Anchor Handling Tug Supply Vessel (AHTS)

Anchor Handling Tug Supply Vessels (AHTS) are an essential feature of the offshore oil and gas industry specializing in the towing, positioning and mooring of drilling rigs and other marine equipment.

Dynamic positioning (DP)
Rig Move
Anchor Placement









Category Description Image

Category Description

Anchor Handling Tug Supply Vessels (AHTS) are an essential feature of the offshore oil and gas industry specializing in the towing, positioning and mooring of drilling rigs, semi-submersible rigs and other marine equipment. Equipped with a powerful engine and specialized winches the duties of an AHTS vessel may include;

  • Tugging/Towing rigs, vessels are barges to location or assistance during berthing
  • Retrieving and deploying anchors

In addition to these duties, AHTS's are required to perform supply duties replenishing other vessels, facilities and drilling rigs in the field with operational supplies such as mud, other drilling fluids, cement, freshwater, fuel oil, and miscellaneous equipment.

The wide diversity of the vessel duties also means it is often suitable to perform tasks traditionally undertaken by Platform Supply Vessels (PSV's), Multi-Purpose Supply Vessels (MPSV's), Diving Support Vessels (DSV's) or Emergency Rescue and Recovery Vessels (ERRV).

AHTS's come in a variety of sizes. These can be summarized into 4 broad categories based on brake horsepower (BHP). 


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Supply & Demand Dynamics

 The demand for AHTS's, and offshore service vessels (OSV's) in general continues to be driven by the world's increased energy demands. According to BP Energy Outlook energy demands will continue to grow at a pace of about 1.2% per annum until 2040 with oil and gas remaining the dominant source (circa 55%). 


The AHTS market is highly cyclical. Utilization and rates are quick to react to oil price due to the influence oil price plays on oil company investment. With the primary function of AHTS's being the transport of mobile drilling units (jack-up, semi-submersibles) the utilization (and rates) of AHTS's are closely related to offshore rig count. 


With rig count down and the market severely oversupplied competition remains fierce amongst AHTS owners.  


Demand Outlook

As of Q2 2020, AHTS demand remains restricted especially following the events of the OPEC price war and the global pandemic. Using rig count as an indicator of demand all regions with the exception of Asia-Pacific have seen a large drop in offshore rig count. This has a direct impact on the number of AHTS's required to support operations driving both utilization and rates down. The multi functional role AHTS's can play (tow, anchor handling, and supply duties) means they are the first to be re-hired when drilling activity resumes as company's try to remain lean and maximize the utilization of the fleet. 


Supply Market

Although there has been a slowdown in newbuilds (which is unlikely to increase given the current market outlook and low margins on existing assets) and no new capital entering the market, market oversupply remains the dominant force.  With circa 3,500 available OSV's, of which circa 1,700 are AHTS's, and roughly 250 offshore rigs in service as of July 2020 this implies a 14:1 ratio of OSV's to rigs and a 7:1 ration AHTS's to rigs . With a peak ratio of circa 5:1 back in 2013 (for all OSV's) the supply glut from multiple years of aggressive new-build programs will continue to depress rates for the foreseeable future.

Key PlayersImage

Key Players

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Portfolio Positioning

It is typical to see spend within the Anchor Handling Tug Supply (AHTS) category sit in the “Leverage” quadrant of the Kraljic Matrix (low supply risk, high value) however when markets tighten, depending on the size of AHTS's required, this category can become of "Strategic" importance.

At present buyers are in a strong position with low demand, high competition between owners, and relative ease in switching out vessels. 


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Cost & Price Analysis

Price Analysis

Supply vessel owners have had a difficult past 5 years many of them going through chapter 11 and failing to turn a profit during this period. 

Cost Analysis

The main cost components associated with anchor handling tug supply vessels are the operating costs (crewing, provision, maintenance, insurance and radios) that can represent up to 70%. Other significant cost components are depreciation, overheads and interest expense. Given the current market conditions these cost components will vary significnatly depending on impairments and the company's ability to restructure its debt. 

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Total Cost of Ownership

Parameter Service Cost Fuel Cost Performance Cost
Cost Visibility High Medium Medium
Description The rates and charges agreed in a contract The cost of fuel used by the vessel The cost of inefficiency
Cost Driver
  • Daily Hire Rate
  • Type of operation
  • Type of propulsion
  • Fuel Consumption
  • NPT (breakdown)
  • Learning Curve
  • Quality of work (rework, anchor deployment)
Commercial Impact High Medium High




Given the current market conditions any strategy should be focused on increasing competition and maintaining flexibility in the market. Below are a few options to consider:

  • Refine Specifications and Crewing - Ensure vessels and crew are fit for purpose. With demand low and a glut of supply the market presents an opportunity to charter younger, more fuel efficient, and safer vessel at very competitive rates. That being said try to be as generic as possible to ensure maximum competition.Understand Market
  • Maintain Flexibility - The most competitive prices will be achieved through short to mid-term charter durations (6 months to 18 months) with Owners reluctant to lock in low for long. Always retain flexibility to exit the charter on short notice (no more than 90 days). In areas with an active spot market it may be possible to hire vessels on and off for short periods to execute rig moves etc. 
  • Competitive Tender - Aggregate requirements and tender any anchor handling tug supply vessels competitively. The anchor handling tug supply vessel market, to an extent, has become more like a commodity (especially on the small and mid size vessels) in recent years with all owners offering similar vessels. Competitive tenders, firm negotiations and even reverse auctions will yield the best pricing. 
  • Understand the Market - During a market upturn the larger classes of anchor handling tug supply vessels in a region will become more in demand. This can drive prices from the low 10,000's to the 100,000's as seen in the past. Be sure to understand availability in the market and have mitigation strategies available (eg. locking spot charters in place early based on agreed windows, leverage other marine assets and bring into core fleet).
  • Contract Selection - Time charters are the preferred choice of contract in the oil and gas supply vessel market. Below is a table of the contracting options available for consideration. Be clear on who is responsible to pay for what (e.g lube oil). 


Parameter Time Bareboat
Description Per day or duration of time Vessel hull & machinery only
Operational Preference Preferred Not preferred
Vessel Owner Responsibility Vessel
Vessel Only
Charterer Responsibility Port Charges
Cargo Loading & Discharging
Port Charges
Cargo Loading & Discharge
Calculation of Charges Daily hire rate Monthly lump sum payment
Standard Form Contracts (BIMCO) SUPPLYTIME BARECON
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