Marine link
 
Articles - Offshore Oil - History

Friede Goldman Continues To Expand Capabilities

(FGII) continues to entrench its position as a major beneficiary of the offshore boom, with an enviable expansion of products and services. Its latest move was the signing of a Memorandum of Understanding with the government of the Province of Newfoundland to purchase the Marystown Shipyard in St. Johns. The transaction, expected to close by the end of 1997, will provide FGII with the capability to build two complete semisubmersible offshore vessels simultaneously, as well as North Sea-type boats at the company's Cow Head Fabrication Facility.

The deal also signals an interesting new era of U.S./Canadian cooperations and mergers, with several other Canadian yards posing as potential takeover or partner targets of U.S. yards, which are in need of building space and skilled employees.

According to a recent equity research report from Bear Stearns, FGII is an excellent investment opportunity based on many factors. Bear Stearns expects FGII to be one of the premier rig builders over the next three to five years, as the offshore drilling cycle moves towards its peak. The booming offshore market, driven by technology which enables companies to more economically find resources in and recover them from deepwater fields, has created an unprecedented "up" cycle which has seen day rates soar, while owners/operators scramble to find yards to convert and upgrade older rigs (and build new ones) for the tremendous volume of projects. The result: a strong demand for shipyard space, and an opportunity for yards to enact appropriate pricing initiatives for at least the next two years. To help it cope with the burgeoning demand, FGII is (in addition to the Marystown deal detailed above) constructing a new shipyard, which should be operational by the second quarter of 1998. The yard will focus on newbuild orders for the Gulf of Mexico, the North Sea, West Africa and Southeast Asia. Bear Stearns projects revenue contribution from the facility to be $33 million in 1998 and $137 million in 1999

 
rss feeds | archive | privacy | history | articles | contributors | top news | contact us | about us | copyright