NYK to enter shuttle tanker business

Monday, 29 November 2010 00:01 - - {{hitsCtrl.values.hits}}

TOKYO, (Reuters) - Japan’s biggest shipping company Nippon Yusen KK said on Friday it will take a 50 percent stake in the world’s second-biggest shuttle tanker operator, in a bid to tap the deep-sea oil drilling market.

Nippon Yusen gave no value for the planned purchase of new shares in Norway’s Knutsen Offshore Tankers, but the Nikkei business daily said the investment would worth about 20 billion yen ($239 million).

Despite safety concerns after BP’s Deepwater Horizon disaster in the Gulf of Mexico which led to the worst oil spill in U.S. history, developing deep-sea oil wells is a growth business area, reflecting demand for oil from emerging economies.

The operator of shuttle tankers, which transport oil to shore from deep-water fields, has 24 out of the total of 82 operating or under construction and will be known as Knutsen NYK Offshore Tankers after the transaction, Nippon Yusen said in a statement.

Nippon Yusen, Japan’s biggest shipping firm by sales, fell into the red for the first time in two decades in the financial year that ended in March, but it now expects to make a 76 billion yen net profit this business year on improving shipping margins.

TS Shipping Invest will hold the remaining 50 percent stake in Knutsen NYK Offshore Tankers.