Heerema Tonsberg to Close Yard in 2005

In view of the declining demand for fabrication services related to offshore developments around the North Sea, Heerema Fabrication Group, with yards in Norway, UK and Holland has reviewed the future need for fabrication services. The conclusion is that the demand will not support existing fabrication capacity and thus reductions will be required.

Following a careful review of development scenarios of the Norwegian Continental Shelf, the board of Heerema Fabrication Group has with regret concluded that the demand for fabrication services will not support operating the yard in Tønsberg. This conclusion is based on evaluation of both short term and long term scenarios. It reflects both the shortage of projects and the increasing contents of fabrication from low cost countries.

Consequently it has been decided that the yard will be closed in an orderly fashion, when ongoing commitments have been completed. That is likely to happen in the spring of 2005. With immediate effect Heerema Tønsberg will stop tendering for fabrication work for execution in Norway.

The company will work with the employees to minimize the impact, and will in any case try to assist the employees in finding new work as they are being made redundant.

Heerema Fabrication Group stands behind all commitments made by Heerema Tonsberg until completed or transferred to a new owner in full understanding with the respective clients. Most important among these commitments, are the subsea facilities for Ormen Lange. Other stakeholders will be contacted in due course to facilitate the best possible process.