Wednesday, January 19, 2000

FGH and Ocean Rig settle dispute
Friede Goldman Halter, Inc. and Ocean Rig ASA say they have settled disputes related to the construction and delivery of Ocean Rig's Bingo 9000-1
and Bingo 9000-2 offshore drilling rigs, currently being outfitted at Friede Goldman Offshore's Pascagoula, Miss.,facility.

The settlement terminates the previously announced arbitration proceedings in which both companies were engaged.

The settlement was reached without admission of liability on the part of either company for the delays previously encountered in the outfitting of the two rigs.

As part of the settlement, the Bingo 9000-1 will now be delivered on October 31, 2000
and the Bingo 9000-2 on December 31, 2000. Friede Goldman Offshore has agreed to pay liquidated damages to Ocean Rig if the rigs are delivered later than those dates. In exchange, Ocean Rig has agreed to pay early completion bonuses to Friede Goldman Offshore if the drilling rigs are delivered early.

Friede Goldman Offshore and Ocean Rig say they have also "restructured their relationship in a number of significant respects to help improve cooperation and to give Ocean Rig a more active role in the project." The two have agreed to appoint a mutually acceptable independent organization to take responsibility for planning and scheduling the projects until completion and have agreed to freeze the design of the rig. In addition, the parties have agreed to retain an independent company to organize and manage the commissioning of the rigs.

In an effort to help finance the completion of the rigs, Ocean Rig has agreed to an increase of $21.5 million in the contract price of each rig. These additional per rig amounts will be paid

  • $5 million up front,
  • $5 million upon delivery of the rig to Ocean Rig
  • the remaining $11.5 million will be spread over twice-monthly installments linked directly to the progress made on the rig.

Monthly progress will be assessed and verified by the independent planning consultant who is to be engaged as part of the settlement between the companies.

The companies have also agreed to make further improvements to the cash flow available for the projects by modifying the current milestone structure to allow for additional twice-monthly progress payments.

Friede Goldman Offshore says it is confident in the revised delivery dates and looks forward to working with the independent planning consultants and Ocean Rig to monitor the progress of the rigs.

Korean shipbuilding orders outstrip Japan
Shipbuilders Association of Japan statistics reportedly indicate that, in 1999, South Korean shipbuilding orders reached 12.72 million gt, an increase of 27.3% over the previous year. In contrast, Japanese yards booked less than 10 million gt, a drop of 9.2% from the previous year.

Preliminary figures from the China Shipbuilding Association, meanwhile, show China securing 19% of an estimated world total of 45 million gt with around 8.5 million gt.

Superseacat Service to be launched between
Estonia and Finland

super seacatSea Containers Ltd. says its $30 million SuperSeaCat Four will operate in a new fast ferry service between Tallinn, Estonia and Helsinki, Finland starting in April, 2000. This 100 meter long vessel with capacity for 752 passengers, 164 cars and 4 buses will provide three sailings a day (four in the peak season) until year end. The ship flies the Italian flag.

Sea Containers is establishing a company in Estonia to manage the ship. Silja Line in Helsinki will be the general sales and marketing agents and the service will carry the Silja brand name.

The state of the art fast ferry will cross between Tallinn and Helsinki in 90 minutes at an average speed of 37.8 knots, about 42 miles an hour.

Sea Containers has invested in research and development of the Fincantieri-built SuperSeaCat -- three sister ships operate on the Irish Sea and English Channel. The craft gives a smooth ride as a result of an underwater wing called a T-foil. This hydrodynamic innovation acts as a stabilizer for the vessel and improves the ride by 60% working like an aerofoil. The increased stability the T-foil provides means that high speeds linked with a comfortable ride for passengers across the Baltic Sea
can be maintained on a regular basis.

Facilities on board SuperSeaCat include guaranteed seating for all 752 passengers on two decks, a 50 seat Business Class lounge, amusement area, cafeteria and bars, a duty and tax free shop and a mother and baby room.

RINA reacts to Erika report
Italian classification society RINA has acknowledged the initial findings of the French government inquiry into the sinking of the Erika.

"We understand that the preliminary inquiry has found that there was structural failure, and it has identified a chain of involved parties which includes the owners, the charterers and ourselves," says Nicola Squassafichi, CEO of RINA. "For our part we intend to co-operate fully with the investigations into this casualty so that we can do anything which needs to be done to prevent a similar incident. The evidence as to what exactly happened and who the parties involved are is not yet clear, but we will find out."

Squassafichi emphasizes that RINA is concerned at the environmental damage, and he expressed sympathy for the crew and those affected. "Our duty now is to find out what happened and to play our part to prevent anything like this happening again," he says. "We have already taken a number of urgent measures."

These measures include:

  • Initiating a full internal inquiry into the class history of the Erika with RINA.
  • Initiating a full audit of all other RINA-classed ships owned or operated by the same owner and manager.
  • Cooperating with the Maltese government (the flag state), the European Commission and the French government's inquiries.
  • Preparing information on the Erika for other societies which class sisterships.
  • Conducting a full review of class procedures to see if there are any lessons to be learnt either internally, or which can be used to improve IACS rules and procedures.

"We are confident that we have carried out our duties fully with respect to the Erika," says Squassafichi. "RINA is a classification society with high standards and a good track record, devoted to safe ships and clean seas. We intend to learn what we can from this incident to further improve our performance."

RINA is part of the Registro Italiano Navale group and is a Genoa-based classification society which was formed in 1861. It was a founding member of the International Association of Classification Societies (IACS). Today it classes 3,000 ships totaling more than 18 million gt. It has particular expertise in passenger vessels and fast craft. RINA says it has consistently had good Port State Control figures and an excellent track record with respect to pollution from vessels under its class. It employs more than 645 people in 51 offices around the world.

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