OSLO (Bloomberg) — Norway's offshore shipping will struggle over the next two years because of a lack of financing and project delays, according to Elisabeth Grieg, president of the Norwegian Shipowners Association.

"The industry has started to feel the crisis much more now than maybe they did this spring," Grieg, 50, said in an interview on at the groups office on the Oslo waterfront. "The outlook for the offshore industry is more uncertain for 2010 and 2011."

Norway has the world's second-largest offshore fleet with 465 vessels that service oil and gas platforms at home, in Brazil, West Africa, the Gulf of Mexico and Australia. The industry represents about 55 percent of the associations more than 160 members, which also includes owners of oil tankers, bulk transport and container ships for cross-ocean routes.

Oil producers such as Statoil ASA, Norway's largest, have cut investments and delayed projects after crude prices plunged last year. Industry spending may fall 8.5 percent to 118 billion kroner ($21 billion) next year and decline 11 percent in 2011, according to the Norwegian Oil Industry Association.

"We see that 40 percent of the order book along the coast hasnt been financed yet," Grieg said, referring to offshore ships at Norwegian yards. "There are no new building projects at Norwegian shipyards after 2011 and, of course, with the volatile oil price, fewer projects have been started."

About 10,000 people work in the Norwegian shipyard industry and many more in supporting businesses. Norway, the world's sixth-largest oil exporter and second-largest gas exporter, relies on the petroleum industry for about 25 percent of its economic output. The country's oil production has been in decline since 2001 as fields in the North Sea age.

Members of the association include Seadrill Ltd., the offshore driller founded by billionaire John Fredriksen, Subsea 7 Inc. and Wilh. Wilhelmsen ASA, a Norwegian joint-venture investor in vehicle shipping companies. Grieg, part of the fourth generation at the family controlled Grieg Group, is the first female president in the associations 100-year history.

The group's other big constituency, transcontinental shippers, may start seeing a recovery next year, Grieg said. "The industry will be helped by demand for raw materials such as iron ore, coal and soybeans from China and India as well more willingness to lend by banks," she said.

The Baltic Dry Index, a measure of shipping costs for commodities, has jumped more than fivefold since the start of the year, after plunging 91 percent in 2008.

"I guess we'll see more of a soft landing for 2010 than we had anticipated just a few months ago," Grieg said. "About 90 percent of the world's trade is transported by ship, of which five percent is controlled by Norwegian vessels."

Chinas manufacturing grew last month at the fastest pace in five years, a new survey shows, helping Asia to lead the recovery from the global economic slump.

The industry may also be helped as the number of new ships coming on the market is less than anticipated.

Shipowners have cancelled new ships or asked for delays as shrinking global trade and lower rates caused losses. Container lines worldwide may lose at least $20 billion in 2009, the Transpacific Stabilisation Agreement, a group of shipping companies, said on October 7, citing an estimate from Drewry Shipping Consultants Ltd.

"About 65 percent of the global order book for ships has been delivered so far this year," she said. "The rest have been postponed and even canceled or may not have been viable from the start," Grieg said. "As a shipowner myself, more cancellations are in a way better for a recovery because the order book was just too high."

Global shipping lines may cancel or delay about 40 percent of vessel orders this year and next because of overcapacity, according to China Cosco Holdings Co. Chairman Wei Jiafu. "The financial crisis has struck hard on the world economy and brought serious challenges to international shipping," Wei, head of Chinas biggest shipping group, said at a conference in Shanghai. His forecast covered all types of ships.

Grieg is chairman of the Grieg Shipping Group and Grieg Star Shipping AS. She's also board member of Statoil and member of the corporate assembly and election committee of Orkla ASA and sits on the council of Det Norske Veritas.