Wednesday, April 08, 2009
Maritime Press Collection 2009-001
News reports received from Internet News taken from various news sites
Six-month gap in new building orders to limit tonnage supply in the long-term Wednesday, 08 April 2009
The lack of new building orders worldwide has now reached more than six months, as shipowners have cut down their investments, while order cancellations keep on coming, even at the risk of painful lawsuits following. During the first quarter of 2009, with banks stepping away from shipping and focusing in their own problems, no new orders were submitted, following the trend established from October of 2008 onwards. As a result it no news that Greek shipowners didn't place any new orders during March, according to the latest montly report by shipbroker George Moundreas & Co., what interests ship owners isn't new investments, rather than managing current investment programmes, which render them exposed to the prolongued crisis of the shipping industry. This development leaves the freight market with some rather interesting facts for the future. For instance, from the beginning of 2012 and for at least six months, there will be almost no new deliveries of 2012-built vessels. This of course, unless some of the scheduled for 2011 deliveries are delayed into 2012. Should the current economic crisis be resolved by 2010 and the world economy – and consequently trade – begin rebounding, things will be looking better for the shipping industry, from a tonnage supply point of view. For the time being though, ship owners are doing their best to help allieviate things in terms of coping with the massive orderbook pending. Every week news of cancelled contracts and delays in deliveries are coming in, mainly in the dry bulk and the container segments of the market. Nasdaq-listed StealthGas, owned by Harry Vafias was the latest to add its name to the newbuildings which are about to be delivered at a later stage. The company reached an agreement with Japanese shipyards Karneij Zosen to accept later deliveries for five vessels without any additional cost. It is a token of some yards' willingness to accept terms, which under other conditions they wouldn't. Of course one of the main questions to be resolved is how much of the orderbook is going to be shed, i.e. how many cancellations will there be? In its latest weekly S&P report, Clarksons mentioned that numerous forecasts are being circulated, with very little supporting evidence. “There have certainly been a reduction in the number of ships on order, but 'order cancellation' remains an ambiguous term, with very few orders simply being cancelled following a buyers request. There have yards continue to hold a very strong line with regards to their policy and in most cases will put buyers in default following any non-performance from the buyers side. There have been instances of mutual cancellation, but in general this has only been when the yards have their own problems and the cancellation has allowed them to alleviate these issues. There are certainly no standard cancellation precedents being set and with restructuring discussions being dealt with on a case by case basis, the outcome if any, is dictated by the situation of the individual buyer and respective yard involved» said Clarksons. SOURCE: Nikos Roussanoglou, Hellenic Shipping News
Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites
Oil prices have risen 54.3% from December Wednesday, 08 April 2009
After a three days fall, oil prices remained over $50 per barrel. Without a doubt these are good news for oil producers as day by day it becomes clear that OPEC has fulfilled its mission for the time being, which was to stabilize oil prices amid a severe recession without any serious reaction from the industrialized countries of the West and especially the United States. The improved compliance from the majority of cartel’s members supported the effort for higher oil prices, but oil producers are a little bit lucky. Without the improved sentiment in the world stock markets after the efforts by the U.S. government to support economy with bailout plans of trillions of dollars and the positive results of G20 summit in London, OPEC’s effort would be probably ineffective. But OPEC still has a lot of work to do. According to official estimates, OPEC needs to remove about 800,000 barrels per day (bpd) from the market to comply fully with its 4.2 million bpd of pledged curbs. Some analysts also expect oil to rise this year as the curbs erode high stockpiles. But, as the prices will go higher the danger of less compliance will erode, as many producers are hungry enough for oil revenues. For the time being some members of OPEC have limited their oil price ambitions in 2009 due to the fragility of the world economy, despite OPEC's belief that higher prices are needed to support investment in new supplies. According to Reuters, Algeria and Libya expected oil to reach $60 a barrel by the end of the year from near $50 now -- much less than the $75 that leading OPEC producer Saudi Arabia and others consider a reasonable price. The producer group agreed on Sunday to leave output targets unchanged and enforce supply curbs more strictly. The move comes amid some evidence that output cuts so far are starting to remove excess oil from the market. Oil market analysts are optimistic about oil prices after many months. They estimate that during the last quarter of the year oil prices will reach $60 per barrel, from $45 in the period January-March- as the demand for oil and the stock markets will rebound. But what about consumers? Analysts support that for the time the most important is the improvement psychology in all the markets, and rising oil prices can help to this direction. On the other hand they assumed that the cost of oil can hurt world economy recovery only at levels of more than $80 per barrel. SOURCE: Makis Theodoratos, Hellenic Shipping News
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Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites
China's Plan to Aid Shipbuilders May Add to Shipping Line Pain Wednesday, 08 April 2009
China’s shipbuilding industry may be about to get a bailout -- from its customers. The government may force state-owned shipping groups to buy more vessels as foreign carriers scrap orders, according to Steve Man, an HSBC Holdings Plc analyst in Hong Kong. That risks increasing costs and overcapacity among shipping lines grappling with a collapse in global trade. “They ‘encourage,’ but my thinking is it’s more of a directive,” said Man. “It hurts every player in the industry and creates excess capacity that will take longer to absorb after an upturn.” A collapse in shipping rates led to a worldwide 95 percent decline in new vessel orders in March, according to Clarkson Plc, the world’s largest shipbroker. In response to the drop in demand, China is drawing up plans to aid state-owned China State Shipbuilding Corp. and China Shipbuilding Industry Corp. that will likely force state-owned shipping groups to pick up orders abandoned by overseas lines, driving rates down further, analysts say. “The major overhang for the shipbuilders is potential cancellations,” said Andy Meng, an analyst at Morgan Stanley. The “key message” in the government plan “is to protect order backlogs at the state-owned shipyards.” Meng estimates as many as 60 percent of existing orders in China may be canceled over the next two years. Sinotrans Shipping Ltd., the commodity-shipping unit of China National, may order more ships, depending on prices and market conditions, said spokesman George Yu. The company plans to spend $374.5 million on new ships this year and next, it said last month. China Shipping Development Co., the dry-bulk arm of China Shipping, hasn’t received any details about government plans yet, said spokeswoman Yao Qiaohong. Plunge in Rates Dry-bulk rates have slumped to unprofitable levels as China pares imports of iron ore, a key steelmaking ingredient, on slowing construction and cooling growth. The Baltic Dry Index, the benchmark for commodityshipping costs, yesterday fell for a 19th straight day on April 6, extending its loss from a year ago to 81 percent. China’s biggest shipbuilders, who construct more than 70 percent of dry-bulk carriers, haven’t won an order since October, according to Morgan Stanley. The shipyard stimulus may worsen the overcapacity that contributed to the Baltic Dry Index’s biggest decline in more than two decades. China Cosco Holdings Co., the world’s largest operator of bulk cargo ships, last year canceled plans to order 126 new vessels as rates plunged. China Cosco spokesman Hu Yu said he wasn’t aware of any plans to buy more ships. The company had a fleet of 462 owned and chartered dry-bulk ships as of Sept. 30, with another 62 on order. Modernizing Fleets Shipyards will probably have to share some of the burden by lowering prices, HSBC’s Man said. The government may also sweeten the deal for shipping lines with aid, allowing lines to modernize fleets at reduced costs. “If they let old vessels retire a bit earlier and buy more fuel-efficient ships at lower prices, it’s good for their future development,” said Jack Xu, a Shanghai-based analyst at Sinopac Securities Asia Ltd. “It all depends on how much in subsidies the government is going to give them.” In a bid to revive rates, dry-bulk lines have laid up 15 percent of vessels, according to data complied by Bloomberg. They have also begun to axe orders placed two or three years ago when the market was booming. Chinese yards had 110 vessels canceled from October to the end of February, according to the Ministry of Industry and Information Technology. That was 1.4 percent of their backlog. Only nine new vessels of any type were ordered worldwide last month, according to data compiled by Clarkson Plc. More cancellations are likely, as yards worldwide hold orders for dry-bulk ships with a combined capacity equal to 69 percent of the existing global fleet. As much as 65 percent of bulk ships due for delivery next year may be axed or delayed, followed by as much as 60 percent in 2011, according to HSBC. Source: Bloomberg
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Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites
Indian shipowners ready to offer domestic shipyards the right of first refusal Wednesday, 08 April 2009
Indian shipowners are ready to offer domestic shipbuilders the right of first refusal for vessels that they acquire using the soft loan that the Centre is considering for the shipowners. “We do not have a problem in acquiring ships from domestic shipyards provided they offer us the vessels we are looking to acquire,” Mr S.C. Hajara, Chairman and Managing Director, Shipping Corporation of India (SCI), told Business Line recently. Mr Hajara is also the President of the Indian National Shipowners’ Association (INSA). INSA is the body that has sought the Centre’s help to create a fund of at least Rs 10,000 crore, which could be used to provide low-cost finances to Indian shipowners. Seeking soft loans Meanwhile, domestic shipbuilders have demanded that the proposed Rs 10,000-crore soft loan to shipowners, which is under Government consideration, should be linked to placing orders with them. But with the country heading for elections, a final decision on the issue is expected only after a new government is in place. “The Government should make it mandatory for the shipowners to allow the Indian shipyards the right of first refusal,” Mr V. Kumar, Managing Director of Bharati Shipyard and Chairman of Shipyards Association of India (SAI) recently said referring to the shipping companies’ demand on Rs 10,000-crore soft loan (to help them acquire ships). At present, Indian shipyards have their order books full for the next few three-four years (till 2012-13). But, the orders were taken before August 15, 2007 when the Government’s shipbuilding subsidy scheme existed. Order cancellations Also, it remains to be seen whether the Indian shipyards face any order cancellations. Globally, shipyards are facing order cancellations. China reportedly posted a cancellation of 110 ship orders of 2.74 million DWT during last October to this February. Similarly, German shipyards are faced with order cancellations of 29 vessels in 2008 and another 11 orders in 2009 so far, according to Lloydslist.com. Indian shipyards have seen a dip in orders, which is in line with the global trend, but major shipyards claim that they have not seen any order cancellations. According to SAI data: In the four years preceding August 2007, Indian shipbuilders had received orders for 260 ships. But, since then, the domestic industry has received less than 20 orders. Globally, shipyards have seen a dip in their order-books. For the first 10 months of 2008, global orders were at 2.48 million dead-weight tonnage, the lowest since 2006, and orders dropped by 88.2 per cent year-on-year, according to a China International Capital Corporation report. Source: The Hindu Business Line
WORLD SECOND LARGEST OFFSHORE HAVY CARRIER
Offshore Heavy Transport AS (OHT) Tel. 82 51 463 8250 Email: info@ohtkr.com www.oht.no Page 4
Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites
Iron ore price "big unknown" Wednesday, 08 April 2009
Citigroup says 2009-2010 iron ore benchmark settlement remains "big unknown" for 2009 earnings. The group has forecast a drop of 30 per cent for iron ore fines, pellets and lump to fall 36 per cent. Citi says talks will again be protracted, with steelmakers calling for a 40 per cent to 50 per cent price fall. “But such sharp reductions will make captive iron ore production (especially in China) loss-making without subsidies and paradoxically actually increase the share of seaborne-traded iron ore demand,” Citi says. Citi expects underlying demand to remain weak until the second half of 2010. Source: Dow Jones Newswires
South Oil issues tender for Nassiriya field Wednesday, 08 April 2009
Iraq's South Oil Company has issued a tender to drill 20 oil wells in the country's undeveloped Nassiriya oilfield, which could produce up to a million barrels per day of oil. The deadline for bids is 1 May and the work should be completed within 14 months of being started. The contract is valid for 20 months after the procurement of financing, said a Reuters report. Italy's Eni, Spain's Repsol and Japan's Nippon Oil Corporation are interested in developing the field. SOURCE: Upstream News
Global rig count takes a dip Wednesday, 08 April 2009
Baker Hughes said the number of drilling rigs actively exploring for or developing oil or natural gas across the globe dropped by 440 to 2313 in March. In February, 2753 rigs were at work. Baker Hughes added that the US rig count for March fell by 215 to 1105. SOURCE: Upstream News
STX develops 400K VLOC Wednesday, 08 April 2009
STX Offshore & Shipbuilding (former-STX Shipbuilding) of South Korea recently signed a joint R&D agreement with Nippon Kaiji Kyokai (NK) for the development of the world’s first 400,000-dwt class VLOC. The ultra large ship type would be the world’s largest when completed. Optimizing ship specifications such as holds, hatch covers, arrangement of fuel tanks, etc. is the main task of the project which is set to commence in April and finish in July. When the optimized VLOC with the largest shipping capacity is successfully developed, ship operation cost is expected to be curtailed drastically by reducing fuel cost. An official at STX Offshore & Shipbuilding said, “We underscored our technological prowess when we successfully developed a 22,000-teu containership last year. We also have developed a 298,000-dwt VLOC
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Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites
with optimized shipping capacity and received orders for four such vessels already. We will strengthen our position as the world’s No. 4 shipbuilder by developing a variety of large ship types and putting spurs to winning new orders.”
Primeline, CNOOC agree to vary petroleum contract.
Wednesday, 08 April 2009
LONDON: China National Offshore Oil Corporation (CNOOC) has agreed to vary the terms of the Petroleum Contract with London-based Primeline Energy Holdings Inc. to allow Primeline to carry forward its exploration well obligation into the second exploration phase to accommodate the development and exploration work program.
The Petroleum Contract for Block 25/34 provides for an exploration period of seven years from the date of commencement of May 1, 2005, originally divided into three separate phases of three, two and two years respectively. By a previous Amendment Agreement dated Feb. 18, 2008, the first exploration phase was extended from three to four years, to end on April 30, 2009. Block 25/34 comprises an area of 7,006 square kilometers (2,705 sq miles) area in the East China Sea, about 110 kilometers (68 miles) offshore mainland China, in water depth of 75 meters to 95 meters (246 ft to 312 ft). Primeline has an existing gas discovery, Lishui 36-1, within the block. Primeline is required to complete a minimum exploration work in each exploration phase; the requirement for the first exploration phase is to acquire 200 square kilometers (77 sq miles) of 3D seismic and drill one well of not less than 2,500 meters (8,202 ft) deep with a minimum exploration expenditure of US$6 million. To date, in the first exploration phase, Primeline has acquired a total of 550 square kilometers (212 sq miles) of 3D seismic and has together spent in excess of US$20 million but, due to the lack of availability of drilling rigs, has so far been unable to drill the required well despite all reasonable best efforts.
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Wednesday, April 08, 2009
Maritime Press Collection 2009-001 News reports received from Internet News taken from various news sites In 2007, the company and CNOOC agreed on a rolling development strategy, which entails developing the existing gas resources in the Lishui 36-1 gas field whilst at the same time continuing exploration of nearby prospects. Since October 2008, when the Agreement In Principle for Gas Sale was signed with Zhejiang Natural Gas Development Co. Ltd., Primeline has been proceeding with the compilation of the Overall Development Plan (ODP) for the Lishui 36-1 gas field. In view of the current ODP work program, the rolling development strategy and the approaching end of the first exploration phase, CNOOC has now agreed that Primeline may carry forward the unfulfilled one well commitment from the first phase into the second phase. As a result, the work obligation in the second phase will be to drill two exploration wells. Furthermore, CNOOC has agreed that Primeline may delay its decision to enter into the second exploration phase until Oct. 31, 2009, provided that if Primeline elects to proceed by that date then the second exploration phase shall be deemed to have commenced on May 1, 2009. It is Primeline's current intention to proceed to the second phase but this flexibility will allow Primeline to decide and plan on a better basis when the ODP is completed. When a development decision is made, the agreed development area will be carved out of the exploration area and will be the subject of a Supplemental Development Agreement with CNOOC. Dr. Ming Wang, CEO of Primeline, commented, "CNOOC recognizes the scarcity of drill rigs in the past few years and the benefits of having the ODP report completed and approved before we proceed with the step out exploration work within the overall rolling exploration and development concept. CNOOC's agreement to amend the Petroleum Contract terms demonstrates the cooperative understanding and goodwill between us supporting the Lishui 36-1 development project and beyond." As previously announced, Primeline is progressing well with the preparation of the ODP and is in the process of contracting various surveys required for the ODP. Land acquisition for the onshore terminal site from Wenzhou Government is also proceeding well. On the exploration side, Primeline has completed the site survey of the two proposed exploration well locations in the Lishui gas play and other associated preparatory work. Primeline is ready to drill once a rig is available on acceptable terms. As part of the rolling development strategy, it is now anticipated that drilling of the nearby prospects will only commence after a decision on the development is made. It is also believed that the proposed delay should benefit Primeline in that indications are that drilling costs are now coming down as a result of current market conditions. SOURCE: Energy Current
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