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Have a nice summer

The Danish maritime cluster – ranging from the Minister of Business Affairs over ship lovers, mariners to shipowners – should dip the national flag for Dampskibsselskabet Torm A/S.

The more than 100-year old Danish steamship company has finalised the purchase of 50 per cent of the US company OMI Corporation, giving them an extra fleet of 28 product tankers. And dip the flag for the fact that Torm will transfer 23 of these purchased tankers to the Danish flag!

This shows a will far beyond some of Torm’s colleagues in Denmark. A.P. Møller-Mærsk, J. Lauritzen and Clipper Group have the majority of their new ships under other flags than the Danish. For a number of reasons, they say, but the fact is that of the 25 new ships for A.P. Møller-Mærsk this year, some 20 units will go to the Singapore flag. J. Lauritzen, D/S “Norden” and the Clipper Group only have a handful of ships with the Dannebrog on the flagpole and these companies also have a number of reasons for not flying the Danish flag.

May I remind all these shipowners of the bad-will it shows when they do not support the ambitious plan of Denmark being the leading European maritime nation in 2015?

I don’t think that includes Singapore, the Isle of Man or the Bahamas.
But we will have to look towards the coming year, as the shipowners have made a strong commitment to the government in exchange for tax relief on re-sale of older vessels. Danish Shipowners Associations have announced that the Danish fleet will gain more foreign currency than ever before and that the figure will reach a new high of DKK 180 billion for the whole of 2007, as it looks today. This gives the owners no excuse for not using the Danish flag. It cannot be the money and the earnings in any way at all that prevent them from using the national flag. Even flying it on bareboat charter tonnage owned by Japanese bank syndicates is possible nowadays.

This month’s theme is offshore, which – like shipping in general – is a booming industry. Offshore started a growth line looking like a rocket to the moon some 14 months ago, much to the industry’s own surprise. Surprisingly, as the offshore business has been lying low for almost ten years. Over that period of time a lot of acquisitions and mergers took place in the business, leaving a number of organisations with much internal workload to deal with. Furthermore there was no real money to invest in new fields or exploration, as the oil price was low – to the benefit of us as consumers.

The industry’s boom has been fuelled by the sky-high oil price, which rocketed about 14 months ago. Naturally it gives more leeway in the economy when a barrel of North Sea oil gives USD 67.85 as of the first day in June (after a slight fall from USD 69) than in the days when the oil price was USD 12-14 for a barrel of crude.

During this boom year rigs as well as supply vessels have been ordered for billions of dollars, FPSOs have been planned in order to get the black liquid gold up from underneath the sea.

The offshore industry has at all times been a very international industry. In the early days Americans were setting the standard, but in recent years the Europeans have more or less taken over. In fact, Norwegian standards have become more recognised by the rest of the world’s industry. As was said by several engineering companies in Kristiansand visited by SSG lately: Fewer rigs have to be rebuilt to work in the Norwegian sector nowadays.

Talking about the flagging of ships – in offshore it does not count. It is the ground on which a rig stands that sets the rules and regulations.

And now it is summer and I wish you all a nice summer. SSG will be back in August.