DNV's long presence in many of the key countries in the Middle East, supported by the larger regional office in booming Dubai City, is paying off. In spite of the regional political unrest, the market has picked up pace and DNV has secured an impressive newbuilding market share
Opportunities abound in the increasingly important Middle East and India region for DNV. In spite of the geopolitical situation, the shipping industry has strengthened enough for DNV to secure an impressive newbuilding market share, while staying strong in the ships-in-operation segment. In 2003 DNV received 65 percent of the newbuilding to class in the region, mostly VLCCs, and in 2004 this has jumped to 70 percent. These figures are a testament to DNV's competitive edge, based completely on quality and service.
"This summer we got contracts for two VLCCs, two LPGs and two Panamax tankers ordered by Kuwait Oil Tanker Company (KOTC). Now we are working on two more VLCCs and six chemical tankers ordered by Saudi Arabian owners. In addition there is quite a lot of conversion and repair work for our surveyors. We need to expand our operations in order to keep up, and are looking to hire between eight to ten engineers over the next year," says Eivind Grostad, regional manager for DNV Maritime.
This is quite a turn of events, since it was only six months ago that redundancies loomed. "The first four months of this year were terrible, but in May everything changed. Since then the market has been fantastic, and more contracts are on the way," says Grostad.
Prolong ship life with CAP
DNV is set to offer some new services to this hot market. Rating systems for older tankers, called CAP and CAS, are to be offered.
"The CAP rating regimes are basically performing thousands of measurements of steel thickness throughout older tankers, and then rate from 1 to 4 the ships' condition. The owners can then make targeted repairs, typically steel renewal, and prolong the life of the ship considerably," explains Grostad.
The tests can be performed while the ships are at sea. This greatly reduces ship inactivity, which is a considerable advantage with the current high tanker rates.
Consulting in 3D
With a good standing in the region, DNV has over the past six months been able to obtain several consultancy service contracts from Kuwaiti owners. "We have made specifications for new ships, assured the quality of the drawings and helped choose the yard on behalf of the owners," explains Grostad. "Over the past six months we have gained orders totalling more than 1 million USD."
Another service that DNV is thinking of bringing to the market in the Middle East is services that build on digital 3D models of clients' ships. "We will buy the computerised 3D models of ships, which are made at our Polish Maritime Service Centre, and then offer the owners a number of services, both consulting and others, that build on this extensive knowledge base of their ships. It will be continuously updated as repairs or alterations occur, and will bring us closer to the customer in terms of giving business decision support," says Grostad.
Yet another service DNV aims to offer is approbation services; verifying drawings of supply vessels before they are built. One of the goals with that project is also to make some changes in DNV.
Going for changes
At present all the work on drawings is performed at headquarters in Oslo, and Grostad would like to get some of this work moved to his region.
"A Norwegian engineer costs the same as eight engineers from India, and they are just as good. My hope is that we can achieve two goals with one change; by moving the work on drawings on smaller projects to the regions we not only save money, we can also provide faster answers to our clients. These are opportunities that we can't afford to stop looking at in DNV," says Grostad.
LNG is getting hot
The hottest trend in the world today doesn't come from Italy; Liquefied Natural Gas, or LNG, is causing waves around the world with an estimated doubling of demand over the next six years. This impacts ship design and newbuildings, offshore terminals and onshore infrastructure.
"The largest natural gas reserve can be found in Qatar, stretching from their western border and east far into the Gulf. Qatar's future growth will be fantastic. Current projects are run by Qatargas and RasGas, both government owned, and they have ordered 16 ships so far. Perhaps as many as 30 to 40 additional ships will be needed in the near future," says Grostad.
In addition, countries such as Iran and India are also getting ready to order a number of LNG vessels, highlighting the enormous development within the LNG market in the region.