Benefiting from Norwegian Offshore Sector Growth
Besides Statoil ASA (ADR) (NYSE:STO), which is 67% owned by the Norwegian Government and is intensely involved in the development and production of the Norwegian reserves, two other interesting companies that are heavily involved in the Norwegian waters are Transocean LTD (NYSE:RIG) and Tidewater Inc. (NYSE:TDW).
As Transocean LTD (NYSE:RIG) is currently focusing its fleet on harsh weather and deep-water capabilities, the company looks to be ready to capitalize on the Norwegian front. Over the past few years the drilling company has benefited from Norwegian capex spending as revenues from Norway have increased from $756 million in 2010 to $1.174 billion in 2012. This represents an increase of 55.29%. Currently, Transocean LTD (NYSE:RIG)’s ties with Norwegian oil company Statoil are proving to be beneficial, as Transocean LTD (NYSE:RIG) currently has seven rigs operating in Norway; as production increases in the three Norwegian Seas this number is expected to increase.
In May of 2013, Tidewater Inc. (NYSE:TDW) expanded their footprint in the Norwegian waters as they entered into an agreement with HitecVision to purchase Troms Offshore Supply AS or Troms Offshore. In the acquisition Tidewater Inc. (NYSE:TDW) paid approximately $395 million for the company headquartered in Tromsø, Norway. The timing for this acquisition is excellent as the fleet will expand Tidewater Inc. (NYSE:TDW)’s presence in Norwegian part of the North Sea and will add support to Tidewater’s vessel fleet that operate in harsh environments. Jeffrey M. Platt, President, CEO and Director of Tidewater Inc. (NYSE:TDW) states, “Troms Offshores expertise, relationships and location in Northern Norway provides Tidewater with a unique entry point into the Norwegian sector of the North Sea and cold water markets, including the Barents Sea, Greenland and Eastern Canada.”
Foolish Conclusion
As capex spending in the Norwegian Seas is expected to increase significantly over the next five years, this will provide opportunities to companies that are well positioned in the region. Statoil ASA, which is 67% owned by Norwegian government; Transocean LTD (NYSE:RIG), whose fleet is focused on Harsh and deep-water drilling; and Tidewater Inc. (NYSE:TDW), which just added to its presence in Norway, are solid companies that are well positioned to capitalize on this growth.
The article Exploring Opportunities in Offshore Norway originally appeared on Fool.com and is written by Jeff Williams.
Jeff Williams has no position in any stocks mentioned. The Motley Fool recommends Statoil (ADR). The Motley Fool owns shares of Transocean.
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