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Oil rig supply firm redomiciles to Bermuda

North Sea: one of the Nordic American Offshore’s platform supply vessels, seen here prior to it being renamed NAO Power. The company has redomiciled to Bermuda (Photograph by Alan Jamieson/Wikipedia Commons)

A company that operates platform supply vessels in the North Sea has moved its domicile from the Marshall Islands to Bermuda.

The redomiciling of Nordic American Offshore Ltd became effective on Tuesday. It means the company is now incorporated in the same jurisdiction as its major shareholder, Nordic American Tankers.

Moving its operations to Bermuda, alongside NAT, is expected to bring administrative benefits and other efficiencies for the company.

Bermuda is also the home of Scandic American Shipping Ltd, which provides company management services to NAO and NAT. Scandic is a wholly-owned subsidiary of NAT.

Herbjørn Hansson, the president of NAT, is the chairman of NAO, while Turid Sørensen, is chief financial officer of both companies. The experience of those executives, and Scandic, of managing a company incorporated under the laws of Bermuda and also listed on the New York Stock Exchange, and the introduction of one set of corporate law procedures that apply to both companies, should result in “significant administrative and commercial efficiencies”.

That is the belief of NAO’s board of directors, as stated in a document filed with the US Securities and Exchange Commission.

Nordic American Offshore was formed in 2013 and has a market capitalisation of $77 million. It operates a fleet of ten platform supply vessels, which were all built within the last four years.

The collapse in oil prices since June 2015, and the subsequent reduction of activity in the oil and gas industry, have created challenging conditions for companies operating in the sector.

NOA’s two newest vessels, both built this year, have yet to be deployed. The company said it was “awaiting improved trading conditions”.

Shares of NOA climbed 6 per cent to $3.71 on the NYSE yesterday. Some 100,000 shares were bought by Alexander Hansson, the son of the chairman.

Nordic American Tankers, which owns 29 per cent of NOA, incorporated in Bermuda in 1995. It has a market capitalisation of $902 million and operates a fleet of Suezmax oil tankers.

Disclosure: the writer of this article owns shares in Nordic American Tankers.