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Oil Rig Ship Rates Jump Sevenfold on ‘Mass Panic’ Over Volcano

Iceland’s Eyjafjallajökull volcano has driven rates for ships used to move oil rigs in the North Sea up sevenfold as drillers turned to the vessels to transport workers after helicopters were grounded by the spewing ash.

Day-rates for so-called anchor-handling ships rose as high as 35,000 pounds ($54,000) this week, from as little as 5,000 pounds in February, Steve Brackenridge, a director at Westshore Shipbrokers A/S in Kristiansand, Norway, said by phone today.

“There’s been a mass panic from the offshore operators to at least cover themselves with vessels that can do personnel transfer in case this problem doesn’t resolve itself,” he said. “If you can’t get crew changed offshore, it’s a big problem.”

About 81,000 flights were canceled after the volcano erupted on April 14, costing airlines $1.7 billion, according to the International Air Transport Association. Deep Sea Supply Plc, an operator of the vessels whose biggest shareholder is Norway-born billionaire John Fredriksen, advanced 23 percent this week in Oslo trading. Siem Offshore Inc. gained 10 percent.

The latest anchor-handling ships, which are powerful enough to maneuver rigs, have enough cabins for up to 40 people, and oil companies are hiring the vessels “on standby” in case the volcano continues to disrupt helicopters, Brackenridge said.

There are about 30 to 35 of the vessels operating in the North Sea, he said. As well as supplying goods, fuel and water to the offshore oil industry, the vessels also have winches on board and open sterns to allow them to move rigs, he said.

“These ships have been operating below operating expenses for almost a year,” said Petter Narvestad, an analyst at Fondsfinans ASA in Oslo who recommends buying shares in Deep Sea Supply and Siem. “Now they are suddenly back in style.”

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