Havila Shipping XMAS 2014

HAVILA XMAS

TO BE IS TO DO AT HAVILA WE DO EVEN WHEN IT’S CHRISTMAS

”WE ARE WELL POSITIONED” 2013 was a record year for Havila Shipping. At this writing, 2014 looks to be the best year yet in our 11 year history. The best year by far.

Let us celebrate. We deserve it. All of us. All of us who call Havila Shipping our workplace – and all of our families.

And afterwards get stuck in. 2015 will probably be a very demanding year – and a very exciting year.

NJÅL SÆVIK

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Our business is to provide services to the oil industry. This enormous industry is the motor of the Norwegian economy.

We seem to be at the brink of a very challenging period for this industry, where some of the large oil companies operating in the Norwegian sector are struggling with their costs and profitability.

That means cost cutting. And when they cut costs, all their suppliers are affected. So too in our sector.

Havila Shipping has some advantages. We have a new and attractive fleet. We have delivered quality – and are known to in the market for this. All the hard work, application and quality you have brought to the company these past 11 years will help to ease this situation for us.

Following years of major investments in new vessels, we put the breaks on two years ago. As you know our final newbuild was delivered in December 2012. Over the past two years we have worked intensely to establish a contract coverage which gives us security in tough times. In some cases this may have meant choosing security instead of increasing margins.

I do not regret that today!

Where others are struggling with expensive newbuilds being delivered without contracts, we have contracts which in principle will cover all costs for 2015 and most of 2016.

I write “in principle” because it is difficult to estimate just how rough this patch will become. But to be sure, we are well positioned compared to some of our competitors.

Parallel to developing our fleet we have over the past few years applied ourselves to our communications both internal and external towards the media and our market. Our homepage is an unique footprint, our Facebook pages keep growing and we try to stand out when we buy advertising space.

We have now reached the next phase. Our workshops in Ålesund for all Captains and Chief Engineers uncovered a need to improve our internal communications. On the back of this we started work on a new intranet, which is introduced now.

The intranet will help us solve simple tasks and makes it easy for our administration to communicate swiftly and precicely with our employees, and make it easier for employees to

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keep abreast of information relevant to them – as well as being an arena for building our company culture. Over time it will become an invaluable resource, but as for all new inventions one has to allow for some start-up issues. A little patience will go a long way.

I shall not forget to mention the developments in Fosnavaag over the past year. A new great hotel has opened, a splendid concert hall and of course Fosnavaag Ocean Academy.

Havila is a central contributor to all these projects. Not because we expect a high return on investment, but because we believe that an attractive town centre will over time be important to local businesses. The same rationale is behind our involvement in the new football stadium, Havila Stadion Fosnavaag.

Next year we expect the new swimming hall, Sunnmørsbadet, to open to the benefit of all the inhabitants of Fosnavaag and beyond. Unfortunately this project has received a lot of negative attention in the press. Some of it deserved, some of it exaggerated. I feel quite certain that the project will be realised and that people in the future will think of it as a positive contribution to the quality of life in the region.

I am pleased that we continue to improve our health and safety work on board our vessels – and that we can see the results in the number of injuries sustained. A big thank you to everyone who every day work to ensure that our regulations are upheld – and to all of you who every day uphold them yourselves. We have managed no injury related absences for months. I’m looking forward to experience a year without injury related absences. The New Year gives us the first chance to fulfil that ambition.

Let those be my final words to you this Christmas.

I wish to send a special greeting to those of you who will spend Christmas on board one of our ships, of course not forgetting those of you who get to spend the holidays with your loved ones.

Wishing you a merry Christmas and a happy new year!

And we’ll meet again in 2015 - with rolled up sleeves.

Njål

”Pleasure to meet the crews” Christmas is anticipated to be a peaceful time, hopefully the coming one will be so.

It is close to a fact that our money, the Norwegian Krone, don’t like Christmas.

ARNE JOHAN DALE

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Many of the years since Euro became an electronic currency 1st January 1999, the Norwegian Krone has weakened against other currencies during December.

This year we have the strongest value drop of NOK since 2008 when one Euro at Christmas Eve had ha price above 10. We are very close to that level just now when I’m writing this.

The value of NOK falls following the lower oil price. For our business lower oil price has negative impact, but weaker Norwegian Krone will be positive on long term even if the short term effect is negative. That’s because of value change of foreign currency positions taken. The group accounts have been and will be affected by currency rate changes.

But it is positive for future income from contracts in other currency than NOK. The value of these contracts increases when the price of the actual currency goes up.

Financing the business is more challenging when the market conditions are like now. It as a joke that a bank is one who lend you the umbrella when it is sunny, but then need it

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themselves as soon as the rain comes. Sometimes it does not feel as just a joke.

This year we have started on a management review program where each of us shall visit some of the vessels every year.

I have visited Havila Subsea just outside Havilahouse and Havila Borg in port of Las Palmas. I have one left, Havila Charisma. The plan is to combine the management review with a roundtrip a few days to learn more about our business.

It is a pleasure to meet the crews and listen to others opinion about the company. It is very nice to visit the vessels when the view indicates that the vessel is very well taken care of by the crew.

I wish you all a Merry Christmas and all of us a challenging but Happy New Year.

Arne Johan CFO

”BUSY AND FAST YEAR”

HARALD STENERSEN

The variation of rules and regulations in different parts of the world create their own challenges but this is becoming the norm with a truly international company.

Another busy and fast year in the HSEQ department, travel, audits, investigations and meetings made for an interesting time both in and out of the office.

With the additional HSEQ Superintendent in the department it has meant that more focus can be given to the individual vessels and satellite offices, all vessels and satellite offices have been visited at least once with several receiving more.

Nice to see some of the Havila fleet moored at the quay outside the Havila Head Office during the year, making for many visits by interested locals and schools.

Travel this year has been to Brazil, Malaysia, Gabon, Denmark, Scotland, England and up and down the coast of Norway and next year is lining up to be just as hectic.

Havila Shipping can add Canada and Russia to its areas of operations this year making it challenging for the office when entering “new” waters. As you are aware the variation of rules and regulations in different parts of the world create their own challenges but this is becoming the norm with a truly international company.

The injury statistics in the first half of the year had never been better. The trend was very positive for a long time.

Unfortunately, the second half of the year we attracted 4 lost time injuries and 4 medical treatment cases in as many months.

Our focus for 2015 will be to work hard to get back to the positive trend we saw in the first part of 2014. Increased focus in the use of the risk assessment/Permit system in all departments and the correct use of PPE will be a priority.

A lot of hard challenging work has been completed over 2014, many challenges, in all kinds of weathers and operating areas. A good focus on safety has brought us through the challenges of the year, we have a strong safety system which when used will bring us back stronger than before in terms of our control of both injuries and the consequences of them.

We at HSEQ wish you and yours a Merry Christmas and a Happy and safe New Year wherever you are lokated : )

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”PREPARED TO MEET THE CHALLENGES” All proper cities must have a hotel.

In October this year the Thon Hotel Fosnavåg was officially opened.

I welcome you all to Fosnavåg!

KJELL H RABBEN

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Yet another year is almost gone. With no ongoing new building projects, the activities in 2014 have been mainly related to normal operations, awards of and preparation for several new contracts.

After a large conversion, Havila Phoenix started early May on her 7-years contract with DeepOcean UK. This is an important contract for us, and we are very pleased with the feedback our contractor gives us on our crew, vessel and operations.

Havila Fortune is now operating in Danish waters for Maersk Oil and Gas as a “Walk to Work” vessel, where personnel is being transferred to unmanned installations by use of an Ampelmann system.

The North Sea Spot market this autumn has been quite good.

This is the single most important reason behind our best 3rd Quarter ever. Unfortunately we are now experiencing lower rates. It is hard to predict how this market will be in 2015, but as you all know this market is depending very much on the global oil price.

As you know Fosnavåg is a city, even though it might not have enough citizens to be so. The main reason for applying to become a city was to fulfill the criteria’s for being used as official home port on the fleet operated out of Fosnavåg.

All proper cities must have a hotel. In October this year the Thon Hotel Fosnavåg was officially opened. This is a conference hotel with 115 rooms. In connection to the hotel there is an offshore simulator center, Fosnavaag Ocean Academy. Many of you have already completed courses there. In addition to hotel and simulator center, we also have a new concert hall and a new cinema. This is

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really a step forward for our community. I welcome you all to Fosnavåg!

To create a closer relationship between company and employee, but also give the top management useful input for our work, we earlier this year decided to start a Management Vessel Visit Program. Our intension with this program is that all vessels, at least at one of the shifts, will every year be visited by a representative from the top management.

During this visit we will gather all crew on board, run a short presentation and invite to open discussions. Some of you have already been visited. We will continue this program next year. The representative from top management will use the opportunity to take a roundtrip on the vessel.

In August our LTI statistic was zero! This means it was more than one year since last time someone in our company had an incident which caused sick leave. This was really appreciated! Unfortunately we have had 4 LTI’s since then.

It is often “should just” which is the reason to the incidents.

We therefore urge you all to keep the focus on working in a safe matter.

Then we are almost into 2015. This will be a year with at least as many challenges as we have had in 2014. I’m glad to say that Havila Shipping is well prepared to meet these challenges with good, enthusiastic colleagues both onshore and offshore.

I wish to thank all of you for the cooperation through 2014.

My best wishes for the next year to all of you and your families.

Best Regards Kjell

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aberdeen – the Havila way

BRIAN MCLEAN

Finding it hard to believe that as we come to the close of 2014 that it will soon be one year for Havila Shipping UK Ltd being operational in Aberdeen!

2014 has brought its various challenges in Aberdeen as we establish our presence here but the information must be getting out to the wider community as phone calls and mail increase at a steady pace! The support from head office from all departments has been invaluable in getting things established the correct way- the ‘Havila way’.

The Aberdeen office has had visits from representatives from most departments in Havila Shipping ASA over the year and it has been good to establish and maintain this working relationship.

Co-operations from officers and crew has also helped greatly in the setting up process and I would like to take the opportunity to express my thanks for this. I trust that the Aberdeen office is an asset to all in the time ahead and remember that you are welcome at any time to visit.

May I take the opportunity to wish you and your families a great Christmas and a healthy and safe 2015.

Brian McLean

�THINK SAFETY BEHAVE SAFELY�

We often receive feedback from charterers where they give gratitude to the Captain and crew for excellent performance and professional and safe operation of the vessel. This is something that we appreciate enormously.

ARILD REMĂ˜

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We are now finished with a somewhat stormy autumn and are in the beginning of the first winter months, with those weather-related challenges this entails. Winter weather can at times be quite hard for both crew and vessel, it is therefore important that all have a strong focus on safety and safe operation during this period. Should there be any doubt about the safe operation, it is important to stop, think carefully before continuing operation. If there is any doubt as to whether the operation can be performed in a safe and responsible manner, the operation should be canceled.

We expect that the winter market for OSV will be about the same as last winter. As we all know, several Oil rigs has been canceled by Charterers and some Oil rigs has been sent to Yard for early maintenance. It is therefore uncertainty connected to what the spring and summer will bring. We already know that it will be none operation in Kara Sea during 2015, however we believe that operation in Pechora Sea also will be done in 2015.

Havila operates three AHTS and one PSV on the spot market.

We have during 2014 had several of our vessels operated in area with other operational challenges than we normally meet.

Havila Jupiter > several month UK east coast, ploughing operations using SCAR plough.

Havila Venus > East coast of Newfoundland, 1 inshore rig move which took almost 2 months.

Havila Crusader > Pechora Sea/ SE of Novaia Zemia. The vessel operated in air temperature of minus 10-20 degrees, and sea temperature of minus 1, 5 degrees. The operation was canceled by charterers due to tick ice 20-30 cm Havila Crusader was finish in Pechora Sea 4th of December and will be back in Bergen 8th of December, the vessel will thereafter be operated on the spot market. Havila Favour commenced the 4 years option for Petrobras during November, which mean the vessel have secured another 4 years.

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Havila Fortune secured a 1 Year Firm + 3x1 years option contract with Maersk Olie og Gas Denmark, started 1st of August, walk to walk gangway (Ampelmann) has been installed onboard the vessel.

Havila Borg is finish with their operation in West Africa, will continue their contract with Shell E&P / NGT2 with operation in Black Sea using Istanbul as operation port.

All our vessel has been listed in OVID, it is therefore extremely important to keep OVPQ questionnaire updated at all times. Charterer are using OVID data frequently as quality assurance and information needed before decisions taken for new contracts.

As you all know, there are currently major focus of Fuel Oil saving measures. One of the measures is that all Havila vessels shall sail on economic speed. For the Havila-fleet this is about 10.0 knots / 2 generators. It should be noticed that 10.0 knots are based on calm sea / wind, it must not be misinterpreted that one should increase the engine power in order to keep that speed in bad weather. If the charterer requires the master to increase the speed the charterer should be informed about the increase in Fuel Oil consumption and the consequence in price.

We often receive feedback from charterers where they give gratitude to the Captain and crew for excellent performance and professional and safe operation of the vessel. This is something that we appreciate enormously, and confirms that our wonderful staff does their best to present Havila as a serious and reliable supplier to the charterer.

THINK SAFETY, BEHAVE SAFELY. Wishing you and your family Merry Christmas and Happy New Year Arild Remø Director Chartering and Operation.

”WORKING WELL TOGETHER”

KRISTIN KOLGROV

A total of 23 vessels are manned from our crewing department in Fosnavåg.

Most of our vessels operate in the North Sea area, but also in Malaysia, Brazil, Canada, West Africa and Russia.

Being represented worldwide creates challenges that we might not have been familiar with in the past. Both in terms of competence requirements, taxation, cultural differences, language barriers and so on. We are dependent on good interaction with you all, which I can affirm is in place. It is very important for us that you all thrive in your positions, on board the vessel and among your fellow crew. Mutual respect is essential for a good working relationship and work environment.

A couple of months ago, Havila Subsea came alongside right outside our office for close to two full weeks. During this period they hosted many visitors on board, mainly students from local elementary schools.

I would like take this opportunity to send a big “thank you” to the crew who welcomed them all so warm and patiently, both with guided tours, demonstration of survival suits/

man overboard and delicious food ; ” best lunch ever!!! ” according to the students.

Working offshore also means that every other year, you will spend Christmas onboard our vessel, away from your family and loved ones. We hope that all of you spending this Christmas onboard will stay safe and have a good Christmas among your colleague.

Thanks to all our teams on every vessel and our excellent team at our crewing dept for working so well together in 2014. I am looking forward to continue this in 2015.

Best wishes to all of you for a Peaceful Christmas and a Happy New year.

Kristin Crew Manager

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HAROLDO CRUZ

�GOOD FINANCIAL RESULT�

Dear friends, 2014 is ending and represented another great year for Havila Shipping do Brasil, with higher operability rate and good financial results, allowing us to be even more confident in our competences to sail on the waters of the Brazilian market which continues presenting excellent perspectives for the next years due to increased exploration activities in the giant oil fields in pre-salt areas besides enhanced activities of IOCs. Haroldo

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”advanced and preferred”

SVEIN RUNE SMAADAL

If we all are aiming for improvement, improvement will come.

It’s December already, even though in Fosnavåg the landscape is still green.

Never the less 2014 is nearly history and it’s time to make a summary of this year’s activity and conclude upon the next year budget.

As usual it’s been a busy year where the green fleet once again shows its efficiency and reliability in all ours operation areas and I’m proud to be a part of a company which has one of the most advanced and preferred fleet in the offshore industry.

Some challenging situations occurred during this year as well and lead to some days off hire, but thanks to great effort from the onshore and offshore staff this was limited by showing the right initiative.

During 2009 and 2010 Havila Shipping acquired a lot of new vessels and consequently several five years class renewal is made this year and several are due next year. Since last summer we dry-docked Havila Herøy in Frederikshavn, Havila Venus in Haugesund and Havila Borg in Las Palmas.

We should also dry-dock Havila Princess in Rio in December but she is now postponed to January 2015. We recently finalized next year’s operation and maintenance budget and hopefully we will have less unannounced occurrences this year.

I know everyone onshore and offshore are focused on safe operation and individually safety protection equipment in general, anyway if someone have suggestion for improvement in such matter technical department are pleased to have this as soon as possible for evaluation.

If we all are aiming for improvement, improvement will come.

On behalf of everyone in the technical department I wish one and each of you and your family a happy Christmas and the best wishes for the year to come.

Best regards Svein Rune Smådal Technical Manager

Stability and high retention rate is an important factor for safe operations, as well as good interaction among the crew and offices..... in other words; splendid Teamwork.

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RUNAR SMĂ…DAL

LOW TURNOVER

This year the human resources have been stable and almost unchanged both offshore and onshore. Fortunately, we experience very low turnover on the vessels and the work force on shore is more or less the same as the previous year.

We are aware that seafarers have increased focus to build up seniority and to keep a tight relationship to their Managing Company, in Havila we are experiencing the trend. This is a good inclination as we all know that stability and high retention rate is an important factor for safe operations, as well as good interaction among the crew and offices.....in other words ; splendid Teamwork.

As you probably are aware, Havila is presently conducting an Employee Survey which is tailor made for the shipping industry. Most of you have completed the questionnaire and have contributed in important screening which will give vital information on the working environment in Havila. Thanks to you all! These are important indicators for the Management to take necessary adjustments to improve the working environment both off - and on shore.

Wish you all a Peaceful Christmas Time!

Runar SmĂĽdal HR.

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”no major issue” Real success in life is about balance

It is hard to believe that the end of the year has arrived! 12 months have passed very quickly.

The year’s end always brings with it a tremendous sense of accomplishment. So many things have been happening this year. Of course, we should not forget the activities which have taken place during the year and keep learning from the experiences.

Havila Harmony still works in Labuan with no major issue raised throughout the year & expected to undergo dry docking on February next year so that she can continue her service here in better condition. Havila Management Sdn Bhd also has accomplished an annual cycle & completes our annual DOC audit recently. It has been a visit from an HSEQ team in the months of October & November; it’s a pleasure to have Havila’s personnel to visit our office and our vessel here.

Carrying Havila’s name from West to East

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Any vessel will join her in Labuan?

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Sunset panorama in Labuan

We often think of New Year’s as the time to start fresh and make those famous resolutions. But anytime is the right time to take control of our lives, to choose how we will live. Real success in life is about balance, about choosing priorities, and then following a plan to focus on the things that are most important to us.

Best wishes for the year to come.

Afizi Abdullah General Manager

The picture is taken the first morning in Murmansk and you can clearly see that the temperature is some degrees lower than what we’re used to. The cold caused some challenges, but nothing we or the ship could not handle.

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Havila Crusader in Russia Havila Crusader came to Murmansk October 1th. The weather in Russia was cold with temperatures around -20째C and some snow.

The crew came to Russia with bus from Kirkenes. Similar to all other countries, Russia has its own special way to handle things. It takes a few days to adapt to different practices.

A challenge, of course. As it probably also is for Russians coming for to work in Norway. Some processes took more time than they do in Norway, others went faster.

When we arrived to the port authority we found our crew list ready on the desk. After an hour or so we were checked in; ready to start working.

Shift 1

This is Prirazlomnaya, the rig we supplied. There were new experiences on a wide scale for all of us. We learned a lot from their way of running processes. The exchange of knowledge went both ways and we think that they also learned a few things from our way of conducting operations.

We had up to 10 persons on board for crew change on almost every trip in and out. The crew change for Bourbon Rainbow and Sayan Princess were carried out by transfer basket.

On the picture you can see the basket being lifted with people on board from Sayan Princess to the Havila Crusader.

Everything went exactly as it should do. No dangers involved.

Everybody was very focused on security in all operations.

Our contract with Gazprom lasted till the ice came and made it impossible to continue. The ice came as it always does this time of year on these latitudes. The operation stopped and we started on the long way back home.

With a lot of new experiences, which we assume will help making future operations easier for Havila ships in Russia.

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Shift 2

SOME FACTS ABOUT MURMANSK: The world’s biggest Arctic city will celebrate its 100th birthday in 2016. This bustling, rapidly modernizing place gets much of its wealth from the cornucopia of minerals found beneath the ground. The city and the region have a history of close ties with its Scandinavian neighbors.

The city’s life and industry is founded on its port, kept icefree by comparatively warm Gulf Stream waters.

Beyond the port the lively city is surrounded by incomparable Arctic scenery and is a playground for outdoor adventurers during the months of the midnight sun (late May to late July).

During the winter darkness (late November to midJanuary) the Northern Lights over the snow-covered landscape are an eerie, magical sight.

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TO BE IS TO DO AT HAVILA WE DO EVEN MORE IN 2015

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