GulfNav targets expansion with offshore oil and gas acquisition

Offshore drilling platforms in Singapore. The UAE-based shipping company Gulf Navigation is in talks to acquire a majority stake in Singapore-listed Atlantic Navigation as part of its plans to expand into the offshore oil and gas sector. (Reuters)
Updated 29 January 2018
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GulfNav targets expansion with offshore oil and gas acquisition

LONDON: The UAE-based shipping company Gulf Navigation (GulfNav) is in talks to acquire a majority stake in Singapore-listed Atlantic Navigation as part of its plans to expand into the offshore oil and gas sector in the Gulf.
“This investment marks a major milestone in Gulf Navigation’s strategy to grow our offering to our customers in the regional offshore oil and gas sector. At the same time it gives Gulf Navigation a significant position in the GCC regional OSV O&G market,” said Khamis Juma Buamim, group CEO of GulfNav, in a statement.
Atlantic operates a fleet of 25 vessels including offshore cargo barges, offshore supply vessels and lift boats. It also has a 50 percent share in a consortium to work on a $45 million deconstruction project with a Middle East-based national oil company, a GulfNav statement said. The project involves demolishing and removing offshore and onshore structures at an abandoned oil field in Abu Dhabi.
The planned acquisition is another step in GulfNav’s growth plans launched in July 2016 as it aims to respond to the anticipated demand for the shipping of petroleum and petrochemical products.
GulfNav set a target to double the size of its fleet of chemical tankers and offshore vessels to 20 ships by 2020 as well as increase its revenues by 300 percent by 2021.
In line with that strategy, GulfNav announced on Jan. 2 said it would increase the company’s capital by approximately 448 million dirhams ($121.9 million) to reach a total share capital of 1 billion dirhams. The offering will be launched in the first quarter of this year.
“Many GCC countries have allocated more than $140 billion over the next decade to expand their production,” said Buamim in a statement earlier this month, citing Saudi Aramco as an example which is looking to increase its oil refining capacity from 2.9 million to 3.3 million barrels per day by 2020.
“We are confident that we have all the required expertise to win a large share of this market, and we plan to be ready by having the capabilities and the fleet size sufficient to keep up with this expansion,” he said.
The company said this month it would refinance two petrochemical carriers Gulf Mishref and Gulf Mirdif to increase the firm’s fleet capacity. The vessels have the capacity to carry more than 26,000 tons each of chemical cargo. They will operate on the East Coast of the US, the Gulf of Mexico and will travel between the coast of West Africa and Europe.
Signs of a revival in GulfNav’s fortunes follow a major financial restructuring after it posted a net loss of 147.83 million dirhams in 2012. At the time the company cited poor trading conditions in the VLCC market and a tightening lending market.
The company had to sell two of its VLCCs, Gulf Sheba and Gulf Eyadeh, about four years ago.


EU takes aim at Turkish steel sector

Updated 20 min 52 sec ago
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EU takes aim at Turkish steel sector

  • The Commission said it will extend and beef up its existing ‘safeguard’ steel import caps until July 2021
  • For Turkey’s vast steel sector, the fourth largest contributor to the country’s economy, the caps could prove particularly painful

LONDON: The European Commission’s move to extend its steel import restrictions threatens to force Turkish mills, already buckling under the weight of US tariffs, to cut production further or in some cases close down, sources said.
The Commission said on Wednesday it will extend and beef up its existing “safeguard” steel import caps until July 2021 to counter concerns that European Union markets are being flooded with steel no longer being exported to the US.
For Turkey’s vast steel sector, the fourth largest contributor to the country’s economy, the caps could prove particularly painful as the EU has given it additional “country-specific” quotas.
Under the safeguards, Turkey has a tariff-free quota for rebar, a construction steel that makes up most of its steel exports, of around 300,000 tons for the first nine months of the respective quota periods, down 60 percent from its 2018 exports.
Country-specific restrictions do not apply in the last three months of the quota periods and Turkey could make up some sales then, but its annual export levels will still be sharply lower.
“Our export markets have disappeared, the local market hardly exists, we’ve got lots of capacity and no market,” said a London-based Turkish steel trader.
He added that hopes the US would soon cut its 50 percent tariff on Turkish steel imports were also fading given it is demanding that in return, Ankara hold fire on Kurdish forces in Syria, something Turkish President Tayyip Erdogan cannot do ahead of local elections.

 

 Major Turkish mills such as Cebitas and Ekinciler said they had, before the EU announcement, already slashed output while Koc Metalurji said it had stopped output for about a month.
Erdemir, Turkey’s largest producer, said it was producing as normal.
Investment bank Jefferies estimates EU caps on rebar from all countries combined should reduce its total rebar imports by at least 28 percent a year, adding that producers such as ArcelorMittal and CMC should benefit most from EU caps on long products like rebar.
“(EU) quotas for (Turkish) rebar are extremely low and will be exceeded in the first one or two months. Local demand is also extremely poor,” said Turkish Steel Exporters’ Association (CIB) head Adnan Aslan.
The CIB estimated late last year, before the latest EU move, that Turkey’s steel production, consumption and exports would fall 30 percent this year.
Wednesday’s beefed-up EU safeguards come after the US placed tariffs of 25 percent on
imported steel early last year, while singling out Turkey later in the year with tariffs of 50 percent due to political tensions with
Ankara.
The US had been Turkey’s largest steel export destination in 2017, but the country’s steel flows to the EU ballooned 80 percent last year, according to Jefferies, making the EU Turkey’s the largest steel export destination.
“Traditional export destinations (for Turkish mills) are closing one after the other. Most probably, the (EU) quotas will be filled immediately, so EU producers will have a relatively good year,” the International Rebar Producers and Exports Association said in a note.

FACTOID

The US had been Turkey’s largest steel export destination in 2017, but the country’s steel flows to the EU ballooned 80 percent last year.