OSLO, Dec 18 (Reuters) – Norwegian-born billionaire John Fredriksen has set up a company to snap up oil rigs from firms struggling with low crude prices, adopting a similar approach to the one he used in 2012 when the tanker market collapsed.
In an interview with business daily Dagens Naeringsliv, the man with an estimated fortune of 100 billion crowns ($11 billion), said he was putting some of his money into the venture called Sandbox, but might seek outside investors in due course.
"We have decided to establish a new company which will buy jackups and floating rigs when others have to throw in their cards," Fredriksen told the newspaper. "The Sandbox plan is to build a portfolio of newer drilling vessels, which are about to be completed at shipyards."
The shipping tycoon, nicknamed "Big Wolf" or "Big John", controls companies in offshore drilling, shipping of oil and dry bulk and salmon farming after making a fortune from tankers during the commodities price boom at the start of the century.
Rates for offshore rigs have more than halved since crude oil prices slumped from last year's peak to below $40 a barrel, and about 40 of the 350 rigs worldwide have been taken out of the market by oil companies to save costs.
"We are looking at everything to do with distressed rig assets now. It will certainly take some time before the market comes back, but it is in bad times that it is possible to make reasonable investments," Fredriksen told the newspaper, explaining the plan for Sandbox.
Fredriksen's business empire already has a rig company called Seadrill. Once the most valuable of its kind, its shares have lost 88 percent since their peak in September 2013 and are now valued at $1.9 billion making it the world's second largest offshore driller behind Transocean.
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