour (MWh) to USD 89/MWh. Industry experts estimate major cost increases for projects with COD between 2025 and 2028 due to inflation recently reported to be between 11% and 30%.

U.S. Offshore Support Vessels Market Segmentation Analysis

By Vessel Type Analysis

Based on vessel type, the market is segmented into anchor-handling tug support vessels, platform support vessels, and crew vessels.

The anchor-handling tug supply vessel segment captured the largest U.S. offshore support vessels market share as these vessels are specifically designed for handling anchors for floating production units, drilling rigs, and other offshore construction. Moreover, these vessels have robust designs and better features to propel colossal oil & gas structures from the shore to the desired location.

By Water Depth Analysis

Based on water depth, the market is segmented into shallow water, deepwater, and ultra-deepwater.

The deepwater segment is projected to lead the market as a number of new projects are getting launched and a huge influx of investments are being made. Deepwater in the oil & gas industry with drilling rigs, floating production systems, and subsea infrastructure, which will be responsible for the deepwater segment of the OVS market, will grow over the forecast period.

The significant presence of oil and gas on the continental shelves of many countries, coupled with the continued installation of fixed-platform wind farms for sustainable electricity production, is expected to boost product use in shallow waters. Shallow waters are more accessible for offshore wind farms. They are closer to the coast and often within reach of traditional maritime infrastructure, such as ports, shipyards, and support services. This accessibility makes shallow water operations more cost-effective and logistically efficient.

By Application Analysis

Based on application, the market is segmented into oil & gas, offshore wind, patrolling, research & surveying, and others.

The oil & gas application segment dominates the U.S. offshore support vessels market share. The oil & gas industry relies mainly on offshore exploration and production activities to meet global energy demand.

Offshore oil and gas fields require extensive support services, including the transportation of tools, equipment, and supplies and specialized activities, such as anchor handling, towing, and rig maintenance. Research & survey activities are essential for analyzing seabed conditions, resource mapping, and identification of potential sites for offshore infrastructure development.

List of Key U.S. Offshore Support Vessels Market Companies

A significant portion of the U.S. offshore support vessels market is fragmented due to the presence of many small and big players. Some companies are increasingly engaging in the development of advanced technologies and activities to strengthen their position in the market. Additionally, they are focusing on enhancing their vessel offerings to withstand harsher conditions and meet specific global needs. Key participants operating in the industry include Wärtsilä and SEACOR Marine Holdings Inc., which are leading the market in terms of providing various offshore support vessels across different verticals. Consequently, numerous other small and medium players are present in the offshore support vessels industry, offering different capacity products to meet continuous, peak, and standby power load requirements.

LIST OF KEY COMPANIES PROFILED:

• Wärtsilä (Finland)


• Maersk Supply Service A/S (Denmark)


• SEACOR Marine Holdings Inc. (U.S.)


• Tidewater Inc. (U.S.)


• Edison Chouest Offshore (U.S.)


• Hornbeck Offshore Services, Inc. (U.S.)


• Siem Offshore Inc (Norway)


• Solstad Offshore ASA (Norway)


• Harvey Gulf International Marine LLC (U.S.)


• Damen Shipyards Group (Netherlands)

KEY INDUSTRY DEVELOPMENTS:

• February 2023: Hornbeck Offshore Services, Inc. announced its vessel purchase agreement with Nautical Solutions, L.L.C., a subsidiary of Edison Chouest Offshore. The deal was to purchase a total of six next-generation Offshore Supply Vessels (OSVs) with advanced tech for an undisclosed amount of cash. Each vessel is a US-flagged, class 280 OSV DP-2 vessel with a capacity of approximately 4,750 DWT.


• February 2022: Hornbeck Offshore Services, Inc. announced that it had acquired three high-spec new generation offshore supply vessels from the U.S. Department of Transportation’s Maritime Administration (“MARAD”) for an undisclosed amount of cash.


• September  2022: Tidewater Inc. announced the acquisition of Swire Pacific Offshore. The deal made Tidewater the world’s leading OSV operator to acquire all of the outstanding shares of Swire Pacific Offshore Holdings Limited (“SPO”), a subsidiary of Swire Pacific, for approximately USD 190 million.

REPORT COVERAGE

The research report offers detailed market insights and focuses on critical aspects, such as leading companies, top ship types, and product capacity. Besides this, it also offers insights into the market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses several aspects that have driven the growth of the market in recent years.

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