Analysts warn of more risk that further clients of Singaporean rig builder Keppel Offshore & Marine may cancel their orders and forecast that a total 26% of the outfit’s S$12.5 billion (US$8.27 billion) order book could be slashed as the financial crisis deepens.
The predictions follow hot on the heels of last week’s news that the Singapore giant is faced with the cancellation of a number of new-building contracts totaling S$1.2 million. The orders, signed only a few months ago, with Scorpion Offshore, Seadrill and Lewek Shipping, represent almost 10% of the rig builder’s order book. Now analysts are not ruling out more dark clouds on the horizon. According to Merrill Lynch, excluding Seadrill and Scorpion Offshore, which have already announced their intention to review their rig orders, the “next most highly leverages listed customers” are Norway’s Skeie Drilling & Production, as well as PetroVietnam Drilling & Well Services (PV Drilling). Merrill Lynch said in a report that Skeie Drilling and Production has net debt of US$2.6 billion. It also had gearing of 2.9 times at 30 September, a sign of its heavy debt levels. The outfit has ordered three jack-up rigs from Keppel with scheduled delivery in 2010 and is fully financed with 11% equity and 89% debt. PV Drilling, an affiliate of Vietnam Oil & Gas, has net debt of S$251 million and a gearing ratio of one at 30 September. The company has outstanding orders for two jack-ups from Keppel scheduled for delivery in next year’s fourth quarter. Merrill Lynch estimates that 13% of Keppel’s current order book is attributable to Skeie, while 3% is attributable to PV Drilling.
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Tuesday, December 9, 2008
Ship owners and governments confront piracy crisis
The Somali pirates in control of the Saudi supertanker Sirius Star become frustrated in negotiations over their ransom demands.
They pump 50,000 gallons of crude oil into the water - a tiny fraction of the tanker's load - and they threaten to leave the pumps running until their demands for $15 million are met. To reinforce their message, they toss a crew member over the side, and he drowns in the oily muck. This kind of nightmare scenario - horrifying but plausible - has shipowners, insurers, seafarers and naval officers in something of a panic, given a sharp increase in ever-more brazen pirate attacks. In the Gulf of Aden alone, the huge expanse of water between Kenya and Somalia, 14 ships are currently being held for ransom, including the Sirius Star and a Ukrainian ship, the Faina, with 32 battle tanks aboard. Rumors are swirling in the region that both ships could soon be released. hip owners and governments are desperately seeking successful countermeasures to address what has clearly become a crisis situation. On Monday, the European Union began a yearlong naval operation in the pirate-infested gulf, the EU's first maritime mission ever. Eight countries are participating in the new flotilla, code-named Operation Atalanta (www.mschoa.eu), which will be backed up with three airplanes. Ground-based personnel are at Northwood Headquarters in Britain.Javier Solana, the EU foreign policy chief, said the mission would have "robust rules of engagement" while coordinating with other navies already operating in the region, including those of the United States, India and Russia. Earlier this week the United Nations Security Council passed a resolution allowing navies to breach the 20-kilometer, or 12-mile, territorial limit and enter Somali waters in pursuit of pirates.In the gulf this year 102 ships have been attacked and 40 have been hijacked. With 21,000 ships passing through the region each year and only a handful of international navies to run interference, the risk-to-reward ratio for impoverished Somalis has been unbeatable.
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They pump 50,000 gallons of crude oil into the water - a tiny fraction of the tanker's load - and they threaten to leave the pumps running until their demands for $15 million are met. To reinforce their message, they toss a crew member over the side, and he drowns in the oily muck. This kind of nightmare scenario - horrifying but plausible - has shipowners, insurers, seafarers and naval officers in something of a panic, given a sharp increase in ever-more brazen pirate attacks. In the Gulf of Aden alone, the huge expanse of water between Kenya and Somalia, 14 ships are currently being held for ransom, including the Sirius Star and a Ukrainian ship, the Faina, with 32 battle tanks aboard. Rumors are swirling in the region that both ships could soon be released. hip owners and governments are desperately seeking successful countermeasures to address what has clearly become a crisis situation. On Monday, the European Union began a yearlong naval operation in the pirate-infested gulf, the EU's first maritime mission ever. Eight countries are participating in the new flotilla, code-named Operation Atalanta (www.mschoa.eu), which will be backed up with three airplanes. Ground-based personnel are at Northwood Headquarters in Britain.Javier Solana, the EU foreign policy chief, said the mission would have "robust rules of engagement" while coordinating with other navies already operating in the region, including those of the United States, India and Russia. Earlier this week the United Nations Security Council passed a resolution allowing navies to breach the 20-kilometer, or 12-mile, territorial limit and enter Somali waters in pursuit of pirates.In the gulf this year 102 ships have been attacked and 40 have been hijacked. With 21,000 ships passing through the region each year and only a handful of international navies to run interference, the risk-to-reward ratio for impoverished Somalis has been unbeatable.
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NYK slims down expansion plans by as much as 60 vessels
Tokyo: Nippon Yusen Kaisha, Japan’s largest shipping line by sales, cut its fleet expansion plan by up to 60 ships as slowing growth decreases demand for shipping.
Nippon Yusen will boost its fleet to 940 vessels at the end of March 2011, compared with earlier plans to increase it to 1,000 ships, spokesman Atsuto Kato told Bloomberg in a phone interview today in Tokyo. The shipping line had 776 vessels at the end of March. Nippon Yusen will revise its medium-term profit forecasts next year, Kato said. “The global recession is hurting demand,” Kato said. “We will announce a revision in our forecasts next year.” The shipping line predicts net income of 140 billion yen ($1.51 billion) in the fiscal year ending March 31, and 145 billion yen for the next two fiscal years. Japan’s Nikkei newspaper reported the company’s revised expansion plan earlier today. Nippon Yusen shares rose as much as 5.1 percent to 492 yen in Tokyo and traded at 491 yen as of 9:29 a.m. They have fallen 44 percent this year. itsui O.S.K. Lines Ltd., Japan’s most profitable shipping line, said earlier this month it may lower its earnings forecast this fiscal year as daily charter rates for its largest coal and iron-ore vessels have tumbled 98 percent to a record low. Mitsui O.S.K. may not meet its targets, Kenichi Yonetani, a managing executive officer at the company said in a Bloomberg Television interview on Dec. 3. The world’s largest merchant fleet operator may mothball vessels because of the drop in daily charter rates. Demand for commodity transport has slid as China, the world’s biggest user of iron ore, has slashed steel production and economic growth in the U.S., Europe and Japan is forecast to shrink next year, according to the Organization for Economic Cooperation and Development.
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Nippon Yusen will boost its fleet to 940 vessels at the end of March 2011, compared with earlier plans to increase it to 1,000 ships, spokesman Atsuto Kato told Bloomberg in a phone interview today in Tokyo. The shipping line had 776 vessels at the end of March. Nippon Yusen will revise its medium-term profit forecasts next year, Kato said. “The global recession is hurting demand,” Kato said. “We will announce a revision in our forecasts next year.” The shipping line predicts net income of 140 billion yen ($1.51 billion) in the fiscal year ending March 31, and 145 billion yen for the next two fiscal years. Japan’s Nikkei newspaper reported the company’s revised expansion plan earlier today. Nippon Yusen shares rose as much as 5.1 percent to 492 yen in Tokyo and traded at 491 yen as of 9:29 a.m. They have fallen 44 percent this year. itsui O.S.K. Lines Ltd., Japan’s most profitable shipping line, said earlier this month it may lower its earnings forecast this fiscal year as daily charter rates for its largest coal and iron-ore vessels have tumbled 98 percent to a record low. Mitsui O.S.K. may not meet its targets, Kenichi Yonetani, a managing executive officer at the company said in a Bloomberg Television interview on Dec. 3. The world’s largest merchant fleet operator may mothball vessels because of the drop in daily charter rates. Demand for commodity transport has slid as China, the world’s biggest user of iron ore, has slashed steel production and economic growth in the U.S., Europe and Japan is forecast to shrink next year, according to the Organization for Economic Cooperation and Development.
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'Baltic Queen' launched and christened
The christening and launching ceremony of a big cruise ferry ordered by Tallink took place at STX Europe's shipyard in Rauma last Friday (December 5).
The contract worth US$233.35 million was signed in April 2007. The vessel will start cruises next spring from Tallinn to Stockholm via Mariehamn. The vessel was christened the ‘Baltic Queen’ by Mea Mehtonen, the four-year-old daughter of Marketing Manager of Tallink, Henry Mehtonen. According to plans, the vessel will start operating on the Tallinn (Estonia) - Stockholm (Sweden) via Mariehamn (Aland) route in spring 2009. This vessel is the fifth sophisticated cruise ferry STX Europe is building for Tallink. In addition, a fast ferry called ‘Star’ was delivered to Talllink last spring from the Helsinki yard. At 212 metres long and 29 metres wide, ‘Baltic Queen’ will be one of the biggest cruise ferries in the Baltic Sea, having capacity for 2,800 passengers.
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The contract worth US$233.35 million was signed in April 2007. The vessel will start cruises next spring from Tallinn to Stockholm via Mariehamn. The vessel was christened the ‘Baltic Queen’ by Mea Mehtonen, the four-year-old daughter of Marketing Manager of Tallink, Henry Mehtonen. According to plans, the vessel will start operating on the Tallinn (Estonia) - Stockholm (Sweden) via Mariehamn (Aland) route in spring 2009. This vessel is the fifth sophisticated cruise ferry STX Europe is building for Tallink. In addition, a fast ferry called ‘Star’ was delivered to Talllink last spring from the Helsinki yard. At 212 metres long and 29 metres wide, ‘Baltic Queen’ will be one of the biggest cruise ferries in the Baltic Sea, having capacity for 2,800 passengers.
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Panama Canal to award contract for third dry excavation for Expansion Program
The Panama Canal Authority (ACP) has received six bids for the third of four dry excavation contracts under its Canal Expansion Program.
The submissions will be thoroughly reviewed and a winner will be determined later this month for this next phase of the project. The scope of work included in the contract encompasses the excavation, removal and disposal of eight million cubic meters of material. It also calls for the construction of approximately 2.5 kilometres of access and the clearing of 190 hectares of land bearing munitions and explosives of consideration (MEC), remnants from former US military training in Panama. Ultimately, when this and the fourth contract are completed, a critical access channel linking the new Pacific locks with the Canal’s existing Gaillard Cut (the narrowest stretch of the Panama Canal) will have been created. Similar to the first and second dry excavation projects, this contract will be awarded to the firm with the lowest-priced bid that meets all of the requirements stated in the request for proposals. “With the prices offered today by the bidders for this contract, the Canal’s Expansion program remains on-track and on-budget,” said Executive Vice President of Engineering and Program Management Jorge L Quijano.
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The submissions will be thoroughly reviewed and a winner will be determined later this month for this next phase of the project. The scope of work included in the contract encompasses the excavation, removal and disposal of eight million cubic meters of material. It also calls for the construction of approximately 2.5 kilometres of access and the clearing of 190 hectares of land bearing munitions and explosives of consideration (MEC), remnants from former US military training in Panama. Ultimately, when this and the fourth contract are completed, a critical access channel linking the new Pacific locks with the Canal’s existing Gaillard Cut (the narrowest stretch of the Panama Canal) will have been created. Similar to the first and second dry excavation projects, this contract will be awarded to the firm with the lowest-priced bid that meets all of the requirements stated in the request for proposals. “With the prices offered today by the bidders for this contract, the Canal’s Expansion program remains on-track and on-budget,” said Executive Vice President of Engineering and Program Management Jorge L Quijano.
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