Swire set to invest in large number of newbuildsNews // May 18, 2012
Reports suggest that Swire Pacific Offshore could be about to embark on a massive newbuilding programme.
According to Market Watch, Swire Pacific Ltd says it plans to spend US$1.4 billion over the next two years on offshore support vessels.
Swire Pacific Ltd's chairman, Christopher Pratt, was quoted as saying that the investment in new vessels would not only translate into a "significant increase" in the group's assets under management, but also act as a hedge against the surging operation costs of its airline business Cathay Pacific Airways Ltd.
"Probably the biggest challenge this year as we speak would have to be Cathay Pacific Airways because, pure and simple, the price of fuel is historically extremely high and ... it's very difficult," Pratt said.
But "unlike Cathay Pacific, Swire Pacific Offshore likes a high fuel price. If oil is more expensive, people spend more money looking for it and use more of our boats," Markt Watch reported him as saying.
As Market Watch noted, oil prices, which have hovered above US$100 a barrel, and account for more than 40 per cent of the operation costs of Cathay Pacific, but this has also led to an increase in exploration and production commitments by global energy companies.