Farstad Shipping Purchases P&O's Offshore Service Unit

Farstad Shipping has signed a Memorandum of Understanding with P&O for the purchase of P&O's 50% share in P/R International Offshore Services ANS (IOS) and P&O's offshore supply management services in Melbourne. IOS, where Farstad already has a 50% share, has presently a fleet of eighteen vessels, including two vessels on bareboat contracts. In addition IOS has two newbuildings for delivery in 2003. Except for two vessels, the fleet is trading the South East Asian and Australian market. For 2002 IOS had an operating income of NOK 509.2 million.

The purchase price is 127 million Australian dollars, equivalent to approx. NOK 563 million. The gross investment for Farstad Supply is approx. NOK 1.000 million for the 50%-share. The parties intend to complete the transaction by the end of June. Farstad Shipping will establish a subsidiary in Melbourne, International Offshore Services Pty. Ltd., to continue the operation of the fleet in the region. The new company will in addition have representation in Perth, Singapore, Vietnam and the Philippines.

The acquisition gives Farstad Shipping an improved position in a region with substantial growth and the company's international position will be strengthened.

Farstad Shipping operates today a fleet of 45 vessels and has 8 vessels under construction.