Hurtigruten ship in charter conflict

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A Hurtigruten ship that was chartered to house oil workers off the coast of western Australia is now the subject of a conflict over extra costs that Hurtigruten wants the Australian charterer to pay. Meanwhile, the shipping line best known for its routes along the Norwegian coast reported “disappointing” results for last year.

Hurtigruten's vessel "MS Finnmarken" was chartered to house offshore oil workers for 18 months, but the deal has ended in conflict over extra costs. PHOTO: Hurtigruten

Not even an enormous amount of publicity over the minute-by-minute televised account of a Hurtigruten voyage last summer, which attracted millions of viewers from all over the world, could buoy Hurtigruten’s bottom line. Newspaper Dagens Næringsliv (DN) reported that pre-tax losses within its Norwegian operation rose to NOK 224 million, up from NOK 128 million in 2010.

Hurtigruten blamed the loss on a combination of extreme weather last year and many cancelled departures. Fuel costs also rose by 25 percent and the shipping line suffered a fire on board its vessel MS Nordlys, in which two crew members were killed.

The venerable shipping line otherwise had a brilliant start to the summer season, when Norwegian Broadcasting (NRK) aired marathon coverage of a Hurtigruten voyage from Bergen to Kirkenes. Viewers were glued to the non-stop, minute-by-minute show that ran for five full days and showed how important Hurtigruten is for Norwegians. The show led to a rush of bookings and company officials remain optimistic that 2012 will produce better financial results, not least because of an agreement with the state that guarantees revenues, along with a 6 percent increase in advance sales.

The conflict over the vessel MS Finnmarken, chartered to the Australian company Boskalis, however, threatens to cost the line dearly. Hurtigruten is demanding payment of NOK 360 million, to recover extra costs tied to the deal.

Hurtigruten spokesman Ragnar Norum told DN that Boskalis “recognizes that they owe us money,” but is turning responsibility over to oil company Chevron, which was Boskalis’ customer on the charter deal to accommodate offshore workers.

“We believe we have a good case,” Norum told DN, but the company has set aside NOK 46 million to cover costs tied to the case. It’s expected to be handled by a court of arbitration later this year.

Views and News from Norway/Nina Berglund

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