It's Friday again. It's raining. Again. That would seem to provide evidence of the existance of the rainy season then. It also means that Ayus' family BBQ may have to be held under canvas.

I've been watching the price of oil this week as it made a brave attempt to lurch towards the $50 a barrel mark before falling back. What has struck me is how little effect events outside of the financial world now have upon it.

A few short months ago, political unrest, a pipeline explosion or a sudden cold snap would have the price of oil going into an almost vertical trajectory. Now it seems that those who make the markets no longer consider these events important. One wonders if they will maintain this stance once the recession is over. Doubtful I think.

The oil patch seems to be jogging along, and appears to have adapted to our new reality both well, and quickly. The initial confusion amongst the players shows signs of clearing, and a realisation that a path towards suicidal day rates may not have to be beaten. Dare I say it, but some could be thought to be bullish on even the short term prospects.

News this week of more vessel cancellations. Excessive delays being reported as the culprits. One has to wonder how many more will follow! Whilst events such as these could provide relief to some beleagured owners and their banks, the bad news has to end up in somebodies lap. In this case probably the yards and their banks. (These banks get everywhere don't they). Could this be where the first serious signs of stress begin? How many undelivered new builds can the yards absorb before problems arise? How many of these orphans can find new homes at such short notice when the banks (there they are again) aren't able to lend? Could shipyards be the next group to go to governments asking for assistance? Well, if it's good enough for GM, Ford et al, why not? The fundamentals are the same, employers of large numbers of people, extended clusters of suppliers, mostly export driven. Only the fragmentation of the players, and hence the inability to make a unified approach differentiates them from the auto industry.

My thanks go to Stephen Carson for the following images.

The first vessel is the GlomarIII circa 1968, the other being the new build Dhirubhai Deepwater KG1. No prizes for spotting the difference!! But, if ever there was a need for justification for increased day rates then surely these two pictures illustrate it as well as any.

Welcome to this first blog from our shophouse desk.
Why a blog you may ask, well, there are many excellent reports produced by various reputable organisations within our field and we decided that something a little less quantitative might provide an opportunity to deliver some "lighter" moments.
It will be irregular (almost definitely) irreverent (possibly) irrelevant (we hope not), and we hope that you will entertain us with your contributions, not necessarily on the offshore business, but possibly on what you can see (or hear) from your own desk.
Just like banking and construction, we now seem to be post what appeared to be an unburstable bubble, and of course, conventional shipping is already deep into troubled waters. The difference for our sector would appear to be high level of confidence that the better times will return in a relatively short space of time, say 12-24 months.
Time will tell, but if we assume that the supply/demand predictions for oil & gas are even relatively close, then we'll be back drilling holes, surveying seabeds and constructing things offshore as soon as people get back in their gas guzzlers.
The one thing that is almost certain to happen is that there will be casualties before the good times roll again. Never has the industry been so highly geared, and never has it had so many new, expensive toys to pay for. You can hear the balance sheets straining for miles!
The weakest will almost undoubtedly fall, and consolidation will follow, but is this Darwinian solution necessarily a bad thing? Probably not.