News from BP, the world's largest oil company, that it plans to have "close control" over 50 percent of its tonnage by 2005 may bring a wry smile to more than a few old timers. It was not very long ago at all that oil majors were systematically divesting themselves of vessels that, they said, tied up capital unnecessarily and were not a part of their core business. At the time, they contended that they could rely on others to provide maritime transport more cheaply.
Has the wheel turned full circle? Last month BP's CFO Byron Grote revealed impressive results - BP's second quarter profit was $3.1 million, up 42 percent year on year while its first half figures, at $6.8 billion, were up 81 percent. But he also affirmed that the company intends to control more of its own tonnage, either by owning or time-chartering it.
In his speech entitled "Prestige - A Charterer's Reaction" which Captain Noel G. Hart, Manager, BP Shipping (USA) presented at an INTERTANKO meeting in April and was published, in part, in the June 2003 edition of this publication. Hart said: "Some of you would be aware BP is currently in the midst of expanding its fleet - we have nearly a dozen ships delivering this year alone. Have you asked yourselves why we are doing this?
I will save you the question — we are doing it to be less dependent on a spot market that continues to disappoint — remember the figure I quoted before — only half the ships we could use, we can use. And so our assurance strategy — which was embryonic at the time of the Erika incident, and which matured in the 12 months following, has determined a path for us across a broad range of our marine activities, but one more visible feature was to increase our capacity to move our own cargoes." Hart pointed to some sobering statistics that were used, in part, to formulate the plan: "BP inspects 2,200 tankers/year, utilizes about 1,000 SIRE reports, handles over 25.000 internal vetting enquiries/year and audits about 30 ship owners/year. There are over 12,000 tankers in our data base — we have a potential business interest to charter around 5,000 of those — the others are coasters, or committed into various closed trades not available for spot use and so on, yet we only approve of around 2,500 tankers. Half the fleet that we would want to charter is unacceptable to us. Even with the half that is acceptable, many will still fail an initial inspection." A Look Back Back in the 1960s and early 1970s, oil companies owned a greater proportion of tonnage themselves than at any time since. Then they had another chunk on long-term timecharter, other vessels on medium term deals, and relied on the spot market only for unforeseen requirements.
Then came the age of the tanker independent and when the tanker market crashed, it was better for oil companies to charter in large volumes of third-party tonnage at loss-making rates than continue to run their own high-cost shipping operations along traditional lines.
Now, in the wake of a number of highprofile tanker casualties but particularly the Prestige, the strategic risk associated with shipping activities, which are an essential part of any oil major's global logistics chain, is viewed completely different. Deep-pocketed oil companies simply cannot afford to risk overreliance on independent tonnage, particularly in a tight market where goodquality ships are hard to find. Analysts believe that in certain sectors of the tanker market, such circumstances are now inevitable in the light of the faster phase-out of single hulled tonnage in the months ahead. Just look at the scale of the lawsuits bouncing backwards and forwards across the Atlantic between the Spanish Government and the American Bureau of Shipping. No major corporate, forced to take whatever tonnage it can get in a tight market, would want to find itself having to charter tonnage that it knew was marginal. In practice, no oil major probably would, but then that poses a risk to the company's other fields of operation.
being a major U.S. oil company, the appointments reflect both the international nature of the Liberian Shipowners' Council members and the mix of oil majors and independent owners
Cedex, France E-mail: firstname.lastname@example.org Web: www.lubmarine.com The Company: Total Lubmarine is a global business unit of the oil major Total Group specialized and dedicated to marine lubricants and greases. Providing marine lubricants since 1952, Total Lubmarine is fully integrated
U.S. waters to comply with the revised 2013 Vessel General Permit (VGP). Shell Naturelle S4 Stern Tube Fluid 100 is made with fully saturated ester base oil, as the oil major contends that this offers the best resistance to hydrolysis and oxidation. It is also a non-emulsifying fluid, which allows ship operators
by the December sinking of the Erika off the coast of France, achieved a tangible first step last week with the signing of a Ship Safety Charter by oil majors and ship classification firms involved in the French petroleum shipping industry. The parties signing the three-page document, including TotalFina
While the Offshore Oil & Gas markets continue to push further from shore in ever-deeper waters, the need for proven technology to work more efficiently in increasingly hostile and unfamiliar environments grows in tandem. And while growth in the energy sector continues to energize multiple markets, it is
a possible breach of its debt covenants. The group, whose main activity is building and operating floating production and storage platforms (FPSOs) for oil companies, also said on Tuesday that U.S. oil major Exxon Mobil Corp. would keep one of its FPSOs on a long-term lease rather than buying it as
Notably, though, and in early March, Louisiana-based Harvey Gulf International Marine LLC, which has more than 50 vessels in its fleet and supplies offshore oil rigs among other services, also filed for Chapter 11 bankruptcy in Houston.Better News Ahead?Separately, Norway-based DOF, an operator of 67 purpose-built
we were a little nervous, but, after just one month in operation (it was delivered in March 2013) it’s performing above all expectations.” Norwegian oil major Statoil is also reported to be happy with the innovative approach to engine, fuel and environmental management. The firm has engaged Ocean Response
. Frontline also walks the walk. A large, young, double hull fleet, which is a market trend setter is an apt desire for most any company that carries oil from point A to B. Frontline, has sped from zero to 60 at record pace. Hatched in 1996 over frustration stemming from carrying cargo based on oil
prosper. On the flip side, the abundance of cheap oil and gas found onshore is starting to have an impact on offshore oil and gas developments, as the oil majors are digesting rapidly rising production and crewing costs and slashing E&P expenditure. Jim McCaul, our long-time editorial sounding board, encapsulates
prominent underwriter that offers favorable terms for those firms having to “stack” large numbers of their offshore support fleets. Separately, the same oil majors who spent lavish amounts of money to ramp up for the specter of $115 crude oil now spend similar amounts of sweat equity on negotiating discounted
.S. Navy, NOAA, and vari- MacGregor, part of Cargotec, com- pleted the construction of FibreTrac, the the most signi? cant cost-saving advan- ous offshore oil installations. All equip- ? rst ? ber-rope offshore crane to enter the tages seen in decades. FibreTrac is able ment is manufactured in the U.S
former Second Lady of Scrubber Delivered tric Boat. More than 10,000 shipbuilders from the United States and the ship’s sponsor, The very large crude oil carrier (VLCC) The submarine is the second ship to be Newport News and Electric Boat have during a ceremony in October 2018. Tanzawa, the ? rst
nm in and ity and cost effectiveness to the bene? t pair of FCS 3307 high-spec include Damen’s trademark Axe Bow around Nigeria’s coastal and offshore oil of Homeland’s clients. The decks allow patrol vessels to be operated hull form that is designed to deliver ex- ? elds. The security packages installed
14 ft./4.25 m sel built for the operator by Richardson Devine Construction Marine grade aluminium Marine. The 500-passenger, 35 knot vessel fea- Fuel Oil 4914 gallons / 18 600 liters tures the operator’s trademark parallel boarding Fuel Oil (Day tanks) 1057 gallons / 4 000 liters system, whereby ?
Laza- rev, a prominent Russian admiral and explorer known for his discovery of Antarctica. The tanker was ordered by Sovcom? ot to transport crude oil for the Novy Port project, under a long-term agreement between Sovcom? ot and Gazprom Neft. The ceremony was attended by Oleg Melnikov, Vice-Gov- ernor
Plug-In Hybrid for CEMS applications where condensed wa- ExxonMobil is supplying Mobilgard ter is not present in the ? ue gas. Consisting ADL 40 engine oil for Color Hybrid, Color of a stack-mounted probe and separate con- Line’s latest addition to its ? eet of ferries. trol unit, 4650-PM’s forward scattering
are switching to more expensive than HSFO, the poten- levels of re? ning required for LSFO and While the car’s emissions were lower low sulfur fuel oil (LSFO), but this will tial savings (i.e. savings gained from other distillates (such an upgrade would in GHGs, once the full production pro- mean
S SHIPMANAGEMENT FLAG “As a shipping company that is part of an oil company, our pri- mary role is managing marine risk, our secondary role is trans- porting oil.” Steve Herron, GM of Fleet Operations, Chevron Shipping Photo: Chevron and develop. A certain trust has devel- tal regulations adopted by the
ron Shipping. shaping global regulations at the Inter- Cand more, shipowners are de- ping companies make decisions that lead The business of transporting oil for national Maritime Organization (IMO), manding high levels of standards from to long-term success. Low taxes and low Chevron is not motivated
in- that her organization grows in step with installed, it an issue that everyone is fo- ber of early adopters, there is a growing dustry is a well-oiled machine, and it is an ever-changing industry. “I love being cused on.” reference list, particularly coming out also very adaptable. So if there
lift vessel (launched as a kind of positioning. leading the ELICAN consortium which ening, as well as modi? cations to the ‘Swiss army knife’ for the oil industry The slip joint connection was designed has designed and installed a 5MW pro- tank arrangement to enhance the proba- during its boom in 2013)
SHIPBUILDING USCG POLAR SECURITY CUTTER vessel to reach the North Pole unaccom- transits to get on station and conduct Mardiros. The number one mission for panied—but it is designed primarily for operations with limited or no logistics the new PSC will be to carry out the an- Meet The “Fleet” scienti?
every Arctic Urgent requirement provider and operator of the U.S. polar ral resources there,” said Coast Guard nation in key strategic areas, such as oil The Coast Guard’s icebreaking ? eet capable ? eet but currently does not have Vice Commandant Adm. Robert Ray, and gas development, ports, railways
, and the military, as well as interest icebreaker. communications, and comprehensive eight countries that have territorial land in extracting minerals, oil and gas. Sea- “As the region continues to open and Maritime Domain Awareness. In order to or seas above the Arctic Circle or in the food is a multi-billi
, you have to circulate heat It’s kind of like Subchapter M. Early on we identi? ed was a lot of potential to take those to another level. transfer oil across the interface between the barge and our gaps and started to address them to make an easier the tug. I worked with a naval architect to help
started in the energy industry at 16 working at an The company that I was running was bought by Hous- When I left the vessel I was the Damage Control As- oil storage depot in New York Harbor, working there ton Marine Services, so we moved from the Port Ar- sistant, which was normally an engineering function
Financiers also note the overhang of commodations with its lenders. Its daily region for jack-ups again.” utilization and dayrates. The marketed older oil service vessels in the market- business will continue while discussions Privately held Edison Chouest, ac- utilization for both jackups and ? oaters
WORKBOATS THE OSV MARKET CAROLYN CHOUEST: Edison Chouest vessel working Paci? c waters. he fate of Offshore Service oil, slightly higher (with temporary (but slight) jit- for an uptick in 2020 and 2021 with Photos: Iain Cameron Vessels (OSVs) is, natural- nearby at around $60/ ters as an Iranian
WORKBOATS THE OSV MARKET OSV Market Which way is Up? The environment in oil patches onshore and offshore alike has been challenging throughout 2019; worries about an eco- nomic slowdown – whether cyclical or in- duced by a trade war – have weighed heav- ily on oil prices, even in the face of reduced
Equinor has earmarked around 15 to 20% of its total annual investment for the development of new energy solution until 2030. Much of these resources are pegged for innovative projects, such as deepwater offshore wind energy farms, placed on barges. geted at clean energy projects. Present- ly, Equinor has
change of the company´s Margareth. Equinor is working system- constant offshore winds present off the IOCs have looked with interest at Bra- name from Statoil to Equinor last year. atically in bettering its energy ef? ciency, coasts of north and northeast Brazil will zil’s clean energy market in search
T THOUGHT LEADERSHIP: OFFSHORE WIND Public Of? cials Face Detailed Decisions – needed sooner, not later… AOT is working to develop a new port, speci? cally con? gured to serve Atlantic Ocean wind projects, on 30 acres along the Arthur Kill tidal strait between Staten Island and New Jersey. Boone Davis
such agreements are ties can work around the package limita- in the candy bowl meant the venue had in contract negotiation and/or drafting/ the Louisiana Oil? eld Anti-Indemnity tion either by (a) de? ning a package and not read the contract, and there would be reviewing the same can and often does Act
growing shipbuilding and work in eliminating a major cause of On Thursday October 17, ship repair operations. Clarke holds ocean pollution – oil leaked from con- 2019, Congressman Elijah E. a Bachelor of Arts degree in econom- ventional oil lubricated tailshafts – has Cummings (MD-07) passed