Thursday, February 24, 2000

U.K. detains tanker after RINA pulls certificates
During an inspection Tuesday at Felixstowe, a U.K. Maritime & Coastguard Agency Surveyor Captain Khairul Anam, detained the Panamanian-flag oil tanker ALBORAN I (IMO No 7333858). Built in 1972, the 3,764 gt ship was classed with Registro Italiano Navale (RINA). The vessel is owned by Golden Carriers Shipping SA in Athens.

Captain Anam visited the ship after receiving a fax from RINA stating that the classification society had withdrawn class and statutory certificates from the vessel due to "defects to equipment and machinery".

RINA's get tough attitude comes after it has faced sharp criticism in relation to the Erika incident. RINA's image also took another blow a few days ago when the secretariat of the Paris Memorandum of Understanding on Port State Control (the Paris MOU) selected a RINA-classed ship as its "rust bucket of the month"

The ALBORANI's defects, according to the U.K. MCA , include:

  • Fire and boat drills unsatisfactory;
  • No record of 3-month emergency steering drills
  • Several fire dampers inoperative;
  • Several watertight and weathertight doors without packing;
  • Oily water separator inoperative;
  • Oil discharge monitor equipment tampered with;
  • No evidence of lifejackets being of an approved type;
  • Insufficient generators;
  • No record of renewal of/end for ending of lifeboat davit falls;
  • No hand-held radios;
  • Windlass foundation deformed;
  • Doubler on collision bulkhead (indicating structural problem);
  • Pump room bilge system unable to be operated from outside;
  • No battery expiry date on Emergency Position Indicating Radio Beacon (EPIRB).
  • No evidence of light fittings in hazardous areas being explosion proof.

After visiting the ship Captain Anam confirmed that RINA's decision to withdraw the certification was well-founded. In addition, he has noted that the pilot ladder is unsafe. After an expanded inspection of the vessel, Captain Anam detained the ship on the following grounds:

1. No statutory certificates (withdrawn by class)
2. Emergency fire pump inoperative;
3. Starboard lifeboat engine inoperative;
4. Oily water separating equipment out of order;
5. No GMDSS hand-held 2-way radio-telephone apparatus on board;
6. Lifeboat equipment not properly maintained.

Captain Anam said after the inspection that he was concerned by the state of the vessel and its seriously sub standard safety equipment and that he had had no choice but to detain the vessel.

FGH expects loss for quarter and for year
Friede Goldman Halter, Inc. anticipates reporting a loss for the fourth quarter and its fiscal year ended December 31, 1999. The company also says it has entered into a letter of intent to sell the yacht division of its vessels segment.

On January 12, Friede Goldman Halter announced that it anticipated reporting a loss for its fourth quarter as a result of sluggish market conditions, merger related costs and the impact of a contract dispute with
Ocean Rig ASA. On January 19, the company announced that it had settled its dispute with Ocean Rig. Friede Goldman Halter has now revised its estimates to complete the Ocean Rig contracts and now expects to report a net loss for its fourth quarter of between $38 million and $40 million, or $1.10 to $1.16 per share. For the full year the company expects to report a net loss of approximately $28 million to $30 million, or $1.06 to $1.14 per share.

The company says it believes, based upon current estimates, that all of the earnings impact of unprofitable contracts as well as merger-related expenses have been provided for in the quarter. Any costs in excess of the contract prices related to its Petrodrill contracts will be reflected in the purchase accounting treatment of the acquisition by Friede Goldman of Halter Marine Group,Inc. Accordingly, "costs in excess of the original contract price will have the impact of increasing goodwill, which will be amortized over a 25 year period."

Friede Goldman Halter anticipates "significantly improved" financial results for the current year.

Sale of the yacht division is described as part of "a continuing effort to divest [the company] of its non-strategic assets." Chairman and CEO J.L. Holloway said the division is "a non-core asset that offers very little synergy with our other businesses, and is dilutive to management's efforts to manage the company."

The company plans to release its earnings on March 15th, and will conduct a conference call at 10 am on March 16th to discuss the quarterly and year-end results.

Financing for first Offshore Shuttle
Marine Shuttle Operations Inc. has signed a Memorandum of Understanding for the financing of the first Offshore Shuttle. The agreement has been reached with the Italian Ministry of Industry and various other Italian governmental entities. The financial support would be in the form of equity, debt and government guarantees, and is subject to conditions that include submission by an Italian shipyard of a competitive construction bid with terms and conditions acceptable to the Marine Shuttle, the arrangement
of sufficient commercial debt financing with a major bank and the raising of additional equity capital.

Though Marine Shuttle has not disclosed the selected Italian yard, one that would appear to be well placed to compete is the Belleli Offshore International yard in Taranto, which is operated by a joint venture that includes Friede Goldman Halre (with a 35% stake) and ABB Oil and Gas.

Marine Shuttle is seeking to become a leading player in the market for decommissioning, installing, and transporting offshore oil and gas structures. There are now more than 6,500 offshore oil and gas installations worldwide located on the continental shelf of approximately 53 countries. Marine Shuttle believes that over the next 30 years, most of these structures will have to be decommissioned at an estimated cost of $20 billion to $40 billion. The company has designed a new generation of vessel, the "Offshore Shuttle", which it believes will be capable of lifting and carrying most of the largest installations without extensive cutting or dismantling.

Michigan bill would require sterilization of ballast water
A bill (Senate Bill No. 955) has been introduced in the Michigan legislature to require that vessels bringing ballast water into Michigan from outside the state must sterilize the ballast water and any sediments
contained therein. According to the very useful e-mail newsletter circulated by Haight Gardner Holland & Knight, the legislation also requires that vessels not discharge unsterilized ballast water into Michigan waters. An exception is made for operations authorized by a state permit. The Michigan Department of Environmental Quality would be required to establish a ballast water inspection program and would be allowed to assess application and inspection fees. Hearings on the bill are expected shortly.

ITIC warning on the perils of e-mail
E-mail systems may help in reducing communication costs but they can still lead to "substantial losses at the touch of a button," warns the International Transport Intermediaries Club (ITIC).

The latest issue of ITIC's Claims Review reports the case of a charterer who had invited tenders for a long-term charter. A ship broker sent his principal's bid via an industry message system to the charterers' mailbox in the U.S. using an address code for the charterer. Unfortunately, the American system interpreted the code as a mailing list and the bid was circulated to a number of other owners. The principal did not secure the bid, claiming it was undercut as a result of its inadvertent publication.

In another case, a ship broker in Scandinavia was instructed by his principal to confirm re-delivery of a ship to its owners. He sent the notice of re-delivery to the owner's broker in the Far East by e-mail and requested confirmation of receipt. The owner's broker received the message but when he viewed it, it was blank and he had no idea what the message concerned. The system confirmed receipt to the Scandinavian broker who assumed the re-delivery notice had been received and accepted. The owners refused
to accept re-delivery of the ship and a substantial claim was made against the Scandinavian broker.

As part of its loss prevention services, ITIC has launched a survey in its latest Claims Review, addressing the use of electronic communications. Looking at the type of information sent via e-mail, frequency of use and problems encountered, the survey is designed to gauge the extent to which e-mail is currently used as a communication tool.

West Venture delivered
Smedvig yesterday finally took delivery of the drilling rig West Venture from Hitachi Zosen. West Venture has been under completion at the Coast Center Base outside Bergen, Norway, since November 20 last year. The rig will be transferred to the Troll field to perform the final part of the acceptance test program for Norsk Hydro, which is expected to take a week. Thereafter the rig will start drilling operations on the Troll field under the contract with Norsk Hydro.

Total construction time for the rig was 36 months and total cost at delivery is approximately $340 million.

The fifth generation semii is described by Smedvig "as one of the most advanced drilling rigs ever built. " It is one of a new generation of drilling units fdesigned for a broader range of use, decreased dependence on frequent supplies, higher capacity and drilling efficiency, improved safety and working environment as well as emphasis on reducing discharge of materials into the environment. West Venture is equipped with dual derrick and dynamic positioning system as well as a fully automated drill floor. Smedvig developed the design in cooperation with Norsk Hydro.

West Venture is 100 percent owned by Smedvig and has a four year assignment with Norsk Hydro.

Ship dismantlling and recycling joint venture (SDR)
starts work

Work is underway at the former Hunter's Point Naval Shipyard in San Francisco, California, to dismantle and dispose of the ex-USS Lockwood (FF-1064).

Following a recent decision by the U.S. General Accounting Office (GAO) to uphold the U.S. Navy's selection of Ship Dismantlement and Recycling Joint Venture (SDR) for this work, a project office has been established in San Francisco at what was formerly the Hunter's Point Naval Shipyard to facilitate the dismantllingand disposal process. The $3.7 million contract is one of four competitive contracts awarded by the Navy to bidders under a pilot program to develop and test environmentally sound and cost effective methods for disposing of excess naval ships.Disposal of the ex-USS Lockwood is expected to be completed within approximately six months.

On completion of the pilot program, SDR expects to submit bids to scrap additional ships under the contract. At present, the United States has an inactive fleet of over 200 Navy, Coast Guard, and Maritime Administration ships located at various Inactive Ships Maintenance Facilities around the country.

SDR is a joint venture between Earth Tech, Inc., and Ship Remediation and Recycling, Inc., a subsidiary of VSE Corporation (Nasdaq: VSEC - news). Additional subcontractors participating in the SDR pilot program include Astoria Metal Corporation, Energetics Incorporated, John J. McMullen Associates, Inc., and Strategic Procurement Services, Inc.

Marine operations contract for Bayu-Undan
A 50/50 joint venture of Aker Maritime and Clough Engineering has received a letter of intent for a $28 million (NOK 230 million) contract for Australia's Bayu-Undan Gas Recycle Project in the

Aker Marine Contractors, a company within the Aker Maritime group, and the Australian company Clough Engineering will be responsible for engineering, management and the marine operations for transporting the two platform decks for the Central Production Processing Complex out to the field and installing them on top of the preinstalled steel jacket substructures.

Aker Marine Contractors contributes to the execution with extensive experience from large marine operations in the North Sea, Gulf of Mexico and Canada. Aker Maritime is also participating in the detailed engineering for the Bayu-Undan development, and considers Australia to be a market of high priority, with several interesting projects expected to be started during the next couple of years. The Bayu-Undan development is currently one of the largest oil and gas developments in this region.

Each of the two platforms has an integrated deck solution, measuring approximately 65 by 55 metres. The deck for the drilling/process/ production platform weighs approximately 12,500 tonnes and the topsides for the compression/utilities/ living quarter platform approximately 10,000 tonnes.

The transport and installation will be performed with a new Heavy Lift Vessel operated by Offshore Heavy Transport Management (OHTM), as a sub-contractor. OHTM and Aker Marine Contractors have established an alliance for this type of special services to the offshore market. The transport will be from the topsides fabrication sites to the field. When arriving at the field site, the topsides will be floated over and subsequently
lowered down on to the substructures, which gradually takes over the weight.


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