NYK – Entering Offshore & Energy Sector

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With the Baltic Dry Index hitting rock bottom and low oil prices have caused many companies either to restructure their organization or sell ships or expand into new business ventures.  One such case is about NYK, Japan’s largest shipowner.  NYK is about to stretch beyond the conventional bulkers, tankers, car carriers, and containers into the offshore and energy sector.

Reports from Bloomberg say that NYK is building a FSO (Floating Offshore and offloading system) for TOTAL (French Oil Major).  NYK has also extended its arms by partnering with a Japanese trading house for FPSO (Floating Production Storage and Offloading) business being built for Petrobras in Brazil.

It is evident from the reports that NYK is just inches away from signing a major offshore acquisition aiming to step up in energy sector.  Hitoshi Nagasawa, head of the energy division told Bloomberg that NYK is ready to spend “several tens of billions of Yen” on a deep-sea pipe-laying business.

“The plunge in crude prices means companies are looking to sell assets and offshore oil-related companies are struggling financially,” Nagasawa told the news wire.

NYK’s Interesting Ventures:

  1. NYK – has 50% stake in Knutsen NYK Offshore Tankers (KNOT), a shuttle tanker operation initiated in 2010.
  2. NYK has established consortium company Japan LNG Investment (JLI) with Mitsubishi Corp to participate in the Cameron LNG project in Louisiana.
  3. NYK is interested in venturing into floating production and regasification units (FSRU).
  4. NYK is also involved in Wheatstone project in Australia.

With the low oil prices and bad dry bulk business, many companies have diversified in their operations and results of such diversification are awaited.  This could either be a trendsetting business or may turn out to be an interesting lesson.

Source: Bloomberg, Newswire

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