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Tuesday, May 21, 2024

Fredriksen’s busy summer

Norwegian shipping, offshore and seafood magnate John Fredriksen doesn’t seem to have been taking much time off this summer, with two of his biggest firms announcing major contracts and pushing forward with expansion plans. As usual, though, Norway’s most successful entrepreneur faces some battles with the government.

John Fredriksen wants to buy up more fish farmers in Norway, but must battle the government in order to do so. PHOTO: Marine Harvest/Jan Inge Haga

Fredriksen, who hails from a working class family and started out as a clerk in an Oslo ship brokerage, has built up the world’s largest tanker fleet, is an internationally acclaimed shipping expert, launched into the offshore industry and expanded into fish farming.

Fredriksen’s huge Marine Harvest concern now controls around a quarter of Norway’s fish-farming industry and the company wants to get even bigger by buying up other firms. Further expansion has been blocked by a Norwegian law limiting any single industry player from getting too big, but the European Free Trade Association’s control mechanism ESA recently ruled that Norway’s limits on ownership violate the rules of the European Economic Area (EEA, or EØS in Norwegian), of which Norway is a member.

John Fredriksen

Norway’s government minister in charge of fishing and coastal issues, Lisbeth Berg-Hansen, still aims to rein in Fredriksen’s expansion plans. Berg-Hansen of the Labour Party, whose family also ranks as a major player in fish farming, doesn’t agree with the ESA ruling and vowed to fight any changes Norway’s current system that’s blocking Fredriksen’s growth.

“We have long argued that it is sensible to regulate ownership regarding use of the sea in Norway,” Berg-Hansen told newspaper Aftenposten. “We will work to get ESA to understand that such rules are sensible, and that they don’t conflict with Norway’s obligations regarding the EØS agreement.”

Berg-Hansen claimed the Norwegian government wants havbruks firms like fish farmers “to develop and create new value, at the same time we maintain diffuse ownership.” Her government coalition partners, the Center Party and Socialist Left (SV), already had asked Labour to prevent a major merger in the Norwegian farmed salmon industry. “We’re afraid that if Fredriksen gets the chance to invest further in the business, others will be shoved out,” said Heming Olaussen of the lobbying group Nei til EU (No to the EU).

Marine Harvest officials remain committed to further consolidation efforts and were clearly pleased by the ESA decision. Meanwhile, another Fredriksen-controlled firm tied to the sea, offshore firm Seadrill, won the world’s largest rig contract ever last week, worth NOK 24 billion (around USD 4 billion).

Seadrill, which Fredriksen launched along with his right-hand man Tor Olav Troim as recently as 2005, was already the biggest rig company on the Oslo Stock Exchange, in terms of market value, and now ranks third behind only Statoil and Telenor, reported newspaper Dagens Næringsliv (DN). It also has surpassed Transocean as the world’s biggest rig firm and now it’s secured deals, reportedly with BP, to make three Seadrill rigs available for a total of 19 years. Seadrill will be paid the USD 4 billion for use of the rigs, sending its share price up again.

Analysts had high praise for both Fredriksen and Troim. “There’s no doubt they’ve done well with Seadrill,” Martin Huseby Karlsen of DNB told DN. “I don’t know of any other branch where anyone has managed to build up the world’s seventh-largest company in seven years.” Analyst Frank Harestad of Pareto in Oslo called Seadrill “the rig branch’s Rolls Royce.”

Views and News from Norway/Nina Berglund

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