GATEWAY NORWAY AS – Taking you there where the future is! Document date: 31.10.2016



October 2016 Report – Norway Maritime & Offshore from Finland – Growth Program INDEX: Gateway Norway AS - editorial -------------------------------------------------------------------- 2 Offshore -------------------------------------------------------------------------------------------------- 3 Det norske, BP Norge finalize merger. Create Aker BP ------------------------------------------- 3 Large contract to Aker Solutions and Aibel --------------------------------------------------------- 3 Statoil further cuts investments amid drop in oil price ------------------------------------------ 4 Aker Solutions Signs Two Subsea Framework Contracts With BP ----------------------------- 5 Maritime -------------------------------------------------------------------------------------------------- 6 Norwegian shipyards are loosing money ----------------------------------------------------------- 6 Shipbuilding order situation in 2016 – Norwegian yards ---------------------------------------- 6 Simek: new contract ------------------------------------------------------------------------------------- 7 Rolls-Royce design & equipment package contract ----------------------------------------------- 8 Blokken Skipsverft --------------------------------------------------------------------------------------- 9 Hurtigruten – interior contract ---------------------------------------------------------------------- 10 Norway – Singapore: maritime co-operation increasing --------------------------------------- 10 Automated ferry connection ------------------------------------------------------------------------- 10 Ulstein – new contract – cruise ---------------------------------------------------------------------- 12 Wärtsilä – induction charging of ferries ----------------------------------------------------------- 12 Planning to build 521 meter long fish farm vessel ---------------------------------------------- 13 Coming seminars / exhibitions: --------------------------------------------------------------------- 15 • Norwegian Industry: Shipyard 2016 – conference ------------------------------------------ 15 • 27th International Petroleum Tax Conference ----------------------------------------------- 15 • Offshore Vessel Connect Europe Conference & Exhibition -------------------------------- 15 • The Norwegian Operators Conference -------------------------------------------------------- 15 Attachments: ------------------------------------------------------------------------------------------ 17 Orderbook – Norwegian shipyards: October 2016 ---------------------------------------------- 17





Gateway Norway AS - editorial

Gateway Norway AS, Haugesund office in Norway, is pleased to present this second monthly issue of the maritime & offshore report – Norway for October 2016. The main goal of this monthly project is to inform Finnish companies in the maritime & offshore sector about current / new activities and news in the Norwegian market. Do not hesitate to contact us in the case of your in the Norwegian market and/or for any inquiries. We are here to help your business in Norway! Kind regards, for GATEWAY NORWAY AS Sign. Jaakko Isotalo Senior advisor, member of the board

Tel.: E-mail: Web: Skype: LinkedIn: Twitter: WhatsApp: Facebook: Instagram: Snapchat:

+47 93019616 [email protected] www.gatewaynorway.no jaakkoisotalo

https://no.linkedin.com/in/jaakkoisotalo

https://twitter.com/JaakkoIsotalo Jaakko Isotalo https://www.facebook.com/jaakko.isotalo.9 jaakkoisotalo Jaakko Isotalo Either write something worth reading or do something worth writing. Benjamin Franklin

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Offshore

Det norske, BP Norge finalize merger. Create Aker BP •

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Det norske oljeselskap, a Norwegian oil company, and BP Norge, a Norwegian subsidiary of the British oil firm BP, have completed their previously announced merger. Det norske said on Friday morning that the closing of the transaction was scheduled to take place “today,” September 30, 2016. On Friday afternoon, Det norske reported that the merger and the subsequent establishment of Aker BP, the independent offshore E&P company on the Norwegian Continental Shelf, was completed. To remind, the deal was announced mid-June, when it was agreed that Det norske would issue 135.1 million shares based on NOK 80 per share to BP as compensation for all shares in BP Norge, including assets, a tax loss carry forward of $267 million and a net cash position of $178 million. In parallel, Aker, Det norske’s major shareholder, would acquire 33.8 million of these shares from BP at the same share price to achieve the agreed-upon ownership structure. The company has been renamed Aker BP with Aker and BP as main industrial shareholders. The new E&P company is independently operated and listed on the Oslo Stock Exchange. Aker BP is jointly owned by Aker (40 percent), BP (30 percent), and other Det norske shareholders (30 percent). Also, the company’s shares will from and including October 3, 2016, trade under the new name Aker BP ASA and the new ticker symbol “AKERBP” on Oslo Børs. More info – link: http://www.offshoreenergytoday.com/det-norske-bpnorge-set-to-finalize-merger/

Large contract to Aker Solutions and Aibel • •

Aker Solutions will build the subsea systems and Aibel modules for Heidrun platform. Aker Solutions was awarded contract for the subsea system Dvalin. The agreement has a value of at least NOK 900 million. Meanwhile, the company is awarded the contract to build two modules on the Heidrun platform. Overall, Dvalin license award contracts for NOK 4.5 billion for development. These contracts mark the start of construction of Dvalin, and we are very pleased to have received Aker Solutions and Aibel on the team, says HansHermann Andreae, CEO of DEA Norway. Aker Solutions will build the 300 ton heavy subsea system and the connection between the Heidrun platform and pipeline on the seabed. Aibel will build a 4,000-ton gas processing module and a 400-ton injection module, both of which will be placed on Heidrun for the platform to receive gas and condensate from Dvalin. This contract is handled by Statoil, operator of Heidrun. Together they awarded contracts worth NOK 4.5 billion for development of the field. In addition to the two that www.gatewaynorway.no

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are allocated today, will be awarded a contract for pipeline and installation of production equipment. 68 percent of value added in connection with the development will accrue to Norwegian enterprises, which corresponds work for over 6.000 FTEs (full-time employee working year) in the supplier industry.

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More info – link: http://offshore.no/sak/280742_milliardkontrakter-til-akersolutions-og-aibel

Statoil further cuts investments amid drop in oil price •

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The Norwegian oil giant Statoil announced on Thursday (27.10.2016) a deeper cut to its investments this year after a third-quarter loss because of low oil prices. While the quarterly net loss reached $432 million against $348 million a year ago, Statoil slashed $1 billion in its investment expenditure forecasts, now amounting to about $11 billion. The adjusted earnings dropped to $636 million, well below the $2 billion generated in the third quarter of 2015 and $957 million expected by analysts. "The financial results were affected by low oil and gas prices, extensive planned maintenance and expensed exploration wells from previous periods," said chief executive Eldar Sætre in a statement. More info – link: https://www.thelocal.no/20161027/statoil-further-cutsinvestments-amid-drop-in-oil-price



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Aker Solutions Signs Two Subsea Framework Contracts With BP •

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Aker Solutions has secured two 5-year framework agreements for potential future global deliveries of subsea production systems and lifecycle services at BP-operated oil and gas fields. The first 5-year contract covers engineering, procurement and construction of subsea production systems for new and maturing developments worldwide. Aker Solutions would bid for work under the contract, which sets out the terms and conditions that would need to be met. The companies also agreed on a 5-year servicing agreement, coinciding with the first contract, for any equipment delivered under the first contract and to support previously installed subsea hardware. Both contracts started in August 2016. More info – link: http://www.scandoil.com/moxie-bm2/news/akersolutions-signs-two-subsea-framework-contract.shtml



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Maritime

Norwegian shipyards are loosing money •

Only five shipyards according to analysis of “Nett.no” (19 shipyards) have increased their results from 2014 to 2015. Last year, as well as the year before, the smaller and medium-sized shipyards are having best results.

Shipyard Moen Marine Group Oma Baatbyggeri Brødrene AA Vegsund Slip Aas Mek. Verksted Fitjar Mek. Verksted Vaagland Båtbyggeri Larnses Mek. Verksted Stadyard Båtbygg Simek Fiskerstand Verft Solstrand Verft Havyard Ship Technology Kleven Maritime Holding Ulstein Verft Vard Group Fjellstrand Hellesøy Verft TOTAL:

Profitability - % 2015 7,8 7,7 6,4 6,4 5,9 5,2 4,2 3,6 1,9 0,0 -0,8 -1,3 -3,9 -5,9 -7,7 -10,2 -10,8 -15,7 -100,0 -7,7

Profitability - % 2014 4,3 1,5 10,5 11,2 10,2 4,2 -7,7 5,7 5,2 0,5 -13,9 -0,5 1,8 0,3 1,5 -0,3 1,8 -3,1 -3,1 1,1



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Losses among the largest shipyards; Vard, Kleven, Ulstein and Havyard. All four were heavily oriented towards the construction of offshore vessels. It is primarily Vard and Kleven who has managed to turn activity towards new markets, but they will only know about the results, when the 2016 financial results can be presented later on. Small yard are doing well. Moen Marin Group reached the highest profitability last year. More info – link: http://maritime.no/okonomi/milliardminus-iskipsbygging/

Shipbuilding order situation in 2016 – Norwegian yards •

The order situation at Norwegian shipyards: - The picture is nearly as lamentable that one gets the impression, says the trade organization Norwegian Shipyards in a statement which also praises the government for adopting exception possibilities of the EEA regulations. - This means that the construction of the Coast Guard's three new ships should not be advertised throughout the European Economic Area. Thus nailing this contract where it belongs, namely in Norway, says Norwegian Shipyards.



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From a poor Q1 with only four new contracts with a total value of scarce NOK 1.3 billion, the picture at the end of September is considerably brighter. So far this year it has registered a further 15 contracts of more than NOK 9.6 bn. The status for the whole year so far is 20 new contracts with a total value of almost NOK 11 billion. According to statistics, Norwegian Shipyards has prepared the total order backlog at 30 September 2016 of just under NOK 34 billion. Good activity! CEO Hugo Strand at Fitjar Mek. Verksted AS (FMV) is chairman of the Norwegian Shipbuilders Organization. He is proud that FMV is a yard that cover the entire process from design to complete construction at our own facilities. While several of the traditional "locomotives" of the industry are now struggling properly, the smaller shipyards have generally a far better order situation. Norwegian Shipbuilders draws in this context forward Fitjar Mek. Workshop south of Bergen, Larsnes Mek. Workshop on Gurskøy and Moen Marin on Kolvereid as examples of shipyards which all boast decent order intake so far this year. Within workboats for aquaculture seem demand to be straightforward. That several of the Norwegian offshore-related shipyards now seems to have come a long way in its restructuring, is gratifying. Norwegian Shipbuilders also registers optimism with regards to future contracting rate within the ferry, fishing and well boat sector. - We are particularly pleased that the government now uses exceptions possibilities inside the EEA rules to ensure Norwegian construction of the three new Coast Guard vessels, it is said in conclusion. More info – link: http://www.skipsrevyen.no/begynte-tratt-avslutter-godt/

Simek: new contract •

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Simek shipyard in Flekkefjord (South-Norway) has secured this autumn second fishing boat contract. The yard will deliver a 55.5-meter-long nets and longliner to “VEIDAR AS” in December 2017. For shipbuilders at Simek shipyard, is this company, Veidar AS, from outside of Ålesund a new acquintance. The fishing vessel will to be able to reach a top speed of around 14 knots, developed by Rolls-Royce. On board will be furnished for a total of 25 fishermen, in 16 cabins. Aluminium superstructure will be built at the yard, while the hull is built in steel sections in Poland and transported to Flekkefjord on barge. Section blocks arrive yard summer 2017, and the installation will begin next fall.

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Simek has been through both layoffs and redundancies as a result of oil downturn. The new contract ensures employment out in 2017 and after the delivery, the yard has still one more new building left. In March 2018, a 82.9 meter long trawler will be delivered. It is Simeks biggest ever contract with a value of 400 million. More info – link: http://maritime.no/kontrakter/fisket-hostens-andrekontrakt/

Rolls-Royce design & equipment package contract •

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Freire shipyard in Spain will build two stern trawlers with Rolls-Royce design and equipment. One trawler is ordered by Qajaq Trawl, while the second will be delivered to Polar Seafood. Both of these shipping companies are located in Greenland. The two vessels are designed for shrimp trawling, and get a large package of equipment from Rolls-Royce.- Operational efficiency, low emissions, good working conditions for the crew, safety and seaworthiness have been the main key words in the development of design and equipment, says sales manager Monrad Hide Rolls-Royce in a statement. He says that the company has a long tradition of developing new vessels for the two owners. In addition to the ship design, Rolls-Royce will supply engines, propellers, equipment, winches, steering gears and an electromagnetic system for each vessel. Since early 1970s Rolls-Royce has designed about 150 vessels for the fishing industry. Today's order book in this market now comprises seven fishing vessels and two well boats.

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More info – link: http://maritimt.com/nyheter/2016/hekktralere-med-rollsroyce-design.html

Blokken Skipsverft •

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Last time this yard delivered a new boat (new building) was in 1987. When repair market dried out the shipyard in Vesterålen was starting with a new building activity. When repair market went down for a couple of years ago, we saw that there was a market for new fishing boats. It is hectic at the yard now. In addition to the new building as soon as is finished, we have three fishing vessels in the order book, says shipyard boss Anders Stoltz-Rasmussen. In September, the first newbuilding launched. A milestone for shipbuilders. This is the first boat yard has built on almost 30 years. More info – link: http://maritime.no/nyheter/sist-gang-dette-verftet-leverteet-nybygg-var-i-1987/

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Hurtigruten – interior contract •

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Molde-based “Norwegian Marine Interior” shall furnish the two new expedition ships for several hundred million (NOK). For Norwegian Marine Interior (NMI) comprises large contract with Kleven to deliver and assemble everything from public spaces, galleys, staterooms, suites and technical insulation on ships built for Hurtigruten. The contract for the two vessels has a value of several hundred million kroner (NOK) for the provider, with an option for two additional vessels, the company said in a statement. The first vessel will be completed by July 2018, the next one year later. Norwegian Marine Interior was established in the late summer of 2014, but secured already first year major framework agreements and contracts for various shipyards in Norway. More info – link: http://maritime.no/kontrakter/vant-storkontrakt-pahurtigruten-innredning/



Norway – Singapore: maritime co-operation increasing •

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Norway strengthens the maritime cooperation with Singapore. Norway will come closer to some of the world's leading the yards and technology communities and has signed a maritime joint declaration with Singapore. Norway's economic and commercial presence in Singapore is significant. 80 percent of the almost 250 Norwegian companies with offices in Singapore is in the maritime and offshore industry, says CEO of the Norwegian Shipowner Association, Sturla Henriksen. More info – link: http://maritime.no/nyheter/norge-styrker-det-maritime-samarbeidet-medsinagpore/

Automated ferry connection •

Fjord1s new ferries shall across fjords in “auto – mode”, with "automatic crossing" systems supplied by Rolls-Royce. The system will be installed on two new electric ferries to the route on the ferry route Lote along E39 in “Sogn and Fjordane”.

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Construction of the new ferries begins at the Turkish Tersan yard this autumn. The automatic crossing system reportedly makes energy use more predictable and ensuring that the crossing will be smooth. The system will control the vessels acceleration, deceleration, speed and route. Two azipull thrusters from Rolls-Royce ensures that progress is adapted to local conditions and contributes to the crossing are the most energy efficient. - This system is designed to help ferry operator to meet its commitments to reliability and predictable energy consumption in various weather conditions. It is also a good example of an increasing degree of autonomy at sea, says Jann Peter Strand, product manager for automation & control in Mari division of Rolls-Royce, Alesund in a press release. Still manual control. The ferry captain will be in charge in the first edition of the system and the captain will manually maneuver the ferry the last few meters to the quay. In the next generation of the system Rolls-Royce will automate this part of the operation. If the captain of one reason or another are unable to take manual control, the system will stop the vessel in a safe distance from land and keep it in a safe position as long as necessary.



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More info – link: http://www.skipsrevyen.no/anda-lote-skal-kryssesautomatisk/?platform=hootsuite



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Ulstein – new contract – cruise • •

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Ulstein shipyard (Ulsteinvik, Norway) is going to rebuild a cruise ship: M/V SEA ADVENTURER. This is an important mission for us, says yard director Kristian Sætre. An important mission for us, both to fill a hole in production and because it is a mission within a new and important segment for us, says yard director Kristian Sætre. This 100 meter long vessel, owned by Bahamas-registered Adventures Partners Ltd., will arrive at the shipyard in April next year and in addition to a general upgrading the ship should get on board ten new cabins and among other shift gears, propellers and generator. This relatively small expedition cruise ship today accommodates 122 passengers and a crew of 72. More info – link: http://gatewaynorway.no/2016/10/20/ulstein-newcontract-cruise-vessel/

Wärtsilä – induction charging of ferries •

Inductive ferry charging in February. “Haugaland Kraft” in Haugesund becomes the first network company in the world that will supply power to inductive charging of an electric vessel. Wärtsilä has developed a pioneering electronic concept.



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Haugaland Kraft participates in the preparations for the world's first inductive charging station for electric vessels. The ferry port at Jektevik on Stord (island) will get a pioneering charging system with combined "suck mooring" from Cavotec and inductive charging system from Wärtsilä. The ferry MF Folgefonn, which in 2014 was transformed into a hybrid diesel electric drive, will be test project in this respect. By year end Wärtsilä will be completed rig testing of the charging system in the workshop on Stord. - The system is scheduled for installation in Jektevik in February, and by the summer we will test and verify the technology in regular operation, says technical director Ingve Sørfonn at Wärtsilä. The ferry MF Folgefonn has two electric motors of 750 kW each, in addition to four diesel generators of 460 kW each. With quay in 10 minutes the plant will be able to charge lithium-ion batteries to up to at least 80 percent with an output of 1 MW. The ferry leaves in Triangle Link Jektavik-Nord /HugloHodnanes and will go for diesel electric drive parts of the move. To go with full electric drive, they need recharging at two ports of call. More info – link: http://energiteknikk.net/2016/10/induktiv-ferge-lading-ifebruar

Planning to build 521 meter long fish farm vessel •

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Pure Atlantic is seeking 45 development licenses and NOK 3.3 billion to build the world's longest ship. Behind the company, which wants to build the world's single longest ship standing offshore, is the trio “Tom Henrik Sundby, Svein Johnny Naley and Kåre Jostein Larsen” Sundby is former CFO of seismic company Polarcus and thus has experience of both offshore vessels and financing. FACTS - Ship concept of Pure Atlantic: o There will be eight tanks inside the hull, closed to prevent infection between the tanks. Used water will exit through the side of the ship. o One or more such ships could sail within approved areas in the Norwegian economic zone, at a speed of 1-2 knots. o Where will they take in and out of water during the voyage, and the salmon will consistently get supply of fresh water. o Energy requirements for the vessels will be covered by mounted windmills. We plan to take this project in two phases. The boat itself costs NOK 3.3 billion to build. That is a lot of money. That said, we have seen many offshore installations that are costly to build. With the building diet, we also see that

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there is good economy even after construction costs. And we have a breakeven substantially below the price of salmon that we see today, says Sundby. Now we need NOK 50 million to test the concept and test the ship tank. With soaring salmon prices and an upturn on the stock exchange should basically be good times to recoup money for salmon. Pure Atlantic has already put in place agreements with suppliers and partners, but are at present without an industrial farming partner. - Yes, we have tied us initially to Ulstein, in addition to DNV GL, Marintek / Sintef, but currently only us investors have invested money in this project, says Sundby.



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More info – link: http://maritime.no/nyheter/de-vil-bygge-en-halvkilometer-langt-oppdrettskip/





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Coming seminars / exhibitions: •

Norwegian Industry: Shipyard 2016 – conference o Norwegian Industry (organization) is arranging yearly “shipyard conference” in Ålesund 01.-02.11.2016. o https://www.norskindustri.no/Bransjer/Maritim/verftskonferans en/

• 27th International Petroleum Tax Conference

o 02.-03.11.2016 Gamle Logen Selskapslokaler, Oslo, Norway. o www.npf.no



• Offshore Vessel Connect Europe Conference & Exhibition

o 02.-03.11.2016 Radisson Blu Plaza, Oslo, Norway o https://maritime.knect365.com/offshore-vessel-connect-europe



• The Norwegian Operators Conference





o 16.-17. November 2016, Stavanger. o http://www.operatorsconference.no

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Attachments:

Orderbook – Norwegian shipyards: October 2016 The new orders have been confirmed this time by the following shipyards: Hellesøy, Maritime Partner, Måløy Verft, Simek, Sletta Verft, Vaagland Båtbyggeri and Westcon. This is an impressive and long list of shipyards also in this month with new orders! Link: http://maritimt.com/images/stories/nyheter/ordre/2016/ordre2016-10.pdf

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