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Articles from 2016 In March

GC Reiber diversifies away from oil and gas with Nexans Norway charter

GC Reiber diversifies away from oil and gas with Nexans Norway charter

Commencing in January 2017, the 8.5-month charter will deploy the construction support vessel (CSV) on contract to submarine cable manufacturer Nexans Norway and subsidiary Nexans Skagerrak, comprising survey, trenching and cable laying activities in Norway, the North Sea and the Mediterranean. The contract comes with 18 months worth of options.

"This is an interesting contract for us with a new customer in a non-oil related segment characterised by high activity and a strong project pipeline,” said GC Reiber ceo Irene Waage Basili. “Nexans is a solid international player with a strong presence in Norway, and we look forward to cooperating with them.”

The Polar King is currently listed on GC Reiber's website as having no employment and prompt availability. It is one of three subsea vessels in the company's fleet, and a second the Polar Onyx sees its charter end in April. Its third subsea vessel Polar Queen has a charter to Boa Marine Services to April 2018.

GC Reiber has been hard hit by the offshore downturn and reported losses of $46.7m in Q4 2015, and is subsequently cutting its workforce by 25%.

Nexans Norway supplies power, telecommunications, installations and heating cables in Norway, and is a major manufacturer of offshore control cables and high-voltage submarine cables.

APM Terminals in $859m deal at Tangier Med port

APM Terminals in $859m deal at Tangier Med port

Under the agreement with the Tanger Med Special Agency (TMSA), APM Terminals will create a new organisation in Tangier, and will be responsible for completion of the terminal yard, surface, buildings, container handling equipment, and integrated automated systems.

Located at the Tangier Med 2 port complex, quay wall construction and site reclamation for the first 1,200m has already been completed by the Tanger Med Port Authority, part of TMSA. When completed, the new terminal will increase the port’s total annual throughput capacity to over 9m teu, with up to 2,000 m of quay length. Total investment in the new terminal is expected to be EUR758m ($859m).

“APM Terminals has been in Morocco since the creation of our first company APM Terminals Tangier in March 2005 in partnership with AKWA Group and the start of port operations in July 2007,” said APM Terminals ceo Kim Fejfer. “APM Terminals MedPort Tangier will bring important innovation and future capacity into the West Med market on one of the world’s most strategic seaways – the Strait of Gibraltar.”

An APM Terminals statement called the Tangier and Algeciras facilities “a natural transhipment location” for cargoes transiting between Africa, Europe and the Far East.

The UN projects that more than half of the world’s population growth between 2015 and 2050 will occur in Africa. While African ports currently account for only 4.5% of global port throughput, this is expected to grow significantly as the African population more than doubles from 1.1bn to 2.4bn over the next 35 years.

Mitsui OSK Lines to shut Singapore bulker operation

Mitsui OSK Lines to shut Singapore bulker operation

Releasing further details of a restructuring of its dry bulk and container shipping businesses on which MOL is taking a JPY179.3bn loss in the fourth quarter ended 31 March 2016, it said it would closing down Singapore-based bulker operation MOLBC.

MOLBC was set up in 2012 to charter free dry bulk vessels in the spot market.

“However, the company deemed it necessary to conduct an urgent review of its business models due to the prolonged sluggish dry bulker market, and decided to implement a major scale-down of the fleet to minimize its market exposure by free vessels, dissolve MOLBC, and transfer its business operations from Singapore to Tokyo,” MOL said in a statement.

MOLBC is slated to suspend its operations by September this year. It said about half of the mid-to-long term chartered vessels under MOLBC would be transferred to Tokyo to meet expected cargo demand, while it would move ahead with returning the remaining vessels.

Breaking down the extraordinary loss MOL said it would record a loss of JPY40.5bn on early cancellation of time charter contracts by MOLBC, a JPY30.5bn loss on the transfer of contracts from MOLBC, a JPY36.9bn loss on the sale of capsize bulkers, and a further JPY9.5bn on the early cancellation of capesize chartered in contracts.

In its containership business it is recording a JPY60.7bn extraordinary loss on impairment of asset values, and a JPY1.2bn loss on the sale of vessels.

China’s first locally-built oceanographic research ship

China’s first locally-built oceanographic research ship

The ship, built at a privately-owned Zhejiang Tianshi Shipbuilding at a price of approximately RMB200m ($30.9m), was launched in Wenling, Zhejiang province.

In accordance to plan, the ship named Zhang Jian will make a trial voyage at the end of May before undertaking its first scientific research mission in the Mariana Trench, western Pacific Ocean, in December.

Zhang Jian will also serve as a mother vessel for manned submersible which can dive 11,000 metres into the ocean for research purposes.

Food laid out before the ship as an offering to sea deities to pray for safety at sea

Slowing sales business trims earnings at Tianjin Port

Slowing sales business trims earnings at Tianjin Port

Net profit for last year came up to HKD639.39m ($82.45m), a drop of 21.9% from the profit of HKD819.13m in 2014.

The annual revenue fell by 38.8% year-on-year to HKD20.54bn due primarily to a 60.9% fall in revenue from its sales business, which is mainly engaged in the supply of fuel to inbound vessels, sales of suppliers and other materials.

The container handling business for the group, which operates all container terminal at Tianjin port, remained steady in 2015. Tianjin Port achieved total container throughput of 14.09m teu in 2015, representing a 0.2% year-on-year increase.

The company pointed out that its loss due to the deadly explosion at Tianjin port in August 2015 was negligible, and it took initiatives and implemented a series of measures to ensure its port production and operation continued as per normal and safely.

Looking ahead to 2016, Tianjin Port noted that its businesses are subject to risks and uncertainties as China goes through a structural transformation of the economy.

“In the ‘New Normal’ of the Chinese economy, downside risks to Chinese growth have risen, and international trade environment remains difficult, placing pressures on port industry,” Tianjin Port said.

Another vessel sold off from Mercator Lines (Singapore)

Another vessel sold off from Mercator Lines (Singapore)

The 2000-built, 73,625 dwt bulker carrier Kalpana Prem has been sold to a third party for $2.93m reducing debt owed to main shareholder Mercator International Pte Ltd The vessel is expected to be delivered to the buyer in April this year.

Meanwhile creditor HSH Nordbank has launched a winding up petition against MLS subsidiary Varsha Vidya. The application will be heard by the Singapore High Court on 15 April.

Yinson Holdings 2015 profit down 11% to $57m

Yinson Holdings 2015 profit down 11% to $57m

Revenue was just 5% lower at MYR241.1m from the MYR253.6m seen the year before, indicating it is riding out the current state of the oil and gas sector reasonably well.

Full-year profit however was 11% down at MYR221.9m ($56.6m) compared with MYR247.7m previously and revenue also fell to MYR975.5m compared with MYR1.08bn previously.

COSL sees profit slashed on massive impairment charges

COSL sees profit slashed on massive impairment charges

Net profit for last year was recorded at RMB1.07bn ($165.5m), a plunge of 85.7% from the gain of RMB7.49bn in 2014.

Revenue for 2015 also declined by 29.9% year-on-year to RMB23.65bn on lower contributions from the group’s drilling services, well services, marine support services, and geophysical and surveying services.

The earnings were hit by a RMB1.2bn impairment charges on goodwill, property, plant and equipment, in view of the unfavourable future prospects of the group’s businesses on forecasted low utilisation rate and charter rates of drilling rigs.

“The company faces a severe business environment and our operation faces further pressure. It is expected that the revenue and operating profit for 2016 will decrease significantly as compared with 2015,” COSL said.

The company observed that global oil prices will remain low in the first half of 2016 and may slightly increase in the second half. “With such uncertainties of the decline of international oil and gas market, oilfield services industry will face the most rigorous challenges over the latest several years.”

Meanwhile, COSL subsidiary COSL Drilling Europe announced a decision earlier to axe 230 staff due to Statoil terminating services for one of its mobile drilling rigs COSLInnovator in the Troll Field of Norway.

Statoil, however, has resumed operations for another COSL rig COSLPromoter, also working in Troll Field, after COSL Drilling Europe implemented the necessary measures to meet Statoil’s demands.

Singapore moves closer to mass flow meter bunkering

Singapore moves closer to mass flow meter bunkering

The technical reference, referred as TR48:2015, covers a set of core requirements for metering system qualification, installation, testing procedures and documentation for bunker custody transfer. Some key references from the TR48 include the MFM sytem being able to operate within 0.5% overall measurement uncertainty, and to meet criterias such as system integrity, acceptance test requirements and delivery procedures.

Wong Suan, regional sales manager at ExxonMobil Asia Pacific, pointed out that by stamping out quantity disputes, millions of dollars in business cost savings can be achieved. Singapore, for instance, sells 45.16m tonnes of bunkers in 2015. Going by the global average quantity claim of 5% of total sales volume, that equates to 2.26m tonnes in disputed quantity, translating to around $690m in cost based on bunker price of $300 per tonne. “This shows the magnitude of discrepancy involved,” Wong emphasized.

M Segar, assistant chief executive of Maritime and Port Authority of Singapore (MPA), shared that even before the mandatory use of MFM next year, more than 500,000 tonnes of bunker fuel deliveries in Singapore are being conducted every month via bunker tankers equipped with a MPA-approved MFM.

Segar said Singapore is “well on track to meet the 1 January 2017” implementation date, and by end-2016 approximately 228 bunker tankers operating in Singapore will all be installed with MFM. To date, around 30% of the fleet is already equipped. “Everyone [bunker tanker owners] has a schedule to follow,” Segar said, adding that no one should expect any delays to the enforcement date.

Homegrown physical bunker supplier Sentek Marine & Trading said it has delivered 3.3m tonnes of bunkers via MFM-equipped bunker tankers in 2015, increasing from 1.8m tonnes in 2011. “We expect our MFM-delivered volumes to be even higher than 3.3m tonnes in 2016,” said Sherman Lee, assistant marketing manager at Sentek. In January, Sentek’s 6,000-dwt series bunker tankers made 13 deliveries and the fuel quantity variance was 0.13% on average, based on a total of 65,475.93 tonnes of fuel quantity on bill of lading records.

Singapore-based shipowner Pacific International Lines (PIL) also shared that between July to December 2015, the company made 444 bunker liftings in Singapore via MFM-equipped bunker tankers, and the fuel quantity variance was 0.28% on average. Anthony Nah from PIL’s fleet division said that the shipowner received 44.37% of its bunker fuel from MFM deliveries in 2013, increasing the percentage to 60.41% in 2014 and 81.01% in 2015, and 100% is expected in 2016.

“PIL believes that the benefits of using MFM for bunker deliveries include receiving accurate volumes, lesser or no disputes, eliminating time loss from disputes, and higher productivity onboard vessels,” Nah said.

Starting next year, ships bunkering in Singapore will have to observe the local regulation and take MFM-equipped bunker tanker fuel quantity figure as final, regardless of whether the ship itself has its own MFM or other fuel measuring devices. But if the shipowner still decides to contest the meter readings, a commercial settlement will ensue between the supplier and buyer, subject to MPA ascertaining there had been full compliance to the delivery procedures.

There is also the tricky issue of fuel transfer between shoreside terminals and the bunker tankers. Terminal operators, like shipowners, are not bounded by the MFM regulation and bunker suppliers have questioned whether they will accept the readings on the bunker tankers’ MFM, in the event of a major quantity difference.

CSCL plunges into $449m loss in 2015

CSCL plunges into $449m loss in 2015

This compared to a RMB1.03bn profit the year before, and revenues also fell 12% to RMB31.83bn from RMB36.08bn previously, the company said.

Volumes fell 3.5% to 7.8m teu. Both international and domestic volumes were affected, falling 3.6% and 3.4% respectively. While the fall in international trade lanes was blamed on the "significant slowdown in global economic recovery and weakened demand for container transport", the drop in domestic volumes was "primarily due to limited shipping space utilization rate and tendency of saturation of domestic market which in turn restrained market growth", CSCL said.

In addition the results were even harder hit by the plunge in freight rates. "Decrease in freight rates was primarily due to a slowdown in global economic growth, a sluggish international shipping market and an imbalance in supply and demand in 2015, which led to substantial drop in overall freight rate," CSCL explained, echoing all the lines that had reported before it.

Looking ahead, as a precursor to its possible future direction, CSCL noted the opportunities in China's relatively underdeveloped ship financing sector.

"CSCL will take good advantage of the opportunities arising from China’s initiatives to accelerate development of its finance leasing and financial leasing industries, and set up an integrated financial services platform on the basis of its shipping business, leveraging on its deep understanding and experience in the shipping industry accrued over decades," the management said.

Further elaborating, it concluded that "as a shipping finance platform, CSCL is to integrate premium resources and take advantage of the group’s numerous strengths, such as its background, to realize integration of its shipping and finance business, and promote the finance business with its shipping business as well as the operating efficiency and profit growth."