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Wednesday, December 13, 2017

Few old large tankers left and oil company fleet down to 20 VLCCs with none on order

It looks as if owners may have decided that there could be little life for single hull (SH) tankers after 2010, as newbuilding ordering in March and in the first week of April has been above 14 m dwt: 28 VLCCs, 18 aframaxes, 13 panamaxes, 53 tankers 25,000-51,000 dwt and lastly 14 tankers below 25,000 dwt.  

The orderbooks for 2009 are beginning to fill up with 37 VLCCs being due for delivery in 2008 and 28 in 2009.  

Altogether Johan G Olsen, in its VLCC review, has an orderbook of 128 VLCCs. The SH VLCC fleet is 164, which means another 36 orders to balance newbuildings with existing single hulls. There are now only 8 VLCCs left over 20 years old, one built in 1981, one in 1982, three in 1983, one on 1985 and one in 1986. However, on the basis of anticipating a 2% annual increase in demand, another 50 VLCCs are needed by end 2010, for a 3% increase another 75 VLCCs and for a 4% increase another 105 VLCCs. Seven VLCCs have been sold for conversion in 2005 and only one for decommissioning. 

According to Johan G Olsen, it is the Middle East companies that have the biggest VLCC orderbooks: NITC 13 VLCCs, National Shipping Company of Saudi Arabia 6 VLCCs, Gulf Management Services 7, VELA 6, Saudi Maritime Holding Co. 3 and KOTC one VLCC. 

Japanese companies with a total fleet of some 100 VLCCs have an orderbook of 28 VLCCs. The Japanese VLCC fleet is still mainly on period contracts but there appears to be an increasing number (some 20%) also operating in the spot market. 

The major oil companies - BP, Shell, Chevron - have a VLCC fleet of only 20 units and do NOT have any VLCCs on order. What do they know that other owners don’t? 

The three biggest VLCC owners in Johan G. Olsens book are Mitsui (34 VLCCs), NYK and Frontline (28 VLCCs each) and Bergesen WorldWide (21 VLCCs). 

The suezmax fleet, according to Johan G Olsen, consists of 356 units including 14 combination carriers, of which 186 operate in the spot market. The orderbook is 62 suezmaxes. Frontline is the biggest operator in this segment with 24 suezmaxes. Tanker Pacific has 16 and Konig & Cie has 15 suezmaxes. Teekay Shipping has 11 suezmaxes, Teekay Norway 8, and Teekay Spain 5 suezmaxes, all of which are bareboated out, or on contracts of affreightment or on period contracts. There are only 72 SH suezmaxes left, 3 of which are due for phase-out both this and next year. 

If all the period contracts, shuttle tankers, oil company owned and bare boat contracts are deducted, only some 150 suezmaxes are in the spot market. 

Contact: Erik Ranheim