Oil and gas E&P generates billions of dollars worth of business annually for shipyards in the form of newbuilds, conversions, and ongoing repairs and maintenance. With the downturn in oil, however, much of that business has dried up and forced shipyards that depend on the oil patch to rethink their strategy. Many are repositioning themselves to pursue other markets or are undertaking capital investments in their facilities to be more efficient and competitive. There's no better example than VARD Holdings, one of the world's largest shipbuilding groups, whose portfolio is heavily focused on offshore oil and gas. Amid losses of NOK1.29 billion (about $148 million) for 2015, VARD said last month it would preserve its core expertise and skilled employee base and use its existing shipyard capacity until an eventual recovery in its core market. Among the areas it was pursuing were the offshore wind and aquaculture markets. It will also work more closely with its major shareholder, Fincantieri, to support the cruise and offshore patrol vessel sectors.
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