AP Moller-Maersk's liner shipping business expects stagnation at best in the industry next year but will not cut freight rates to win more market share, the head of the division told a German newspaper.
"We are pretty disappointed by what we've seen in April and May," the head of Maersk Line, Eivind Kolding told business daily Financial Times Deutschland in an interview published yesterday. He said growth in shipping volumes in 2010 is unlikely.
Kolding said he is currently not trying to increase Maersk Line's market share, which stands at about 15 per cent.
"If we did that we would increase the pressure on freight rates further," Kolding was quoted as saying.
It is hard to predict whether the Danish company will manage to lift rates, he added.
Capacity utilisation in the industry should decline further over the next 12 months, particularly in the first quarter of 2010, the division head also said.
The current downturn could speed up consolidation and capacity reduction and Maersk should play an active role in takeovers in the next few years, even though takeovers are not currently on Maersk's agenda, he said.
Moller-Maersk's tanker business is also anticipating merger and acquisition activity picking up as shippers try to cut costs and boost vessel usage, the division's chief Soren Skou said in an interview on Wednesday.
In another development, Maersk Oil & Gas A/S, Scandinavia's second-largest producer of crude, said it's still interested in opportunities in Iraq and may join in future licensing rounds after failing to win rights in the country's first tender.
"The oil sector of Iraq represents significant business potential for Maersk Oil," Jakob Thomasen, head of exploration and new business, said in an e-mail. "Many of the oil fields in Iraq have carbonate reserves, which are a good match for Maersk Oil's core technologies, given our experience in developing carbonate fields in the Danish North Sea and in Qatar."
Maersk made a joint bid with Repsol YPF SA and StatoilHydro ASA to produce 650,000 barrels a day at the southern West Qurna field at an average price of US$19.30 a barrel (US$1 = RM3.52). The Iraqi authorities requested a recovery cost of just US$1.90 a barrel for the deposit. An Exxon Mobil Corp-led group, which put in the preferred bid out of five received for the field, dropped its application, declining to improve its offer.
Iraq failed to award most contracts it offered this week in a bidding round aimed at attracting foreign partners and their cash, leaving the country seeking new ways to develop the world's third-largest oil reserves. A service agreement for the Rumaila oil field, the largest of the eight oil and natural-gas fields offered, won by a BP Plc-led group was the only contract awarded.
The Middle Eastern country wants to increase production more than 60 per cent from the fields on offer, potentially raising US$1.7 trillion in profit over 20 years for the country, Oil Minister Hussain al-Shahristani said on June 30. Iraq later this year plans to hold a second auction round for 11 oil and gas fields with the aim of boosting production to about 6 million barrels a day by 2015.
Source: BusinessTimes
"We are pretty disappointed by what we've seen in April and May," the head of Maersk Line, Eivind Kolding told business daily Financial Times Deutschland in an interview published yesterday. He said growth in shipping volumes in 2010 is unlikely.
Kolding said he is currently not trying to increase Maersk Line's market share, which stands at about 15 per cent.
"If we did that we would increase the pressure on freight rates further," Kolding was quoted as saying.
It is hard to predict whether the Danish company will manage to lift rates, he added.
Capacity utilisation in the industry should decline further over the next 12 months, particularly in the first quarter of 2010, the division head also said.
The current downturn could speed up consolidation and capacity reduction and Maersk should play an active role in takeovers in the next few years, even though takeovers are not currently on Maersk's agenda, he said.
Moller-Maersk's tanker business is also anticipating merger and acquisition activity picking up as shippers try to cut costs and boost vessel usage, the division's chief Soren Skou said in an interview on Wednesday.
In another development, Maersk Oil & Gas A/S, Scandinavia's second-largest producer of crude, said it's still interested in opportunities in Iraq and may join in future licensing rounds after failing to win rights in the country's first tender.
"The oil sector of Iraq represents significant business potential for Maersk Oil," Jakob Thomasen, head of exploration and new business, said in an e-mail. "Many of the oil fields in Iraq have carbonate reserves, which are a good match for Maersk Oil's core technologies, given our experience in developing carbonate fields in the Danish North Sea and in Qatar."
Maersk made a joint bid with Repsol YPF SA and StatoilHydro ASA to produce 650,000 barrels a day at the southern West Qurna field at an average price of US$19.30 a barrel (US$1 = RM3.52). The Iraqi authorities requested a recovery cost of just US$1.90 a barrel for the deposit. An Exxon Mobil Corp-led group, which put in the preferred bid out of five received for the field, dropped its application, declining to improve its offer.
Iraq failed to award most contracts it offered this week in a bidding round aimed at attracting foreign partners and their cash, leaving the country seeking new ways to develop the world's third-largest oil reserves. A service agreement for the Rumaila oil field, the largest of the eight oil and natural-gas fields offered, won by a BP Plc-led group was the only contract awarded.
The Middle Eastern country wants to increase production more than 60 per cent from the fields on offer, potentially raising US$1.7 trillion in profit over 20 years for the country, Oil Minister Hussain al-Shahristani said on June 30. Iraq later this year plans to hold a second auction round for 11 oil and gas fields with the aim of boosting production to about 6 million barrels a day by 2015.
Source: BusinessTimes
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