The time charter party of the Cap Victor (2007 -158,853 dwt) with BP and the time charter party of the Fraternity (2009 – 157,714 dwt) with Vitol have been extended with 24 and 12 months respectively.
On 10 February 2010, the company took delivery of the newbuilding Suezmax Eugenie (2010 – 157,677 dwt) from Samsung Heavy Industries, Koje Island, South Korea. The vessel, which is owned 50%-50% in joint venture with JM Maritime, is being operated on the spot market.
The storage contract of the V-plus TI Europe (2002 – 441,561 dwt) has been extended by an additional 90 to 120 days at USD 50,000 per day.
The company sold the VLCC Namur (2000 – 298,552 dwt) for a selling price of USD 59.2 million. The capital gain of this sale transaction of about USD 14.3 million has been recorded on 21 April 2010, day of delivery of the Namur to its new owner.
The Suezmax Cap Guillaume (2006 – 158,889 dwt) has been chartered out for a period of 24 months starting in July 2010.
The time charter party of the Suezmax Felicity (2009 – 157,677 dwt) with Total has been extended with an additional 18 months as from December 2010.
The company sold the TI Creation (1998 – 298,324 dwt), its oldest double hulled VLCC, for USD 55.5 million. The capital loss of this sale transaction is about USD 9.9 million and has been recorded in the second quarter of 2010. The TI Creation was delivered to its new owner on 12 October 2010.
The company fixed its Suezmax vessels Cap Leon (2003 – 159,048 dwt) and Cap Laurent (1998 – 146,646 dwt) on time charter contract for a period of 36 and 42 months respectively.
FSO
On 4 January 2010, the FSO Asia, a Floating Storage and Offloading service vessel owned by the joint venture in which OSG and Euronav each have a 50% interest, was successfully hooked-up and started operations at the Al Shaheen oil field in Qatar.
On 21 January 2010, TI Africa Ltd. received a notice of termination from Maersk Oil Qatar concerning the service contract related to the FSO Africa.
The FSO Africa was mechanically completed and delivered from the conversion yard.
On 20 August 2010, TI Africa Ltd., the owner of the FSO Africa, signed a new contract with Maersk Oil Qatar (MOQ) for the provision of FSO services on the Al Shaheen Field offshore Qatar.
Prospects for 2011
Despite signs of weak market dynamics, growth in global crude demand to Asian economies especially China and India, offers hope for growth in global crude demand for the coming years. Expanding oil demand in these markets will likely translate into increased tonne-mile demand as rapidly growing nations look to sources far and wide to fulfil their domestic requirements. There have been signs of recovery reflected in the fourth quarter of 2010 as VLCC cargoes of crude oil in the Arabian Gulf have seen a 20% increase. With the phase out of single hull tankers largely complete, the market over medium term is shaping up to be challenging. However, age restrictions at terminals and the stronger industry standards for trading vessels may push more tonnage out of the market.
While order book delivery will be a key element of any market upswing over the medium term, the near term prospects for the tanker industry remains tied to recovery of international economies; in particular economic recovery in the USA will only support the market if it leads to an increase in employment. The current outlook is for a weak market, any volatility is certain to improve the outlook and returns for the large crude tanker market.
The recent unrest in the Middle East has caused a big upward spike in oil prices, as the European markets worry about interruptions of supply. It remains to be seen which effect this will have on the freight market and for how long.
There is considerable expansion of projects in the offshore sector and increasing demand for FSOs particularly as many of those projects are in deep water and far offshore. Euronav will be looking to deploy further assets in this sector during this phase of expansion.
Oil prices have risen dramatically over the last 18 months and so has the price of heavy fuel oil for ships. The effect has been so dramatic for the net earnings of ships that all of the container lines are slow steaming their ships as they use disproportionately less fuel than the time lost in the longer voyage caused by the lower speed. It has also resulted in the full employment of the container fleet avoiding the wasteful redundancy of some of the world container ship fleet. The most effective economic exploitation of the world tanker fleet would be achieved if slow steaming is adopted by all owners for some if not all of their steaming time. Industry bodies and major companies have offered their expertise on how this can be managed operationally without affecting the ship’s life in service. Euronav is advocating this practice in the pools in which it is a member and directly on the ships that it operates. Many operators see the concept of slow steaming a temporary phenomenon, but at Euronav the view is that oil prices will have a tendency to remain high and as fuel oil is a variable cost it must be controlled to maximise net revenues for the vessel and the Company. In short it is here to stay and the companies who gain experience in its management will have a competitive advantage.
On 10 February 2010, the company took delivery of the newbuilding Suezmax Eugenie (2010 – 157,677 dwt) from Samsung Heavy Industries, Koje Island, South Korea. The vessel, which is owned 50%-50% in joint venture with JM Maritime, is being operated on the spot market.
The storage contract of the V-plus TI Europe (2002 – 441,561 dwt) has been extended by an additional 90 to 120 days at USD 50,000 per day.
The company sold the VLCC Namur (2000 – 298,552 dwt) for a selling price of USD 59.2 million. The capital gain of this sale transaction of about USD 14.3 million has been recorded on 21 April 2010, day of delivery of the Namur to its new owner.
The Suezmax Cap Guillaume (2006 – 158,889 dwt) has been chartered out for a period of 24 months starting in July 2010.
The time charter party of the Suezmax Felicity (2009 – 157,677 dwt) with Total has been extended with an additional 18 months as from December 2010.
The company sold the TI Creation (1998 – 298,324 dwt), its oldest double hulled VLCC, for USD 55.5 million. The capital loss of this sale transaction is about USD 9.9 million and has been recorded in the second quarter of 2010. The TI Creation was delivered to its new owner on 12 October 2010.
The company fixed its Suezmax vessels Cap Leon (2003 – 159,048 dwt) and Cap Laurent (1998 – 146,646 dwt) on time charter contract for a period of 36 and 42 months respectively.
FSO
On 4 January 2010, the FSO Asia, a Floating Storage and Offloading service vessel owned by the joint venture in which OSG and Euronav each have a 50% interest, was successfully hooked-up and started operations at the Al Shaheen oil field in Qatar.
On 21 January 2010, TI Africa Ltd. received a notice of termination from Maersk Oil Qatar concerning the service contract related to the FSO Africa.
The FSO Africa was mechanically completed and delivered from the conversion yard.
On 20 August 2010, TI Africa Ltd., the owner of the FSO Africa, signed a new contract with Maersk Oil Qatar (MOQ) for the provision of FSO services on the Al Shaheen Field offshore Qatar.
Prospects for 2011
Despite signs of weak market dynamics, growth in global crude demand to Asian economies especially China and India, offers hope for growth in global crude demand for the coming years. Expanding oil demand in these markets will likely translate into increased tonne-mile demand as rapidly growing nations look to sources far and wide to fulfil their domestic requirements. There have been signs of recovery reflected in the fourth quarter of 2010 as VLCC cargoes of crude oil in the Arabian Gulf have seen a 20% increase. With the phase out of single hull tankers largely complete, the market over medium term is shaping up to be challenging. However, age restrictions at terminals and the stronger industry standards for trading vessels may push more tonnage out of the market.
While order book delivery will be a key element of any market upswing over the medium term, the near term prospects for the tanker industry remains tied to recovery of international economies; in particular economic recovery in the USA will only support the market if it leads to an increase in employment. The current outlook is for a weak market, any volatility is certain to improve the outlook and returns for the large crude tanker market.
The recent unrest in the Middle East has caused a big upward spike in oil prices, as the European markets worry about interruptions of supply. It remains to be seen which effect this will have on the freight market and for how long.
There is considerable expansion of projects in the offshore sector and increasing demand for FSOs particularly as many of those projects are in deep water and far offshore. Euronav will be looking to deploy further assets in this sector during this phase of expansion.
Oil prices have risen dramatically over the last 18 months and so has the price of heavy fuel oil for ships. The effect has been so dramatic for the net earnings of ships that all of the container lines are slow steaming their ships as they use disproportionately less fuel than the time lost in the longer voyage caused by the lower speed. It has also resulted in the full employment of the container fleet avoiding the wasteful redundancy of some of the world container ship fleet. The most effective economic exploitation of the world tanker fleet would be achieved if slow steaming is adopted by all owners for some if not all of their steaming time. Industry bodies and major companies have offered their expertise on how this can be managed operationally without affecting the ship’s life in service. Euronav is advocating this practice in the pools in which it is a member and directly on the ships that it operates. Many operators see the concept of slow steaming a temporary phenomenon, but at Euronav the view is that oil prices will have a tendency to remain high and as fuel oil is a variable cost it must be controlled to maximise net revenues for the vessel and the Company. In short it is here to stay and the companies who gain experience in its management will have a competitive advantage.