A part of Watch Media

ShippingWatchSaturday28 January 2023

  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Search
  • Log in
  • Latest
  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
14/07/2015at 13:42

Stena's growth driver in tough offshore market

Stena Group division Stena Drilling has been a solid contributor to the group's combined earnings in recent years, but now the oil company has come under pressure from the oil price, the company's CEO tells ShippingWatch.
BY LOUISE VOGDRUP-SCHMIDT

MARSTRAND, SWEDEN

Stena Drilling has for years represented a solid unit in Stena AB's portfolio of shipping companies, but this status could now change in light of the steep slide in the oil price and the crisis in the offshore markets, says Stena Shipping, Drilling & Ferries CEO Carl-Johan Hagman in an interview with ShippingWatch.

"There is no doubt that we all have some tough years ahead of us in the current drilling market. Investments in offshore are generally declining, and the thing about supply is that there has been and still are far too many rigs entering the market. This has hurt a lot, resulting in a strong decline in rates," he says, adding:

"On the other hand, we're also seeing a considerable number of rigs being pulled from the market. That's good for us, because we're not forced to do that."

A Nordea analysis recently showed that several hundred rigs look set to leave the market ahead of 2017, and that numerous major players in the drilling market, including Transocean, will come out on the other side with considerable injuries.

Stena Drilling's fleet consists of four drilling rigs and four drilling vessels, and contract coverage for the rigs brings almost full employment until 2017.

"We feel that we are as prepared as we can be for this softer market, but we are also facing risks. We're noting a constant pressure in terms of contracts," says Carl-Johan Hagman, adding:

"We expect to avoid idling. We'll take delivery of one midwater rig next year, and our top priority right now is to secure employment for this unit.

According to the Nordea analysis, the worst part of the offshore crisis will have worn off by the second half of 2017, though things are still too uncertain to make any definitive conclusions. Carl-Johan Hagman stresses that Stena Drilling, like most of the market, did not expect the massive slide in the oil price, and as such he also declines to guess at when the oil price will stabilize at a higher level, or when the rig market might turn around.

The growth driver

Stena Drilling's 2014 revenue came to USD 986.6 million, and the company's earnings increased in the first quarter 2015 compared to the same period 2014, due to the dollar rate.

Stena Drilling publishes its results alongside the other companies in Stena AB, which had a combined revenue of USD 917 million in the first quarter 2015, while the profit in the same period grew to USD 282.1 million, mainly attributed to the sale of ferry operations on Helsingor-Helsingborg which was co-owned with Scandlines.

In addition to Stena Drilling, the Shipping, Drilling & Ferries division, headed by Carl-Johan Hagman, also covers Stena Line, Stena RoRo, Technical Manager Northern Marine Group and the two tanker carriers Stena Bulk and Concordia Maritime, of which the latter represents the only listed part of the major Swedish privately held shipping group.

"When I look at drilling in light of the portfolio as a whole, there is a continuous pressure on the division, just as there is a continuous commercial pressure on all our business areas. The dynamics at drilling are not as different from the dynamics at any other shipping divisions, so we just have to be pleased that the market has been this strong for this long and that our other segments are doing well. Even though it hurts now, we're trying to say: Here we go again, and try to deal best possible with this situation," Carl-Johan Hagman tells ShippingWatch.

Stena in big profit after Helsingor-Helsingborg sale 

Stena Bulk to expand its tanker fleet 

Media: Stena Bulk declines IPO 

Related articles:

  • Photo: Stena

    Stena in big profit after Helsingor-Helsingborg sale

    For subscribers

  • Stena Bulk to expand its tanker fleet

    For subscribers

  • Photo: Stena

    Media: Stena Bulk declines IPO

    For subscribers

Sign up for our newsletter

Stay ahead of development by receiving our newsletter on the latest sector knowledge.

!
Newsletter terms

Front page now

Foto: Höegh Autoliners
Carriers

Car carriers have rarely seen such profits: "We are probably at an all-time high"

After a difficult time during the pandemic, 2022 has exceeded all expectations for car carriers, says chief exec of Höegh Autoliners. Low capacity and electric cars out of China are main factors in elevating prices.
  • Norwegian carrier lands another large gas deal with Germany
  • Höegh Autoliners joins climate coalition

For subscribers

Foto: Markus Scholz/AP/Ritzau Scanpix
Container

Maersk rebrands Hamburg Süd and several other well-known subsidiaries

For subscribers

Foto: Ints Kalnins/Reuters/Ritzau Scanpix/REUTERS / X02120
Tanker

Fredriksen now owns nearly as many Euronav shares as the Saverys family

For subscribers

”Blue Water wants to grow – but it will be with a focus on profitable growth, and we will hold on to our strong values, unique customer focus and high level of satisfaction among both customers and personnel,” states Kurt Skov, founder and departing chair at Blue Water Shipping. | Foto: Carsten Andreasen/Ritzau Scanpix
Logistics

Blue Water founder promises future "focus on profitable growth"

For subscribers

Foto: Tatiana Meel/Reuters/Ritzau Scanpix
Regulation

EU considers capping Russian fuel prices at USD 100 a barrel

For subscribers

Foto: Statoil/AP/Ritzau Scanpix
Offshore

Borr Drilling raises USD 400m to pay off debt

For subscribers

Further reading

Foto: Statoil/AP/Ritzau Scanpix
Offshore

Borr Drilling raises USD 400m to pay off debt

The drilling company has secured a new bond loan of USD 150m, which in combination with another recent credit facility will be used for resolving an existing loan due late May.

For subscribers

Foto: World Marine Offshore
Offshore

Offshore carrier goes bankrupt after major claim and dispute among owners

World Marine Offshore has filed for bankruptcy. Deficits, conflict among owners, and a large claim in the US all play a part, says the insolvency administrator, who is now searching for a buyer of the Danish carrier.

For subscribers

One of Cadeler's large installation ships. | Foto: PR-foto Cadeler
Offshore

Semco to upgrade crane capacity on two Cadeler jack-ups

Danish contractor Semco Maritime is awarded new contract for modifications on two crane ships for offshore carrier Cadeler.

For subscribers

Latest news

  • Blue Water founder promises future "focus on profitable growth" – 27 Jan
  • Borr Drilling raises USD 400m to pay off debt – 27 Jan
  • Income for ice class tankers has surged by 1,644 percent following sanctions – 27 Jan
  • Floating power station to provide energy for one million Ukrainians – 27 Jan
  • Maersk rebrands Hamburg Süd and several other well-known subsidiaries – 27 Jan
  • Car carriers have rarely seen such profits: "We are probably at an all-time high" – 27 Jan
  • Fredriksen now owns nearly as many Euronav shares as the Saverys family – 27 Jan
  • EU considers capping Russian fuel prices at USD 100 a barrel – 27 Jan
  • New partnership to investigate potential human rights abuse at sea – 27 Jan
  • Singaporean competition authorities to probe DSME sale – 27 Jan
See all

Jobs

  • Copenhagen Shipping Company is hiring a skilled cargo broker

  • Junior Finance Business Partner - offshore wind industry

  • Chartering Manager for Lauritzen Bulkers A/S

  • Foundation Package Manager - Offshore wind industry

  • Financial Controller for International Shipping Company

  • Senior Lead, Human Sustainability at Sea

Jobs

  • Copenhagen Shipping Company is hiring a skilled cargo broker

  • Junior Finance Business Partner - offshore wind industry

  • Chartering Manager for Lauritzen Bulkers A/S

  • Foundation Package Manager - Offshore wind industry

  • Financial Controller for International Shipping Company

  • Senior Lead, Human Sustainability at Sea

See all jobs

Colophon

ShippingWatch
Search

Sections

  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
  • Sitemap
  • RSS feeds

Editor

Tomas Kristiansen

tk@shippingwatch.dk

Tel.: +45 3330 8360

Editor-in-chief

Anders Heering

Publisher

JP/Politiken Media Group Ltd

Advertising

annoncering@infowatch.dk

Tel.: +45 7077 7445

Advertising

Job Advertising

job@infowatch.dk

Tel.: +45 7077 7445

Jobs

Subscription

Try ShippingWatch or get an offer for a subscription meeting the exact needs of you or your company.

shippingwatch@infowatch.dk

Tel.: +45 7077 7445

Learn more about subscriptions here

Address

ShippingWatch

Rådhuspladsen 37

1785 Copenhagen K, Denmark

Tel.: +45 3330 8360

Guidelines

  • Privacy Policy

Copyright © ShippingWatch — All rights reserved

Microsoft is in the process of discontinuing Internet Explorer – and so are we.
For a better experience, we recommend using one of the following browsers.

Kind regards,
ShippingWatch

Google ChromeMozilla FirefoxMicrosoft Edge