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

People & Company News

VT Halter Begins Building LNG-powered ConRo Ships for Crowley

VT Halter Marine, Inc., a subsidiary of Vision Technologies Systems, Inc. (VT Systems), has commenced construction on the first of two liquefied natural gas (LNG)-powered,

NYK Line Joins PNW West Coast Metro Pool

Effective October 20, 2014, NYK Line has become a member of the PNW West Coast Metro Pool (WCMP) operated by Trac Intermodal. The WCMP operates chassis at all major marine terminals,

ISS Manages Heavy-lift Project at Port of Mombasa

Inchcape Shipping Services (ISS) announced it has completed another complex heavy-lift project in Africa, this time at the Port of Mombasa in Kenya. ISS was

Energy

Russian Minister to Intervene with Gazprom on Slovakia Gas Flow

Russia's Energy Minister Alexander Novak will intervene with Gazprom to raise reduced gas shipments to Slovakia to contracted levels, Slovakia's economy ministry

Total Names Refining Boss to Replace de Margerie

French oil company Total has appointed refining boss Patrick Pouyanne as chief executive to succeed Christophe de Margerie who was killed in a plane crash in Moscow this week.

Asia-Pacific Solar Collaboration Conference

The Australian Photovoltaic Institute is holding the inaugural Asia-Pacific Solar Research Conference at the University of New South Wales in Sydney from 8-10 December 2014.

News

Video: USCG Medevacs Navy Sailor off Virginia

The U.S. Coast Guard (USCG) medevaced a man Wednesday from a Navy vessel off the Virginia coast after watchstanders at Coast Guard Sector Hampton Roads in Portsmouth

VT Halter Begins Building LNG-powered ConRo Ships for Crowley

VT Halter Marine, Inc., a subsidiary of Vision Technologies Systems, Inc. (VT Systems), has commenced construction on the first of two liquefied natural gas (LNG)-powered,

New Research Vessel Delivered on the Great Lakes

The new oceanographic research and fisheries assessment vessel, Arcticus, completed her sea trials and was delivered to the U.S. Geological Survey's Great Lakes Science Center on October 17.

Vessels

VT Halter Begins Building LNG-powered ConRo Ships for Crowley

VT Halter Marine, Inc., a subsidiary of Vision Technologies Systems, Inc. (VT Systems), has commenced construction on the first of two liquefied natural gas (LNG)-powered,

New Research Vessel Delivered on the Great Lakes

The new oceanographic research and fisheries assessment vessel, Arcticus, completed her sea trials and was delivered to the U.S. Geological Survey's Great Lakes Science Center on October 17.

US Navy Christens Future USS Detroit

The U.S. Navy christened the future USS Detroit (LCS 7), the fourth Littoral Combat Ship of the Freedom variant, in a ceremony at Marinette Marine Shipyard in Marinette, Wisconsin, Oct.

 
 
Maritime Contracts Maritime Security Navigation Pipelines Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
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: 0.4840 sec (2 req/sec)