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No upswing in newbuild orders till 2017: new DNV GL ceo Eriksen

No upswing in newbuild orders till 2017: new DNV GL ceo Eriksen
Incoming DNV GL ceo Remi Eriksen does not see an upswing in ship newbuilding orders until 2017, and “things to get worse before they get better” for the oil and gas sector.

Eriksen, who takes over the top post at DNV GL on 1 August, characterised the shipping industry as one with low rates, overcapacity and fierce competition, combined with stricter environmental regulation.

“We probably see it being 2017 before we see an upswing in newbuilding ordering again. But it will not be to the levels we have seen during the past 10 years,” he told media briefing ahead of Nor-Shipping 2015 on Monday.

The only exception would likely be the tanker sector, mid-sized LPGs and certain parts of the containership sector.

DNV GL ceo of maritime Tor Svensen added, “We have just reached a peak of newbuilding activity and it will tail off a little bit more to end of this year and we will see it tail off further next year.”

In response to the changing market conditions Svensen said DNV GL had introduced a “very early” recruitment freeze and also cut some positions relating to newbuildings largely through a natural process of people leaving the class society. DNV GL had also redeployed staff into the oil and gas sector, however, with the fall the in the oil price this now more difficult to do.

Eriksen does not expect to see any improvement for the oil and gas sector over the next 18 months.

“A lot of customers are dependent on the oil and gas industry and the oil price has nosedived since June last year and we see cost developments going in the wrong direction,” he commented.

“For many parties in the oil and gas industry things will get worse before they get better and we think it will be the later part of 2016 before things are trending in the right direction again.”

For the offshore drilling rig the picture was even bleaker with no recovery predicted till 2018.