Farstad Shipping Goes Big

Farstad Shipping ASA is a valued Norwegian owner/operator of offshore supply vessels, well regarded for its innovative approach but reliance on conservative values in relation to safety of ships and crew.

The company, which has steadily built its fleet and reputation in the offshore sector since exiting the tanker business in 1973, has a decidedly neutral take on the future, though. "There is a lot of uncertainty right now, about how the industry will move forward," said Torstein L. Stavseng, Farstad's CFO. "We are entering a period where there is a lot of over-tonnage, which will require us to push into new fields. More than likely, some of the small players will disappear into the larger ones."

While the crystal ball may seem a bit cloudy, Farstad has proven in the past to be an astute evaluator of companies and markets in the past. It acquired the Seafourth fleet in 1989, just as the market was starting to pick up steam, established International Offshore Services (IOS) in 1997 in an Australian joint venture with P&O, and established Brazil Offshore Services in 1995.

The organization has a market capitalization of more than $200 million and a newbuild orderbook of approximately $170 million. Including the vessels under construction (four Platform Supply Vessels and six Anchor Handling Tug Supply vessels), the Farstad controlled fleet is 53.

Though future demand is uncertain, Farstad's strategy is not. The company is firmly focused on owning and operating large PSVs and AHTS', in excess of 2,000 dwt for the former and units in excess of 10,000 bhp for the latter. In evaluating its prospects, it sees the move to deeper water for E&P to be the most vibrant.