South Korean shipbuilders sign MOUs for Iranian $2.4bn shipbuilding projects

In a welcome move which temporarily diverts the financial pain suffered by South Korean shipbuilders, Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding & Marine Engineering Co (DSME) have reached preliminary deals, collectively estimated at $2.4bn with an Iranian shipping company Islamic Republic of Iran Shipping Lines (IRISL) and an Iranian petroleum company Iranian Offshore Oil Co. (IOOC) to build ships, tankers and offshore equipment.

However, the efforts have fallen short of reaching official contracts as the companies have just signed memorandum of understandings (MOUs).

Hyundai Mipo Dockyard, a subsidiary of HHI, signed a MOU with IRISL for orders of 10 tankers and at least six handy-size bulk carriers.

Hyundai Heavy was also in talks with IRISL for building around six container carriers with a 14,500 TEU capacity. In this deal, however, HHI was known to be competing with China’s Dalian Shipbuilding Industry Co.

IRISL, which operates about 115 oceangoing vessels, with a total of capacity of 3.3m tons, has an aging fleet which requires urgent replacement. While IRISL was modernizing its vessels, the company was chartering ships from foreign shipping companies including Greek carriers.

DSME was in negotiations with IOOC to seal orders of at least five jack-up rigs. But the deal also reached just signing a MOU.

Separately, Daewoo’s creditors have urged the shipbuilder’s workers to refrain from going on a strike as the restructuring plan outlined by the company had proposed job cuts in order to stay viable, financially.

Source: Business Korea

 

Iran has no plans to freeze oil exports, official says ahead of OPEC meeting

According to Iran’s Deputy Oil Minister Rokneddin Javadi, the country had no plans to freeze its output as the country tried to raise its crude exports to pre-sanctions levels.
 

According to Mr. Javadi, Iran’s current crude oil exports, excluding gas condensates touched 2m barrels per day (bpd) and that its crude oil export capacity would reach 2.2m barrels by the middle of summer.

Separately, a meeting between OPEC and non-OPEC producers would take place on 2 June 2016 to plan on freezing output to shore up crude oil prices.

Source: Reuters

Inconclusive over production output, crude stays at lows

With barely a week passing by since top crude oil producers discussed the possibility of freezing output to prop up crude oil prices, Saudi Arabia has already ruled out a production cut. Saudi Arabia’s oil minister Ali al-Naimi stated that the co-ordinated production cuts would not fructify as many producing nations were not willing to do so.

It is also known that Iran has already ruled out freezing output. Non-OPEC member Russia has so far agreed to reducing its supply.

Iran’s oil minister Bijan Zagahneh was quoted as describing the move as a “joke”. His comments came as nations had asked Iran to restrict output to 1m barrels a day but increased theirs to about 10m barrels for export.

This sort of a disagreement continues to keep WTI Crude at $31.48 (NYMEX) and Brent Crude at $32.95 a barrel.

Source: Reuters

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