The decline of the shipping market has had an unprecedented impact across the full reach of the industry. More than 500 vessels or rigs are on order for Norwegian interests at a time when shipyards and buyers are facing severe financial challenges. This update looks at some of these challenges and discusses, from the buyer's perspective, some strategic considerations which may be of use when renegotiating terms.
A buyer that has entered into a contract with a shipyard for the construction of a vessel often wishes to utilize the value of the shipbuilding contract as part of its financing scheme during the construction period by mortgaging it. This update looks at the questions this raises, as well as the relevant legislation and conflicts which may arise.
Norwegian ship managers can reduce the potential risk of having to pay for goods or services ordered for the ship by specifying both that orders are made on behalf of a named owner and that orders are to be governed by Norwegian law and jurisdiction. Procedural conflicts and the uncertainty that often follows may be avoided by having explicit internal instructions regarding contractual procedures.
Norway leads the way in the floating production, storage and offloading (FPSO) sector. This update focuses on the legal and practical challenges in a typical FPSO conversion project, and highlights issues that could be useful for risk assessments by owners and banks.