NOL’S SHARES RISE AFTER SECURING OIL CONTRACT
The stock price of Neptune Orient Lines rose by 1.5 percent on Monday, after the Singapore-based shipping and logistics group announced a new $250-million oil contract to transport fuel from Venezuela to Asia.
NOL’s stock closed at S$0.905 on Monday on the Singapore stock exchange.
The group had faced several turbulent weeks since the beginning of the year caused by senior management departures and the announcement of a record $330 million annual loss.
American Eagle Tankers, a subsidiary of NOL, has won a tender to transport “orimulsion,” a bitumen-based fuel, for Bitor, a subsidiary of the Venezuelan national oil company PDVSA, for delivery to Singapore power company Power Seraya.
The contract is for seven years, with an option for a three-year extension. The contract requires a fleet of five very large crude carriers to transport the fuel from Venezuela to Singapore and other parts of Asia. The value of the contract is “in the order of $220 million,” NOL said.
As a consequence of the extra business, the company has committed to expand its fleet of VLCCs by three ships, to five units. The contract is due to begin in the second half of 2004 with two existing VLCCs.
NOL said that the contract will impact its results from 2003 and will have no impact on earnings per share in 2003.