While contracting activity of commercial ship having plummeted by almost 90% from the highest point in 2007 amid economic downturn, newbuilding investment in the offshore sector (ship-type offshore plant, such as drillship, FPSO, LNG-FSRU, etc., and offshore supply vessel) during the first half of 2012 outpaced shipping volumes for the first time on record, with continued spending in offshore energy E&P.
According to a recent report from Clarkson Research, from 2004 to 2011 on average investment in the offshore sector accounted for just 18.6% of total newbuilding investment, however, in H1 2012, investment reached 51.8%.
2007 saw the peak in shipping investment, reaching $228.6bn, which fell considerably by 88% to $27.7bn in 2009, due to global financial crisis in 2008. The shipping sector received $81.9bn and $60.4bn of investment in 2010 and 2011 each, however, it face downward again in the first half of the year with $14.6bn.
However, offshore investment remained at 7.5% in 2004 but in H1 2012 reached 51.8%, with $15.7bn invested of overall $30.3bn of newbuilding investment.
In 2010, of $108.5bn of total investment, offshore sector accounted for 25%, while it increased to 41% in 2011, of overall $102.4bn.
Around $41.7bn was invested in offshore sector in 2007, with a flurry of speculative orders for FPSO units, which decreased to $38.2bn and $13.6bn in 2008 and 2009, respectively. However, in 2010, it recovered to $26.6bn and $42bn in 2011.
Particlarly, 39 drillship orders took 58% of overall newbuilding investment in offshore sector last year.
In 2004 Korean shipyards accounted for 4.3% of total offshore investment, but by 2011 this figure grew to 54.4%.
In case of Korea Big3 shipbuilders - Hyundai Heavy Industries, Samsung HI and Daewoo Shipbuilding & Marine Engineering, their orders for offshore sector will reach close to 70% of overall newbuilding investment this year.
The challenging shipbuilding and shipping market has affected newbuilding investment in both the shipping and offshore sectors, but offshore sector's proportion of newbuilding investment is increasing. 2012 could even see more investment in offshore sector than shipping for the first time on record.