Teekay Turns up the Heat in Bid for Petrojarl

Published Sep 7, 2006 12:01 AM by The Maritime Executive

The oil tanker shipping group Teekay Shipping Corp. said last week that it had increased its stake in the shares of Petrojarl ASA, the North Sea FPSO specialist to 40% and that intended to propose a mandatory bid for the remaining stake. The move continued to heat up the bidding war for Petrojarl, a Norwegian offshore oil services firm which operates a fleet of floating production, storage and offloading (FPSO) vessels. As the booming oil market continues, the industry has placed a premium on the control and availability of FPSO vessels.

Earlier last week, Teekay had announced that it had increased its ownership stake in Petrojarl to 37.7% from 22.8%. The additional 7.5 million shares placed Teekay in an enviable position in what is seen by analysts as a likely bidding war between the shipping tanker group and rival Prosafe. The additional shares now owned by Teekay can only solidify that position. Prosafe currently holds a 29.6% stake in Petrojarl, but Teekay’s growing, larger stake and (perceived) better relationship with Petrojarl's board positions Teekay as the favorite to gain a controlling interest over Petrojarl.

Petrojarl, a Norwegian offshore oil services firm, has seen its share price rise by 65% since mid-August. Petrojarl operates a total of four ship-based oil-production ships known as floating production storage and offloading vessels (FPSO). Both Teekay and Prosafe are both seen as anxious to get their hands on Petrojarl’s fleet, seeking to increase their fleets of rigs and oil-production vessels as high oil prices spur producers to spend more on exploration and production. Teekay’s expected mandatory bid for the remaining shares of Petrojarl should take place within the next four weeks.