PRIVATE equity’s future role in shipping faces inherent complications, but this investor segment is expected to enter the fray if and when the timing is right. “Private equity will have the opportunities and the guts to invest, but opportunities will be more prevalent when the market is more distressed than it is now,” asserted Octavian Advisors director Igor Kuzniar. “The marriage between shipping and private equity will not be simple,” noted Goldman Sachs VP Sunder Reddy.
He explained that shipping boasts the criteria that attract private equity: depressed asset prices, market dislocations and scarcity of capital. He noted two different avenues for private equity stakes in shipping: investments in operating companies and asset plays via strategic partnerships with experienced shipping professionals.
“The asset play is a little bit tougher because private equity likes to look at specific opportunities,” explained Reddy. “With the shipping asset play, it’s different because we’re talking about private equity partnering with someone with a track record and providing a commitment to go buy assets. “That’s tricky because private equity doesn’t know what they’re actually valuing.” Reddy concluded: “If private equity is looking at an operating business, that’s a little bit easier because it’s a known quantity.".
Monday 29 June 2009
Stolt Cancels Newbuilding Contract Again
Saturday, 27 June 2009
Stolt Tankers B.V., a subsidiary of Stolt-Nielsen S.A. (OsloBørs: SNI), today announced that it cancelled a contract with SLS Shipbuilding Co. Ltd. of South Korea for the construction of hull #474, a 44,000 dwt coated parcel tanker, the second in a series of four ships, citing extended delivery delays.
On March 30, 2009, Stolt Tankers had entered into arbitration with SLS Shipbuilding Co. Ltd. disputing their claim for force majeure to justify delays on hull #474. The ship was originally scheduled for delivery in September 2008. All progress payments to date are covered by bank refund guarantees. This cancellation follows the cancellation of hull #473, the first ship in the series from SLS Shipyard Co. Ltd., on March 18, 2009. The shipyard has disputed the cancellation of hull #473 and the parties entered into arbitration on March 26, 2009.
Source: Stolt-Nielsen S.A.
Stolt Tankers B.V., a subsidiary of Stolt-Nielsen S.A. (OsloBørs: SNI), today announced that it cancelled a contract with SLS Shipbuilding Co. Ltd. of South Korea for the construction of hull #474, a 44,000 dwt coated parcel tanker, the second in a series of four ships, citing extended delivery delays.
On March 30, 2009, Stolt Tankers had entered into arbitration with SLS Shipbuilding Co. Ltd. disputing their claim for force majeure to justify delays on hull #474. The ship was originally scheduled for delivery in September 2008. All progress payments to date are covered by bank refund guarantees. This cancellation follows the cancellation of hull #473, the first ship in the series from SLS Shipyard Co. Ltd., on March 18, 2009. The shipyard has disputed the cancellation of hull #473 and the parties entered into arbitration on March 26, 2009.
Source: Stolt-Nielsen S.A.
Shell and Sovcomflot sign shipping cooperation agreements
Monday, 29 June 2009
Open Joint Stock Company ‘Sovcomflot’ and Shell International Trading & Shipping Company Limited (Shell) signed a General Cooperation Agreement. The official signing ceremony was held within the framework of the meeting of Russian Federation Prime Minister, Mr Vladimir Putin, with outgoing Chief Executive Royal Dutch Shell plc, Mr Jeroen van der Veer and his successor from 1st July, Mr Peter Voser.
The documents were signed by Mr Sergey Frank, CEO of the Sovcomflot Group of Companies, and Mr Jan Kopernicki, Shell’s Vice President for Shipping.The General Cooperation Agreement covers cooperation between the two companies in potential liquefied natural gas (LNG) shipping projects in Russia, including on the Arctic offshore. The Agreement provides for broadening of cooperation in future Sakhalin II project development, development of joint shipping solutions for natural gas fields on Yamal Peninsula, further improvement of LNG shipping technologies, including in difficult ice conditions, and development of floating storage and regasification units for gasification in remote regions of Russia.
According to Sergey Frank, Sovcomflot CEO, “The signed agreement allows to combine Shell’s profound experience in the production and the transportation of liquefied natural gas with Sovcomflot’s knowledge and technical potential in delivering cargos by sea in harsh ice conditions of the Arctic and Far-Eastern seas. This long-term international project is aimed at working out highly effective and ecologically safe transportation and logistical solutions for Russia’s future oil and gas projects implemented in the offshore fields of the Arctic”.Speaking at the event, Mr Kopernicki said, “Shell and Sovcomflot have for some time worked together on LNG seafarer training and through the development of the Sakhalin II project. The signing of these agreements builds on this and allows us to share our respective skills in LNG and Arctic shipping to support future Russian LNG projects.
Alongside General Cooperation Agreement, the companies signed time-charter agreements for Sovcomflot’s Aframax type oil tankers to ship Shell’s crude from North West Europe and the Mediterranean.Sovkomflot Group is a major Russian infrastructural company with a fleet of 136 vessels with the aggregate deadweight of 9,6 million tonnes. The company’s current shipbuilding programme includes 24 vessels with the aggregate deadweight of 2,1 million tonnes. Its fleet average age is 6 years (with the global average of 12). Sovkomflot is №1 in the world in the Aframaks segment, № 2 in the segment of product tankers.
Sovkomflot has the largest global ice class fleet and is №1 operator in the segment of Arctic shuttle tankers and ice class LNG tankers. Apart from shipping of hydrocarbons, Sovkomflot provides services for crude transhipment via floating storage units, and develops efficient logistical solutions for transportation of energy resources. Shell’s share in Sovkomflot shipping portfolio makes up to 5% and gradually increasing with the development of oil and gas projects both in Russia and internationally.
Source: Sovcomflot
Open Joint Stock Company ‘Sovcomflot’ and Shell International Trading & Shipping Company Limited (Shell) signed a General Cooperation Agreement. The official signing ceremony was held within the framework of the meeting of Russian Federation Prime Minister, Mr Vladimir Putin, with outgoing Chief Executive Royal Dutch Shell plc, Mr Jeroen van der Veer and his successor from 1st July, Mr Peter Voser.
The documents were signed by Mr Sergey Frank, CEO of the Sovcomflot Group of Companies, and Mr Jan Kopernicki, Shell’s Vice President for Shipping.The General Cooperation Agreement covers cooperation between the two companies in potential liquefied natural gas (LNG) shipping projects in Russia, including on the Arctic offshore. The Agreement provides for broadening of cooperation in future Sakhalin II project development, development of joint shipping solutions for natural gas fields on Yamal Peninsula, further improvement of LNG shipping technologies, including in difficult ice conditions, and development of floating storage and regasification units for gasification in remote regions of Russia.
According to Sergey Frank, Sovcomflot CEO, “The signed agreement allows to combine Shell’s profound experience in the production and the transportation of liquefied natural gas with Sovcomflot’s knowledge and technical potential in delivering cargos by sea in harsh ice conditions of the Arctic and Far-Eastern seas. This long-term international project is aimed at working out highly effective and ecologically safe transportation and logistical solutions for Russia’s future oil and gas projects implemented in the offshore fields of the Arctic”.Speaking at the event, Mr Kopernicki said, “Shell and Sovcomflot have for some time worked together on LNG seafarer training and through the development of the Sakhalin II project. The signing of these agreements builds on this and allows us to share our respective skills in LNG and Arctic shipping to support future Russian LNG projects.
Alongside General Cooperation Agreement, the companies signed time-charter agreements for Sovcomflot’s Aframax type oil tankers to ship Shell’s crude from North West Europe and the Mediterranean.Sovkomflot Group is a major Russian infrastructural company with a fleet of 136 vessels with the aggregate deadweight of 9,6 million tonnes. The company’s current shipbuilding programme includes 24 vessels with the aggregate deadweight of 2,1 million tonnes. Its fleet average age is 6 years (with the global average of 12). Sovkomflot is №1 in the world in the Aframaks segment, № 2 in the segment of product tankers.
Sovkomflot has the largest global ice class fleet and is №1 operator in the segment of Arctic shuttle tankers and ice class LNG tankers. Apart from shipping of hydrocarbons, Sovkomflot provides services for crude transhipment via floating storage units, and develops efficient logistical solutions for transportation of energy resources. Shell’s share in Sovkomflot shipping portfolio makes up to 5% and gradually increasing with the development of oil and gas projects both in Russia and internationally.
Source: Sovcomflot
BLT - Announcement on Rights Issue Mechanics
Thursday 25 June 2009
Brazil to Expand Palm Oil Facility
Market has indicated that a consortium of Brazil palm oil players has agreed to spend nearly USD500mio to expand the current production capacity and will become the biggest producer of palm oil in the Americas and such oil will be used to manufacture biodiesel fuel with the increased total production close to 500,000 tonnes of biofuel a year.
It is interesting to note that Vale is involved in this, as it will be partnering with Biopalma da Amazonia. Vale is a multinational engaging in the trade of mostly Iron Ore and has limited handling in palm oil in the past. This shows the increased usage of biofuel (and biofuel needs to be transported by a chemical tanker IMO II) and the shift of Vale strategic move to a more lucrative palm oil business. Vale plans to export after operation begins in 2014.
Vale’s investment in the scheme in the north-central region of Para state will be $305M, but Vale will own 100% of the biodiesel plant. Output would be 500,000 tonnes of biodiesel a year, with Vale itself using 160,000 tonnes a year and Biopalma selling the rest.
Currently, Indonesia is still the largest producer of palm oil in the world with total capacity of 20.5million tonne of palm oil per year and with Malaysia producing approximately 17.5mio tonne per year. Both Indonesia and Malaysia combined palm oil production accounts for 82% of world palm oil production.
According to Indonesian Palm Oil Board (IPOB) vice-chairman Derom Bangun, currently the average oil palm plantation yields in Indonesia was still below three tonnes per ha. It was envisaged that Indonesia’s average yield would increase to 4.5 tonnes per ha from 3.5 tonnes while land under plantation would expand from 7.9 million ha to 10 million ha by 2020.
If this is achieved Indonesia expects to increase its palm oil production to 40mio tonner per year by 2020 which will probably accounts for almost 50% of world palm oil production.
Source: From various sources
It is interesting to note that Vale is involved in this, as it will be partnering with Biopalma da Amazonia. Vale is a multinational engaging in the trade of mostly Iron Ore and has limited handling in palm oil in the past. This shows the increased usage of biofuel (and biofuel needs to be transported by a chemical tanker IMO II) and the shift of Vale strategic move to a more lucrative palm oil business. Vale plans to export after operation begins in 2014.
Vale’s investment in the scheme in the north-central region of Para state will be $305M, but Vale will own 100% of the biodiesel plant. Output would be 500,000 tonnes of biodiesel a year, with Vale itself using 160,000 tonnes a year and Biopalma selling the rest.
Currently, Indonesia is still the largest producer of palm oil in the world with total capacity of 20.5million tonne of palm oil per year and with Malaysia producing approximately 17.5mio tonne per year. Both Indonesia and Malaysia combined palm oil production accounts for 82% of world palm oil production.
According to Indonesian Palm Oil Board (IPOB) vice-chairman Derom Bangun, currently the average oil palm plantation yields in Indonesia was still below three tonnes per ha. It was envisaged that Indonesia’s average yield would increase to 4.5 tonnes per ha from 3.5 tonnes while land under plantation would expand from 7.9 million ha to 10 million ha by 2020.
If this is achieved Indonesia expects to increase its palm oil production to 40mio tonner per year by 2020 which will probably accounts for almost 50% of world palm oil production.
Source: From various sources
GrandUnion eyes Aries takeover
PRODUCT tanker and box shipowner Aries Maritime Transport is considering a deal that would transfer control to Greece’s GrandUnion. In a filing with the SEC yesterday, NASDAQ-listed Aries said the non-binding proposal calls for Aries to acquire three Capesize bulkers (Yiosonas, Nike and Grand Mirsinidi), valued at $36M per vessel. In return, GrandUnion would obtain 16M newly issued Aries shares and assume board control.
GrandUnion is controlled by Michael Zolotas and Nicholas Fistes. If the deal goes through, Fistes would be board chairman and Zolotas would be a board member and company president. Altogether, GrandUnion would hold four of the seven board seats and would also appoint a finance chief. The letter of intent has a 60-day exclusivity period and a $3M break-up fee to GrandUnion, and expires on 31 August if no definitive agreement is reached.
The proposal is contingent on receiving a commitment letter from a bank for a fully underwritten private issuance of $145M in 7% senior unsecured convertible notes due 2014. Proceeds would fund vessel acquisitions and partially repay indebtedness. The deal also hinges on Aries obtaining amendments to its senior credit facility.
Source: FairPlay
GrandUnion is controlled by Michael Zolotas and Nicholas Fistes. If the deal goes through, Fistes would be board chairman and Zolotas would be a board member and company president. Altogether, GrandUnion would hold four of the seven board seats and would also appoint a finance chief. The letter of intent has a 60-day exclusivity period and a $3M break-up fee to GrandUnion, and expires on 31 August if no definitive agreement is reached.
The proposal is contingent on receiving a commitment letter from a bank for a fully underwritten private issuance of $145M in 7% senior unsecured convertible notes due 2014. Proceeds would fund vessel acquisitions and partially repay indebtedness. The deal also hinges on Aries obtaining amendments to its senior credit facility.
Source: FairPlay
Wednesday 24 June 2009
Shipping M&A - Stock for Stock Deal
SHIPPING mergers & acquisitions could increasingly favour stock-for-stock transactions over cash deals, banking representatives has told the Marine Money conference in New York. Stock-for-stock transactions could be driven by a variety of catalysts, including credit-access issues, covenant breaches, counterparty defaults and a greater willingness to sell among investors, Citigroup managing director Loli Wu told the conference yesterday.
This view was supported by Deutsche Bank Securities managing director Craig Fuehrer, who noted that boards are becoming much more risk averse, making cash transactions that require higher leverage less attractive. “We’d hope [stock-for-stock] deals would happen out of their strategic merits, but many will happen out of necessity,” Fuehrer predicted. Unsolicited approaches may have more resonance with boards in the current environment, explained Wu.
Highly conditional deals involving restructured debt terms could also have more appeal to boards and their lenders. Boards have a duty to evaluate proposed offers, even when the principal owner is averse to sale. “Just as boards are more risk averse in terms of leverage, they’re also more risk averse when it comes to having the spotlight on then for not taking their proper fiduciary responsibility,” Fuehrer said. He also noted that the depressed share price environment increases that pressure.
Source: Fairplay
This view was supported by Deutsche Bank Securities managing director Craig Fuehrer, who noted that boards are becoming much more risk averse, making cash transactions that require higher leverage less attractive. “We’d hope [stock-for-stock] deals would happen out of their strategic merits, but many will happen out of necessity,” Fuehrer predicted. Unsolicited approaches may have more resonance with boards in the current environment, explained Wu.
Highly conditional deals involving restructured debt terms could also have more appeal to boards and their lenders. Boards have a duty to evaluate proposed offers, even when the principal owner is averse to sale. “Just as boards are more risk averse in terms of leverage, they’re also more risk averse when it comes to having the spotlight on then for not taking their proper fiduciary responsibility,” Fuehrer said. He also noted that the depressed share price environment increases that pressure.
Source: Fairplay
Tuesday 23 June 2009
BLT - Notice of Dividend Payment Date
Dear All,
Please find below the notice regarding the date for the dividend payment which will fall on 31 July 2009.
Monday 22 June 2009
Eitzen Bulk to be listed in Copenhagen
Tuesday, 23 June 2009
The Norwegian shipping company Eitzen considers registration of its dry cargo operations in Copenhagen. If so, this will go through the already registered shipping company Orion, which has been inactive for several years, and of which Eitzen owns 93.1 per cent. As part of a restructuring of the company's activities, Camillo Eitzen & Co considers to register its dry cargo activities on the OMX stock exchange in Copenhagen. The shipping company informs that more information will follow as soon as considerations are over.
Camillo Eitzen & Co transferred in April all of its share holdings in Orion to the 100% owned daughter company Eitzen Bulk. Eitzen Bulk has three ships and controls 50. There are 14 new constructions on their way and 64 employees. The main segment is handymax and the secondary is panamax.
Camillo Eitzen & Co is registered on the stock exchange in Oslo and is also involved in Eitzen Chemical, which has activities on the chemical tanker market and has a separate stock exchange registration.
Source: maritimedanmark.dk
The Norwegian shipping company Eitzen considers registration of its dry cargo operations in Copenhagen. If so, this will go through the already registered shipping company Orion, which has been inactive for several years, and of which Eitzen owns 93.1 per cent. As part of a restructuring of the company's activities, Camillo Eitzen & Co considers to register its dry cargo activities on the OMX stock exchange in Copenhagen. The shipping company informs that more information will follow as soon as considerations are over.
Camillo Eitzen & Co transferred in April all of its share holdings in Orion to the 100% owned daughter company Eitzen Bulk. Eitzen Bulk has three ships and controls 50. There are 14 new constructions on their way and 64 employees. The main segment is handymax and the secondary is panamax.
Camillo Eitzen & Co is registered on the stock exchange in Oslo and is also involved in Eitzen Chemical, which has activities on the chemical tanker market and has a separate stock exchange registration.
Source: maritimedanmark.dk
Friday 19 June 2009
Eitzen sells four vessels at loss
NORWAY’S Eitzen Chemical today told Fairplay it will sell four vessels for a total of $27M.
“It’s a strategic move more than anything else,” said CEO Terje Askvig from Eitzen’s Oslo headquarters. “These types of sales have always been part of our strategy.”
Eitzen has had financial difficulties lately, and the company expects to record a loss of about $3M from the sale to an unnamed buyer.
When asked by Fairplay if more sales are planned in the future, Askvig said: “At the time, I’ll let you know.”
The vessels being sold are 40,200dwt Siteam Anatas, 9,200dwt Sichem Anne, 7,930dwt Sichem Princess Marie Chantal and 8,700dwt Sichem Provence.
Eitzen has also sold three newbuildings being built in Brodotrogir, Croatia, to Sweden's Laurin Maritime for $124M.
Source: Fairplay
“It’s a strategic move more than anything else,” said CEO Terje Askvig from Eitzen’s Oslo headquarters. “These types of sales have always been part of our strategy.”
Eitzen has had financial difficulties lately, and the company expects to record a loss of about $3M from the sale to an unnamed buyer.
When asked by Fairplay if more sales are planned in the future, Askvig said: “At the time, I’ll let you know.”
The vessels being sold are 40,200dwt Siteam Anatas, 9,200dwt Sichem Anne, 7,930dwt Sichem Princess Marie Chantal and 8,700dwt Sichem Provence.
Eitzen has also sold three newbuildings being built in Brodotrogir, Croatia, to Sweden's Laurin Maritime for $124M.
Source: Fairplay
Thursday 18 June 2009
World Bank raises China's 2009 growth forecast
Thursday, 16 June 09
BEIJING (AFP) — The World Bank has raised its forecast for growth in China this year to 7.2 percent from 6.5 percent, citing an unprecedented public spending drive as the main reason for its revision.
But the bank also warned it was too soon to declare an end to the crisis and said the world's third-largest economy may have to live with the possibility that exports will not be as spectacular as before.
"Developments in the real economy have been somewhat better than expected three months ago. More importantly, bank lending in the first part of 2009 has been much larger than expected," the World Bank said.
"Government expenditure has also substantially outpaced expectations in the first five months. In this light, we forecast (economic) growth of 7.2 percent in 2009," it said in its quarterly update on China.
China began to feel the impact of the global financial crisis in the second half of last year, and in response unveiled an unprecedented 580-billion-dollar stimulus package aimed at boosting domestic demand as exports dived.
The World Bank said that without the massive government injection into the economy, its growth forecast for this year would have been little more than one percent.
China, whose trade-dependent economy saw double-digit growth every year from 2002 to 2007, reported growth of nine percent last year and just 6.1 percent in the first quarter of this year.
However, a growing body of evidence has given rise to hopes, both at home and abroad, that China could emerge from the global crisis earlier than expected.
"Our economy is at a critical moment as it steadily moves in an upward direction," Chinese Premier Wen Jiabao said in a cabinet meeting Wednesday, according to the state-run Xinhua news agency.
While predicting "respectable" growth in 2009 and 2010, the World Bank warned it was too early to say if a robust sustained recovery was on the way.
"There are limits to how much and how long China's growth can diverge from global growth based on government influenced spending, given that China's real economy is relatively integrated in the world economy," it said.
"Meanwhile, market-based investment is likely to continue to lag for a while because of the squeeze on margins amidst spare capacity in many manufacturing sectors."
Consumption was unlikely to pick up, the World Bank said, but argued that it was not necessary or appropriate to add more government stimulus in 2009.
"One reason is that the fiscal deficit is likely to be significantly higher than budgeted and additional stimulus now reduces the room for stimulus in 2010," the report said.
Looking into the next decade or so, the World Bank said Beijing may have to get used to less stellar growth due to a more permanent impact on its exports.
"We estimate that we may have to reduce our expectations of medium-term trend growth in China by two percentage points or so, which is significant but not catastrophic," World Bank economist Louis Kuijs told reporters in Beijing.
Source: AFP
BEIJING (AFP) — The World Bank has raised its forecast for growth in China this year to 7.2 percent from 6.5 percent, citing an unprecedented public spending drive as the main reason for its revision.
But the bank also warned it was too soon to declare an end to the crisis and said the world's third-largest economy may have to live with the possibility that exports will not be as spectacular as before.
"Developments in the real economy have been somewhat better than expected three months ago. More importantly, bank lending in the first part of 2009 has been much larger than expected," the World Bank said.
"Government expenditure has also substantially outpaced expectations in the first five months. In this light, we forecast (economic) growth of 7.2 percent in 2009," it said in its quarterly update on China.
China began to feel the impact of the global financial crisis in the second half of last year, and in response unveiled an unprecedented 580-billion-dollar stimulus package aimed at boosting domestic demand as exports dived.
The World Bank said that without the massive government injection into the economy, its growth forecast for this year would have been little more than one percent.
China, whose trade-dependent economy saw double-digit growth every year from 2002 to 2007, reported growth of nine percent last year and just 6.1 percent in the first quarter of this year.
However, a growing body of evidence has given rise to hopes, both at home and abroad, that China could emerge from the global crisis earlier than expected.
"Our economy is at a critical moment as it steadily moves in an upward direction," Chinese Premier Wen Jiabao said in a cabinet meeting Wednesday, according to the state-run Xinhua news agency.
While predicting "respectable" growth in 2009 and 2010, the World Bank warned it was too early to say if a robust sustained recovery was on the way.
"There are limits to how much and how long China's growth can diverge from global growth based on government influenced spending, given that China's real economy is relatively integrated in the world economy," it said.
"Meanwhile, market-based investment is likely to continue to lag for a while because of the squeeze on margins amidst spare capacity in many manufacturing sectors."
Consumption was unlikely to pick up, the World Bank said, but argued that it was not necessary or appropriate to add more government stimulus in 2009.
"One reason is that the fiscal deficit is likely to be significantly higher than budgeted and additional stimulus now reduces the room for stimulus in 2010," the report said.
Looking into the next decade or so, the World Bank said Beijing may have to get used to less stellar growth due to a more permanent impact on its exports.
"We estimate that we may have to reduce our expectations of medium-term trend growth in China by two percentage points or so, which is significant but not catastrophic," World Bank economist Louis Kuijs told reporters in Beijing.
Source: AFP
Wednesday 17 June 2009
Odfjell Seals Deal with NCC
Thursday, 16 June 2009
NORWAY'S Odfjell told Fairplay today that it has signed a 50/50 joint venture accord with Saudi Arabia’s National Chemical Carriers. "That's where all the growth in production and exporting is coming from," Odfjell's interim CEO Jan Hammer said about Saudi Arabia. But the tanker operator will not be limited to NCC and the profitable Middle East, he added from his base in Bergen: "We will operate in the global market."
Under the deal, the newly formed, Dubai-based venture NCC Odfjell will operate a fleet of chemical tankers of 40,000dwt and above, for trading in chemicals, vegetable oils and clean petroleum products. Hammer also commented on the “strong and strategic relationship” between Odfjell and NCC, which goes back 20 years. The venture will “serve the expansions in Saudi and other Middle East countries of the exports of liquid chemicals”, he said in a company release.
NCC Odfjell will begin operating early next year with 15 vessels and a total dwt capacity of nearly 660,000 tonnes, which will grow to 31 vessels and a total dwt of nearly 1.4M tonnes over the next three years. Hammer has no concerns that the recession will scupper growth plans. "16 ships are already on order to be delivered, so we know for certain there will be 31," he told Fairplay.
Source: Fairplay
NORWAY'S Odfjell told Fairplay today that it has signed a 50/50 joint venture accord with Saudi Arabia’s National Chemical Carriers. "That's where all the growth in production and exporting is coming from," Odfjell's interim CEO Jan Hammer said about Saudi Arabia. But the tanker operator will not be limited to NCC and the profitable Middle East, he added from his base in Bergen: "We will operate in the global market."
Under the deal, the newly formed, Dubai-based venture NCC Odfjell will operate a fleet of chemical tankers of 40,000dwt and above, for trading in chemicals, vegetable oils and clean petroleum products. Hammer also commented on the “strong and strategic relationship” between Odfjell and NCC, which goes back 20 years. The venture will “serve the expansions in Saudi and other Middle East countries of the exports of liquid chemicals”, he said in a company release.
NCC Odfjell will begin operating early next year with 15 vessels and a total dwt capacity of nearly 660,000 tonnes, which will grow to 31 vessels and a total dwt of nearly 1.4M tonnes over the next three years. Hammer has no concerns that the recession will scupper growth plans. "16 ships are already on order to be delivered, so we know for certain there will be 31," he told Fairplay.
Source: Fairplay
TORM - Re-organizes global set-up & Announces Efficiency Programme
Thursday, 18 June 2009
TORM announced the launch of a comprehensive efficiency programme - Greater Efficiency Power - in order to take full advantage of the global reach the Company has gained from the recent years’ acquisitions and strong growth. When fully implemented in 2010, the programme is expected to contribute with annual cost savings of USD 40-60 million.
As part of the programme, TORM has re-organized its global set-up of crew and fleet management to better support commercial requirements and to align with TORM’s overall strategy. Likewise, support functions will be further centralized to achieve synergies and better utilize the global IT platform. Further standardization of maintenance as well as crew optimization will not only secure reductions in operating expenses, but also improve efficiency and enhance the quality of TORM’s service to the benefit of the customers.
As a result of the rollout of Greater Efficiency Power, 35 land-based employees throughout the organization will be made redundant over the coming months, corresponding to approximately 10 percent of all onshore staff. “A plan like Greater Efficiency Power is a logical and necessary consequence of the strong growth TORM has experienced in the past five years and has been planned prior to the economic slowdown. This is also meant to create the foundation for TORM’s future growth,” CEO Mikael Skov says. The net effect of the above will have no influence on TORM’s 2009 pre-tax profit forecast of USD 100-140 million incl. sale of vessels as stated on 9 June 2009
Source: TORM
TORM announced the launch of a comprehensive efficiency programme - Greater Efficiency Power - in order to take full advantage of the global reach the Company has gained from the recent years’ acquisitions and strong growth. When fully implemented in 2010, the programme is expected to contribute with annual cost savings of USD 40-60 million.
As part of the programme, TORM has re-organized its global set-up of crew and fleet management to better support commercial requirements and to align with TORM’s overall strategy. Likewise, support functions will be further centralized to achieve synergies and better utilize the global IT platform. Further standardization of maintenance as well as crew optimization will not only secure reductions in operating expenses, but also improve efficiency and enhance the quality of TORM’s service to the benefit of the customers.
As a result of the rollout of Greater Efficiency Power, 35 land-based employees throughout the organization will be made redundant over the coming months, corresponding to approximately 10 percent of all onshore staff. “A plan like Greater Efficiency Power is a logical and necessary consequence of the strong growth TORM has experienced in the past five years and has been planned prior to the economic slowdown. This is also meant to create the foundation for TORM’s future growth,” CEO Mikael Skov says. The net effect of the above will have no influence on TORM’s 2009 pre-tax profit forecast of USD 100-140 million incl. sale of vessels as stated on 9 June 2009
Source: TORM
D'Amico Announces Ship Cancellation
Thursday, 18 June 2009
d'Amico International Shipping S.A., an international marine transportation company, operating in the product tanker market, yesterday announced that GLENDA International Shipping Ltd., the joint venture company between d'Amico International Shipping S.A. and Glencore Group, gave notice to SLS Shipbuilding Co. Ltd Tongyeong Korea shipyard to terminate and rescind the new building contract related to the 51,000 DWT product /chemical tanker vessel bearing the Hull n° S510.
The notice has been given as a result of excessive delays occurred in the final expected vessel's delivery. In accordance with the relevant contract and availing itself of the rights arising from it, GLENDA demanded to the shipyard to refund the full amount of all advances settled on account of the vessel together with accrued interest thereon.
Source: d'Amico
d'Amico International Shipping S.A., an international marine transportation company, operating in the product tanker market, yesterday announced that GLENDA International Shipping Ltd., the joint venture company between d'Amico International Shipping S.A. and Glencore Group, gave notice to SLS Shipbuilding Co. Ltd Tongyeong Korea shipyard to terminate and rescind the new building contract related to the 51,000 DWT product /chemical tanker vessel bearing the Hull n° S510.
The notice has been given as a result of excessive delays occurred in the final expected vessel's delivery. In accordance with the relevant contract and availing itself of the rights arising from it, GLENDA demanded to the shipyard to refund the full amount of all advances settled on account of the vessel together with accrued interest thereon.
Source: d'Amico
Tuesday 16 June 2009
Indonesia Offers 24 New Oil and Gas Blocks
Please find below the message of the news. Some conclusion of recent de-regulation and boost for foreign investment in oil and gas is as follows:
1. Indonesia is now oil importer and it is going to go all out to increase oil and gas exploration to increase oil and gas production
2. Indonesia hystorically involved more on onshore oil and gas exploration and in recent years have increased the portion of untapped offshore oil and gas exploration
3. Indonesia is moving towards deeper water exploration and areas with huge potential of oil and gas reserve and more towards the eastern part of Indonesia where economic activities are pacing at slower rate - Deeper water exploration means that tanker will travel a lot farther than it used to be
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Yessar Rosendar - Jakarta Globe
The government on Tuesday officially opened 24 new oil and gas blocks in a drive to bolster energy output and investment, a senior official at the Ministry of Energy and Mineral Resources said on Tuesday. Evita Legowo, director general of oil and gas at the ministry, said that the blocks would be awarded through tenders and direct appointments. “Seven blocks will be offered directly, while 17 will be offered through regular tenders,” Evita said. Offshore blocks located in South Sulawesi, West Java and Central Java are among those that will be directly assigned to some companies. Most of the 17 blocks up for bidding are located in the eastern part of the country, including the Tomini Basin and Bone Bay offshore blocks in Gorontalo on Sulawesi. The Tomini Bay and Gorontalo Tomini working areas, which include seven blocks, are seen as the most promising sites. “Gorontalo and Tomini are believed to hold huge amounts of resources,” Evita said. She said proposals for direct appointments would be accepted until July 30, while regular tender bids would be accepted until Oct. 13. Last year, the government signed 33 contracts worth $912.1 million, covering resources such as oil, natural gas and coal-bed methane. The contracts included 29 oil and natural gas blocks, consisting of 20 direct-offer blocks and nine regular-bid blocks worth a combined $891.8 million, as well as four coal-bed methane projects worth $20.3 million. Evita said contracts for six blocks now operated by multinational energy companies were due to expire this year. The operators are seeking extensions from the government. “Pertamina is interested in the Madura Strait and Mahakam blocks, but it is not planning to become a major shareholder,” she said.
1. Indonesia is now oil importer and it is going to go all out to increase oil and gas exploration to increase oil and gas production
2. Indonesia hystorically involved more on onshore oil and gas exploration and in recent years have increased the portion of untapped offshore oil and gas exploration
3. Indonesia is moving towards deeper water exploration and areas with huge potential of oil and gas reserve and more towards the eastern part of Indonesia where economic activities are pacing at slower rate - Deeper water exploration means that tanker will travel a lot farther than it used to be
-------------------------------------------
Yessar Rosendar - Jakarta Globe
The government on Tuesday officially opened 24 new oil and gas blocks in a drive to bolster energy output and investment, a senior official at the Ministry of Energy and Mineral Resources said on Tuesday. Evita Legowo, director general of oil and gas at the ministry, said that the blocks would be awarded through tenders and direct appointments. “Seven blocks will be offered directly, while 17 will be offered through regular tenders,” Evita said. Offshore blocks located in South Sulawesi, West Java and Central Java are among those that will be directly assigned to some companies. Most of the 17 blocks up for bidding are located in the eastern part of the country, including the Tomini Basin and Bone Bay offshore blocks in Gorontalo on Sulawesi. The Tomini Bay and Gorontalo Tomini working areas, which include seven blocks, are seen as the most promising sites. “Gorontalo and Tomini are believed to hold huge amounts of resources,” Evita said. She said proposals for direct appointments would be accepted until July 30, while regular tender bids would be accepted until Oct. 13. Last year, the government signed 33 contracts worth $912.1 million, covering resources such as oil, natural gas and coal-bed methane. The contracts included 29 oil and natural gas blocks, consisting of 20 direct-offer blocks and nine regular-bid blocks worth a combined $891.8 million, as well as four coal-bed methane projects worth $20.3 million. Evita said contracts for six blocks now operated by multinational energy companies were due to expire this year. The operators are seeking extensions from the government. “Pertamina is interested in the Madura Strait and Mahakam blocks, but it is not planning to become a major shareholder,” she said.
Monday 15 June 2009
BLT - Notice of the EGM 30 June 2009
Dear Shareholders,Please find the Notice of the EGM to be held on 30 June 2009.
Regards
BLT - Voting Instruction Form for EGM
Please find the link to the file
http://rapidshare.com/files/245013879/2009.06.12_PT_Berlian_EGM_VIF.pdf
http://rapidshare.com/files/245013879/2009.06.12_PT_Berlian_EGM_VIF.pdf
BLT - AIP from SGX on Rights Issue
Please find below the link to the file
http://rapidshare.com/files/245013040/2009.06.05_AIP_from_SGX_on_Rights_Issue.pdf
http://rapidshare.com/files/245013040/2009.06.05_AIP_from_SGX_on_Rights_Issue.pdf
BLT - Circular to Shareholders on Rights Issue
Please find below the link to the file.
http://rapidshare.com/files/244752605/2009.06.15_BLT_Circular_FINAL.pdf
http://rapidshare.com/files/244752605/2009.06.15_BLT_Circular_FINAL.pdf
Big economies 'stabilising' - G8
Monday, 15 June 2009
The world's largest economies are beginning to stabilise but still face major risks amid an ongoing global recession, G8 finance ministers say. At a meeting in Italy of G8 nations, the ministers said stock markets were rising , interest rates more stable, and consumer confidence was returning. However, US Treasury chief Tim Geithner led warnings that it was too early to wind down economic stimulus packages. He said they should remain in place until a global recovery was under way. At the meeting in Lecce, which aimed to lay the groundwork for a full G8 heads of government conference next month in the earthquake-hit town of L'Aquila, the finance ministers conceded that the global situation "remains uncertain". "Significant risks remain to economic and financial stability," the ministers said in a statement released at the end of their meeting. It highlighted the possibility that unemployment could continue to rise even after output growth resumes. Joint problemsBut they agreed a joint statement which offered signs of hope after nine months of gloomy economic news. "We have taken forceful and co-ordinated action to stabilise the financial sector and provide stimulus to restore economic growth and there are signs of stabilisation in our economies," the statement said. Mr Geithner said the "early signs" were encouraging, but injected a note of caution. "The global economy is still operating well below potential and we still face acute challenges," he said. "I don't think we're at the point yet where we can say we have a recovery in place," Mr Geithner warned, saying it was "too early" to move away from the interventionist economic policies put in place around the world since the banking crisis of September 2008. UK Chancellor Alastair Darling said Britain's economic prospects remained linked to those of other G8 nations. "A lot will depend on other countries making progress: on cleaning up their bank balance sheets; volatility in commodity prices, oil for example. So I think there are reasons to be cautious," he told Reuters news agency. The meeting comes two months after a full G8 heads of government meeting in London agreed to inject billions of dollars into the global economy. While the finance ministers agreed to begin considering exit strategies from those extraordinary measures, Mr Darling said they were unlikely to come into play any time soon. "One thing we are absolutely clear about is we are not there yet. No-one's talking about exiting now, this is some way down the track. We've still got to work this through," he said.
Source: BBC
The world's largest economies are beginning to stabilise but still face major risks amid an ongoing global recession, G8 finance ministers say. At a meeting in Italy of G8 nations, the ministers said stock markets were rising , interest rates more stable, and consumer confidence was returning. However, US Treasury chief Tim Geithner led warnings that it was too early to wind down economic stimulus packages. He said they should remain in place until a global recovery was under way. At the meeting in Lecce, which aimed to lay the groundwork for a full G8 heads of government conference next month in the earthquake-hit town of L'Aquila, the finance ministers conceded that the global situation "remains uncertain". "Significant risks remain to economic and financial stability," the ministers said in a statement released at the end of their meeting. It highlighted the possibility that unemployment could continue to rise even after output growth resumes. Joint problemsBut they agreed a joint statement which offered signs of hope after nine months of gloomy economic news. "We have taken forceful and co-ordinated action to stabilise the financial sector and provide stimulus to restore economic growth and there are signs of stabilisation in our economies," the statement said. Mr Geithner said the "early signs" were encouraging, but injected a note of caution. "The global economy is still operating well below potential and we still face acute challenges," he said. "I don't think we're at the point yet where we can say we have a recovery in place," Mr Geithner warned, saying it was "too early" to move away from the interventionist economic policies put in place around the world since the banking crisis of September 2008. UK Chancellor Alastair Darling said Britain's economic prospects remained linked to those of other G8 nations. "A lot will depend on other countries making progress: on cleaning up their bank balance sheets; volatility in commodity prices, oil for example. So I think there are reasons to be cautious," he told Reuters news agency. The meeting comes two months after a full G8 heads of government meeting in London agreed to inject billions of dollars into the global economy. While the finance ministers agreed to begin considering exit strategies from those extraordinary measures, Mr Darling said they were unlikely to come into play any time soon. "One thing we are absolutely clear about is we are not there yet. No-one's talking about exiting now, this is some way down the track. We've still got to work this through," he said.
Source: BBC
Saturday 13 June 2009
Video - Ballast Water Inspection
Please find link below for the sample video of Ballast Water Inspection Process
http://www.youtube.com/watch?v=EDMWYNrd0xM
http://www.youtube.com/watch?v=EDMWYNrd0xM
Friday 12 June 2009
China Eyes 35% Share of Global Shipbuilding by 2011
Friday, 12 June 2009
China is seeking to expand its share of the global shipbuilding industry to more than 35 percent by 2011, aiming to raise production to 50 million tons by then, the State Council said in a detailed industry stimulus plan. The plan includes government support for qualified companies pursuing listings and issuing bonds. The cabinet also said it would expedite the process of setting up an industry investment fund.Financial institutions will be urged to boost credit to shipbuilders and support mergers and acquisitions in the industry.
Domestic buyers of long-range ships will benefit from the stimulus plan with financial support from the government, which at the same time is trying to reduce overcapacity. Currently, Chinese shipyards have a combined production capacity of 28.81 million DWT, accounting for 29.5 percent of the world's total, official figures showed. China’s shipbuilding industry has struggled with plummeting orders and overcapacity since the economic crisis triggered a collapse in Chinese trade.
The China Association of National Shipbuilding Industry has forecast a 50 percent year-on-year fall in orders for 2009. However, the industry stands to gain from the planned investment fund as the government pushes for consolidation in the sector.Beijing has this year introduced policies intended to revitalize several key sectors of the economy, including textiles, autos, petrochemicals, real estate and non-ferrous metals.
Source: Caijing
China is seeking to expand its share of the global shipbuilding industry to more than 35 percent by 2011, aiming to raise production to 50 million tons by then, the State Council said in a detailed industry stimulus plan. The plan includes government support for qualified companies pursuing listings and issuing bonds. The cabinet also said it would expedite the process of setting up an industry investment fund.Financial institutions will be urged to boost credit to shipbuilders and support mergers and acquisitions in the industry.
Domestic buyers of long-range ships will benefit from the stimulus plan with financial support from the government, which at the same time is trying to reduce overcapacity. Currently, Chinese shipyards have a combined production capacity of 28.81 million DWT, accounting for 29.5 percent of the world's total, official figures showed. China’s shipbuilding industry has struggled with plummeting orders and overcapacity since the economic crisis triggered a collapse in Chinese trade.
The China Association of National Shipbuilding Industry has forecast a 50 percent year-on-year fall in orders for 2009. However, the industry stands to gain from the planned investment fund as the government pushes for consolidation in the sector.Beijing has this year introduced policies intended to revitalize several key sectors of the economy, including textiles, autos, petrochemicals, real estate and non-ferrous metals.
Source: Caijing
Wednesday 10 June 2009
Videos - Panama Canal Passage
Some Videos on the above
http://www.youtube.com/watch?v=-vi19z4LEi0
http://www.youtube.com/watch?v=UEh_vJnNoG4&NR=1
http://www.youtube.com/watch?v=Kwx7UrdiBqU
http://www.youtube.com/watch?v=ZcUlUEtr9zE&feature=related
http://www.youtube.com/watch?v=ZD0AFuKBWR8&NR=1
http://www.youtube.com/watch?v=8Jj3HDTdJXs&NR=1
http://www.youtube.com/watch?v=1rF4k375Mog&feature=related
http://www.youtube.com/watch?v=-vi19z4LEi0
http://www.youtube.com/watch?v=UEh_vJnNoG4&NR=1
http://www.youtube.com/watch?v=Kwx7UrdiBqU
http://www.youtube.com/watch?v=ZcUlUEtr9zE&feature=related
http://www.youtube.com/watch?v=ZD0AFuKBWR8&NR=1
http://www.youtube.com/watch?v=8Jj3HDTdJXs&NR=1
http://www.youtube.com/watch?v=1rF4k375Mog&feature=related
Videos - Continued Effort to Eradicate Piracy
Please find below some of the videos regarding Piracy Attack
http://www.youtube.com/watch?v=DSp9OGK69oA&feature=fvw
http://www.youtube.com/watch?v=14MSfVgg1F4
http://www.youtube.com/watch?v=LAIj-aLLBTY&NR=1
http://www.youtube.com/watch?v=ypcI0fyD-qo
http://www.youtube.com/watch?v=2Wplw55nhRM&feature=related
http://www.youtube.com/watch?v=7Zc_fGz3peQ
http://www.youtube.com/watch?v=a5AIrBDMOOw&feature=related
http://www.youtube.com/watch?v=DSp9OGK69oA&feature=fvw
http://www.youtube.com/watch?v=14MSfVgg1F4
http://www.youtube.com/watch?v=LAIj-aLLBTY&NR=1
http://www.youtube.com/watch?v=ypcI0fyD-qo
http://www.youtube.com/watch?v=2Wplw55nhRM&feature=related
http://www.youtube.com/watch?v=7Zc_fGz3peQ
http://www.youtube.com/watch?v=a5AIrBDMOOw&feature=related
Videos of Tank Cleaning Process
Please refer to below link on some simulation videos regarding Cargo Tank Cleaning Process
http://www.youtube.com/watch?v=fYCFLaXtpxM
http://www.youtube.com/watch?v=M5GgSYFgQPw&feature=related
http://www.youtube.com/watch?v=KHa7GxLSd9g&feature=related
http://www.youtube.com/watch?v=MTp5hlH2ULU
http://www.youtube.com/watch?v=fYCFLaXtpxM
http://www.youtube.com/watch?v=M5GgSYFgQPw&feature=related
http://www.youtube.com/watch?v=KHa7GxLSd9g&feature=related
http://www.youtube.com/watch?v=MTp5hlH2ULU
History & Purpose of US Cabotage Laws - A Brief Overview
The intent and purpose of the Jones Act has been codified in the preamble of the Act itself:
It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine…(1800JonesAct, 2008)
The history of the Jones Act must be evaluated in its historical context. At the turn of the century the United States was completing a process of development after overcoming the turmoil of the Civil War. It was at this time that strong and viable merchant fleet became a political priority. The British, known for a strong merchant fleet, were looked upon as a model because of their ascension to a position of dominant world power. This was attributed to having a strong naval fleet. Sir Walter Raleigh stated, "Whosoever commands the sea commands trade; whosoever commands the trade of the world commands the riches of the world, and consequently the world itself” (McClintock, 2004).
Another development was the need for American military forces to have a dependable sea lift capability in time of defense. This was realized during World War I. The infant U.S. Navy did not possess the capability of performing this function, and thus relied on the civilian sector for the transport of military cargo to overseas destinations.
The volume of cargo and international trade for the U.S. merchant fleet had drastically decreased due to the economic decline and global turmoil caused by World War I. Further complicating the ability of the U.S. merchant fleet to compete in international commerce were higher construction and operation costs. For example, in 1926 the comparative monthly crew costs for ships of equal size were: $3,270 for the United States; $1,308 for Great Britain; and $777 for Japan. Historically, the United States curbed the impact of such issues through cabotage laws, which are government measures used to protect or foster a domestic shipping industry by reserving all or a portion of international sea commerce to ships which fly the national flag (McClintock, 2004).
Cabotage laws were first introduced with the Shipping Act of 1916. The Shipping Act stated that only citizens of the United States, or companies in which a controlling interest was held by a citizen of the United States, could own a U.S. vessel. Additionally, the secretary of transportation had strict control over the transfer and chartering of U.S. vessels to foreign companies, and it provided for the regulation of rate agreements to avoid rate wars. Subsequently, Congress passed the Merchant Marine Act of 1920, which was arguably the nation's most influential cabotage law (McClintock, 2004).
Proponent Argument
In addition to national defense, proponents argue that the Jones Act provides additional benefits to the United States. Among these include job protection due to unfair competition by from other nations.
Job Protection
Phillip Grill (1996) says that job protected by the Jones Act is 124,000 (as cited in The Hidden Costs, 1996). Grill further says that these jobs must be protected in order to prevent the loss of jobs to foreign competitors, who charge less than fair wages for similar work done by U.S. workers. This is a claim to unfair competition. Indeed the wages of a merchant marine are incredibly high compared to their counterparts. A U.S. longshoreman or marine clerk can earn upwards of $100,000 to $137,000 per year (Longshoremen, 2002). Indeed this is a much greater salary found in such places as China.
National Defense
In the wars of this century, commercial shipping has been critically important. The relevant question is not whether future threats might require that fleets of commercial-type ships be available. The question is whether present programs provide such a capability effectively and efficiently. If the U.S. flagged fleet is fully employed during peacetime serving commercially important domestic and international trades, it is neither an entirely reliable nor a low-cost military reserve. This was verified during the Gulf War (Ferguson, n.d.).
Some security justification for transporting war material in peacetime exclusively on U.S. flagged ships is valid. The fact that a large fraction of military preference cargo consists of household goods and private automobiles dilutes any such basis for incurring the high costs of cargo preferences. Further, cargo preference does not buy much reserve military capability; the cargo preference largely supports bulk carriers and container ships that are of limited military use (Ferguson, n.d.).
The higher than competitive prices that are permitted under the antitrust exemption for conference ratemaking may be important, given present regulatory constraints, in sustaining the U.S. flag fleet. However, more than 80 percent of traffic in American international liner commerce is carried by foreign companies. Therefore, whatever military gain is achieved through conference price fixing accrues predominantly to foreign governments (Ferguson, n.d.).
The defense-related rationale for present policies presupposes that, despite the enormous capacity available on the open market, only U.S.-flag service could be relied on in an emergency. In contrast, the Military SealiftCommand made extensive use of foreign ships and crews in the Gulf War, and representatives of the Department of Defense have recently declared that there is no need to rely on the U.S.-flag commercial fleet in any foreseeable wars (Ferguson, n.d.).
The Pros of the Jones Act as viewed by the Maritime Cabotage Task Force
1. Creates jobs for Americans by contributing 87% of entire seafarer employment and 70% of projected US ship building
2. 40,000 vessels contributed $15 billion to US economy, representing an investment of $26 billion in vessel construction
3. Cargo shipment annually 1.1 billion tons valued at $222 billion, plus $3 billion from tourism
124,000 jobs in the US including 20,000 workers in shipbuilding and 14,000 in maintenance
$1.41 billion in income taxes
$322 million in state taxes
4. Foreign built vessels would lead to unfair competition - they are not subject to US laws, taxes, regulations - i.e. labor laws, minimum wage, tax liabilities, health and safety protections, and environmental standards
Statements of Support
The Jones Act has long been supported by the Executive Branch, Congress and military leaders.
Presidential Support:
“America needs a strong and vibrant U.S.-Flag Merchant Marine. That is why you … can continue to count on me to support the Jones Act (which also includes the Passenger Vessel Services Act) and the continued exclusion of maritime services in international trade agreements.” Barack Obama, August 28, 2008
“The United States needs a maritime policy tailored to 21st century needs. Programs that have contributed to the growth of our domestic fleet, such as the Jones Act ... should be maintained.”
President George W. Bush, 2004
“My Administration ... continues to support the Jones Act as essential to the maintenance of the nation's commercial and defense maritime interests.”
President William J. Clinton, 1997
“Sealift is essential to both executing this country’s forward defense strategy and to maintaining a wartime economy... . [T]he U.S.-owned commercial ocean carrier industry ... will be relied upon to provide sealift in peace, crisis and war.”
President George Bush, 1989
“I can assure you that a Reagan Administration will not support legislation that would jeopardize this long-standing policy ... embodied in the Jones Act ... or the jobs dependent on it.”
President Ronald Reagan, 1980
Congressional leaders from both parties are likewise staunch advocates:
“The Jones Act is a cornerstone statute of the United States maritime industry... The American maritime industry also provides a critical commercial and military service to our country.”
Rep. James L. Oberstar (D-MN), 2005
“We must preserve the Jones Act. The Jones Act ensures the United States that it will always have a safe,reliable, and economically efficient domestic transportation system -- providing America the vital waterborne commerce it needs and deserves.”
Sen. Trent Lott (R-MS), 1997
“Rest assured that I will continue to support the men and women who contribute to the Jones Act’s continued success.”
Rep. Don Young (R-AK), 2000
America’s military leaders and establishment recognize the value of the Jones Act:
“The [Jones Act trailership] SS NORTHERN LIGHTS made 25 voyages and 49 port calls [to the Iraqi war zone]. She carried 12,200 pieces of military gear totaling 81,000 short tons and covering over 2 million square feet. Those statistics clearly demonstrate the value that the U.S.-flag shipping industry brings to the Defense Transportation System.”
General Norton A. Schwartz, USAF, Commander in Chief, U. S. Transportation Command, 2005
“I have no doubt that as long as America maintains the Jones Act as the foundation of our maritime policy, U.S.-flag vessel operations will meet the needs of waterborne commerce. And it will sustain the maritime infrastructure - the builders, the owners, the mariners - whose labors always have and always will ensure our security. USTRANSCOM, Military Sealift Command, The Surface Deployment and Distribution Command, and MARAD support the maintenance of a viable U.S.-flagged fleet and U.S. mariner pool. We can't do business without either.”
Lt. General Gary Hughey, USMC, 2004
“The Jones Act is one of the original foundation blocks of our nation’s maritime security.”
Admiral James Loy, Deputy Secretary,Department of Homeland Security, 2003
“First the Jones Act... My bottom line is: The Jones Act is a proven performer that supports both our nation's military security and its economic soundness. I can't put it any simpler than that.” General Charles T. Robertson, USAF, Commander in Chief,U.S. Transportation Command, 1999
Source: Various Sources
It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine…(1800JonesAct, 2008)
The history of the Jones Act must be evaluated in its historical context. At the turn of the century the United States was completing a process of development after overcoming the turmoil of the Civil War. It was at this time that strong and viable merchant fleet became a political priority. The British, known for a strong merchant fleet, were looked upon as a model because of their ascension to a position of dominant world power. This was attributed to having a strong naval fleet. Sir Walter Raleigh stated, "Whosoever commands the sea commands trade; whosoever commands the trade of the world commands the riches of the world, and consequently the world itself” (McClintock, 2004).
Another development was the need for American military forces to have a dependable sea lift capability in time of defense. This was realized during World War I. The infant U.S. Navy did not possess the capability of performing this function, and thus relied on the civilian sector for the transport of military cargo to overseas destinations.
The volume of cargo and international trade for the U.S. merchant fleet had drastically decreased due to the economic decline and global turmoil caused by World War I. Further complicating the ability of the U.S. merchant fleet to compete in international commerce were higher construction and operation costs. For example, in 1926 the comparative monthly crew costs for ships of equal size were: $3,270 for the United States; $1,308 for Great Britain; and $777 for Japan. Historically, the United States curbed the impact of such issues through cabotage laws, which are government measures used to protect or foster a domestic shipping industry by reserving all or a portion of international sea commerce to ships which fly the national flag (McClintock, 2004).
Cabotage laws were first introduced with the Shipping Act of 1916. The Shipping Act stated that only citizens of the United States, or companies in which a controlling interest was held by a citizen of the United States, could own a U.S. vessel. Additionally, the secretary of transportation had strict control over the transfer and chartering of U.S. vessels to foreign companies, and it provided for the regulation of rate agreements to avoid rate wars. Subsequently, Congress passed the Merchant Marine Act of 1920, which was arguably the nation's most influential cabotage law (McClintock, 2004).
Proponent Argument
In addition to national defense, proponents argue that the Jones Act provides additional benefits to the United States. Among these include job protection due to unfair competition by from other nations.
Job Protection
Phillip Grill (1996) says that job protected by the Jones Act is 124,000 (as cited in The Hidden Costs, 1996). Grill further says that these jobs must be protected in order to prevent the loss of jobs to foreign competitors, who charge less than fair wages for similar work done by U.S. workers. This is a claim to unfair competition. Indeed the wages of a merchant marine are incredibly high compared to their counterparts. A U.S. longshoreman or marine clerk can earn upwards of $100,000 to $137,000 per year (Longshoremen, 2002). Indeed this is a much greater salary found in such places as China.
National Defense
In the wars of this century, commercial shipping has been critically important. The relevant question is not whether future threats might require that fleets of commercial-type ships be available. The question is whether present programs provide such a capability effectively and efficiently. If the U.S. flagged fleet is fully employed during peacetime serving commercially important domestic and international trades, it is neither an entirely reliable nor a low-cost military reserve. This was verified during the Gulf War (Ferguson, n.d.).
Some security justification for transporting war material in peacetime exclusively on U.S. flagged ships is valid. The fact that a large fraction of military preference cargo consists of household goods and private automobiles dilutes any such basis for incurring the high costs of cargo preferences. Further, cargo preference does not buy much reserve military capability; the cargo preference largely supports bulk carriers and container ships that are of limited military use (Ferguson, n.d.).
The higher than competitive prices that are permitted under the antitrust exemption for conference ratemaking may be important, given present regulatory constraints, in sustaining the U.S. flag fleet. However, more than 80 percent of traffic in American international liner commerce is carried by foreign companies. Therefore, whatever military gain is achieved through conference price fixing accrues predominantly to foreign governments (Ferguson, n.d.).
The defense-related rationale for present policies presupposes that, despite the enormous capacity available on the open market, only U.S.-flag service could be relied on in an emergency. In contrast, the Military SealiftCommand made extensive use of foreign ships and crews in the Gulf War, and representatives of the Department of Defense have recently declared that there is no need to rely on the U.S.-flag commercial fleet in any foreseeable wars (Ferguson, n.d.).
The Pros of the Jones Act as viewed by the Maritime Cabotage Task Force
1. Creates jobs for Americans by contributing 87% of entire seafarer employment and 70% of projected US ship building
2. 40,000 vessels contributed $15 billion to US economy, representing an investment of $26 billion in vessel construction
3. Cargo shipment annually 1.1 billion tons valued at $222 billion, plus $3 billion from tourism
124,000 jobs in the US including 20,000 workers in shipbuilding and 14,000 in maintenance
$1.41 billion in income taxes
$322 million in state taxes
4. Foreign built vessels would lead to unfair competition - they are not subject to US laws, taxes, regulations - i.e. labor laws, minimum wage, tax liabilities, health and safety protections, and environmental standards
Statements of Support
The Jones Act has long been supported by the Executive Branch, Congress and military leaders.
Presidential Support:
“America needs a strong and vibrant U.S.-Flag Merchant Marine. That is why you … can continue to count on me to support the Jones Act (which also includes the Passenger Vessel Services Act) and the continued exclusion of maritime services in international trade agreements.” Barack Obama, August 28, 2008
“The United States needs a maritime policy tailored to 21st century needs. Programs that have contributed to the growth of our domestic fleet, such as the Jones Act ... should be maintained.”
President George W. Bush, 2004
“My Administration ... continues to support the Jones Act as essential to the maintenance of the nation's commercial and defense maritime interests.”
President William J. Clinton, 1997
“Sealift is essential to both executing this country’s forward defense strategy and to maintaining a wartime economy... . [T]he U.S.-owned commercial ocean carrier industry ... will be relied upon to provide sealift in peace, crisis and war.”
President George Bush, 1989
“I can assure you that a Reagan Administration will not support legislation that would jeopardize this long-standing policy ... embodied in the Jones Act ... or the jobs dependent on it.”
President Ronald Reagan, 1980
Congressional leaders from both parties are likewise staunch advocates:
“The Jones Act is a cornerstone statute of the United States maritime industry... The American maritime industry also provides a critical commercial and military service to our country.”
Rep. James L. Oberstar (D-MN), 2005
“We must preserve the Jones Act. The Jones Act ensures the United States that it will always have a safe,reliable, and economically efficient domestic transportation system -- providing America the vital waterborne commerce it needs and deserves.”
Sen. Trent Lott (R-MS), 1997
“Rest assured that I will continue to support the men and women who contribute to the Jones Act’s continued success.”
Rep. Don Young (R-AK), 2000
America’s military leaders and establishment recognize the value of the Jones Act:
“The [Jones Act trailership] SS NORTHERN LIGHTS made 25 voyages and 49 port calls [to the Iraqi war zone]. She carried 12,200 pieces of military gear totaling 81,000 short tons and covering over 2 million square feet. Those statistics clearly demonstrate the value that the U.S.-flag shipping industry brings to the Defense Transportation System.”
General Norton A. Schwartz, USAF, Commander in Chief, U. S. Transportation Command, 2005
“I have no doubt that as long as America maintains the Jones Act as the foundation of our maritime policy, U.S.-flag vessel operations will meet the needs of waterborne commerce. And it will sustain the maritime infrastructure - the builders, the owners, the mariners - whose labors always have and always will ensure our security. USTRANSCOM, Military Sealift Command, The Surface Deployment and Distribution Command, and MARAD support the maintenance of a viable U.S.-flagged fleet and U.S. mariner pool. We can't do business without either.”
Lt. General Gary Hughey, USMC, 2004
“The Jones Act is one of the original foundation blocks of our nation’s maritime security.”
Admiral James Loy, Deputy Secretary,Department of Homeland Security, 2003
“First the Jones Act... My bottom line is: The Jones Act is a proven performer that supports both our nation's military security and its economic soundness. I can't put it any simpler than that.” General Charles T. Robertson, USAF, Commander in Chief,U.S. Transportation Command, 1999
Source: Various Sources
US Cabotage Laws - The Jones Act
Named for the late Senator Wesley Jones (R-WA), the Jones Act is the most commonly known of the U.S. maritime cabotage laws.
Cabotage laws, which are common throughout the world, are designed to protect trade between two points within a single country.
Just as you cannot take British Airways to fly between New York and Los Angeles, you cannot take use a foreign flagged vessel to transport goods and passengers between two ports in the United States.
The Jones Act, as Section 27 of the Merchant Marine Act of 1920 is commonly referred to, is the most fundamental and bedrock principle that sustains the modern American merchant marine. Despite the fact that the underlying legislation is nearly ninety years old, the Jones Act still maintains the full support of the executive and legislative branches of our government.
Although the current Jones Act only dates back to 1920, the United States has had similar cabotage laws on the books since the first Congress in 1789. The basic impetus behind these laws is to encourage the construction and maintenance of an American flag merchant fleet, as well as to maintain the number of crews and skilled workers needed to keep that fleet sailing.
The Jones Act mandates that all vessels engaged in domestic waterborne commerce between two ports in the United States be:
Built in the United States
Owned by a U.S. citizen
Documented under the laws of the United States (fly the U.S.-Flag)
Crewed by U.S. citizen seafarers
The Jones Act and other cabotage laws, which includes laws regarding Passenger Vessels, dredging and salvage, ensure that the United States has the vessels, seafarers and shipyards necessary to protect the national security of the country, and for use in time of war or national emergency.
According to the Maritime Administration, there are 105 vessels large than 10,000 deadweight tons serving in the domestic, Jones Act fleet. AMC (American Maritime Congress) is dedicated to ensuring the long-term viability of the Jones Act, and providing education and information to the public and to Congress as to the need for domestic cabotage laws and the benefits that the Jones Act provides America.
From Various Sources incl.
www.americanmaritime.org
www.takeaction.jonesactquestions.com
Cabotage laws, which are common throughout the world, are designed to protect trade between two points within a single country.
Just as you cannot take British Airways to fly between New York and Los Angeles, you cannot take use a foreign flagged vessel to transport goods and passengers between two ports in the United States.
The Jones Act, as Section 27 of the Merchant Marine Act of 1920 is commonly referred to, is the most fundamental and bedrock principle that sustains the modern American merchant marine. Despite the fact that the underlying legislation is nearly ninety years old, the Jones Act still maintains the full support of the executive and legislative branches of our government.
Although the current Jones Act only dates back to 1920, the United States has had similar cabotage laws on the books since the first Congress in 1789. The basic impetus behind these laws is to encourage the construction and maintenance of an American flag merchant fleet, as well as to maintain the number of crews and skilled workers needed to keep that fleet sailing.
The Jones Act mandates that all vessels engaged in domestic waterborne commerce between two ports in the United States be:
Built in the United States
Owned by a U.S. citizen
Documented under the laws of the United States (fly the U.S.-Flag)
Crewed by U.S. citizen seafarers
The Jones Act and other cabotage laws, which includes laws regarding Passenger Vessels, dredging and salvage, ensure that the United States has the vessels, seafarers and shipyards necessary to protect the national security of the country, and for use in time of war or national emergency.
According to the Maritime Administration, there are 105 vessels large than 10,000 deadweight tons serving in the domestic, Jones Act fleet. AMC (American Maritime Congress) is dedicated to ensuring the long-term viability of the Jones Act, and providing education and information to the public and to Congress as to the need for domestic cabotage laws and the benefits that the Jones Act provides America.
From Various Sources incl.
www.americanmaritime.org
www.takeaction.jonesactquestions.com
What is Cabotage?
Cabotage refers generally to the transport of passengers and goods. Originally, it referred specifically to shipping, but cabotage also applies to airlines, trucking, and trains. Many nations have cabotage laws which dictate the terms which carriers must follow when transporting people or materials within their borders. Many of these laws are designed to promote the development of domestic transport companies, and some cabotage laws have been criticized because they can restrict free trade.
The word comes from the French caboter, which means “to sail along a coast.” While the word initially referred to navigation and trade in coastal waters, it has come to refer also to the right of a country to restrict its airspace. Cabotage rights are guaranteed to all nations because a threat to national airspace can threaten national security, and therefore countries need to be able to protect themselves by protecting their airspace. In addition to keeping themselves safer, many nations used cabotage laws to protect their economies and to promote a strong national shipping industry.
Many countries give preference to domestic carriers in the air and in ports. The United States is one such example; airlines operating domestic flights in the United States must be American, although foreign carriers may fly into American airports. In ports, under the Jones Act, domestic cabotage must be carried out by American ships, although foreign carriers are welcome in international ports with trade goods and passengers. Foreign ships which make multiple stops, like cruise ships, may be receive special dispensation so that they do not violate cabotage laws.
As an example of how cabotage works, if you board an plane in Peru which is operated by a Peruvian airline, the plane will be allowed to fly you to any international airport in the United States. If the plane lands in Chicago but continues on to New York, you can choose to disembark in either city. However, the plane may not take on new passengers in Chicago, because this would violate cabotage laws by transporting passengers domestically within the United States.
In terms of shipping, cabotage laws are very important. The Jones Act is credited as being the driving force behind America's Merchant Marine, which numbers in hundreds of ships and thousands of skilled sailors. By restricting domestic cabotage to American-flagged ships, the United States government ensured that American carriers would enjoy a wide range of privileges which some foreign companies believe to be unfair. The justification for these cabotage laws is that the Merchant Marines benefit the United States by ensuring that the country has a large fleet of ships when it needs it, and the Merchant Marine would not be possible without the assurance of cabotage restrictions.
The word comes from the French caboter, which means “to sail along a coast.” While the word initially referred to navigation and trade in coastal waters, it has come to refer also to the right of a country to restrict its airspace. Cabotage rights are guaranteed to all nations because a threat to national airspace can threaten national security, and therefore countries need to be able to protect themselves by protecting their airspace. In addition to keeping themselves safer, many nations used cabotage laws to protect their economies and to promote a strong national shipping industry.
Many countries give preference to domestic carriers in the air and in ports. The United States is one such example; airlines operating domestic flights in the United States must be American, although foreign carriers may fly into American airports. In ports, under the Jones Act, domestic cabotage must be carried out by American ships, although foreign carriers are welcome in international ports with trade goods and passengers. Foreign ships which make multiple stops, like cruise ships, may be receive special dispensation so that they do not violate cabotage laws.
As an example of how cabotage works, if you board an plane in Peru which is operated by a Peruvian airline, the plane will be allowed to fly you to any international airport in the United States. If the plane lands in Chicago but continues on to New York, you can choose to disembark in either city. However, the plane may not take on new passengers in Chicago, because this would violate cabotage laws by transporting passengers domestically within the United States.
In terms of shipping, cabotage laws are very important. The Jones Act is credited as being the driving force behind America's Merchant Marine, which numbers in hundreds of ships and thousands of skilled sailors. By restricting domestic cabotage to American-flagged ships, the United States government ensured that American carriers would enjoy a wide range of privileges which some foreign companies believe to be unfair. The justification for these cabotage laws is that the Merchant Marines benefit the United States by ensuring that the country has a large fleet of ships when it needs it, and the Merchant Marine would not be possible without the assurance of cabotage restrictions.
Monday 8 June 2009
Indonesian shipping companies double investment in ships via q1 imports
Saturday, 06 June 2009
Indonesian shipping companies more than doubled investment for ship procurement through imports in the first quarter of 2009 amid shrinking ship cargoes. Based on data at the trade ministry ship imports in the first three months of this year were valued at US$352.9 million, up from US$167 million in the same period last year.
The Indonesian National Ship owners' Association (INSA) said the increase in import is to forestall shortage in shipping service when the country fully implements the cabotage principle in 2010.More vessels especially barges and tugboats will be needed to transport coal in January, 2010, Johnson W. Sucipto, the INSA chairman said.The cabotage principle is already implemented by phases but coal is still allowed to be transported by ship flying foreign flag until now.
Source: TMCNet.com
Indonesian shipping companies more than doubled investment for ship procurement through imports in the first quarter of 2009 amid shrinking ship cargoes. Based on data at the trade ministry ship imports in the first three months of this year were valued at US$352.9 million, up from US$167 million in the same period last year.
The Indonesian National Ship owners' Association (INSA) said the increase in import is to forestall shortage in shipping service when the country fully implements the cabotage principle in 2010.More vessels especially barges and tugboats will be needed to transport coal in January, 2010, Johnson W. Sucipto, the INSA chairman said.The cabotage principle is already implemented by phases but coal is still allowed to be transported by ship flying foreign flag until now.
Source: TMCNet.com
Teekay - Fourth Quarter and Annual Results
Friday, 05 June 2009
Teekay Corporation yesterday reported adjusted net income of $53.2 million, or $0.73 per share, for the quarter ended December 31, 2008 , compared to adjusted net income of $23.0 million, or $0.31 per share, for the same period of the prior year. This excludes a number of specific items which had the net effect of decreasing net income by $714.1 million (or $9.85 per share) and $137.8 million (or $1.86 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported a net loss, on a GAAP basis, of $660.8 million, or $9.12 per share, for the quarter ended December 31, 2008, compared to a net loss, on a GAAP basis, of $114.8 million, or $1.55 per share, for the same period of the prior year.
Net revenues(2) for the fourth quarter of 2008 increased to $615.9 million from $501.5 million for the same period of the prior year.For the year ended December 31, 2008, the Company reported adjusted net income of $285.3 million, or $3.94 per share, compared to $197.5 million, or $2.64 per share, for the prior year, excluding a number of specific items which had the net effect of decreasing net income by $764.7 million (or $10.55 per share) and $134.0 million (or $1.79 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported a 2008 net loss, on a GAAP basis, of $479.4 million, or $6.61 per share, compared to net income, on a GAAP basis, of $63.5 million, or $0.85 per share, for the same period of the prior year.
Net revenues for the year ended December 31, 2008 increased to $2.4 billion from $1.9 billion in the prior year."Teekay achieved good operating results in the fourth quarter. Despite the rapid slowdown in the global economy during the quarter, our adjusted net income more than doubled to $0.73 per share compared to $0.31 per share in the same quarter last year," commented Bjorn Moller, Teekay Corporation's President and Chief Executive Officer.
"Although we are experiencing a weaker spot tanker market in 2009, Teekay is well-positioned given its substantial long-term fixed-rate businesses, $1.9 billion of liquidity, and fully-funded capital expenditure program. In addition, during the fourth quarter and continuing into 2009, we have taken steps to further strengthen the company. We have reduced our spot market exposure through a number of additional fixed-rate out-charters at attractive rates while allowing existing in-charters to roll-off at the end of their contracts. We also sold a number of ships in our spot tanker fleet, generating a gain of $107 million and proceeds of over $380 million during the fourth quarter of 2008 and 2009 to date, which have been used to reduce our debt.
Further, we have made significant progress on company-wide cost reduction initiatives, which so far has resulted in overhead expense reductions of approximately 20 percent commencing in the fourth quarter of 2008."Mr. Moller continued, "As with many other companies that made acquisitions during the last few years, due to the significant decline in the stock market and the increase in market discount rates, Teekay recorded a non-cash goodwill impairment charge for accounting purposes in the fourth quarter of 2008.
The goodwill impairment is related to our ownership of Teekay Petrojarl, which owns and operates five floating production, storage and offloading (FPSO) units. It is important to note that this non-cash charge does not affect our operations, cash flows, liquidity, or any of our loan covenants and we continue to have a positive outlook on the long-term fundamentals of our FPSO business."Mr. Moller added, "Teekay currently uses interest rate swaps to economically hedge its fixed-rate cash flows. However, since we are not currently applying hedge accounting to our interest rate swaps, the mark-to-market changes in their fair value are shown as gains or losses on our income statement each quarter.
The significant decline in swap rates during the fourth quarter led to an unusually large unrealized loss which lowered our reported GAAP-based net earnings for the quarter. Since the unrealized losses are non-cash, they have no impact on our actual interest costs, liquidity, or any of our loan covenants. With swap rates generally increasing so far in 2009, we expect this will result in unrealized gains on our interest rate swaps during the first half of 2009.
"Operating ResultsDuring the fourth quarter of 2008, approximately 71 percent of the Company's cash flow from vessel operations was generated from its fixed-rate segments, compared to 82 percent in the fourth quarter of the prior year. This change is primarily due to increases in spot tanker rates in the fourth quarter of 2008, compared to the same period of the prior year, partially offset by the continued growth of the Company's fixed-rate segments.Offshore SegmentThe Company's offshore segment is comprised of shuttle tankers, floating storage and off-take (FSO) units, and floating production storage and offloading (FPSO) units.
Cash flow from vessel operations from the Company's offshore segment increased to $63.2 million in the fourth quarter of 2008 from $56.8 million in the same period of the prior year, primarily due to the increase in net revenues from the delivery of the FPSO Siri in February 2008, partially offset by increases in crewing costs, repair and maintenance expenditures, and business development costs.Vessel operating expenses for the Company's offshore segment increased to $99.0 million in the fourth quarter of 2008 from $89.3 million in the fourth quarter of prior year.
The fourth quarter of 2008 figure includes an unrealized loss of $3.9 million due to the change in the fair value of foreign exchange forward contracts not designated as cash flow hedges pursuant to US GAAP. Also contributing to the increase were additional operating expenses relating to the Siri FPSO, as well as increases in crewing costs and repair and maintenance expenditures.In December 2008, the Company entered into a contract extension with Talisman Energy for the FPSO Petrojarl Varg. The new terms under the contract extension commence on July 1, 2009, and provide that the Petrojarl Varg will continue to be chartered to Talisman for an additional four years, with its option to extend the contract for up to an additional nine years thereafter.
The contract extension provides an increased base daily time-charter rate plus an incentive component based on the operational performance of the unit and a tariff component based on the volume of oil produced. The new contract terms are expected to increase the annual cash flow from vessel operations from the Petrojarl Varg with opportunities for additional upside from the tariff component if nearby oil fields that would be covered by the contract become operational, as is expected. In accordance with an existing agreement, Teekay's publicly-traded subsidiary Teekay Offshore Partners, L.P. (Teekay Offshore) has the right to purchase the Petrojarl Varg at any time prior to December 4, 2009 at its fair market value when such right is exercised.
Fixed-Rate Tanker SegmentThe Company's fixed-rate tanker segment includes its conventional tankers that operate under fixed-rate charter contracts with an initial term of three or more years.Cash flow from vessel operations from the Company's fixed-rate tanker segment increased to $41.8 million in the fourth quarter of 2008 compared to $24.0 million in the same period of the prior year.
This increase was primarily due to an increase in the size of the Company's fixed-rate tanker fleet, partially offset by an increase in vessel operating expenses.The increase in the fixed-rate tanker fleet included the addition of two in-chartered Aframax tankers that delivered in January 2008 as part of the previously-announced multi-vessel transaction with ConocoPhillips and the delivery of two newbuilding Aframax tankers, which commenced long-term out-charters.During 2008, the fixed-rate tanker fleet also increased by the net transfer of three vessels from the spot tanker segment upon commencing time-charters with durations of three or more years.Liquefied Gas SegmentThe liquefied gas segment includes liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers.
The Company's cash flow from vessel operations from its LNG and LPG carriers during the fourth quarter of 2008 increased to $36.6 million from $35.1 million in the same period of the prior year. This increase was primarily due to the contribution from the two Kenai LNG carriers acquired in December 2007, partially offset by an increase in vessel operating expenses and foreign currency exchange differences.During the fourth quarter of 2008 and first quarter of 2009, the Company took delivery of two newbuilding LNG carriers, which have subsequently commenced service under 20-year fixed-rate time-charter contracts for the Tangguh project.
Spot Tanker Segment
The Company's spot tanker segment includes its conventional tankers that operate on voyage and time-charters with an initial term of less than three years.Cash flow from vessel operations from the Company's spot tanker segment increased to $57.6 million for the fourth quarter of 2008 from $25.8 million for the same period of the prior year, primarily due to increases in spot tanker rates in the fourth quarter of 2008 compared to the same period of the prior year and an increase in the size of the Company's spot tanker fleet. This was partially offset by an increased time-charter hire expense and higher vessel crewing and service costs.
On a net basis, fleet changes increased the total number of revenue days in the Company's spot tanker segment to 7,635 for the fourth quarter of 2008, compared to 7,446 for the same period of the prior year. Revenue days increased in 2008 as a result of two vessel purchases, three newbuilding deliveries and additional in-charters, partially offset by the reduction of revenue days related to the net transfer of three vessels to the fixed-rate tanker segment. Revenue days represent the total number of vessel calendar days less off-hire associated with major repairs, drydockings, or mandated surveys.
Average spot rates for very large crude carriers (VLCCs) declined in the fourth quarter of 2008 as OPEC producers implemented production cutbacks in response to declining oil prices. In comparison, rates for medium-sized crude oil tankers remained relatively firm due to seasonal factors, rising volumes of non-OPEC production corresponding with the completion of summer maintenance in the North Sea, and weather-related delays, particularly in the Bosphorus Straits and United States Gulf ports.In 2009 to date, spot tanker rates have experienced significant declines compared to 2008 as a result of the contraction in the global economy.
The economic downturn has led to shrinking global oil demand and OPEC production cutbacks of approximately 3.0 million barrels per day (mb/d) since September 2008. The impact of the OPEC supply reduction has been amplified by the above average growth of the world tanker fleet.In the first four months of 2009, the pace of tanker newbuilding deliveries increased, resulting in world tanker fleet growth of 13.4 million deadweight tonnes (mdwt), or 3.3 percent. The 2009 and 2010 newbuilding delivery schedule is higher than previous years, although factors such as newbuilding order cancellations and the IMO mandated phase-out target in 2010 for single-hull tankers are expected to moderate tanker fleet growth.As of May 14, 2009, the International Energy Agency forecasted global oil demand to average 83.2 mb/d for 2009 which represents a 2.6 mb/d, or a 3.0 percent decline from the prior year.
Source: Teekay Corp.
Teekay Corporation yesterday reported adjusted net income of $53.2 million, or $0.73 per share, for the quarter ended December 31, 2008 , compared to adjusted net income of $23.0 million, or $0.31 per share, for the same period of the prior year. This excludes a number of specific items which had the net effect of decreasing net income by $714.1 million (or $9.85 per share) and $137.8 million (or $1.86 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported a net loss, on a GAAP basis, of $660.8 million, or $9.12 per share, for the quarter ended December 31, 2008, compared to a net loss, on a GAAP basis, of $114.8 million, or $1.55 per share, for the same period of the prior year.
Net revenues(2) for the fourth quarter of 2008 increased to $615.9 million from $501.5 million for the same period of the prior year.For the year ended December 31, 2008, the Company reported adjusted net income of $285.3 million, or $3.94 per share, compared to $197.5 million, or $2.64 per share, for the prior year, excluding a number of specific items which had the net effect of decreasing net income by $764.7 million (or $10.55 per share) and $134.0 million (or $1.79 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported a 2008 net loss, on a GAAP basis, of $479.4 million, or $6.61 per share, compared to net income, on a GAAP basis, of $63.5 million, or $0.85 per share, for the same period of the prior year.
Net revenues for the year ended December 31, 2008 increased to $2.4 billion from $1.9 billion in the prior year."Teekay achieved good operating results in the fourth quarter. Despite the rapid slowdown in the global economy during the quarter, our adjusted net income more than doubled to $0.73 per share compared to $0.31 per share in the same quarter last year," commented Bjorn Moller, Teekay Corporation's President and Chief Executive Officer.
"Although we are experiencing a weaker spot tanker market in 2009, Teekay is well-positioned given its substantial long-term fixed-rate businesses, $1.9 billion of liquidity, and fully-funded capital expenditure program. In addition, during the fourth quarter and continuing into 2009, we have taken steps to further strengthen the company. We have reduced our spot market exposure through a number of additional fixed-rate out-charters at attractive rates while allowing existing in-charters to roll-off at the end of their contracts. We also sold a number of ships in our spot tanker fleet, generating a gain of $107 million and proceeds of over $380 million during the fourth quarter of 2008 and 2009 to date, which have been used to reduce our debt.
Further, we have made significant progress on company-wide cost reduction initiatives, which so far has resulted in overhead expense reductions of approximately 20 percent commencing in the fourth quarter of 2008."Mr. Moller continued, "As with many other companies that made acquisitions during the last few years, due to the significant decline in the stock market and the increase in market discount rates, Teekay recorded a non-cash goodwill impairment charge for accounting purposes in the fourth quarter of 2008.
The goodwill impairment is related to our ownership of Teekay Petrojarl, which owns and operates five floating production, storage and offloading (FPSO) units. It is important to note that this non-cash charge does not affect our operations, cash flows, liquidity, or any of our loan covenants and we continue to have a positive outlook on the long-term fundamentals of our FPSO business."Mr. Moller added, "Teekay currently uses interest rate swaps to economically hedge its fixed-rate cash flows. However, since we are not currently applying hedge accounting to our interest rate swaps, the mark-to-market changes in their fair value are shown as gains or losses on our income statement each quarter.
The significant decline in swap rates during the fourth quarter led to an unusually large unrealized loss which lowered our reported GAAP-based net earnings for the quarter. Since the unrealized losses are non-cash, they have no impact on our actual interest costs, liquidity, or any of our loan covenants. With swap rates generally increasing so far in 2009, we expect this will result in unrealized gains on our interest rate swaps during the first half of 2009.
"Operating ResultsDuring the fourth quarter of 2008, approximately 71 percent of the Company's cash flow from vessel operations was generated from its fixed-rate segments, compared to 82 percent in the fourth quarter of the prior year. This change is primarily due to increases in spot tanker rates in the fourth quarter of 2008, compared to the same period of the prior year, partially offset by the continued growth of the Company's fixed-rate segments.Offshore SegmentThe Company's offshore segment is comprised of shuttle tankers, floating storage and off-take (FSO) units, and floating production storage and offloading (FPSO) units.
Cash flow from vessel operations from the Company's offshore segment increased to $63.2 million in the fourth quarter of 2008 from $56.8 million in the same period of the prior year, primarily due to the increase in net revenues from the delivery of the FPSO Siri in February 2008, partially offset by increases in crewing costs, repair and maintenance expenditures, and business development costs.Vessel operating expenses for the Company's offshore segment increased to $99.0 million in the fourth quarter of 2008 from $89.3 million in the fourth quarter of prior year.
The fourth quarter of 2008 figure includes an unrealized loss of $3.9 million due to the change in the fair value of foreign exchange forward contracts not designated as cash flow hedges pursuant to US GAAP. Also contributing to the increase were additional operating expenses relating to the Siri FPSO, as well as increases in crewing costs and repair and maintenance expenditures.In December 2008, the Company entered into a contract extension with Talisman Energy for the FPSO Petrojarl Varg. The new terms under the contract extension commence on July 1, 2009, and provide that the Petrojarl Varg will continue to be chartered to Talisman for an additional four years, with its option to extend the contract for up to an additional nine years thereafter.
The contract extension provides an increased base daily time-charter rate plus an incentive component based on the operational performance of the unit and a tariff component based on the volume of oil produced. The new contract terms are expected to increase the annual cash flow from vessel operations from the Petrojarl Varg with opportunities for additional upside from the tariff component if nearby oil fields that would be covered by the contract become operational, as is expected. In accordance with an existing agreement, Teekay's publicly-traded subsidiary Teekay Offshore Partners, L.P. (Teekay Offshore) has the right to purchase the Petrojarl Varg at any time prior to December 4, 2009 at its fair market value when such right is exercised.
Fixed-Rate Tanker SegmentThe Company's fixed-rate tanker segment includes its conventional tankers that operate under fixed-rate charter contracts with an initial term of three or more years.Cash flow from vessel operations from the Company's fixed-rate tanker segment increased to $41.8 million in the fourth quarter of 2008 compared to $24.0 million in the same period of the prior year.
This increase was primarily due to an increase in the size of the Company's fixed-rate tanker fleet, partially offset by an increase in vessel operating expenses.The increase in the fixed-rate tanker fleet included the addition of two in-chartered Aframax tankers that delivered in January 2008 as part of the previously-announced multi-vessel transaction with ConocoPhillips and the delivery of two newbuilding Aframax tankers, which commenced long-term out-charters.During 2008, the fixed-rate tanker fleet also increased by the net transfer of three vessels from the spot tanker segment upon commencing time-charters with durations of three or more years.Liquefied Gas SegmentThe liquefied gas segment includes liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers.
The Company's cash flow from vessel operations from its LNG and LPG carriers during the fourth quarter of 2008 increased to $36.6 million from $35.1 million in the same period of the prior year. This increase was primarily due to the contribution from the two Kenai LNG carriers acquired in December 2007, partially offset by an increase in vessel operating expenses and foreign currency exchange differences.During the fourth quarter of 2008 and first quarter of 2009, the Company took delivery of two newbuilding LNG carriers, which have subsequently commenced service under 20-year fixed-rate time-charter contracts for the Tangguh project.
Spot Tanker Segment
The Company's spot tanker segment includes its conventional tankers that operate on voyage and time-charters with an initial term of less than three years.Cash flow from vessel operations from the Company's spot tanker segment increased to $57.6 million for the fourth quarter of 2008 from $25.8 million for the same period of the prior year, primarily due to increases in spot tanker rates in the fourth quarter of 2008 compared to the same period of the prior year and an increase in the size of the Company's spot tanker fleet. This was partially offset by an increased time-charter hire expense and higher vessel crewing and service costs.
On a net basis, fleet changes increased the total number of revenue days in the Company's spot tanker segment to 7,635 for the fourth quarter of 2008, compared to 7,446 for the same period of the prior year. Revenue days increased in 2008 as a result of two vessel purchases, three newbuilding deliveries and additional in-charters, partially offset by the reduction of revenue days related to the net transfer of three vessels to the fixed-rate tanker segment. Revenue days represent the total number of vessel calendar days less off-hire associated with major repairs, drydockings, or mandated surveys.
Average spot rates for very large crude carriers (VLCCs) declined in the fourth quarter of 2008 as OPEC producers implemented production cutbacks in response to declining oil prices. In comparison, rates for medium-sized crude oil tankers remained relatively firm due to seasonal factors, rising volumes of non-OPEC production corresponding with the completion of summer maintenance in the North Sea, and weather-related delays, particularly in the Bosphorus Straits and United States Gulf ports.In 2009 to date, spot tanker rates have experienced significant declines compared to 2008 as a result of the contraction in the global economy.
The economic downturn has led to shrinking global oil demand and OPEC production cutbacks of approximately 3.0 million barrels per day (mb/d) since September 2008. The impact of the OPEC supply reduction has been amplified by the above average growth of the world tanker fleet.In the first four months of 2009, the pace of tanker newbuilding deliveries increased, resulting in world tanker fleet growth of 13.4 million deadweight tonnes (mdwt), or 3.3 percent. The 2009 and 2010 newbuilding delivery schedule is higher than previous years, although factors such as newbuilding order cancellations and the IMO mandated phase-out target in 2010 for single-hull tankers are expected to moderate tanker fleet growth.As of May 14, 2009, the International Energy Agency forecasted global oil demand to average 83.2 mb/d for 2009 which represents a 2.6 mb/d, or a 3.0 percent decline from the prior year.
Source: Teekay Corp.
Eitzen - Q1 09 Results
Please refer to below link for the results.
http://rapidshare.com/files/242322002/Eitzen_s_1Q09.pdf
Regards
http://rapidshare.com/files/242322002/Eitzen_s_1Q09.pdf
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Odfjell's Q1 09 Results
Please find the link below for the results.
http://rapidshare.com/files/242321790/Odfjell_s_1Q09.pdf
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http://rapidshare.com/files/242321790/Odfjell_s_1Q09.pdf
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Stolt's Q1 2009 Results
Please refer to the link below for the results.
http://rapidshare.com/files/242321506/Stolt_s_1Q09.pdf
Regards
http://rapidshare.com/files/242321506/Stolt_s_1Q09.pdf
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BLT - Roadshow Presentation 08 June 2009
Please refer to below link to download the presentation.
http://rapidshare.com/files/242196913/2009.06.08_Roadshow_Presentation.pdf
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http://rapidshare.com/files/242196913/2009.06.08_Roadshow_Presentation.pdf
regards
Thursday 4 June 2009
BLT - S'pore & HK Roadshows 8 June - 12 June 2009
BLT is going to conduct a Roadshow in Singapore and Hongkong from 8 June – 12 June. Any investors intend to have discussion with the company will need to contact the arranger Macquaire Capital S’pore Pte Ltd
The contact person is as follows:
Macquaire Capital S’pore Pte Ltd
Contact Person: Edwin Basuki
Tel: +65 6321 1163
email: edwin.basuki@macquarie.com
The contact person is as follows:
Macquaire Capital S’pore Pte Ltd
Contact Person: Edwin Basuki
Tel: +65 6321 1163
email: edwin.basuki@macquarie.com
Tuesday 2 June 2009
China to beef up ethylene capacity by 82% in three years
Ethylene capacity would likely grow 82% to 17.84m tonnes/year over the next three years with the help of the fiscal stimulus package dedicated to the petrochemical sector, industry sources said on Tuesday.
The additional capacity will come from five new crackers and six cracker expansions projects that would be completed from this year to 2011, most of which were being carried out by subsidiaries of state-owned refiners Sinopec and PetroChina.
(Please see the table below on cracker project updates compiled by CBI based on interviews with respective companies)
About 45% or 3.56m/ tonnes of the expected capacity increase would come in this year, starting off with the new 800,000 tonne/year cracker of Sinopec unit Fujian Refining & Petrochemical (FREP) that will be launched in July.
Also in July, Shanghai Secco Petrochemical’s cracker would have added 300,000 tonnes/year in new capacity to 1.2m tonne/year. Tianjin Petrochemical, another subsidiary of Sinopec, would have a major ethylene capacity increase of 1m tonnes/year in November and December to 1.2m tonnes/year.
PetroChina unit Dushanzi Petrochemical was also expected to boost its ethylene capacity by the same magnitude to 1.22m tonne/year at around the same time.
By the end of 2009, Huajin Chemical Industrial Group would have also raised its cracker capacity by 460,000 tonne/year to 620,000 tonnes/year.
In 2010, ethylene capacity in China would be raised further by 1.3m tonnes/year with the launch of Sinopec subsidiary Zhenhai Oil Refining and Chemical (ZRCC)’s 1m tonne/year cracker in April to May and Baotou Shenhua Coal Chemical’s new 300,000 tonnes/year ethylene plant coming on stream in the second half.
Another 3m tonnes/year in ethylene capacity will come on stream in 2011, with the expected start-ups of two new crackers and two other capacity expansion.
PetroChina unit Fushun Petrochemical would also boost its cracker capacity by 800,000 tonnes/year in the first half of 2011, while Sichuan Petrochemical would have a new 800,000 tonnes/year cracker by the end of that year.
PetroChina unit Fushun Petrochemical would also boost its cracker capacity by 800,000 tonnes/year in the first half of 2011, while Sichuan Petrochemical would have a new 800,000 tonnes/year cracker by the end of that year.
Sinopec’s Wuhan Petrochemical will further augment China’s ethylene capacity by 800,000 tonnes/year while PetroChina unit Daqing Petrochemical will doubled its ethylene capacity to 1.2m tonnes/year by the end of 2011.
The last two companies have some reservations on the scheduled start-ups, citing slow progress on the projects, industry sources said.
“We expect the completion of the project would be in 2012 based on current status; however, earlier launch would also be possible if everything goes smoothly under government’s support,” said a source from Wuhan Petrochemical.
The Chinese government had unveiled last week the specific targets on what its petrochemical stimulus plan aims to achieve three years down the road.
“We expect the completion of the project would be in 2012 based on current status; however, earlier launch would also be possible if everything goes smoothly under government’s support,” said a source from Wuhan Petrochemical.
The Chinese government had unveiled last week the specific targets on what its petrochemical stimulus plan aims to achieve three years down the road.
It hopes the government funds would ensure stable growth in the industry by boosting the country’s crude oil processing capacity to 405m tonnes and increase its ethylene output o 15.5m tonnes by 2011.
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