ShipCrunch

Shipping's lawyers clean up

When it's a question of survival, contracts and other binding agreements are tossed.

By Ryan Skinner (email)

A recent article in Business Times decries the cavalier disregard for contracts seen by Intercargo members.

Charter parties are only one hostage of the recession. Ship orders are another. And what about accepted governance practices, of publicly-traded and private companies alike? At least half of the business stories in shipping and offshore these days reflect discord that will soon go litigious, if it hasn't already.

Shipping's legal community will happily clean up. I suspect that, for many in the shipping universe, the question of survival in this downturn will depend on the strength of contracts, and legal connections.

I remember visiting BIMCO two years ago. During those high times, they proposed a standardised newbuilding contract. Some people may be kicking themselves for ignoring the advice...

29 May: DN's marine headlines - Seeing red

Lower valuations of assets pushed many companies into the red in the first quarter.

By Ryan Skinner (email)

Online marine headlines from DN, the Norwegian biz daily, on 29 May:

• "His heart is in Frontline": Frontline announces quarterly results that beat analysts' expectations. Many were happily surprised to see Frontline cancel six newbuilding orders.
• "Cecon asks for new extension": Cecon had to use funds meant for interest payments on support of the Davie yard where it has subsea construction ships under construction. Its primary creditor is "concerned".
• "Share price gone wild": TTS Marine had to make an emergency placement, after Ability Drilling's bankruptcy scotched its future earnings. Despite the placement, the share has held strong. 
• "The owners must bleed": Write-downs in Subsea constractor Oceanteam have pushed the company into the red in the first quarter, and murkier financial waters.
• "Sunk by big write-downs": Lower valuations of its ships forced BW Gas to make write-downs that led the company into minus in the first quarter 2009.
• "PGS made it rain": In one hour, PGS' private placement was over-subscribed five times over. The placement, plus flagged sales, gives PGS NOK 1 billion in the pot. 

Most dangerous? Integrated operations or robot journalists?

A simple technology story gets no better as it passes through newsrooms.  

By Ryan Skinner (email)

"Hackers can take over oil platforms!"

Over the past month, a string of Norwegian publications (including the national broadcaster, a leading tabloid and a leading engineering magazine) grabbed the headline above from the public-interest magazine of a Norwegian engineering school.

God knows what some dork-Bluebeard might do with control of a massive, mind-bogglingly complex industrial production platform hundreds of miles to sea? (Come to think of it, what would he do? And why would he do it, given juicier and more visible military, and land-based, targets?)

The purported bogeyman here is integrated operations (IO), or e-fields.

28 May: DN's marine headlines - Nail-biting in Bergen Group

Bergen Group's customers are struggling; so Bergen Group struggles.

By Ryan Skinner (email)

Online marine headlines from DN, the Norwegian biz daily, on 28 May:

• "Yard risks order crisis": Bergen Group's Fosen yard has only one order starting this fall. Many jobs are at risk if BOA is unable to finance outfitting of its nine newbuildings at the yard.
• "No obligatory share offering for Rem": Rem Offshore minority shareholders' effort to force Åge Remøy and Solstad Offshore, who are splitting the company in two, to make a share offering for the entirety of the company was shot down by Oslo Børs.
• "Doesn't regret acquisition": Knutsen OAS Shipping reports a positive return in the first quarter. The company is seeking to grow further in its core shuttle tanker, LNG and product/chemical tanker niches.  

Two readers of TradeWinds

By Ryan Skinner (email)

Drago Eric has lost his cigarette lighter again.

"Zoran! Zoran!"

Zoran is pounding on a flange with a mallet.

"Zoran!"

Drago tugs on Zoran's sleeve, which at last gets Zoran's attention.

"Do you have my lighter?"

27 May: DN's marine headlines - Weighing their options

BOA, Volstad and Scorpion all seek solutions to ongoing problems.

By Ryan Skinner (email)

Online marine headlines from DN, the Norwegian biz daily, on 27 May:

• "Scorpion paid more poorly": Scorpion Offshore gets an extension on Vietnamese Thang Long Joint Operating Company's contract for Scorpion's jack-up rig Offshore Resolute, at a rate 20 per cent lower.
• "Crushes expectations": Analysts expected Seadrill's first-quarter result to be disappointing. Instead, the company beat prognoses by USD 100 million. 
• "Considers building in China": BOA's owner considers outfitting his nine offshore newbuildings at the Chinese hull yard. He is struggling to get the necessary financing in Norway to outfit them at the Bergen Group Fosen yard, as planned.
• "Ålesund-shipowner thinks ship will be claimed": Latest chapter in Deep Cygnus story. Volstad Maritime, 49% owner of the new offshore ship, says it's in talks with its partners, Trico Maritime and DeepOcean, to take delivery of the ship. 
• "Norden share worth 1.7 billion": Kristiansand shipowners Rasmussen sold Norden shares this spring, but retains an estimated NOK 1.7 billion in the Danish bulk and tanker company. 
• "Lost nearly a billion": Marine insurance group Gard reported losses of almost NOK 1 billion in the 2008 accounting year. 

26 May: DN's marine headlines - Now we know what doesn't work

Shipowners and rig owners squirm in the tough market, make some bad calls. 

By Ryan Skinner (email)

Online marine headlines from DN, the Norwegian biz daily, on 26 May:

• "Shipowner gamble flopped": Nordenfjelske Dampskibsselskap now lacks a managing director, has no revenue-generating activities and soon no employees. The Trondheim company's efforts to get into the offshore business has failed.
• "Shtokman decision in 2010": Statoil awaits a final investment decision on Gazprom's plans to develop Shtokman, the world's largest subsea gas field, next year.  
• "Rig values were jacked up": Petrojack, only one struggling drilling company in a whole family of them, is effectively insolvent, says one analyst, who claims the company has jacked up the value of its one jack-up drilling rig.
• "Thinks market should be worse": Golden Ocean-boss Herman Billung would prefer it if the dry bulk market was much worse. Why? He'd like to see more new tonnage cancelled, and old tonnage scrapped. 
• "Sued by ex-partners": Shipowner Jan Olaf Tønnevold faces a court date with two investors, who claim a ship they commonly owned, now Mandship Tacoma, was in worse condition than disclosed.   
• "Locked up in Rem Offshore": Rem Offshore's two majority shareholders plan to split the company in two. Minority shareholders scream it's a bad deal, and hope to block it at a shareholders' meeting next Tuesday.

  

Bourbon Dolphin drama ends with rules changes

North Sea accident is translated into a sheaf of new rules to anchor handlers.

By Ryan Skinner (email)

The report issued by the Norwegian Ministry of Justice and the Police in March 2008 on the loss of Bourbon Dolphin makes suspenseful reading. The Norwegian Maritime Directorate recently followed that up (at the behest of the Ministry of Trade and Industry) with a list of recommendations for anchor handling vessel design and operation (see more on this below).

First, the background: Bourbon Dolphin capsized 12 April 2007 during an anchor-handling operation in the North Sea. It was placing an anchor for the Chevron-chartered drilling rig Transocean Rather. Another anchor handler, Highland Valour, is also in the picture, as it attempted to relieve Bourbon Dolphin before the fatal accident.

Extracts from the Ministry of Justice and the Police report (translated roughly by yours truly):

"Highland Valour, when it lost its grip on the chain, drifted rapidly towards Bourbon Dolphin, and a collision seemed inavoidable. In a later explanation to the commission, the first officer has changed this, saying it was surely Bourbon Dolphin drifting to stern when Highland Valour lost the chain..."

25 May: Marine headlines - Signals every which way

Uncertainty about bulk prices reflects uncertainty about China's health.

By Ryan Skinner (email)

Online marine headlines from DN and other sources on 25 May:

• "China lifts dry bulk": Golden Ocean's fate looked grim early in 2009. After newbuilding cancellations and a climbing share price, things look better. Higher capesize rates are driven by stoked demand for iron in China.
• "Drewry calls dry bulk recovery temporary": Drewry believes that dry bulk has bottomed out, but the market will stay depressed, due to the deep orderbook. (Source: Journal of Commerce)
• "Supply & Demand, or lack thereof": Brokers Marcon International give their assessment of the market. (Source: www.marcon.com)
• "Captain Tsarev still in Brest": Panamanian-flagged cargo vessel Captain Tsarev has been in Brest for six months after an engine failure. Its Russian and Ukrainian crew await payment, and a clarification from the ship's owners. (Source: Le Télégramme)

Kapitalister 1, Sosialister 0

Norwegian morality play demonstrates state ineptness in boardrooms.

By Ryan Skinner (email)

For those who missed it: This past Easter in Norway a tussle erupted between one of the country's leading industrialists/robber barons, Kjell Inge Røkke, and the socialist/labour government.

Only one year previous, the two got in bed together when the government invested in Røkke-run Aker Solutions. Røkke had made clear to Jens Stoltenberg and other huns of the labour party that their investment would secure Norwegian industry, and protect it from ruthless foreign investors. Stoltenberg and his government did as they were told, hastily and ineptly buying into the house of Aker.