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Wednesday, November 14, 2018

Developments and challenges of Russia’s oil exports discussed at Mare Forum in St. Petersburg

The Mare Forum held in St Petersburg this week brought together many leading representatives of Russian and international shipping, oil and related companies, with several INTERTANKO member companies prominent in presentations and panels. The delegates to the conference on the “ Maritime Transportation of Energy from Russia and Central Asia : Challenges and Opportunities ” focused mainly on the export of Russian crude oil, oil products and LNG. 

The main thrust of the Forum involved looking at the growth in the production and export of crude oil, products and LNG (see Market Information below) and at developments in the shipments of oil from the FSU countries. Presentations highlighted the particular challenges of exporting oil through environmentally sensitive and challenging areas such as the Bosporus, the ice-restricted Baltic, the Barents Sea and out of Sakhalin, to deliver it to markets mostly in Europe for the oil and in Asia and West Coast U.S. for the LNG. Some of these challenges involve constraints on the capacity of the transportation system – traffic congestion (incl. Bosporus), the lack of any suitable deep water ports for VLCCs, winter restrictions – ice, fog, high winds.

Forum discussion also looked at methods of funding new tonnage, at the current order book for ice-classed tonnage and at some of the legal and financial considerations of doing business in Russia.

In lively debates many participants expressed their concerns about the increased traffic in European waters, and in particular the failure to adhere to IMO recommendations and industry best-practice guidelines on pilotage, traffic navigation and ship-to-ship transfers. Many of the Russian shipping companies, in turn, highlighted their many years of experience in operating in the most severe conditions, their very extensive fleet renewal programmes and their commitment to training, coupled with access to first class training and research facilities.

Other shipowners also demonstrated their extensive experience in the design, construction, manning and operation of ice-classed vessels in the region. However several delegates highlighted the lack of experience of some of the new “players” and the failure of some companies to adopt appropriate shipboard policies for restricted water passages, taking of pilots, ice-transits and ship-to-ship transfers.

Particular challenges thrown up include insufficient investment in ice-breakers, inconsistency in port state control  (Paris, Tokyo and Black Sea MoUs all apply), and the redressing of a perception in many of the European institutions that Russia tends to use inferior tonnage for its oil exports.

Contact:Peter Swift