SSG No 10 - Shipgaz

SHIPPING AND SHIP MANAGEMENT
The Bourbon Peridot was completed by Ulstein Verft in 2005 as a platform supply vessel, but
converted for subsea support for Amerada-Hess off Equatorial-Africa.
wrestling with the dilemma of investing
now, rather late in the cycle and at high
prices, or miss the boom altogether. Trusting
the proverb of striking when the iron is
hot, the shipping industry at large has
Proposal
overruled
❯
The much-publicized official
report on taxation of shipping
companies by a working group headed
by professor Guttorm Schjelderup,
launched in March last year, was quickly
condemned to the political shredding
machine. As may be recalled, the
group recommended that all tax benefits
to shipowners and seafarers be
repealed, the tax credit paid and all
arrangements for foreign-based ventures
effectively plugged. The capital
and human resources should rather be
employed in the domestic economy.
This rather radical and perhaps not
very wise conclusion – given Norway’s
ever-stronger dependency on the oil
industry – reveals the ill effects of academic
oversimplification and economic
theory. When presenting the agenda
for the new policy for the maritime
industries to the NSA general meeting,
the Minister of Trade, Dag Terje
Andersen, mentioned specifically that
the Schjelderup proposal had been
shelved.
played along when investors and banks are
willing to finance new equipment.
Compared to the estimated value of the
trading fleet of USD 32.9 billion (NSA figures),
investment in orders and secondhand
vessels went from USD 10 billion in
2005 to USD 16.7 billion last year –
drilling rigs not included.
The new orders in 2006 amounts to 231
ships of USD 12.1 billion, of which 53 per
cent is for cargo vessels – mostly tankers,
45 per cent for offshore vessels and the rest
for passenger vessels and specialized units.
The volume of second-hand purchases
reached 194 ships of USD 4.6 billion, a figure
not seen since 1988/1989. A heady
USD 6.8 billion in drilling rigs may be
added on top, as it draws largely from maritime
community and financial market.
There is, however, little reason to expect
a larger Norwegian fleet – the 231 vessels
will have a tonnage of 8.1 million DWT,
against 27.5 million DWT ordered by
Greek owners at a cost of 16.6 billion. The
trend from the 1980s is still prevailing:
Smaller and more expensive vessels.
Polarization
What has been unique about the Norwegian
maritime industry is its broad range,
from every aspect of international shipping
to a strong offshore sector with support
vessels, subsea and FPSO (Floating production,
storage, off-loading) units. Unlike for
example the US maritime offshore sector,
the Norwegian is strongly related to the
shipping industry from which it evolved.
The maritime offshore sector draws on
much of the same infrastructure in opera-
tion, manning, financing and organization;
although it has also given the rise to a
strong technological cluster.
The strategy of Maritimt Forum and particularly
the NSA since 1990 has been to
wedge political goodwill from the importance
of the entire maritime cluster. This
has paid off well in theory, as reflected by
the shipping whitebook rhetoric of 1996
and 2005, but not in reality. The offshore
sector carries the largest political weight;
hence the supply ships were given a net
wage system in 2004.
The resignation to pragmatism by the
companies in international shipping, as
witnessed by Wilh Wilhelmsen taking its
ships to UK registry and management, is
bound to widen the gap between shipping
and offshore. In all probability the maritime
sector will become more bi-polar in
the future. This means that the shipping
community will adapt to the commercial
realities in a wider world, whereas the maritime
offshore industry will develop as an
integral part of a technology cluster with a
stronger foothold in Norway.
This may be inevitable for more reasons
than one, but the wobbly and ever-changing
conditions offered by Norwegian politicians
have indeed been a contributing factor.
On the move
There is no doubt that the shipping activities
carried out from Norway have been
strengthened over the last few years. The
most conspicuous deals have been driven
by entrepreneurs only partly considered as
Norwegian, like John Fredriksen, Arne
Blystad and Axel Eitzen, and partly by a
broader range of offshore entrepreneurs.
But the advances are driven by more
people than these; in fact the majority of
the 300 shipping companies have in some
way played the opportunities of a dynamic
market to profit, invest and prepare for the
future. Perhaps not as spectacular as the
Greeks and Germans, the Norwegians have
still shown a healthy appetite for tonnage
and deals.
Even more promising is the entry of a
new generation; for better or worse without
the shell-shock of the shipping crisis, but
with an international outlook and ambition.
The shipping industry is generally
considered important and desirable; to the
extent that low-marginal sea transport can
be interesting in a country that is often
seen as the richest in the world.
dag bakka jr
70 SCANDINAVIAN SHIPPING GAZETTE • MAY 21, 2007
BOURBON OFFSHORE NORWAY