Container shipping firms entering energy business

Containership operators are taking advantage of their seamanship to enter the offshore energy production business, the Nikkei Report reported.

As emerging-economy firms muscle into the shipping business, Japanese firms are setting sail for what they hope will be more valuable waters.

Japanese marine transporters are swarming to "Pre-salt," a ultra-deep sea oil field off the coast of Rio de Janeiro, Brazil. The project is run by Brazilian state oil company Petrobras Brasilerio, which will invest up to US$220 billion dollars in the project through to 2014.

Japanese firms are there to supply floating production platforms rather than ships. Nippon Yusen KK has partnered with the Itochu Corporation to build and operate an oil rig that will bring crude up from the sea floor 2,000 meters below.

The projects are expected to generate revenues of about US$3.8 billion over 20 years, starting in 2013. Mitsui OSK Lines, meanwhile, will lease a floating oil rig to Petrobras with Modec, a Mistui Group company that supplies floating offshore platforms.

Japanese marine cargo firms have long concentrated on container shipping and transporting commodities like iron ore and liquified natural gas (LNG). But they are growing concerned as Asian rivals expand their trade volumes. "Asian companies are flexing their muscles and approaching us at top speed," said Akimitsu Ashida, president of Mitsui OSK.

In response to this challenge, shippers are looking to offshore natural resource development as an area where they can make use of their seamanship. The business carries environmental risks, as the ongoing oil spill in the Gulf of Mexico shows. But Yasumi Kudo, president of Nippon Yusen believes the business is promising, saying, "The energy sector is wide-ranging and offers many business opportunities."
(Source:www.cargonewsasia.com)