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Thursday, September 20, 2018

Major oil companies changing chartering policy

Since the beginning of the 1980s the major oil companies have drastically reduced their tanker fleets and period chartering. The various oil companies have, however, had quite different transportation strategies. The most spectacular difference has been between western and Japanese charterers, the latter having covered some 80% of their transportation demand with tankers that are often on very long period contracts.

There have also been marked differences among the western oil companies, with some having kept fairly large tanker fleets whilst others have virtually left tanker owning. Many of the oil companies have also created various types of alliances with independent operators, e.g. Texaco with Stena, Shell with OMI et al, and BP with Ugland Nordic and Frontline. Oil company mergers also changed the situation, for example when Exxon, which sold some of its tankers and has spun others off into SeaRiver Maritime, merged with Mobil, which had a fairly large fleet.

Based on figures from Johan G. Olsen, the VLCC share owned or period contracted (for one year and above) by the traditional oil majors (Shell, ExxonMobil, ChevTex, BPAmoco and Tokyo Tankers) was some 35% in 1972. That number reduced to 22% in 1990 and further to 13% in March 2003 (all figures based on the number of tankers). In fact in 1972 almost 97% of the VLCC fleet was either owned by oil or state owned companies (28%) or they were on long term contracts (69%). Some of the other large oil and state owned companies with sizeable tanker fleets are based in the Middle East. In March 2003 VELA, NITC and KOTC owned altogether 41 VLCCs and had some 19 on long term contracts.

 

1972

1980

1990

2000

2003 March

 

Own

TC

Own

TC

Own

TC

Own

TC

Own

TC

Shell

21

34

33

23

10

7

11

6

7

5

BP

8

29

22

17

8

7

8

2

4

0

Exxon

22

16

46

5

16

0

13

8

9

8

Mobil

4

5

19

10

13

0

0

0

 

 

Socal/Chevron

12

3

27

0

13

1

9

2

4

0

Texaco/Stentex

9

19

16

30

7

3

0

0

 

 

*Tokyo Tankers

3

8

2

10

5

5

5

16

6

15

Gulf oil

1

16

6

8

 

0

 

 

 

 

Total above

51

67

116

63

72

23

46

34

30

28

*Tokyo Tankers now Nippon Oil Tankers

Source: Johan G. Olsen Shipbrokers, Kristiansand

The oldest figures Johan G. Olsen has for Suezmaxes are for 1988 when 10% of the fleet was controlled by the oil majors. In 1990 the majors controlled 15%, and they had an 8% share in March this year. In 1988 a total of some 47% of the suezmax fleet was either owned (37%) by oil or state owned companies or they were on long term contracts (10%). In 2003 a total of 38% of the suezmax fleet was either owned (25%) by oil or state owned companies or they were on long term contracts (13%), which means that the chartered share has increased.

The oldest figures we have for Aframaxes were 17% controlled by the majors in 1992, 10% in 1995 and 9% October 2002. In 1992 a total of some 51% of the aframax fleet was either owned (30%) by oil or state owned companies or they were on long term contracts (21%). In 2002 a total of some 31% of the aframax fleet was either owned (17%) by oil or state owned companies or they were on long term contracts (14%). Since October 2002 we have recorded 34 Aframaxes taken on period contracts of one year and above, 15 for one year, 14 for two years and the balance for longer periods. However, many of these contracts were fixed with independent operators.

BP is one of the major oil companies that is clearly changing its transportation policy in order to take greater control by building more tankers and taking more on period charter. It has stated that half its fleet will be either owned or time chartered by 2005.

According to Lloyd’s List, the world’s third largest oil major has a massive USD 3bn fleet renewal programme running to 2006. The order book, according to Clarkson shipyard monitor, includes 11 aframax newbuildings from Samsung HI (7) and Tsuneishi Zosen (4), and 12 product carriers of 46,000 dwt from Hyundai Mipo. Under contract with BP Shipping, Nordic American Tanker Shipping also has four 185,000 dwt Alaskan crude carriers on order at National Steel for delivery Nov 2003 - mid-2006 to operate on the US West Coast.

None of the other majorshas such a newbuilding programme. Chevron has on order two Aframaxes, COSCO three Aframaxes, three Panamaxes and two VLCCs, China Shipping, three Aframaxes and four Panamaxes, NITC three VLCCs, Nippon Oil Tanker (previous Tokyo Tankers) two VLCCs and one Aframax, Pertamina two VLCCs, Petrobras two Panamaxes and two Suezmaxes, and Vela one VLCC.