The cost of renting offshore supply vessels (OSVs), servicing oil and gas firms, will continue to rise as many ships that were mothballed up during the downturn will not return to the market, the CEO of Norway’s DOF said April 11.

A number of offshore vessel companies went bankrupt after oil prices plunged between 2014 and 2016 or were forced to merge with competitors to survive as oil companies cut spending for exploration and new developments.

But the rates for hiring specialized vessels, which include platform supply, diving support (DSV) and anchor-handling vessels, have increased in the last year.

While the North Sea has been leading the increase in demand for OSVs, with rates for some vessel segments improving by 30% from a year ago, activity is starting to pick also elsewhere in the world, DOF’s CEO told Reuters.

“The rate levels for PSVs have increased quite a bit from low levels [last year]... Now, at least, you can pay interest rates,” Mons Aase said.

The company, which operates more than 60 OSVs, said in a separated statement on Wednesday it had won a three-year contract from Petrobras for a DSV in Brazil.

DOF shares were trading up by 3.8% on the Oslo exchange by 09:55 GMT and were up 37% since the beginning of the year.

The company didn’t disclose the contract’s value or price, but Aase said it expected “better earnings” from the new contract than before.

“There are reasons to be a bit more optimistic than we have been... Overall [globally], we see that a modest increase in activity,” he told Reuters.

His optimism was based on the expectation that a majority of offshore supply vessels laid up in Europe will not return to the market.

“Many of those vessels parked in Europe came from Africa and Brazil, and they don’t meet the [European] specifications... We clearly see that a significant portion, about two-thirds, will not be back,” Aase said.

Last week, the Norwegian Shipowners’ Association said oil companies had to be prepared to pay higher rates for offshore supply vessels in order to ensure the survival of their suppliers.

Some 183 offshore supply vessels and drilling rigs, corresponding to almost one third of the Norwegian offshore supply fleet, were idle last year, the association’s data showed. That number had fallen to 162 units by February, the association added.

Offshore