Helicopter Investor 2020: Offshore headwinds and tailwinds
Reports of the death of the offshore oil and gas market – and the helicopter fleet that serves it – are exaggerated, according to speakers at Helicopter Investor’s London 2020 Conference.
While there is no dispute that the sector is in long-term decline, there is still – and will be for decades – a need for helicopters to support offshore operations. And that spells good news for helicopter operators, lessors and financiers as the oversupply of helicopters is reduced; bringing demand and supply more closely into line.
Ensuring demand for newer and safer helicopters in the offshore market continues, the International Association of Oil and Gas Producers (IOGP) has agreed to raise safety standards for its members by implementing new regulations for helicopters flying to and from offshore oil and gas rigs. The new regulations, which also cover procedures on offshore installations, rule out certain models from offshore operations and will be another factor prompting the sale of new helicopters, as older models become obsolete.
Commenting on the new IOGP guidelines and the financial health of helicopter operators, Tony Cramp, chairman of IOGP’s Aviation Committee and vice president of Shell Aircraft, said: “I don’t want to be sitting here in the future talking about an accident related to the financial health of an aircraft operator, due to market conditions, or because we were using hardware that was not designed to be as safe as we know it can be.”
It remains to be seen whether other oil and gas companies will follow IOGP’s example, but the new standards were warmly received by delegates.
Steve Robertson, director of Air & Sea Analytics, highlighted the brighter future for the offshore helicopter fleet, saying: “We have decades of activity left in oil and gas, change is coming but it is not coming overnight, or two years, or five.”
His confidence was shared by delegates, with an audience poll revealing that 50% thought that oil and gas would remain a viable market, requiring offshore helicopter support for more than 30 years. The remaining 50% of respondents believed the sector’s future was assured for 20 or more years.
Also, demand would be buoyed by the development of new markets for helicopters. Greater demand for SAR helicopters was predicted in emerging economies, as the increasingly affluent middle class came to expect the level of Search and Rescue (SAR) services available in Europe and North America. And demand for helicopters to service offshore wind turbines was also expected grow.
So, despite the well-documented headwinds that have hit the helicopter market since the oil price crash in 2014, the new decade promises to bring tailwinds, which could spark sustained growth for the sector. It is only up from here.