Rio Tinto holds course as it looks inward for new chairman
Global miner Rio Tinto signalled on Monday it will stick with its “value over volume” strategy, outlining further moves to boost shareholder returns and appointing a new chairman from within its board. Rio ended months of speculation by naming Simon Thompson to succeed chairman Jan du Plessis, who will step down after almost nine years at the helm of the Anglo-Australian mining house. (Reuters)
China’s top two banks won’t lend to Adani’s Australian coal mine
China’s two biggest banks said they do not plan to finance a controversial Australian coal mine, in the latest blow to Indian conglomerate Adani Enterprises’ long delayed project. Industrial and Commercial Bank of China (ICBC), and China Construction Bank said in separate statements they were not working on the project, after media recently reported that Chinese banks may get involved. (Reuters)
Last Index Published Date: 4 DECEMBER 2017
Baltic Exchange Dry Index 1662 +36
Baltic Exchange Capesize Index 4129 +104
Baltic Exchange Panamax Index 1559 +65
Baltic Exchange Supramax Index 944 0
Baltic Exchange Handysize Index 626 0
‘Lake Despina ‘ Koch Shipping relet 2014 181600 dwt dely Huanghua 06/08 Dec trip via Australia redel Singapore-Japan $29,000 daily – Cargill – <fixed 30/11>
‘Evgenia’ 2011 176000 dwt dely Wilhelmshaven in d/c 07/10 Dec trip via Colombia redel Skaw-Cape Passero $30,000 daily – Cargill
‘Xenia’ Bunge relet 2006 87144 dwt dely Port Talbot spot trip via Murmansk & Civitavecchia redel Gibraltar $23,000 daily – Cofco
‘Adam I’ 2008 79775 dwt dely Mariveles 13/18 Dec trip via Indonesia redel south China $14,000 daily – Ausca Shipping
‘Osmarine ‘ 2006 76596 dwt dely Tianjin 27 Nov trip via NoPac redel China $10,000 daily – cnr – <recent>
‘Dream Seas’ 2009 75151 dwt dely Qingdao 03/04 Dec trip via NoPac redel Singapore-Japan $10,000 daily – Cargill
‘Doric Trident’ 2016 57859 dwt dely Singapore prompt trip via Indonesia redel India $12,000 daily – cnr
‘Ehime Queen ‘ Bunge relet 2016 181221 dwt dely CJK prompt 4/6 months trading redel worldwide $27,700 daily – U Ming – <fixed 1/12>
‘Lake Dolphin’ 2011 179418 dwt dely South Korea – Quadrolink – <reported 1/12 this ship is not a Koch Shipping relet >
‘Star Markella’ 2007 82594 dwt dely Taichung 6 Dec 12 months trading redel worldwide $12,500 daily – EGPN
‘Cape Race’ 2012 81438 dwt dely Lanshan 28 Nov 4/7 months trading redel worldwide $12,000 daily – Cobelfret – <recent>
Oil fell after U.S. shale drillers added more rigs last week, but prices still held close to their highest since mid-2015, supported by an extension of output cuts agreed last week by OPEC and other producers. Gold prices fell in Asian trade, as the dollar gained on expectations that the United States’ economy will expand further after the Senate passed a bill to overhaul the country’s tax system. London copper held its ground, defying a stronger dollar to find support from resilient manufacturing demand in top consumer China, although analysts said downward pressure may mount towards year-end. Chicago corn climbed to its highest since early September with concerns that dry weather will hurt crop yields in Argentina underpinning the market. (Reuters)
Exxon eyes Egypt’s offshore oil and gas
Exxon Mobil is considering a foray into Egypt offshore oil and gas, seeking to replicate rivals’ success in the country and boost its reserves, officials and industry sources said. Officials from the world’s largest listed oil producer recently held talks with Egypt’s petroleum ministry to discuss investments in oil and gas production, known as upstream operations, Petroleum Minister Tarek El Molla told Reuters. (Reuters)
Venezuela Maduro gains control over oil contracts amid purge
Venezuela’s President Nicolas Maduro on Sunday gained more powers over the OPEC member’s oil contracts, as a deepening purge looks set to strengthen the leftist leader’s control of the key energy sector amid a debilitating recession. A months-long crackdown on alleged graft in Venezuela’s oil industry has led to the arrest of some 65 former executives, including two prominent officials who used to lead both the oil ministry and state oil company PDVSA. (Reuters)
U.S. shale eases into detente with OPEC as supply cut extended
U.S. shale oil producers and OPEC appear to have called a truce of sorts even though there is no sign the U.S. industry will do anything to help reduce the global oil supply glut. U.S. producers applauded Thursday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers led by Russia to extend output cuts until the end of 2018. (Reuters)
Russia’s Lukoil not seeking additional compensation for OPEC/non-OPEC output cut deal extension
Russia’s second-largest crude producer Lukoil has not asked for any additional compensation in return for curbing production in line with the extension to the OPEC/non-OPEC production cut deal, CEO Vagit Alekperov said Friday.
“We are discussing legislation governing the oil industry in Russia overall, but we are not separately discussing any compensation on the production cut,” he said.
Ahead of the OPEC/non-OPEC meeting Thursday, some analysts questioned whether Russian companies would continue to support the output cut deal.
Although it has benefited producers by boosting prices, the longer the agreement is in place, the greater the risk that they may be forced to postpone the launch of greenfield projects in order to meet their obligations.
“Subsoil resources in Russia belong to the state, and decisions taken by the ministry are obligatory for us. Today we are discussing the issues, and of course the market has to be balanced, stocks are high and the ministry’s decision is aimed at stabilizing the oil market,” Alekperov said.
He added that the structure of implementation of the deal in Russia, where the cuts were shared out across companies proportionally, will not change.
“The volumes won’t change,” he said.
On Thursday Lukoil officials said that they will continue their strategy of balancing out higher output at greenfield sites with lower production at mature fields in West Siberia and Timano-Pechora to meet their obligations under the OPEC/non-OPEC deal.
Alekperov said that, when the agreement is lifted, the company can bring additional production volumes back on stream quickly.
“We think wells where output is limited, we can bring back into production in around two weeks,” he said.
Alekperov added that he hopes Russian producers will meet with the energy minister again at the end of the spring to discuss the state of the market.
Another potential risk for Russian producers linked to extension of the deal would be a strengthening in the ruble to dollar exchange rate, which would see costs rise and income fall in ruble terms, analysts have said. Alekperov said he does not currently see this as a problem and does not expect the ruble to strengthen significantly.
“Today we do not see that the ruble is directly dependent on the oil price, the ruble is in free-float,” he said.
When oil prices fell sharply in 2014, Russian producers were cushioned to some extent by the fact that the ruble weakened significantly against the dollar. With their income largely in dollars and costs largely in rubles, this allowed companies to minimize the financial impact of the price drop. Russia’s taxation system also helped companies to weather the storm.
Alekperov said that a crude price of $60-65/b suits OPEC and non-OPEC countries alike.
“Therefore we need to agree to be restrained so as not to repeat the mistakes of the mid-2000s,” he said.
Lukoil is including an oil price of $50/b in its budget for 2018.
Lukoil is also in talks with Iran to participate in two major onshore oil field development projects — Ab Teymour and Mansour — as well as wider investments in the country, Iranian oil minister Bijan Zanganeh said following a meeting in Vienna Friday. It will join Denmark’s Maersk for the developments.
“They told us that they are going to be joint with Maersk. We asked them to send a letter to us. The two companies are due to give us their proposals,” Zanganeh said.
“We discussed ways to develop [Iran’s] oil industry with Lukoil to use their resources, management and technology in our fields and also trade,” he said.
The talks also involve expanding crude and products trading.
“Because we are expanding our crude oil and oil products with Lukoil. They take crude and products from us and we want to do a joint marketing work for products. They sell us a certain volume of gasoline in north Iran which is important for us to be able to supply gasoline cheaper,” Zanganeh added.
At the moment, a relatively small volume of gasoline is sent to Iran’s NICO Intertrade Co. at the country’s Caspian Sea port of Anzali. Lukoil also receives oil directly from state-owned National Iranian Oil Co. for its refineries in Europe.
“They will decide the volumes between themselves. This is to diversify our markets and customers,” Zanganeh said.
Total to Supply LNG for CMA CGM’s New Boxship Giants
French carrier CMA CGM has signed an agreement with oil and gas major Total for the supply of liquefied natural gas (LNG) to fuel the company’s recently ordered 22,000 TEU container ships.
Under the deal, Total is to supply around 300,000 tons of LNG per year for a period of 10 years starting in 2020, when the new boxship giants will start joining the fleet.
CMA CGM, the first shipping company in the world to equip its nine giant container ships with LNG propulsion, has selected Total Marine Fuels Global Solutions, the Total affiliate responsible for marketing marine fuels worldwide, for these future supply operations.
In February 2017, CMA CGM and Total already signed a cooperation agreement to examine the most environmentally responsible propulsion solutions to meet the International Maritime Organization’s 2020 implementation date for new sulfur regulations.
“LNG is the fuel of the future for shipping,” Rodolphe Saadé, Chairman and Chief Executive Officer of CMA CGM, said, adding that the entire maritime industry will benefit from the new supply chains that will be created following this “groundbreaking decision by the CMA CGM Group.”
Under this agreement, Total will provide a tailor-made solution for LNG supply. The group is currently considering chartering on long-term basis a LNG bunkering vessel that would not only deliver fuel to CMA CGM in Europe, but also to other customers in the same region.
The new supply chains created would lead to a wider use of LNG, especially in other shipping sectors, to achieve even greater and ambitious environmental responsibility.
In addition, both companies reached an agreement in principle on the potential supply of lubricants for the nine newbuilds, giving CMA CGM access to Total Lubmarine’s products, technical expertise and global distribution network. (World Maritime News)
Wärtsilä Introduces Voyage Emissions Reduction System
Finnish technology group Wärtsilä is introducing its Voyage Emissions Reduction (VER) system as a means for increasing oil tanker revenues, while also significantly aiding the environment through reduced emissions.
The system effectively eliminates the problem of volatile organic compound (VOC) emissions from tankers during laden voyages, according to the company.
VOC’s are organic chemicals having a high vapour pressure resulting from their low boiling point, which leads to extensive evaporation. On average, an oil tanker will emit 0.085 percent of its contained cargo per each week. For a 320,000 dwt very large crude carrier (VLCC), this amounts to 270 tons of lost cargo per week.
The Wärtsilä VER system is being made available in two versions, the ‘reabsorption’ and the ‘fuel’ version. The first one represents a technology for eliminating cargo losses, which operates automatically and without manual intervention, while the fuel version utilises the VOC as fuel for the vessel with fuel cost saving advantages. Both versions promote environmental sustainability by reducing VOC emissions by up to 75 percent.
Wärtsilä informed that its system meets all the regulation 15 requirements of the International Maritime Organization’s (IMO) MARPOL Annex VI protocol. It also fulfils port specific requirements for terminals with regards to VOC emission reductions. (World Maritime News)
Rotterdam Sets New Port Dues for Three Years
Dutch port of Rotterdam informed that port dues will rise by 1% per year for the next three years.
Over the recent period, fixing the development of port dues for three years has provided the market with a lot of clarity, according to the port. Therefore, after constructive talks, the Port of Rotterdam Authority, Deltalinqs, VRC and VNPI have again decided upon a multi-year agreement.
Rotterdam is using this conservative rate of increase in port dues to up its competitive position among the surrounding sea ports. The Port Authority adopted these specific measures to strengthen Rotterdam’s position as a container hub.
Over the coming years, the port dues for tankers carrying crude oil will again be set at 1.5% below the overall increase, as was the case in the preceding period. This means the difference between port dues charged on crude and, for example, those charged on mineral oil products will be further reduced. The inland shipping dues will rise by 1% per year for the next three years.
The Port Authority, Deltalinqs and VNPI have fixed rules on how the port dues rate is set each year. Through structured market consultation, the sector is meeting the government’s desire for self-regulation of the port dues. Among other things, this consultation takes inflation, market conditions and economic development into account. The port dues apply to the sea ports of Rotterdam, Schiedam, Vlaardingen, Maassluis, Dordrecht and Moerdijk.
In 2016, the Port Authority received EUR 295 million in sea port dues and EUR 14 million in inland port dues. (World Maritime News)
IMO Assembly Elects New 40-Member Council
The Assembly of the International Maritime Organization (IMO) has elected new members of its council for the 2018-2019 biennium.
Category (a) includes ten states with the largest interest in providing international shipping services:
China, Greece, Italy, Japan, Norway, Panama, Republic of Korea, Russian Federation, United Kingdom, United States.
Category (b) comprises ten states with the largest interest in international seaborne trade:
Australia, Brazil, Canada, France, Germany, India, Netherlands, Spain, Sweden, United Arab Emirates.
Category (c) encompasses 20 states not elected under (a) or (b) above, which have special interests in maritime transport or navigation and whose election to the council will ensure the representation of all major geographic areas of the world:
Bahamas, Belgium, Chile, Cyprus, Denmark, Egypt, Indonesia, Jamaica, Kenya, Liberia, Malaysia, Malta, Mexico, Morocco, Peru, Philippines, Singapore, South Africa, Thailand, Turkey.
The council is the executive organ of IMO and is responsible, under the assembly, for supervising the work of the organization. Between sessions of the assembly, the council performs all the functions of the assembly, except that of making recommendations to governments on maritime safety and pollution prevention.
The newly elected council will meet, following the conclusion of the 30th Assembly, for its 119th session on December 7 and will elect its chair and vice-chair for the next biennium.
The 30th Assembly of IMO is meeting in London at IMO Headquarters from November 27 to December 6, 2017. All 172 member states and three associate members are entitled to attend the assembly, which is IMO’s highest governing body.
The assembly, which meets once every two years in regular session, is responsible for approving the work program, voting the budget and determining the financial arrangements of the organization. It also elects the organization’s 40-member council. (World Maritime News)
Maersk reflagging Hamburg Süd fleet to Denmark and Singapore
The Danish and Singapore flags have had a bumper end to the year with Maersk Line deciding to reflag all the owned ships of its new acquisition, Hamburg Süd.
Last week the Danish container line sealed the deal for Hamburg Süd, getting regulatory approval from across the world. While the Hamburg Süd brand will continue – with its famous red hulls – Maersk Line has wasted little time enforcing other changes, most notably the reflagging of the German line’s fleet.
“Hamburg Süd’s owned vessels change ownership to Maersk Line and fall under Danish ownership in Maersk Line A/S or Singaporean ownership under A. P. Moller Singapore,” a spokesperson for Maersk Line in Copenhagen told Splash today, adding: “In line with the Maersk Line flagging principles we intend to reflag the Hamburg Süd owned vessels to Denmark and Singapore.”
Alianca vessels will continue under own management and continue to sail under the Brazilian flag.
The major loser from Maersk’s decision to reflag the Hamburg Süd is Liberia, while the German flag will also suffer from the move. (World Maritime News)
Ocean Yield Provides Financing for NAT’s Suezmax Trio
Norwegian shipowner Ocean Yield has inked a deal to acquire Nordic American Tankers’ (NAT) three Suezmax newbuildings with ten-year bareboat charters to NAT.
Ordered by NAT in October 2016, the crude tanker trio is currently under construction at South Korean shipyard Samsung Heavy Industries (SHI). NAT paid 30% of the contract price for each vessel on contract signature.
Under the new deal, Ocean Yield will pay USD 43.2 million per ship after seller’s credit. As explained, the net purchase price constitutes 77.5% of the gross purchase price, which is equal to the yard contract price.
The 157,000 dwt vessels are scheduled for delivery in June, August and October 2018. NAT will buy back the vessel at the end of the ten-year charter, but also has the flexibility to acquire the vessels from Ocean Yield after year five and seven.
“It is exciting to do business with Ocean Yield, which is 66% owned by Aker ASA. We are pleased to have secured solid long-term financing for the three newbuildings with such good companies,” Herbjørn Hansson, Chairman & CEO of NAT, commented.
“This transaction fits well with our strategy to invest in modern vessels with long-term charters,” Lars Solbakken, Ocean Yield ASA’s Chief Executive Officer, said. (World Maritime News)
DryLog takes supramax pair
Monaco-based DryLog is linked by multiple broking sources to the sale of two five-year old supramaxes.
DryLog is thought to have paid $17.5m per ship for the Orient Orchid and Orient Jasmine, two vessels that were controlled by Singapore-based OMC Shipping, a wholly-owned subsidiary of Japanese trading house Mitsui.
OMC, like many large Japanese owners, has been busy this year offloading a significant portion of its fleet, both wet and dry. (Splash247)