Ocean Yield remains in the market for transactions despite uncertainty over the future employment of its only floating production, storage and offloading vessel.
The Oslo-listed ship lessor, which is part of Kjell Inge Rokke's stable of companies, has grown its fleet from three vessels at the time of its initial public offering in 2013, to 60 units trading in multiple markets today.
Its deal making in the past couple of years has seen it enter the crude market in both the VLCC and suezmax sectors, and move into the dry cargo space.
However, questions remain about the future employment of the 214,266-cbm FPSO Dhirubhai-1 (built 1979), which has come off charter with Reliance Energy and is presently in Sri Lanka while its next project is finalised.
Rokke’s Aker Energy has an option on the vessel until 1 September that could see it enter a 15-year bareboat deal but, for now, it is the one question mark in the Ocean Yield system.
'Open-minded'
Lars Solbakken, chief executive of Ocean Yield, said other parties are also interested in the Dhirubhai-1 but stressed the situation will not put the kibosh on other deals.
“We have spent a lot of time on that, of course, but it does not stop us from doing other deals,” Solbakken told TradeWinds during an interview at the company’s headquarters in Lysaker near Oslo.
“With the multi-segment strategy, we are open-minded," he said. "It all depends on the counterparty. We are happy to look into several segments.”
Tanker and dry bulk deals have provided the staple diet for the Oslo-listed company during the past couple of years, with Solbakken noting that it has been in a position to execute quickly on transactions involving both new and secondhand tonnage.
It has also kept an eye out for LNG transactions. However, so far, the sums have not added up.
“We looked at LNG on several occasions,” Solbakken said. “Generally, we found risk reward to be better in tankers.
“The reason for that is there have been too many shipping companies, or investors, willing to basically invest into LNG projects at what we find to be too low returns.
“We have been able to achieve 13.5% to 14% return on equity. In LNG, that is impossible. You might manage 10%. Compared to other segments, LNG has had clearly lower returns.”
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