Finnish oil refining and marketing firm Neste Oil has announced it will be selling off its entire fleet of ships and will outsource all ship management functions currently covering them.
As part of the restructuring, Neste Oil will sell five tankers (Mastera, Futura, Neste, Kiisla, and Suula) and three tugs (Ukko, Ahti, and Esko) to companies owned by Finland’s National Emergency Supply Agency and the Ilmarinen Mutual Pension Insurance Company. These will be sold at the current market value and Neste Oil will lease the vessels back under long-term contracts.
In addition, Neste Oil plans to sell three of its other tankers – Tempera, Purha, and Jurmo – at a later stage, together with its 50% ownership of another three tankers – Stena Poseidon, Palva, and Stena Arctica – which are owned together with the Stena Group of Sweden.
This decision directly affects around 320 personnel from Neste Oil’s ship management division who will soon be transferring to a new employer according to a statement on their website.
Neste Oil will however, retain its chartering team which will be “integrated with Neste Oil’s organization.”
“Neste Oil’s shipping needs have changed in recent years,” explains Neste Oil’s President & CEO, Matti Lievonen. “The proportion of the Group’s cargoes carried by Neste Shipping ships flying the Finnish flag has steadily declined. Because of its high costs level, Neste Shipping has been unable to compete profitably on the international shipping market. Ensuring the long-term continuity of the business in its present form would also call for significant investments. As a result, we are now planning to exit the shipping business and reinforce our focus on developing our core cleaner traffic solutions.”
“I am glad that we have been able to find an arrangement that will keep the key vessels needed by Neste Oil in Finnish ownership and in use by us,” continues Lievonen. “These vessels, together with vessels chartered from other shipowners, will meet our current shipping needs and ensure that we are able to continue to provide our customers with a high level of service. The arrangement will continue to ensure Finland’s security of supply in the area of marine-based oil transportation.”
Neste Oil notes that this restructuring is expected to free up approximately EUR 60 million of capital from Neste Oil’s balance sheet and improve the Group’s result by approx. EUR 10 million annually during the coming years.