Odfjell Exits European Short Sea Market Following Sale

By MarEx 2015-06-24 13:52:09

Stolt Tankers B.V., a division of Stolt-Nielsen Limited, has been announced as the buyer for three parcel tankers sold by Odfjell Tankers AS. The sale marks Odfjell’s exit from the European short sea market.

Stolt Tankers B.V.,has agreed to purchase the Bow Balearia, Bow Bracaria and Bow Brasilia three 5,800 dwt fully stainless steel tankers. The ships, which were built in 1997-1998 and are sister ships of three tankers currently operated by Stolt Tankers, are expected to join the Stolt-Nielsen Inter-Europe Service by the end of August 2015.

The three ships were the last remaining vessels in Odfjell’s trade in the European short sea market. The tankers are being divested as a part of the company’s cost-cutting and efficiency program which includes exiting from unprofitable trades. The sales will result in an accounting loss for Odfjell, but the company has said the transaction will have a positive effect on the group’s liquidity and profitability.

Commenting on the purchase, Hans P. Feringa, President of Stolt Tankers, said, “We are pleased to have acquired these well priced, high quality assets, which enhance the scale efficiency of our fleet of European regional parcel tankers. The ships are a perfect fit with our current fleet, the contract portfolio we serve, and our goal of providing our customers with the quality, reliability and service flexibility that their supply-chain needs demand.”

The three ships are highly specialized, with 20 duplex stainless steel tanks, ICE class 1A and fitted with nitrogen generators. They are sister ships to Stolt Tankers’ R5 class, which consists of Stolt Razorbill, Stolt Kingfisher and Stolt Pelican.

Further terms of the transaction were not disclosed.


UAE’s Topaz Eyes Expansion Amid Oil Slump

By Reuters 2015-06-24 12:24:41

Topaz Energy and Marine is eyeing expansion into South America in the next two years as the Dubai-based oil services firm looks beyond the current difficulties in the sector caused by the lower oil price, its chief executive told Reuters.

Servicing companies are suffering as producers and explorers cut back on costs and capital expenditure to cope with oil prices trading around 45 percent below their June 2014 peak.

Topaz reported an 88 percent slump in first-quarter net profit, and Chief Executive Rene Kofod-Olsen expected earnings to continue to be disappointing through the rest of 2015.

“First half has been very tough for all of us and the second half will be moderately better but, I think, everyone in the industry should expect that 2015 will be a bad outlier for the past many years,” he said.

Despite this, Topaz, a unit of Oman’s Renaissance Services believes it is in a position to weather the storm and take advantage of opportunities to expand both its fleet and geographical presence beyond the Caspian Sea, the Middle East and West Africa.

South America is the main target, according to Kofod-Olsen, with the biggest draw being Mexico, which is opening up its oil industry to more international involvement, and Brazil, where the firm had previously operated but had pulled out because it didn’t have the scale and relationships with Petrobras to make the business work.

“We would go in if the working environment normalizes and I believe there is a good chance that it will,” he said of Brazil.

State-run Petrobras is embroiled in Brazil’s largest ever corruption probe which has seen dozens of high-ranking company officials and politicians questioned over charges including bribery and inflating the value of contracts for personal gain.

Topaz is also aiming to expand its subsea division over the next two years in the Atlantic basin, targeting areas of medium depth, Kofod-Olsen said.

Having said in November it was in talks to acquire two ships to augment its subsea division for delivery in late-2016, Kofod-Olsen said the firm subsequently renegotiated its deals and would pay significantly less than envisaged as lower oil prices and cut-backs by firms in new orders had given it a better negotiating position.

The company has finance to back its plans, having signed a $550 million seven-year loan in April to refinance existing debt at a cheaper rate and to back expansion.

As for merger and acquisition plans, Kofod-Olsen said Topaz was open to opportunities to build its presence in each region.

He saw further consolidation happening across the industry as firms looked to cut costs in the current strained operating environment, especially as oil majors squeezed their suppliers and servicing firms.

By David French


27 Companies in Bid for Sewol Salvage Contract

By Kathryn Stone 2015-06-24 11:56:08

A total of 27 domestic and international companies have submitted bids to salvage the Sewol ferry that sank last year, killing over 300 people.

Both South Korean and foreign companies are vying for the contract, which has an allocated budget of $91.6 million. There are seven consortia represented in the bids. Five groups are made up of international and Korean salvage companies, while the other two consist of only local companies.

Twenty-seven companies are involved in the bidding process including one in Denmark, one in the Netherlands and two in the U.S. and China respectively.

The Ministry of Oceans and Fisheries (MOF) opened tender for the project in late May and officially closed bidding June 23. An evaluation committee comprised of internal and external experts will begin reviewing the submitted proposals in early July. As part of the review process, the committee will conduct technical evaluations over a two-day period at a restricted site.

Preference will be given to companies that demonstrate superior technological capability, as the South Korean government has emphasized the need to recover the ferry and missing bodies in the best condition possible.

According to the Yonhap news agency, all bidders will be evaluated on a 100-point scale, with technological capability making up 90% of the assessment criteria.

The SEWOL ferry sank in April of last year killing 304 people, mostly school children. The disaster has caused the IMO to call for increased safety measures on shortsea passenger voyages and has resulted in widespread public outcry in South Korea.

The ferry is located beneath 44 meters (144 feet) of water and is embedded in 1.5 meters (5 feet) of sediment. Since the vessel was built over 20 years ago, there is considerable concern over corrosion leading to structural weakening. There are believed to be nine bodies still onboard the sunken ship.

The MOF said that the salvage of the 6,825-ton ferry has no prior precedent, however it is committed to selecting the company which best represents the nation’s interests.


Port of Calais Strike Ends, Border Security Prioritized

By MarEx 2015-06-24 09:11:29

French ferry workers at the Port of Calais have ended their strike against English Channel operator, MyFerryLink and operations at the port have resumed.

Traffic through the Channel Tunnel linking Britain and France has also started flowing normally, a spokesman for operator Eurotunnel said on Wednesday.

“Traffic is totally normal in both directions since last night at 1830 (French time),” he said.

Traffic was suspended on Tuesday after striking ferry workers accessed the terminal on the French side and set fire to tires to protest against the restructuring of Eurotunnel’s maritime business MyFerryLink.

Shipping had been halted early on Tuesday and both Eurotunnel and Eurostar later suspended their services because of the disruption, creating kilometers-long tailbacks.

Prime Minister David Cameron said on Wednesday his government was considering reinforcing Britain’s border with France around the port of Calais after what he said were unacceptable scenes of chaos involving migrants trying to reach his country.

Television footage on Tuesday showed large crowds of migrants trying to board queuing trucks after traffic was halted through the Channel Tunnel linking Britain and France due to disruption by striking French ferry workers.

“We have been looking at whether we can put more personnel and indeed sniffer dog teams on that side of the channel to make a difference,” Cameron told parliament.

“There is also more work being done in terms of installing fencing not just around the port at Calais but also around the Eurostar and Eurotunnel entrance,” he said.

The mayor of Calais has criticized the British government for not doing enough to fund security in the port, saying Britain needs to overhaul its generous welfare system and improve identity controls she says make it a magnet for illegal immigrants.

Cameron said Britain had already invested 12 million pounds ($19 million) on bolstering the border and was happy to do more if needed. There was no point in either country “trying to point the finger of blame at each other”, he said, saying it was more important to maintain a strong partnership.