Neste Oil to Exit the Shipping Business

Marinelink.com
Thursday, September 19, 2013
(Photo: Courtesy Neste Oil)

Ownership of key vessels will remain in Finland
 


Neste Oil is planning to exit its shipping business. According to the plan, the company would sell all its own vessels and outsource the ship management functions currently covering them, with around 320 ship management personnel transferring to a new employer. Neste Shipping's chartering functions would be retained and integrated with Neste Oil's organization. Going forward, Neste Oil intends sourcing its marine transportation through contractual arrangements.

 

"Neste Oil's shipping needs have changed in recent years," explains Neste Oil's President & CEO, Matti Lievonen. "The proportion of the Group's cargoes carried by Neste Shipping ships flying the Finnish flag has steadily declined. Because of its high costs level, Neste Shipping has been unable to compete profitably on the international shipping market. Ensuring the long-term continuity of the business in its present form would also call for significant investments. As a result, we are now planning to exit the shipping business and reinforce our focus on developing our core cleaner traffic solutions."


Service levels will be unaffected and national security of supply guaranteed
As part of the restructuring of its shipping business, Neste Oil intends selling five tankers (Mastera, Futura, Neste, Kiisla, and Suula) and three tugs (Ukko, Ahti, and Esko) to companies owned by Finland's National Emergency Supply Agency and the Ilmarinen Mutual Pension Insurance Company. These will be sold at the current market value. Neste Oil will lease the vessels back under long-term contracts and they will continue to sail under the Finnish flag.
 


"I am glad that we have been able to find an arrangement that will keep the key vessels needed by Neste Oil in Finnish ownership and in use by us," continues Lievonen. "These vessels, together with vessels chartered from other shipowners, will meet our current shipping needs and ensure that we are able to continue to provide our customers with a high level of service. The arrangement  will continue to ensure Finland's security of supply in the area of marine-based oil transportation."



In addition, Neste Oil plans to sell three of its other tankers - Tempera, Purha, and Jurmo - at a later stage, together with its 50% ownership of another three tankers - Stena Poseidon, Palva, and Stena Arctica - which are owned together with the Stena Group of Sweden.


Plan to outsource ship management functions
As part of the restructuring, Neste Shipping plans transferring its ship management functions covering the crewing and maintenance of its vessels to a commercial ship management company that would take over the operations of the vessels that would remain in Neste Oil usage following the restructuring. Neste Shipping's ship management functions currently employ around 300 people at sea and 20 people on shore.

 

In connection with the planned outsourcing, Neste Shipping will commence statutory employer-employee negotiations covering all the land- and sea-based personnel. The plan is to transfer these personnel to a new employer. The planned sale of the Tempera, Purha, and Jurmo at a later stage could impact personnel in the event that the new employer is unable to offer substitutive positions to those concerned.
 


Financial impact

If the current plans are implemented as intended, no significant capital gains or losses are expected. However, the arrangement is expected to free up approx. EUR 60 million of capital from Neste Oil's balance sheet and improve the Group's result by approx. EUR 10 million annually during the coming years.

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

AEGIR-Marine Partners with On Site Alignment

AEGIR-Marine and On Site Alignment (OSA) signed a contract at SMM in Hamburg confirming the companies’ strategic alliance concerning stern seal and propulsion service

BSH Certifies SeaCURE for Wide Range of Flow Rates

The Federal Maritime and Hydrographic Agency of Germany (Bundesamt für Seeschifffahrt und Hydrographie- BSH), which previously granted the Evoqua SeaCURE Ballast

SSI Webinar: ShipConstructor MarineDrafting

As part of its Technical Webinar Series, SSI will host a ShipConstructor MarineDrafting Product webinar on Wednesday, September 24, 2014 from 8-9 a.m. (PDT).  The

Finance

Oil Edges Below $99 but Supply Risks in Focus

Oil traded slightly lower below $99 a barrel on Thursday, pressured by ample supply and concern over the weakening of demand growth in major consumer nations, as well as a rise in the U.

Aiming to Make Less Fuel Go Further: Maersk Drilling

Maersk Drilling says it is engaged in an energy efficiency project for its newbuilds together with Maersk Maritime Technology. The project involves an Energy Management System (MSPS),

Sound Oil Announce 2014 Interim Results

Sound Oil, the European / Mediterranean focused upstream oil and gas company, announced its unaudited interim results for the six months ended 30 June 2014.   Highlights   *

Energy

Oil Edges Below $99 but Supply Risks in Focus

Oil traded slightly lower below $99 a barrel on Thursday, pressured by ample supply and concern over the weakening of demand growth in major consumer nations, as well as a rise in the U.

Shell: Nigeria Oil Union Strike Not Affecting Exports

A strike by Nigeria's oil unions is not having any immediate impact on crude oil exports from Africa's top exporter, despite moving into a third day, spokesmen

Ricardo to Support Kongsberg WFMS Development

Ricardo and Kongsberg have signed a framework agreement that will see Ricardo support the development of the Kongsberg Wind Farm Management System (WFMS) as well

News

BSH Certifies SeaCURE for Wide Range of Flow Rates

The Federal Maritime and Hydrographic Agency of Germany (Bundesamt für Seeschifffahrt und Hydrographie- BSH), which previously granted the Evoqua SeaCURE Ballast

Oil Edges Below $99 but Supply Risks in Focus

Oil traded slightly lower below $99 a barrel on Thursday, pressured by ample supply and concern over the weakening of demand growth in major consumer nations, as well as a rise in the U.

Shell: Nigeria Oil Union Strike Not Affecting Exports

A strike by Nigeria's oil unions is not having any immediate impact on crude oil exports from Africa's top exporter, despite moving into a third day, spokesmen

Vessels

World’s Largest Fast Crew Boat Christened at Incat

The 70-meter Fast Crew Boat (FCB) was christened Muslim Magomayev at a ceremony at the Incat shipyard on Monday, September 15. This is the first vessel that

Australian Navy Delivers Solomon Island Supplies

Two Royal Australian Navy landing craft have delivered vital supplies to remote communities in Solomon Islands as part of Australia’s commitment to provide support to the region.

USCG in Search of Missing Man in Lake Michigan

The Coast Guard is searching for a man who went missing on Lake Michigan, Tuesday. Missing is 48-year-old Joseph Kiehm from Milwaukee. Kiehm was last seen aboard his 26-foot white sailboat,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Offshore Oil Pipelines Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.5595 sec (2 req/sec)