Fred Olsen Energy News

Rig firm Fred. Olsen Energy and South Korean yard Hyundai Heavy Industries settle dispute over construction of semi-submersible rig Bollsta Dolphin. Shares in Fred. Olsen Energy up 17 percent at 0736 GMT on the news, after rising 37 percent at the opening of the Oslo bourse. Ownership of platform will be retained by Hyundai and arbitration proceedings associated with disputes have been terminated by consent. Fred. Olsen Energy's subsidiary firm Bollsta Dolphin will receive about $176.4 million from Hyundai of first installment paid by Bollsta. Reporting by Gwladys Fouche

Hyundai Heavy, as a turnkey contractor, will undertake all works including engineering, procurement and commissioning for the USD 700 million project. The contract also includes an option exercisable by the owner to order an additional same class drilling rig. The rig will be built at Hyundai Heavy’s Gunsan Shipyard. Equipped with a 1,650 ton Goliath Crane and the world’s largest 1.3 million DWT dry dock, the Gunsan Shipyard has delivered 26 ships since its establishment in 2010.

Offshore wind-power producers from Dong Energy A/S to RWE AG are building custom ships at record rates to reduce the cost of the technology which is  three times as pricey as electricity from coal plants. As many as 20 vessels, some with movable legs which reach the seafloor, will come onto the market in the next few years, reducing chartering costs of as much as 200,000 euros ($261,000) a day, said Marc Seidel, an offshore engineer at Suzlon Energy Ltd., which supplies turbines to Germany’s RWE. A lack of specialized installation ships has forced companies to hire barges designed for oil exploration, holding up work at projects such as EON AG’s Robin Rigg wind farm off Scotland’s western coast.

Statoil has awarded a contract to Dolphin AS and a letter of intent to Seadrill for two rigs which will operate on the Norwegian continental shelf (NCS). The Bideford Dolphin rig has won a three-year contract with start-up from 27 January 2011. The contract is worth about $421m. Statoil has an option to extend the contract from three to four years by 1 November 2010. The value of the contract will then increase to about $553m. Dolphin AS is a wholly-owned subsidiary of Fred Olsen Energy ASA. Seadrill’s West Epsilon rig has been awarded a letter of intent for a four-year contract to take effect on 29 December 2010. This contract is worth about $394m. The agreement is conditional on partner approval. Statoil can extend the contract period to five or six years before 1 October 2010.

The original contract signed on February 26, 2004 with Blackford Dolphin Pte Ltd (Owner), a subsidiary of Fred Olsen Energy ASA, for work to be carried on the Blackford Dolphin was $177m. The expected delivery date was in June 2007. On July 20, 2007, an addendum was agreed upon, which took into account changes up to that point in time by the Owner. The contract value was increased to $239.5m with the delivery date revised to February 2008. Since the addendum, there have been further revisions, including changes to the design of the rig, by the Owner. This has resulted in variation orders and a delay in the completion of the rig. While some variation orders were agreed upon and paid for by the Owner, outstanding and unresolved variation orders remain.

Harland & Wolff's (H&W) existence was extended last week as it won a 300 million pound ($458 million) contract to build four passenger ferries. The order from Bahamas-based Seamasters International Inc. includes an option for two additional ships. "This is very good news for us. If the full six vessels are ordered, we're looking at work until 2004," spokesman Peter Harbinson said. The order came just a day after Harland & Wolff workers accepted a three-year pay deal, a deal which was equally crucial in ensuring the company's near-term future. Harbinson estimated the order for the RoRo ferries would secure around 1,000 of the 1,300 core jobs at the shipyard.

Harland & Wolff's (H&W) existence was extended last week as it won a 300 million pound ($458 million) contract to build four passenger ferries. The order from Bahamas-based Seamasters International Inc. includes an option for two additional ships. If the full order is taken, the six ships should provide work for the yard through 2004. The order came just a day after Harland & Wolff workers accepted a three-year pay deal, a deal which was equally crucial in ensuring the company's near-term future. Harbinson estimated the order for the RoRo ferries would secure around 1,000 of the 1,300 core jobs at the shipyard. The yard, whose giant yellow cranes dubbed "Samson and Goliath" dominate the Belfast skyline, is still a mainstay of the British-ruled province's economy.

Workers at Harland and Wolff shipbuilders narrowly accepted a pay offer that could throw a lifeline to the yard that built the Titanic, their union said. The margin was slim at 424 to 389 to support what management said were final proposals that would give skilled employees about $475 a week. That wage would be guaranteed until at least January 2003 and include a further bonus opportunity. The Northern Ireland yard, majority-owned by Norway's Fred Olsen Energy, could be poised to win a $613 million order for four Norwegian ferries that may help it avoid closing its gates for good. "According to the negotiations we have been having with the company, there is an order now available on the basis that we were prepared to accept these proposals," Joe Bowers of the MSF union said.

Two Norwegian oilfields were shut Wednesday amid fears that a stricken exploration rig might start dragging its anchors in high seas and threaten to crash into them. The North Sea Snorre and Vigdis fields, with a combined output of 260,000 bpd, closed after three of the rig's eight anchors broke free of the seabed in a storm which produced 55 ft. waves. About two-thirds of the rig workers were evacuated via helicopter, and no injuries were reported. According to the company, it is still too early to indicate what the Bideford Dolphin incident would cost. The rig, which was recently upgraded at Harland and Wolff, is owned by Fred Olsen Energy and is on lease to Hydro for oil exploration drilling.

Two Norwegian oilfields were shut Wednesday amid fears that a stricken exploration rig might start dragging its anchors in high seas and threaten to crash into them. The North Sea Snorre and Vigdis fields, with a combined output of 260,000 bpd, closed after three of the rig's eight anchors broke free of the seabed in a storm which produced 55 ft. waves. About two-thirds of the rig workers were evacuated via helicopter, and no injuries were reported. According to the company, it is still too early to indicate what the Bideford Dolphin incident would cost. The rig, which was recently upgraded at Harland and Wolff, is owned by Fred Olsen Energy and is on lease to Hydro for oil exploration drilling.

Harland and Wolff will await the outcome of arbitration next week with a major customer before deciding the fate of the Belfast shipyard. Harland and Wolff's owners, Norwegian offshore group Fred Olsen Energy, said last week the yard was at risk because of a dispute over a final 23 million pound ($33.78 million) payment for a deepwater drill ship. Talks with U.S. rig owner Global Marine, which ordered the drillship, are scheduled to take place in London for three days beginning September 5. On Tuesday, Harland and Wolff said it would do all it could to secure the shipyard's future. "They (management and board) have decided however that no decision can be taken regarding the yard's future prior to the arbitration hearings," the company said in a statement.

Norwegian offshore group Fred Olsen Energy said it aimed to resolve next week the fate of its Northern Irish Harland shipyard, famed for building the ill-fated Titanic. It said in a statement that its board of directors had met on Thursday to address the "present difficult situation at Harland and Wolff" and that "alternatives were being considered with a view to agree on a way forward during next week". It said the yard's future was at risk due to a refusal by American rig owner, Global Marine, to pay a final delivery installment of $34.09 million on completion of the Glomar Jack Ryan deepwater drillship.

Cammell Laird Holdings, which has been a strong shipbuilding and repair success story for several years, announced that it was to build two cruise ships, breathing further life into the struggling U.K. shipbuilding industry. Cammell Laird, however, said the contract with Luxus (UK) Ltd. for two 28,000-ton ships was conditional on the go-ahead from the UK government and Shipbuilding Intervention Funding, as well as ship mortgage finance guarantees to Luxus's bankers. The deal could be worth a reported $497.9 million, with the work expected to be shared between Merseyside in the northwest, Teeside and Tyneside in the northeast and Gosport on the south coast. Cammell Laird lost out last month on orders for six army roll-on roll-off transport ships.

The British government placed much-anticipated contracts for six RoRo ferries with two going to UK yards, and four going to a German shipyard. Defense Secretary Geoff Hoon also announced he would place orders for four amphibious landing ships, split between the Swan Hunter shipyard in North-East England and the Govan yards in Glasgow. Two of the ferries will be built by Belfast's Harland & Wolff yard, which built the ill-fated Titanic and is owned by Norway's Fred Olsen Energy. The others will be built by the Flensburger yard in Germany.

Norway's Fred Olsen Energy is buying the real estate interests of its Belfast, Northern Ireland shipyard Harland and Wolff for $67.2 million to boost the yard. "This is to improve Harland and Wolff's position to succeed in competing and obtaining orders," Senior Vice President Leif Dons said. Fred Olsen Energy owns about 70 percent of Harland and Wolff. Fred Olsen Energy is buying the so-called Titanic Quarter with about 100 acres (40.47 hectares) of land in Belfast and 35 acres of partly-developed commercial land beside the yard. "We're taking the property development away from Harland and Wolff to let the yard concentrate on securing jobs," Dons said.

Harland and Wolff signed a deal with the British Defense Ministry to build two RoRo ferries. The two 14,200 dwt vessels are scheduled for delivery in October 2002 and January 2003. Harland and Wolff, which is majority owned by Norwegian group Fred Olsen Energy, did not specify the value of the deal. "Harland and Wolff has today been offered a singular opportunity to rebuild and revitalise shipbuilding in Belfast. It is an opportunity which we fully intend to grasp," CEO Brynjulv Mugaas said. - (Reuters)

According to Rigzone, Fred Olsen Energy ASA (FOE) has entered into an agreement of intent with the Korean state owned oil company, Korea National Oil Corporation (KNOC) of South Korea, to request proposals for the construction of a jointly owned new-build ultra deepwater drillship. FOE's wholly owned subsidiary, Dolphin Drilling Ltd., will in case of realizing the project, undertake the technical and commercial operation of the drillship. Finalization of the project including Board approval, is expected within the end of the year. Source: Rigzone

Northern Ireland's economy suffered a blow when the shipyard that built the Titanic lost its bid to build a new Queen Mary cruise liner. The loss to a French yard threatened the survival of Harland and Wolff, the shipyard that once employed 30,000 workers and symbolized Northern Ireland's industrial prowess. Today it is a shadow of its former self with 1,745 workers. "The impact that this has on the ability of the UK shipbuilding industry to compete for projects is now clear and needs to be urgently addressed if there is to be a future for the industry in the United Kingdom," he said. British Prime Minister Tony Blair rejected the criticism. "We're very disappointed at the decision. But it's a decision by a commercial company.

Fred Olsen Energy has signed a contract for the Floating Production Storage Offloading (FPSO) vessel Petróleo Nautipa, which is owned and operated by a joint venture between Fred. Olsen Energy ASA and Prosafe ASA. The contract signed with the Houston based oil company Vaalco Gabon (Etame) Inc. has an approximate value of $30 million, and is initially for two years with options for Vaalco Gabon (Etame) Inc. to extend for up to three more years. The FPSO is currently under contract with Canadian Natural Resources in Angola, and is expected to demobilise from its current location during the summer of 2002, where it will be taken to a shipyard for necessary upgrading before being installed on the Etame Field offshore Gabon by September 2002.

More than 1,700 jobs are at risk at the Belfast birthplace of the Titanic after Cunard Line decided to build the Queen Mary II cruise liner at a French shipyard. Cunard, a unit of Carnival Corp., signed a letter of intent to build the Queen Mary II at the Alstom subsidiary Chantiers de l'Atlantique shipyard in Saint-Nazaire, France. The super liner is expected to be launched in 2003. The other shipyard in the running, Harland and Wolff, is a key pillar of Northern Ireland's economy, and previously warned that its 1,745 workers could lose their jobs if the yard did not land the $600 million contract. The 140-year-old shipyard, now majority-owned by Norway's Fred Olsen Energy, has just two ship orders left on its books and had pinned hopes of survival on winning the Cunard order.