Norway yard interests “bailed out” by $7B

Published Nov 24, 2008
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Aker anchor handler AH08

Oil-rich Norway will guarantee billions of dollars worth of financing in place to build dozens of new-build offshore service vessels under a new “bail-out” proposal recommended for the country’s 2009 budget.

The 50-billion-kroner ($6.98 billion) is understood to be headed for export enabling agency Eksportfinans, which lends money to foreign banks who in turn lend to governments and smaller lenders intent on financing large capital items, like today’s offshore vessels.

“With so many building projects on hand, financial security from the state is very, very important to us,” a grateful Bergen Group managing director, Magnus Stangeland, told Norwegian TV 2.

Yet another shipbuilder suggested, that perhaps the extra billions might not have been needed. An STX Europe executive said the company’s finance and production capacity was in place to build the ships on order.

While the money was aimed at the range of Norwegian exporters, government and national media focused on the country's all-important shipyards as the money's target. Despite the attention, the sector had been seen by many observers as buoyant and strong, helped by its own policy of spreading risk among stakeholders in a given new-build ship.

The credit crunch in export markets and perceived surplus in numbers of some types of ships aroused fears that partners in shipbuilding might pull out of ship-finance deals.

Indeed, the count of anchor-handlers is already seen as giving way to new types of offshore service vessels. Industry experts see the world's fleet of offshore vessels doubling within five years (see Scandinavian Oil-Gas Magazine).

Tags: Bergen Group Dreggen, STX Norway AS


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