In my last blog post, I touched on the changing oil and gas landscape due to the growing focus on net zero carbon targets. This is driving a lot of focus to the offshore wind sector. Interestingly, this is also prompting many companies to turn not just their focus but actual investments into this market as well. Recently, Edison Chouest announced they had secured a charter contract for a new vessel by the Danish power company Orsted.
Jackson Offshore is actively engaged in the burgeoning wind market both with providers and vessel designers. This market presents a lot of potential but also requires very significant investments with the cost of a SOV coming in at around $80 million. In turn, this will not only require very long-term contracts but also successfully negotiating the structure necessary to be profitable in a challenging U.S. market.
The positive takeaway in all of this is the lack of attention currently being paid to the offshore oil and gas industry. I know it sounds counterintuitive but I do believe it will be a net positive. We are all well aware of the recent decline in offshore activity with U.S. deepwater rig counts falling to the mid-to-low teens during the COVID downturn. This condition will likely persist through most of next year. As the fortunes of the domestic offshore ebb with the decline in activity, there is a real lack of focus on this market. More high-specification vessels from the U.S. fleet are being relocated to markets such as Guyana and Suriname in northern South America. And, as I have already pointed out, we are seeing companies spend capital dollars in wind support vessels. What will inevitably result when the domestic offshore oil and gas industry rebounds is a very tight OSV market. When we then consider that there have been no new vessels delivered this year and only three between 2018 and 2019, the long-term prospects for vessel owners with the newest vessels is very positive. Certainly the small, but very new JOO fleet, is well positioned when this starts to happen toward the end of next year.
The industry downturn that began in 2014 and has now extended through our new COVID downturn will end. Oil and gas are not only viable and necessary sources of energy but will remain so for decades to come despite the growth of renewable energy sources. JOO remains well positioned to take advantage of the improvements in market which is forecast to begin a resurgence in the latter half of next year and accelerating into 2022.