Page 6: of Maritime Reporter Magazine (December 1997)

MARITIME

REPORTER & ENGINEERING NEWS A host of seemingly unrelated financial forces have conspired to drag down the maritime market as 1997 comes to a close, but prospects for continued fleet renewals — particularly in the tanker segment — and for the lucrative offshore market remain upbeat for the year to come.

If anything, the recent spate of financial turmoil and market moves has proven the true breadth and depth of international business co-dependency. In particu- lar, events in the Middle East — specifically the recent meeting of OPEC nations — have direct, tangible effects on ship, boat and rig building and supply com- panies around the world, from the North Sea to the Gulf of Mexico.

As soon as OPEC leaders decreed to boost oil production by 10 percent — combined with the possi- bility of additional Iraqi oil coming to market with the potential expansion of the U.N. oil-for-food deal — a case of collective jitters hit the stock market, as oil majors, E&P companies and builders alike saw their stock and market value summarily drop.

While the business of extracting and bringing oil to market has, is and will always be a slave to supply and demand, this latest "oil boom" is proving more resilient and less sensitive to price-per-barrel swings for a few reasons. First, worldwide demand for oil products is predicted to rise steadily through 2000, despite recent trouble in the Far East. Second, technology and royalty tax breaks now allows companies to find and extract deepwater resources more cost effectively.

Another trend worth watching in 1998 is the recovery and re-shaping of the Korean market. The near collapse of the Korean financial system warranted a record bail-out on behalf of the International

Monetary Fund in the neighborhood of $55 billion.

This money, of course, comes with strings attached. While specifics of the deal were still unfolding at press time, it seems the package mandates a reform of Korean industrial giants, calling for them to open their traditionally tightly held markets to foreign competition.

What this all means to the shipbuilding market is still uncertain, but any company with hopes of break- ing into the Korean market — the world's second largest commercial shipbuilding market — (i.e. ship- builders and ship equipment suppliers) may have a golden opportunity next year and beyond.

Gregory R. Trauthwein, editorial director

Please contact me with any comments regarding the publication and!or news leads at: tel: +212-477-6700; fax: +212-254-6271; or e-mail: [email protected] i, the new weekly paper from the publishers of Maritime Reporter, provides crucial, timely, financial-related information for anyone conducting business in the maritime industry. For a FREE 4-

WEEK trial subscription, contact me by telephone, fax or e-mail using the information above.

HHHHHHHHHH^^

Editorial & Executive Offices 118 E. 25th St., NY, NY 10010

Tel: (212) 477-6700; Fax: (212) 254-6271; e-mail: [email protected]

PUBLISHERS

Charles P. O'Malley

John E. O'Malley

John C. O'Malley

Vice President

Gregory R. Trauthwein

EDITORIAL

Editorial Director

Gregory R. Trauthwein

Senior Editor

Nina D. Miller

Production Editor

Anthony Besada

Technical Editor

David Tinsley

International Editor

Alan Thorpe

Editorial Consultant

James R. McCaul, president,

International Maritime Associates

INFORMATION SYSTEMS

Manager of Information Systems

Susan Cosme

MARKETING

Marketing Assistant

Jennifer Bobbe

PRODUCTION

Production Manager

Adam Hellman

Asst. Production Manager

Christopher Eaton

CIRCULATION

Grculation Manager

Dale L. Barnett

ADVERTISING SALES

Regional Sales Manager

Lucia Annunziata

Regional Sales Manager

Amy Stuart

Regional Sales Manager

Jean M. Vertucci

Classified Sales Representative

Carrie Rivera

U.S. GULF COAST

James N. McClintock

Simpson Corporate Park, Indigo House, Suite A, 206 South

Tyler Street, Covington, La. 70433

Telephone: (504) 893-5099; Fax: (504) 893-5024

Advertising Sales Information

Telephone: +212-477-6700 8 Maritime Reporter/Engineering News