The global offshore construction industry will face tougher market conditions in the future if the oil price remains at a low level or even slips further, according to a news report.
Chinese shipbuilders have inked a huge number of contracts with lower down payment, particularly for jack up platforms. Some speculative orders only bear 5 percent down payment or lower, and the remaining payment is required to be paid off upon delivery.
A majority of the said orders are expected to see delayed deliveries or even withdrawals because of low losses to shipowners, said an unidentified lawyer from the offshore construction arena.
Renowned yards in Singapore and South Korea will take a huge beating with petroleum companies like Chevron and Petrobras decided to cut their investment by 20 percent to 30 percent in 2015.
In addition, the world's top three deepwater drilling contractors all decided to continue leaving drilling vessels idle or even scrap them in January, revealed relevant reports.
Kohe Hasan, partner of Singapore-based law firm Oon & Bazul, said that the declining oil price may injure the growth of the offshore support vessel (OSV) sector.