Press Release from 2015-02-02 / KfW IPEX-Bank
KfW IPEX-Bank finances two state-of-the-art vessels for offshore industry
- Well intervention vessels for maintenance of offshore oil wells
- Vessels being constructed at FSG shipyard in Flensburg
KfW IPEX-Bank co-arranges the financing of two state-of-the-art well intervention vessels for Siem Offshore Inc.’s subsidiary Siem Offshore Rederi AS. Siem Offshore Inc. is an important new customer for KfW IPEX-Bank in the high-potential offshore segment.
The two vessels are to be built by Flensburger Schiffbau-Gesellschaft (FSG) and are scheduled to be delivered in February and July 2016. For the shipyard, this order is another step towards expanding its range of products and services in the offshore specialist vessels segment. It is also key to safeguarding jobs in Flensburg. In addition to structuring this project, Siem Industries Inc., which is the largest shareholder in Siem Offshore Inc. has taken over FSG as the new owner.
"This contract shows that high-quality specialist vessels from Germany are in demand around the world," said Christian K. Murach, Member of the Board of Directors of KfW IPEX-Bank, when signing the contract. "We are delighted that Siem Offshore has commissioned FSG with this order, enabling it to build its reputation in the promising offshore market."
KfW IPEX-Bank as Mandated Lead Arranger is providing 50% of the pre- and post-delivery financing of up to USD 350 million. It is covered by export credit insurance from the government (Hermes cover) and includes the shipping CIRR (Commercial Interest Reference Rate) determined by the OECD. Within the transaction, KfW IPEX-Bank is acting as the Euler Hermes and CIRR agent and also as the documentation bank. The term is 12 years from delivery.
The vessels have already been chartered to the US offshore specialist Helix Energy Solutions for seven years after their delivery. Fitted with comprehensive, technical offshore equipment from Helix and manned by the specialised and experienced Siem Offshore team, they are to operate off the coast of Brazil.
Well intervention vessels are employed to foster (deepsea) offshore oil fields. In addition to improving well production, maintenance work can also be performed. Once the oil resources have been depleted, the vessels are used to securely decommission and seal the wells which is why the requirements regarding security, reliability and positioning of the vessels are demanding and of utmost importance. Well Intervention Vessels are also used for hazard prevention according to statutory regulations. In the Gulf of Mexico, for example, a vessel of this kind must be on standby on the open sea at all times during drilling and production to guarantee an immediate response in crisis situations.
About KfW IPEX-Bank GmbH
Within the KfW Group, KfW IPEX-Bank is responsible for international project and export finance. Its function of providing financing to boost the German and European economy is derived from the legal mandate assigned to KfW. It offers medium- and long-term financing to support key export industries, to develop economic and social infrastructure and to fund environmental and climate protection projects. KfW IPEX-Bank operates as a legally independent group subsidiary and plays a major role in fulfilling KfW's promotional mission. It is represented in the most important economic and financial centres across the globe.