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Tougher regulations ahead

26 October 2010

“The oil spill in the Gulf of Mexico is widely expected to lead to tougher regulations with consequences for the whole offshore industry,” said Andreas Sohmen-Pao, CEO of the BW Group. He added that new requirements, if based on thoughtful regulation, can bring the industry forward and generate business opportunities for progressive companies.

Sohmen-Pao said: “We are watching carefully to see what the outcome of the oil spill will be. It is hard to predict specifically how the regulations will change, as some of the changes will be politically driven. However, there is no doubt that requirements will be tougher,” he says. One concern he has is that decisions will be made on emotional rather than practical grounds.

“A general trend towards higher environmental expectations from society and politicians is also leading to stricter environmental legislation for both the offshore and shipping industries,” said Sohmen-Pao. “One benefit is that the changes will help us prepare for a world with more expensive energy costs. As such, we should embrace fuel management and energy efficiency as opportunities to be ready for the future, not just from an environmental point of view but also from an economic one.”

On the question about whether shipping has been through the worst now with regards to the financial crisis, he says: “I don’t have a crystal ball, but I think there is still the potential for new setbacks. It’s very unlikely that we will see the declines of 2009, but we still have some unresolved issues: huge shipyard capacity, a continued high level of ordering in some segments, companies with very different levels of readiness to cope with reversals. On the positive side, we see tremendous demand in emerging economies which could prove enough to pull us through, so it’s obviously quite possible that the worst is behind us.”

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