This document discusses unlocking the embedded value of real options in offshore vessel investment decisions. It presents a case study analyzing the value of options to modify five vessel types - PSV, CSV, WROV, DSVAIR and DSVSAT. A valuation model is developed using Black-Scholes to calculate the real option value in addition to traditional NPV. Results show accounting for real options can significantly increase overall vessel value and impact investment decisions. For example, factoring the option to modify a CSV to a DSV increases its NPV from $2.3 million to $7.3 million. Regularly updating the model is important to seek ongoing value as forecasted day rates and option values fluctuate over time
This report analyzes liquid alternative investments (Liquid Alts) to see if they improve risk-adjusted returns when added to a portfolio. The author examines the 25 largest multi-alternative Liquid Alt funds. Adding most funds to a generic portfolio lowered its Sharpe and RoMAD ratios, indicating they did not provide the expected diversification benefits. Few funds limited maximum drawdowns during the 2008 crisis as expected. The author concludes Liquid Alts have so far failed to deliver on their promises and investors should be wary of allocating capital to them.
Long horizon simulations for counterparty risk Alexandre Bon
The Challenges of Long Horizon Simulations in the context of Counterparty Risk modeling : CVA, PFE and Regulatory reporting.
This joint presentation reviews the key decisions that need making regarding the choice of risk factor evolution models and calibration methods. In particular, we will analyse the performance of classical historical calibration methods (such as Maximum Likelihood and the Efficient Method of Moments) in estimating the volatility and drift terms of the Hull & White class of Interest Rate models ; both in terms of convergence and stability.
As most methods perform satisfactorily for volatility but disappoint on the mean reversion estimation, we propose a new modified Variance Estimation method that significantly outperform the classical approaches.
Lastly, after reviewing historical economic evidence of mean-reversion dynmics in high interest rate regime, we propose modifying classical models by making mean reversion non-linear and accelerating for high rates - that can be referred as "+R" models.
This model address unrealistically large and persistent interest rates values often observed at high quantile in PFE and CVA simulations.
RiskAsean 2017: the relevance of CVA & XVAs in Asia Alexandre Bon
This document discusses valuation adjustments (XVAs) for over-the-counter derivatives, their relevance in Asia, and how Asian institutions are approaching them. It notes that while most Asian banks do not currently price credit valuation adjustments (CVAs) accurately, regulatory changes around capital requirements and margin rules are increasing incentives to adopt XVA frameworks. The document also outlines challenges Asian institutions face in implementing XVAs and factors that may drive more adoption, such as decreasing costs for XVA systems technology.
This document discusses applying the Capital Asset Pricing Model (CAPM) for investment decisions in emerging countries. It proposes a modification of the CAPM that takes into account a project's cash flow sensitivity to various markets and only includes the country's systematic risk. Specifically, it:
1) Criticizes the traditional approach of treating country risk as a premium added to the risk-free rate.
2) Suggests a modified CAPM that uses weighted betas based on a project's income originating from different markets, and references a developed stock market as the proxy for the market portfolio.
3) Notes challenges in applying the modified CAPM include indirectly estimating betas and imprecision given limited data from emerging market stock
The document provides an overview of price risk management and hedging strategies. It discusses the outlook for commodity prices including oil, analyzes counterparty credit risk during the credit crunch, and reviews different hedging policies and instruments that can be used in volatile markets. Specific hedging programs like discretionary, ratable, and structured opportunistic are defined and examples are given. Current market conditions and factors influencing prices are also assessed.
Paradigm Shift Investing In Illiquid Assets Nov 2008Xavier_Timmermans
This document discusses the advantages of investing in illiquid assets. It argues that illiquidity can provide higher returns through an illiquidity premium. During times of crisis, like the current credit crunch, the illiquidity premium increases significantly as investors demand liquidity. The document examines why some investors accept restricted liquidity in hedge funds, private equity, and credit markets to target higher returns. However, it also notes that illiquidity can increase risks for hedge funds during periods of market stress when liquidity is needed.
Hintons offers discretionary fund management services to assist independent financial advisors in selecting investment solutions for their clients. Hintons constructs portfolios using a blend of asset classes and expert fund managers. It uses a risk profiling process to determine the appropriate asset allocation for each client based on their individual needs and risk tolerance. Hintons then selects funds across equities, fixed income, property, alternative investments, and cash to build customized and diversified portfolios for clients. It actively monitors the portfolios and funds to ensure they continue meeting the goals for each client.
This report analyzes liquid alternative investments (Liquid Alts) to see if they improve risk-adjusted returns when added to a portfolio. The author examines the 25 largest multi-alternative Liquid Alt funds. Adding most funds to a generic portfolio lowered its Sharpe and RoMAD ratios, indicating they did not provide the expected diversification benefits. Few funds limited maximum drawdowns during the 2008 crisis as expected. The author concludes Liquid Alts have so far failed to deliver on their promises and investors should be wary of allocating capital to them.
Long horizon simulations for counterparty risk Alexandre Bon
The Challenges of Long Horizon Simulations in the context of Counterparty Risk modeling : CVA, PFE and Regulatory reporting.
This joint presentation reviews the key decisions that need making regarding the choice of risk factor evolution models and calibration methods. In particular, we will analyse the performance of classical historical calibration methods (such as Maximum Likelihood and the Efficient Method of Moments) in estimating the volatility and drift terms of the Hull & White class of Interest Rate models ; both in terms of convergence and stability.
As most methods perform satisfactorily for volatility but disappoint on the mean reversion estimation, we propose a new modified Variance Estimation method that significantly outperform the classical approaches.
Lastly, after reviewing historical economic evidence of mean-reversion dynmics in high interest rate regime, we propose modifying classical models by making mean reversion non-linear and accelerating for high rates - that can be referred as "+R" models.
This model address unrealistically large and persistent interest rates values often observed at high quantile in PFE and CVA simulations.
RiskAsean 2017: the relevance of CVA & XVAs in Asia Alexandre Bon
This document discusses valuation adjustments (XVAs) for over-the-counter derivatives, their relevance in Asia, and how Asian institutions are approaching them. It notes that while most Asian banks do not currently price credit valuation adjustments (CVAs) accurately, regulatory changes around capital requirements and margin rules are increasing incentives to adopt XVA frameworks. The document also outlines challenges Asian institutions face in implementing XVAs and factors that may drive more adoption, such as decreasing costs for XVA systems technology.
This document discusses applying the Capital Asset Pricing Model (CAPM) for investment decisions in emerging countries. It proposes a modification of the CAPM that takes into account a project's cash flow sensitivity to various markets and only includes the country's systematic risk. Specifically, it:
1) Criticizes the traditional approach of treating country risk as a premium added to the risk-free rate.
2) Suggests a modified CAPM that uses weighted betas based on a project's income originating from different markets, and references a developed stock market as the proxy for the market portfolio.
3) Notes challenges in applying the modified CAPM include indirectly estimating betas and imprecision given limited data from emerging market stock
The document provides an overview of price risk management and hedging strategies. It discusses the outlook for commodity prices including oil, analyzes counterparty credit risk during the credit crunch, and reviews different hedging policies and instruments that can be used in volatile markets. Specific hedging programs like discretionary, ratable, and structured opportunistic are defined and examples are given. Current market conditions and factors influencing prices are also assessed.
Paradigm Shift Investing In Illiquid Assets Nov 2008Xavier_Timmermans
This document discusses the advantages of investing in illiquid assets. It argues that illiquidity can provide higher returns through an illiquidity premium. During times of crisis, like the current credit crunch, the illiquidity premium increases significantly as investors demand liquidity. The document examines why some investors accept restricted liquidity in hedge funds, private equity, and credit markets to target higher returns. However, it also notes that illiquidity can increase risks for hedge funds during periods of market stress when liquidity is needed.
Hintons offers discretionary fund management services to assist independent financial advisors in selecting investment solutions for their clients. Hintons constructs portfolios using a blend of asset classes and expert fund managers. It uses a risk profiling process to determine the appropriate asset allocation for each client based on their individual needs and risk tolerance. Hintons then selects funds across equities, fixed income, property, alternative investments, and cash to build customized and diversified portfolios for clients. It actively monitors the portfolios and funds to ensure they continue meeting the goals for each client.
The document discusses the use of pooled investment vehicles for ultra-high net worth investors. Pooled vehicles can provide diversified access to top investment managers at lower fees than separate accounts. They allow investors to access strategies that require higher minimum investments than they could afford individually. Professionally managed pooled funds also simplify portfolio implementation and management. Overall, pooled funds offer UHNW investors improved risk-adjusted returns through diversification and lower costs.
Balance-sheet dynamics impact on FVA, MVA, KVAAndrea Gigli
- Andrea Gigli presented at the 13th Fixed Income Conference in Florence on understanding the impact of balance sheet dynamics on funding valuation adjustment (FVA), margin valuation adjustment (MVA), and capital valuation adjustment (KVA).
- Gigli discussed modeling FVA, MVA, and KVA using a multi-period structural model to understand how these valuation adjustments relate to model parameters and regulatory constraints.
- The presentation aimed to show how to allocate capital across business units, manage funding strategies, and price banking products based on a bank's utility function, funding policy, and regulatory requirements.
Call warrants give the holder the right to purchase the underlying asset, such as a share of stock, at a predetermined price (the exercise or strike price) on or before the expiration date. They are issued by companies and trade on exchanges separately from the underlying asset. While call warrants offer unlimited upside if the underlying asset rises above the strike price, potential losses are limited to the amount invested. Key terms that define a call warrant include the issuer, underlying asset, exercise price, expiration date, and entitlement or conversion ratio.
Short sellers borrow securities from brokers and sell them, hoping to profit if the price declines by buying them back at a lower price later. However, if the price rises sharply instead, it can trigger a "short squeeze" where short sellers rush to cover their positions by buying back the securities, driving the price up further. This vicious cycle of rising prices and demand can squeeze short sellers and cause significant losses. Brokers may also issue margin calls if prices rise, requiring short sellers to post more collateral or forcing the brokers to cover positions using other account assets. An example is when the Swiss National Bank's decision to unpeg the Swiss franc from the euro triggered a massive franc rally that squeezed short sellers.
This document provides an overview of financial derivatives, including common types like options, forwards, futures, and swaps. It discusses why derivatives are used to reduce risk exposure and how they work. However, it also notes the risks of leveraging and lack of oversight in some derivatives trading. Several case studies are presented of companies that suffered major financial losses from speculative or fraudulent use of derivatives. Overall, the document aims to explain derivatives while also highlighting potential ethical issues that can arise from their misuse.
The document discusses decentralized investment management involving multiple investment managers. It begins by outlining the traditional model involving a single beneficiary and manager. It then explores reasons for employing multiple managers, including diversifying styles and judgments. The key assumptions and approaches are presented, including how managers' predictions can be blended optimally. Separating active and passive components allows clients to determine how aggressively to weight managers' views. Relative performance objectives can further incentivize managers without requiring short positions. Overall, blending multiple managers' predictions in an optimal manner allows for diversification of both styles and judgments.
Dublin Port Company required a twin-screw work barge/pontoon to be built for Harbor and
Coastal work including the Irish Sea. The vessel which we design complies with Bureau
Veritas requirements for workboats. Its duties include bed leveling, towing, buoy and quay
maintenance and an oil recovery option with ½ day „bolt on‟ facility. We can also count
diving support, anchor handling, supply, survey, mooring, pollution control, etc. for its duties.
Requested main specifications are:
L.O.A. 20 meters approx.
Beam O.A. 8 meters approx.
Depth midships. 2.7 meters approx.
Displacement 170-ton approx.
Leveling depth 16 meters approx
Fuel oil capacity 25,000 liters approx.
F.W. capacity 10,000 liters approx.
The hull, propeller, shaft, main and auxiliary engines, rudder and steering gear are selected by
taking into account Classification Society regulations. All trade names mentioned in the
specifications describe the desired quality of equipment and not intended to exclude other
makes of similar quality.
The M/V "EDT JANE" is a 2013-built, Cyprus-flagged multipurpose support vessel owned by Desedo Shipping Ltd and operated by EDT Shipmanagement Ltd.
Key specifications include a gross tonnage of 4,953, an overall length of 88.8 meters, capacity for 69 persons accommodation, and propulsion via four main engines and a combination of bow, stern, and retractable azimuth thrusters.
The vessel is equipped for a variety of offshore support functions including DP system operations, deck space for equipment, ROV operations, and tank capacities for fuels, liquids, ballast, and dry bulk.
AT SUBSEA VESSEL OPERATIONS CONFERENCE, OSLO (YEAR 2013)coderweb
The document describes the design of an ultra deep water rigid and flexible pipelay/heavy lift/DP3 construction vessel. Some key details include:
It is 178 meters long with a breadth of 46 meters and draft of 15.6 meters. It can accommodate 239 people and has a deadweight of 11,000 tons. It is equipped with a 3000 ton crane, 1200 ton reels, 1250 ton carousels, and dynamic positioning system. Extensive analyses and testing were performed to optimize the hull design and ensure operational safety in various sea states.
The world today has about 4000 offshore support vessels of various types. While statistical data are not very precise, there appears to be more than 200 under construction at present. These modern vessels, intended for fleet replacement on the one hand, and to meet the more demanding needs of deeper water operations on the other, are of much improved designs and packed with multifunctional capabilities.
The DP2 multipurpose deck cargo vessel AURA was built in 2006 by Remontowa S.A. and is owned and operated by Gaiamare Ltd and Meriaura Ltd. It has a length of 101.8 meters, a breadth of 25 meters, and can carry up to 30 clients in its accommodations. Key features include a 1625 square meter working deck with cranes and winches, propulsion via two 2,220 kW main engines and two 1,600 kW thrusters, and dynamic positioning capabilities that allow it to maintain position without anchors.
- The Small Business loan segment in Indonesia, defined as loans between Rp50-200 million, represents a significant opportunity for banks to double their market capitalization.
- The segment is currently underpenetrated, with only 25% of potential customers currently being served. Customers in this segment are also not very price sensitive.
- To capture this opportunity, banks need to develop a new delivery model combining acquisition of existing banks and building new "Units" to specifically target Small Businesses and their simple needs around accessibility, convenience, and simplicity.
- Developing 600 new Units could allow one bank to gain 20% market share in the Mass Market, representing around Rp10 trillion in assets. The potential profit
The document discusses Indonesia's marine business and need for additional vessels to support its upstream oil and gas activities. It states that 235 additional vessels will be needed by 2015 to transport equipment and provide services like seismic surveying, pipeline laying, tugboats, and platform supply. The industry currently operates 630 vessels but the country lacks infrastructure like shipyards with large dry docks to build vessels domestically, relying mainly on imports.
offshore activities, marine activities. Offshore Vessels are specially designed ships for transporting goods and personnel to offshore oil platform that operate deep in oceans. The size of these vessels ranges between 20 meters and 100 meters. They are good at accomplishing a variety of tasks in the supply chain. The category may include Platform Supply Vessels (PSV), offshore barges, and all types of specialty vessels including Anchor Handling Vessels, Drilling Vessels, Well Intervention Vessels, Ice Breaking Vessels, Cable Laying Vessels, Seismic Vessels, and Fire Fighting Vessels.
This document provides an overview of different types of vessels that serve important roles in transportation and supply chains. It discusses dry cargo vessels like general cargo, reefer, and ro-ro vessels. It also covers tankers for crude oil, LPG, LNG, and chemicals. Dry bulk carriers and specialized vessels like dredgers, tugs, firefighting, and naval vessels are described. The document also summarizes fishing vessels including fish factory and stern trawlers as well as passenger ships and livestock carriers.
Vacon case study. Baltika, innovative multi purpose icebreakerVacon Plc
The document summarizes an innovative icebreaker vessel called Baltika. Baltika is the world's first oblique icebreaking vessel, using an asymmetric hull and three azimuth propulsors to efficiently navigate ahead, astern, and sideways in ice up to 1 meter thick. It features an advanced oil recovery system. Eighteen VACON NXP AC drives are used to control the azimuth propulsors enabling movement in any direction including sideways to clear a wider channel for other vessels. The AC drive control system provides benefits over hydraulic steering like efficiency and redundancy. Steerprop, who provided the propulsors, has used VACON drives successfully in over 2250 projects since 2001.
Final Specification Of Salvin Princess DP2 Vessel 123Jimmy James
The Salvin Princess is an 85 meter offshore support vessel with DP-2 capability, a 4-point mooring system, and FIFI-1 firefighting rating. It has a 100 ton crane and accommodations for 238 people. The vessel is flagged in Singapore and operated by Canega Offshore Services.
1) Primary percutaneous coronary interventions (PCI) in patients with ST-elevation myocardial infarction (STEMI) and multivessel coronary artery disease can be performed via culprit-only PCI, multivessel (MV) PCI during the same procedure, or staged PCI.
2) Studies have found that MV PCI during STEMI is associated with higher mortality and stent thrombosis compared to culprit-only or staged PCI.
3) The HORIZONS-AMI trial of patients with STEMI and multivessel disease found higher mortality with single/one-time MV PCI compared to staged PCI.
A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds.
Today's bulkers are specially designed to maximize capacity, safety, efficiency, and durability.
Today, bulkers make up 15% - 17% of the world's merchant fleets and range in size from single-hold mini-bulkers to mammoth ore ships able to carry 400,000 metric tons of deadweight (DWT).
The document summarizes a student project to design a water taxi for 100 passengers on the Sadarghat-Ashulia route in Bangladesh. Key details of the proposed design include a length of 24.9 meters, capacity for 106 people, and selection of a Yanmar 4JH4-HTE engine with 186 horsepower. The students updated their general arrangement, lines plan, hydrostatic calculations, and stability analysis based on a reduced displacement of 74.88 tons from the previous 123.48 tons.
My first presentation in my life was about container ship in my first year at college in department of Marine and Naval Engineering hope to add some information to you about container ships
The document discusses the use of pooled investment vehicles for ultra-high net worth investors. Pooled vehicles can provide diversified access to top investment managers at lower fees than separate accounts. They allow investors to access strategies that require higher minimum investments than they could afford individually. Professionally managed pooled funds also simplify portfolio implementation and management. Overall, pooled funds offer UHNW investors improved risk-adjusted returns through diversification and lower costs.
Balance-sheet dynamics impact on FVA, MVA, KVAAndrea Gigli
- Andrea Gigli presented at the 13th Fixed Income Conference in Florence on understanding the impact of balance sheet dynamics on funding valuation adjustment (FVA), margin valuation adjustment (MVA), and capital valuation adjustment (KVA).
- Gigli discussed modeling FVA, MVA, and KVA using a multi-period structural model to understand how these valuation adjustments relate to model parameters and regulatory constraints.
- The presentation aimed to show how to allocate capital across business units, manage funding strategies, and price banking products based on a bank's utility function, funding policy, and regulatory requirements.
Call warrants give the holder the right to purchase the underlying asset, such as a share of stock, at a predetermined price (the exercise or strike price) on or before the expiration date. They are issued by companies and trade on exchanges separately from the underlying asset. While call warrants offer unlimited upside if the underlying asset rises above the strike price, potential losses are limited to the amount invested. Key terms that define a call warrant include the issuer, underlying asset, exercise price, expiration date, and entitlement or conversion ratio.
Short sellers borrow securities from brokers and sell them, hoping to profit if the price declines by buying them back at a lower price later. However, if the price rises sharply instead, it can trigger a "short squeeze" where short sellers rush to cover their positions by buying back the securities, driving the price up further. This vicious cycle of rising prices and demand can squeeze short sellers and cause significant losses. Brokers may also issue margin calls if prices rise, requiring short sellers to post more collateral or forcing the brokers to cover positions using other account assets. An example is when the Swiss National Bank's decision to unpeg the Swiss franc from the euro triggered a massive franc rally that squeezed short sellers.
This document provides an overview of financial derivatives, including common types like options, forwards, futures, and swaps. It discusses why derivatives are used to reduce risk exposure and how they work. However, it also notes the risks of leveraging and lack of oversight in some derivatives trading. Several case studies are presented of companies that suffered major financial losses from speculative or fraudulent use of derivatives. Overall, the document aims to explain derivatives while also highlighting potential ethical issues that can arise from their misuse.
The document discusses decentralized investment management involving multiple investment managers. It begins by outlining the traditional model involving a single beneficiary and manager. It then explores reasons for employing multiple managers, including diversifying styles and judgments. The key assumptions and approaches are presented, including how managers' predictions can be blended optimally. Separating active and passive components allows clients to determine how aggressively to weight managers' views. Relative performance objectives can further incentivize managers without requiring short positions. Overall, blending multiple managers' predictions in an optimal manner allows for diversification of both styles and judgments.
Dublin Port Company required a twin-screw work barge/pontoon to be built for Harbor and
Coastal work including the Irish Sea. The vessel which we design complies with Bureau
Veritas requirements for workboats. Its duties include bed leveling, towing, buoy and quay
maintenance and an oil recovery option with ½ day „bolt on‟ facility. We can also count
diving support, anchor handling, supply, survey, mooring, pollution control, etc. for its duties.
Requested main specifications are:
L.O.A. 20 meters approx.
Beam O.A. 8 meters approx.
Depth midships. 2.7 meters approx.
Displacement 170-ton approx.
Leveling depth 16 meters approx
Fuel oil capacity 25,000 liters approx.
F.W. capacity 10,000 liters approx.
The hull, propeller, shaft, main and auxiliary engines, rudder and steering gear are selected by
taking into account Classification Society regulations. All trade names mentioned in the
specifications describe the desired quality of equipment and not intended to exclude other
makes of similar quality.
The M/V "EDT JANE" is a 2013-built, Cyprus-flagged multipurpose support vessel owned by Desedo Shipping Ltd and operated by EDT Shipmanagement Ltd.
Key specifications include a gross tonnage of 4,953, an overall length of 88.8 meters, capacity for 69 persons accommodation, and propulsion via four main engines and a combination of bow, stern, and retractable azimuth thrusters.
The vessel is equipped for a variety of offshore support functions including DP system operations, deck space for equipment, ROV operations, and tank capacities for fuels, liquids, ballast, and dry bulk.
AT SUBSEA VESSEL OPERATIONS CONFERENCE, OSLO (YEAR 2013)coderweb
The document describes the design of an ultra deep water rigid and flexible pipelay/heavy lift/DP3 construction vessel. Some key details include:
It is 178 meters long with a breadth of 46 meters and draft of 15.6 meters. It can accommodate 239 people and has a deadweight of 11,000 tons. It is equipped with a 3000 ton crane, 1200 ton reels, 1250 ton carousels, and dynamic positioning system. Extensive analyses and testing were performed to optimize the hull design and ensure operational safety in various sea states.
The world today has about 4000 offshore support vessels of various types. While statistical data are not very precise, there appears to be more than 200 under construction at present. These modern vessels, intended for fleet replacement on the one hand, and to meet the more demanding needs of deeper water operations on the other, are of much improved designs and packed with multifunctional capabilities.
The DP2 multipurpose deck cargo vessel AURA was built in 2006 by Remontowa S.A. and is owned and operated by Gaiamare Ltd and Meriaura Ltd. It has a length of 101.8 meters, a breadth of 25 meters, and can carry up to 30 clients in its accommodations. Key features include a 1625 square meter working deck with cranes and winches, propulsion via two 2,220 kW main engines and two 1,600 kW thrusters, and dynamic positioning capabilities that allow it to maintain position without anchors.
- The Small Business loan segment in Indonesia, defined as loans between Rp50-200 million, represents a significant opportunity for banks to double their market capitalization.
- The segment is currently underpenetrated, with only 25% of potential customers currently being served. Customers in this segment are also not very price sensitive.
- To capture this opportunity, banks need to develop a new delivery model combining acquisition of existing banks and building new "Units" to specifically target Small Businesses and their simple needs around accessibility, convenience, and simplicity.
- Developing 600 new Units could allow one bank to gain 20% market share in the Mass Market, representing around Rp10 trillion in assets. The potential profit
The document discusses Indonesia's marine business and need for additional vessels to support its upstream oil and gas activities. It states that 235 additional vessels will be needed by 2015 to transport equipment and provide services like seismic surveying, pipeline laying, tugboats, and platform supply. The industry currently operates 630 vessels but the country lacks infrastructure like shipyards with large dry docks to build vessels domestically, relying mainly on imports.
offshore activities, marine activities. Offshore Vessels are specially designed ships for transporting goods and personnel to offshore oil platform that operate deep in oceans. The size of these vessels ranges between 20 meters and 100 meters. They are good at accomplishing a variety of tasks in the supply chain. The category may include Platform Supply Vessels (PSV), offshore barges, and all types of specialty vessels including Anchor Handling Vessels, Drilling Vessels, Well Intervention Vessels, Ice Breaking Vessels, Cable Laying Vessels, Seismic Vessels, and Fire Fighting Vessels.
This document provides an overview of different types of vessels that serve important roles in transportation and supply chains. It discusses dry cargo vessels like general cargo, reefer, and ro-ro vessels. It also covers tankers for crude oil, LPG, LNG, and chemicals. Dry bulk carriers and specialized vessels like dredgers, tugs, firefighting, and naval vessels are described. The document also summarizes fishing vessels including fish factory and stern trawlers as well as passenger ships and livestock carriers.
Vacon case study. Baltika, innovative multi purpose icebreakerVacon Plc
The document summarizes an innovative icebreaker vessel called Baltika. Baltika is the world's first oblique icebreaking vessel, using an asymmetric hull and three azimuth propulsors to efficiently navigate ahead, astern, and sideways in ice up to 1 meter thick. It features an advanced oil recovery system. Eighteen VACON NXP AC drives are used to control the azimuth propulsors enabling movement in any direction including sideways to clear a wider channel for other vessels. The AC drive control system provides benefits over hydraulic steering like efficiency and redundancy. Steerprop, who provided the propulsors, has used VACON drives successfully in over 2250 projects since 2001.
Final Specification Of Salvin Princess DP2 Vessel 123Jimmy James
The Salvin Princess is an 85 meter offshore support vessel with DP-2 capability, a 4-point mooring system, and FIFI-1 firefighting rating. It has a 100 ton crane and accommodations for 238 people. The vessel is flagged in Singapore and operated by Canega Offshore Services.
1) Primary percutaneous coronary interventions (PCI) in patients with ST-elevation myocardial infarction (STEMI) and multivessel coronary artery disease can be performed via culprit-only PCI, multivessel (MV) PCI during the same procedure, or staged PCI.
2) Studies have found that MV PCI during STEMI is associated with higher mortality and stent thrombosis compared to culprit-only or staged PCI.
3) The HORIZONS-AMI trial of patients with STEMI and multivessel disease found higher mortality with single/one-time MV PCI compared to staged PCI.
A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds.
Today's bulkers are specially designed to maximize capacity, safety, efficiency, and durability.
Today, bulkers make up 15% - 17% of the world's merchant fleets and range in size from single-hold mini-bulkers to mammoth ore ships able to carry 400,000 metric tons of deadweight (DWT).
The document summarizes a student project to design a water taxi for 100 passengers on the Sadarghat-Ashulia route in Bangladesh. Key details of the proposed design include a length of 24.9 meters, capacity for 106 people, and selection of a Yanmar 4JH4-HTE engine with 186 horsepower. The students updated their general arrangement, lines plan, hydrostatic calculations, and stability analysis based on a reduced displacement of 74.88 tons from the previous 123.48 tons.
My first presentation in my life was about container ship in my first year at college in department of Marine and Naval Engineering hope to add some information to you about container ships
This document summarizes the evolution of ship building from ancient times to modern day. It describes early ships from 3000-4000 BC built by Egyptians from reeds with no internal framing. During 1500 BC, Greek ships became smaller and faster with lean designs that could hold up to 50 oarsmen. Later, Polynesian ships were discovered with outriggers that could stabilize large vessels up to 180 feet long carrying 1000 people. Viking ships from 1000-1200 AD were long and narrow, up to 80 feet long used for travel, trading and colonization. Starting in the 15th century, European and Spanish ships were built for long distance travel with cannons and much larger hulls than Vikings. Modern ships can carry
This document summarizes different types of ships that have developed since 1800 to transport various cargoes. It describes how after World War 2, ships became more specialized to carry only one type of cargo, such as oil tankers, chemical tankers, container ships, and reefers. The document then provides examples and images of these specialized ship types that developed to transport liquids, bulk goods, containers, vehicles, passengers, and for recreation.
Ships come in many types and are used for various purposes. They are generally distinguished from boats based on their large size, distinct shape, and ability to carry cargo or passengers. Some main types of ships include bulk carriers which transport unpackaged bulk goods, container carriers which use intermodal containers, general cargo ships which move packaged goods, vehicle carriers which carry cars and trucks, and passenger ships whose primary function is to carry people. Other ship types specialize in transporting liquids like oil, gas, or chemicals in tankers or transporting perishable goods, fish, animals, or refrigerated items.
The document provides technical specifications for the Norshore Atlantic, a multi-purpose drilling vessel developed by Norshore. The vessel is designed to reduce well costs for clients by operating in shallow and mid-water drilling and performing subsea decommissioning. It is equipped for pre-drilling top hole sections in deep water as well as intervention operations and subsea construction. Key specifications include dimensions of 115.4m length, 28m beam, accommodation for 98 people, dynamic positioning systems, cranes, helideck, and drilling equipment like a rotary table, BOP, mud systems, and more.
Blood vessels: Arteries, Veins and CapillariesAmir Rifaat
It is one of the circulatory systems. This explains the roles of arteries, veins and capillaries. It also differentiate between the arteries, veins and capillaries. This slide also explained the pulmonary circuit and systemic curcuit. This is an interesting notes and easy to be understand.
"Real Option Analysis versus DCF Valuation - An Application to a Tunisian Oil...Lotfi TALEB, ESSECT
Lotfi Taleb
A new journal article entitled "Real Option Analysis versus DCF Valuation - An Application to a Tunisian Oilfield" published in International Business Research
https://www.researchgate.net/publication/330714663_Real_Option_Analysis_versus_DCF_Valuation_-_An_Application_to_a_Tunisian_Oilfield
URL: https://doi.org/10.5539/ibr.v12n3p17
This document provides an overview of real options analysis (ROA) and how it can be applied to evaluate an oil field investment project. ROA accounts for flexibility and uncertainty in a project's cash flows, unlike traditional discounted cash flow analysis. The document discusses financial options concepts, outlines the Black-Scholes options pricing model, and provides an example of using ROA to determine the optimal drilling order for nine oil wells to maximize project value for investors in an unnamed private fund. Linear optimization software is used to calculate the combination of drilling schedules across the nine wells that results in the highest total value of real options.
This paper discusses how institutional-quality hedge funds possess a much greater risk/reward pay off then the leading liquid alternative funds can offer.
Importance of wacc and npv on investment decisionsCharm Rammandala
The purpose of this article is to understand the importance of Weighted Average Cost of Capital and Net Present Value have on the investment decisions. It is vital to ensure all the investment decisions are done after looking at the viability of the investment opportunity and whether it is increasing the shareholder value by exceeding the opportunity cost. This study will primarily look in to the role played by WACC and NPV on the investment decisions.
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The true value of a multi-purpose vessel - IHC - July 2014
1. IHC Asia Pacific Pte. Ltd.
The true value of a multi-purpose vessel
Unlocking the embedded value of Real Options in the offshore industry
Written by K.J. Mulder and A.J. van Oers
Amsterdam / Singapore
July 2014
Introduction
Traditional valuation methods do not always reveal the true value of an asset. Today, it is popular for
financial engineers to spend a good amount of their time developing new financial derivatives customers
did not ask for and barely understand. While these new instruments continue to be created, few, if any,
resources are typically dedicated to examining a more basic, and more vital, consideration: the value of
Real Options. In any investment decision, a missed Real Option value has an ultimately negative impact
on the overall decision. To incorporate Real Options into one’s investment decision is to create value.
This paper focuses on the application of Real Option theory in the offshore industry and plumbs a real-
life case to explore the additional value of options and their impact on investment decisions regarding
vessels. In any industry, but particularly in a volatile one such as offshore, looking at only part of the
picture leads to decisions that can make an organization sink instead of swim. Unlocking the embedded
value of Real Options is in the best interest of all stakeholders and crucial to any investment
consideration.
History of Real Option Theory
The term ‘Real Option’ was introduced by Stewart Myers1
in 1977 to point to the section of the
investment picture that traditional measures, like Net Present Value (NPV) and Discounted Cash Flow
(DCF), could not identify. Such tools, Myers suggested, were comments on the present. Real Options,
by contrast, represent future decision opportunities.
1
Myers, S.C. (1977). Determinants of Corporate Borrowing. Journal of Financial Economics, 5 (2), 147-175
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Real Options do not lend themselves to straightforward value calculation, like those modeled by Black
and Scholes2
in 1973. They are therefore often overlooked, as are any other instruments that demand a
lens into the future. To make a sound investment decision, however, one must consider all sides: what
goes into the value, how the value is seen today, and how the value may change tomorrow. By asking a
critical question—how the worth of the potential investment may change over time—Real Options
provide a vital perspective into the overall investment picture.
Financial Options vs. Real Options
Financial derivatives and options, developed originally to allow investors to distribute risk and exposure
within the marketplace, now appear in a variety of incarnations. While they are used in large part to
anticipate valuation adjustments, such instruments are only as useful as the people who manage them.
There are an unfortunate number of examples of companies that have found themselves in financial
distress due to the inappropriate use, or outright mismanagement, of financial options and related tools.
If there is one general failing that can be pointed to as a cause of such situations, it is that the inherent
risk was underpriced in the first place, leading to unforeseen and unalterable exposure later.
Real Options, on the other hand, have a different character, offering the investor the possibility to adjust
the initial investment during its lifecycle. Traditional NPV and DCF methods assume all data related to
the investment period to be available at t=0. From the viewpoint of these tools, modeling all of the
known data equals calculating all of the known value. Real Options acknowledge that not all decisions,
in fact, are to be taken at t=0, and that a true valuation must include recognizing the potential for future
adjustments. Omitting this important consideration means leaving a crucial part of any investment
decision aside. A common result is opportunities being overpriced by those analyzing them—and, in
turn, recommendations to postpone or abandon the opportunity, when in many cases it might have been
in the interest of shareholders to proceed.
2
Black, F. & Scholes, M. (1973). The Pricing of Options and Corporate Liabilities. Journal of Political Economy, 81 (3), 637-654
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Leonos Trigeorgis3
has categorized Real Options into seven different classes according to effect on the
investment decision: defer, stage, alter, abandon, switch, accelerate or interact. Lander and Pinches4
take
a different tack, classifying Real Options instead into 17 areas of specific application, from natural
resources to real estate, research and development to mergers and acquisitions, hysteric effect and
corporate behavior to environmental development and protection. The goal of each of these taxonomies
is to establish a multi-faceted view of the total value project. Testing Trigeorgis’ and Lander and
Pinches’ groupings allows us to look more deeply into the potential decision at hand, unlocking a
decisive part of the picture.
Consider the usefulness of options in the following two investment scenarios:
Option to expand. A network provider requires new cable trenches. At the moment of the initial
investment, spare capacity is created, causing higher early-stage costs. The return
on the investment is represented by the potential need for more capacity in the
future, but it is not known if or when more capacity will be required. At the same
time, by not including the option for expansion up front, expansion in the future
will be regarded as even more expensive. By valuing the option for future
expansion, the NPV calculation will be positively impacted.
Option to switch. Vessel fleet extensions are based on the NPV of future cash flows of the vessel. In
the initial investment phase, macroeconomic data, as well as detailed market
information, are used to forecast future costs (capital expenses and operational
expenses) and revenues (day rates) by vessel type. Including Real Options in the
investment analysis will show that the value of a given vessel is higher than that
reflected by using traditional valuation methods without the application of Real
Options.
3
Trigeorgis, L. (1993). Real Options and Interactions with Financial Flexibility. Financial Management, 22 (3), 202-224
4
Lander, D.M. & Pinches, G.E. (1998). Challenges to the Practical Implementation of Modeling and Valuing Real Options. The Quarterly Review of Economics and
Finance, 38 (3), 537-567
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In both circumstances, adding Real Options to the investment consideration has a significant impact on
the overall picture of value.
Case Study: Offshore Support Vessels
In cooperation with IHC Asia Pacific, we examined the embedded option value of a specific group of
offshore support vessels. We chose these particular vessels because they are variations of a base model
that offers different outfitting and, directly relevant to our purposes, the possibility of modification over
time5
.
The basic model of this vessel is called the Platform Supply Vessel (PSV). Variations on this theme are
versions of the PSV with other equipment or features that enable them to be deployed for certain
specific offshore sub-markets. These vessels can be customized, with features added to facilitate utility
in a specialized market segment, then removed again later, or modified for yet a different sub-segment.
In other words, the value of a single vessel may be altered multiple times during its lifetime, hence this
group of vessels offers an appropriate subject for our examination
We have defined the following five vessel types, each with its own distinct level of specifications: (1)
Platform Support Vessel (PSV), (2) Construction Support Vessel (CSV), (3) Work Class Remote
Operated Vehicle Vessel (WROV), (4) Diving Support Vessel for air diving (DSVAIR), and (5) Diving
Support Vessel for saturation diving (DSVSAT).
5
IHC Packhorse™ and Packhorse™-Maxi:
http://www.ihcmerwede.com/about-ihc-merwede/media/news/article/ihc-merwede-introduces-new-ihc-packhorseTM-offshore-support-vessels/
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Modeling: Value Calculation with Real Options
With the ultimate goal of establishing a manner for making more thorough, more accurate investment
decisions for vessels, we have developed a model for revealing the Real Option value, a calculation that
in turn has the potential to refine our picture of the overall initial investment. Inputs required for this
model include day rates, operating expenses, utilization rates, initial investments, costs of modification,
tax rates and financing. Assumptions for the input of the model are based on market reports, industry-
specific sources and discussions with several industry experts.
The first step in the model is a Net Present Value (NPV) analysis for each of the five vessel types. By
using the traditional Discounted Cash Flow (DCF) method, where each of the future cash flows
generated by the vessel is discounted to today’s value, we calculate the present value of the vessel as
follows:
Base value of the vessel6
The total forecast period is seven years: two years pre-delivery of the vessel (design and construction)
and five years post-delivery (operational), with a residual value at the end of year 7 (seven) equal to a
fixed percentage of the replacement value for a new build.
If the simplified NPVA—the base value of the vessel minus the investment (VA - IA) —is greater or equal
to zero, we would have to say that the investment appears worthwhile, since the risk-adjusted return on
the investment is higher than the hurdle rate, incorporated in the discount rate.
But let us step back a moment and consider the larger picture. For a vessel that has embedded Real
Options, our initial view is dangerously simple; it significantly undervalues the correct NPV. If there are
other factors that may serve to add value at this moment in time, they must be taken into account, or we
are knowingly making decisions based on an incomplete view.
6
Where VA is the present value, FCF is the free cash flow in a particular period, r the discount rate or Weighted Average Cost of Capital (WACC), and n the number
of periods.
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It is therefore the second part of the model that is paramount to determining the true value of a vessel.
Valuations of Real Options are technically more challenging than more traditional, more straightforward
financial options; but they are constructive, for they force us to acknowledge the future uncertainty
about any project’s value, including management’s ability to respond to changes.
There is much similarity between the modeling of Real Options and financial options. The model we use
for valuing Real Options is that developed by Black and Scholes:
Option value of the vessel7
where
In this case, the current value of the underlying asset (VA
*
- VA) is the difference between the PV of the
FCFs with a particular modification of the vessel at a certain moment in time and the PV of the FCFs in
their basic mode. The strike price (IA
*
- IA) is equal to the PV of the additional investment needed in
order to modify the vessel. The costs of the modification are dependent on the phase in which the vessel
is modified. To calculate the difference in PV of the FCFs, a DCF model is used for each combination
(option), of which there are a total of 360. Each combination represents a different configuration of the
inputs noted above, and therefore different parameters for the investment decision.
Besides the value of the underlying asset and the strike price, a further determinant in the current model
is volatility. For the purposes of this study, we use the historical volatility of the most significant
determinant for the PV, day rates, as a proxy for the volatility of the underlying asset. The value of the
option is highly dependent on the volatility of the forecasted day rates, along with differences in the
evolution of the day rates between sub-segments. The higher the volatility, the higher the upward
potential—and therefore the higher the value. In addition, the impact will be larger when expectations in
day rates for the different sub-segments, and thus vessel types, do not move in tandem.
7
Where CA is the value of the call option, (VA
*
- VA) is the current value of the underlying value, N is the cumulative normal distribution, (IA
*
- IA) is strike price of the
option, r is the riskless interest rate corresponding to the life of the option, T is the life to expiration of the option, and σdr is the volatility of the underlying asset.
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Figure 1: Historical day rates PSV, January 1998 - January 2013; source: www.workboat.com
For each of the different combinations (options), the value of the asset can be calculated by using Black
and Scholes’ formula, after we adjust the formula with parameters suitable for these Real Options. Note
that the value of an option will never be negative. The option to modify the vessel will only be exercised
by management if the value is seen as positive.
In order to have a clear additional value, created by the Real Options, the average option value is
calculated for each vessel type. For the specialized vessels, which we consider to be any of those above
the basic PSV—this results in four Real Option values. The outcome of the first part of the model
(simple traditional NPV), when combined with the outcome of the second part of the model (value
adding Real Options), gives us a complete picture, and the vessel’s true value.
True Net Present Value of the vessel
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Results: Real Options as part of the Value Calculation
If the investment decision at hand is based on a standard NPV calculation without unearthing the
additional embedded value, the expected NPV on a Platform Supply Vessel could be calculated as
negative. By the same token, if the investment calculation on a DSV comes up negative—likely because
the occupation rate in the future is uncertain, or the market prospects are declining over time—the
investment will likewise not be pursued. By combining the base value of these vessels, however, and
taking the critical step of adding the value of the embedded Real Option, we see an important shift
occur: the value can turn positive.
Figure 2 Forecasted day rates, July 2013 - July 2019
Performing the analysis on a CSV operated in Asia with current available information on capital
expenses and operational expenses (costs) as well as day rates (revenues) yields an NPV of US$2.3
million.
The potential option to moderate the vessel to a DSV in the future has an impact on capital expenses,
since its modification will entail separate costs, and in addition we must allow a period of time in which
it will not be operational. Furthermore, the calculation of the value of the overhauled asset is impacted
by operational expenses, since the modified vessel now entails different costs for daily operations, such
as crew, consumables and fuel consumption.
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Based on the current model, the value of the option itself may be as big as US$5.0 million, leading to a
total NPV of US$7.3 million.
Remember that the diving equipment, an extra feature, is available at any point during the lifetime of the
vessel. If the day rate for CSV drops, the original crane is dismantled and replaced with diving
equipment, sending the day rate back up in the future. In our model, future day rates (see Figure 1) are
used, however during the lifetime of the asset, these rates can change, and, during the vessel’s lifetime
of 30 years or more, the Real Option can be executed earlier, later or not at all.
Table 1: Example option values for exercising the embedded options in Asia at years 1-6.
Red indicates a decrease in option value compared to the previous year, green an increase.
As shown in the above table, the value of the option to modify a vessel, as determined by the forecasted
day rates, fluctuates appreciably over time. It is thus essential to update the model regularly if one is to
seek ongoing value creation for the organization.
Options 1 2 3 4 5 6
Asia WROV → CSV $0 $0 $0 $0 $0 $0
DSV (air) → CSV $0 $0 $0 $0 $0 $154
DSV (sat) → CSV $2,819,866 $2,560,409 $3,774,660 $3,328,529 $1,364,518 $198,268
CSV → WROV $12,046,608 $11,946,158 $8,656,020 $4,909,561 $2,778,732 $1,551,477
DSV (air) → WROV $40,597 $202,990 $33,326 $78,357 $80,745 $236,264
DSV (sat) → WROV $17,633,445 $17,460,018 $13,974,458 $9,662,831 $4,674,158 $1,428,416
CSV → DSV (air) $11,094,495 $11,180,337 $7,975,757 $5,110,785 $3,428,066 $1,650,171
WROV → DSV (air) $0 $0 $0 $3,876 $426,618 $577,003
DSV (sat) → DSV (air) $13,689,260 $13,359,745 $10,925,274 $7,899,841 $4,279,574 $1,399,033
CSV → DSV (sat) $0 $0 $0 $0 $90,950 $735,823
WROV → DSV (sat) $0 $0 $0 $0 $0 $298,058
DSV (air) → DSV (sat) $0 $0 $0 $0 $37 $345,570
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Real Options in Practice
Recently, Boskalis released two new vessels in Singapore: the Ndeavor and the Ndurance, part of the so-
called N-class. The two new vessels, with accommodation for over 90 persons, were initially ordered by
SMIT as accommodation vessels for offshore support.
In the wake of the merger between Boskalis and SMIT, the Ndeavor and the Ndurance have been
allocated to the former’s offshore fleet. The Ndurance has been converted into a cable-laying vessel, and
the other, with a similar hull, into a multi-purpose stone-dumping vessel with dredging capabilities.
These conversions are both driven by specific, current projects, and can be further added to, or reverted,
in the future depending upon the requirements of the offshore market. The accommodation capacity of
these vessels itself represents an option, since, though most offshore vessels do not require many
persons on board, creating more capacity can thereby increase the vessel’s utilization rate. An option on
multi-purpose projects is included in the value calculation.
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Conclusion
Given that any forward-looking statements necessarily include a high level of uncertainty, Real Options
can be of considerable value to any investment analysis. While the valuation of Real Options is
complex, since their effect on predicted cash flows is always farther into the future than those of the
initial investment, recognizing their contribution is not only critical if one aims to paint a thorough
picture of the investment decision, but also leads to a positive impact on valuation, and therefore the
business proposition, for different stakeholders: investors, by increasing the number of options to invest
in value-adding propositions; financiers, due to the higher residual value of the vessel and its
operational utility in different markets (especially if the default risk of the owner is high); construction
companies, since recognition of the option value will lead to more initial investments being made,
including additional potential re-constructions (modifications) over time; and customers, due to the
higher residual value of the asset and, in turn, more competitive day rates.
It is not only in the interests of today’s company leaders to think in terms of options; it is imperative to
do so, if they seek to make investment decisions based on a broader, more inclusive picture of value
than that generated by traditional models. By unlocking the embedded value of Real Options, we
increase stakeholder value and contribute to the sustainability of the organization over time. This effort
should be made a priority not only by the finance department, but by the entire management team.