Oil Economics: Freight Rate Surge Cuts into Trader's Profits
A jump in freight rates has shaved profits for oil traders seeking to store crude for sale towards the end of the year, even as the contango in the first six months for Brent futures stretched to its widest ever, trade sources said.While a sharp rebound in spot crude differentials could lift traders' profits, a broadening slump in global demand is stretching out the time that markets will need to digest bulging inventories and spark a price recovery, traders said.Unlike in previous contango plays -- where low oil prices eventually prompted major producers to tighten supplies…
5000th Ship Installed Inmarsat Fleet Xpress
The 5,000th ship installation of Inmarsat Fleet Xpress, the world’s only high-speed, globally-available Ka-band VSAT service designed for mobility and available from a single operator, is set to be completed by the close of the month.Following its launch in March 2016, Fleet Xpress has emerged as the market-leading pathway to digital transformation as shipping companies seek to deliver improved vessel and fleet efficiency, boost profitability and enhance seafarer wellbeing.The latest data compiled by the respected…
New Fuel Rules Push Shipowners to Go Green with LNG
Tough new rules on marine fuel are forcing shipowners to explore liquefied natural gas as a cleaner alternative and ports such as Gibraltar are preparing to offer upgraded refueling facilities in the shipping industry's biggest shake-up in decades.From 2020, International Maritime Organization rules will ban ships from using fuels with a sulphur content above 0.5 percent, compared with 3.5 percent now, unless they are equipped to clean up sulphur emissions. This will be enforced…
Tightening Noose: Venezuela's Crisis Deepens
The news that Venezuela's PDVSA has diverted a crude tanker from Curacao after ConocoPhillips moves to satisfy a $2 billion arbitration award signals that worst may be yet to come. Reuters is reporting that Venezuela's state-run PDVSA ordered a tanker waiting to discharge at its Curacao terminal to divert to Venezuelan waters after ConocoPhillips introduced an order in a Caribbean court to seize its inventories and other assets in the island, according to a shipper and Reuters data on Tuesday.
Korean Shipyards Still in Rough Sea
South Korean shipyards are still struggling to cut costs through unpaid leave for their workers and shutting down dry docks idled amid a lack of orders, Yonhap reported quoting industry sources. The report said that for decades, the shipbuilding sector has been one of the key growth drivers for Asia's fourth-largest economy. The top three shipyards in the country - Hyundai Heavy Industries Co (HHI), Samsung Heavy Industries Co. (SHI) and Daewoo Shipbuilding & Marine Engineering Co.
Cuban Trade with Venezuela Plunges over Two Years
Cuban trade with socialist ally Venezuela has fallen 70 percent since 2014 due to the South American oil producer's inability to meet delivery contracts and purchase goods as it struggles with low oil prices and a resulting economic meltdown. A cash crunch and lower oil supplies from Venezuela have forced the Communist-run Caribbean island to slash imports and reduce the use of fuel and electricity, helping tip its centrally planned economy into recession in 2016 for the first time in nearly a quarter century.
Global Trade Recovery Lifts Diesel Demand: Kemp
World trade is growing again which will give a big boost to middle distillates such as diesel used in the high-power engines that move almost all freight. World trade volumes grew by 5 percent in the three months to May compared with the same period a year earlier, according to the Netherlands Bureau for Economic Policy Analysis (CPB). Trade growth came close to a standstill in the first quarter of 2016 but has been accelerating gradually since then especially from the fourth quarter onwards ("World Trade Monitor", CPB, May 2017).
A.P. Moller-Maersk Elects New Chairman to Steer Digital Transformation
A.P. Moller-Maersk's new chairman committed to automating its systems as the oil and shipping group steps up its drive to become more efficient and save costs at a time of low oil prices and declining freight rates. The more than 100-year-old conglomerate's digital push will mean that in theory, it should be as easy to book a container as booking an airline ticket, Chairman Jim Hagemann Snabe told Reuters shortly after he was elected. "We transport goods in the physical world and that won't change as we won't start beaming things around the world…
Shipping Woes: DVB Bank Posts Loss
Shipping Financier DVB Bank reported a consolidated net loss before taxes of EUR 135.3 million ($142.4 miln) for 2016 (previous year: consolidated net income of EUR 46.1 million). Since DVB Bank SE, the parent company of the DVB Bank Group, did not generate a net retained profit during the financial year, regretfully no dividends will be paid. Due to the persistent downturn in numerous segments of the shipping industry and an ongoing challenging environment for the offshore industry caused by low oil prices…
Vessel Earnings and Global Fleet Trends
Clarkson Research Services says market conditions across most sectors of the shipping industry have been highly challenging in 2016. The ClarkSea Index, which illustrates the fortunes of earnings for the major commercial ship types makes fairly clear the fate of the volume shipping sectors, but how is the wider global fleet covered by World Fleet Monitor faring now, in comparison to the post-downturn period as a whole? The ClarkSea Index, an average of earnings for tankers, bulkers…
Container Trade In The 21st Century
While container trade growth has slowed in recent years, box trade has still expanded significantly since the turn of the milliennium, according to Clarkson Research Services Limited. In 2016, box trade is projected to total 181m TEU, almost three times volumes in 2000, having grown by an average 6.4% p.er annum. However, with an increased focus on Asia, this growth has not been evenly spread across the trade lanes. This century has seen significant growth in global container trade driven by increased volumes across a range of trade lanes (see graph)…
No recovery for Container Traffic in sight - Drewry
Asia to West Africa container traffic fell by 19% in the third quarter; the end-year result will not be much better. The IMF’s latest World Economic Outlook, published last month, described “multispeed” growth for sub-Saharan Africa economies with the divide between the haves and have nots hinging on different nations’ exposure to commodities. The biggest West African economies of Nigeria and Angola are struggling to adjust to lower oil revenues with the former expected to see GDP contract by 1.7% this year and the latter to flat-line.
Canada July Trade Deficit Shrinks as Non-energy Sector Shines
Canada's trade deficit in July unexpectedly shrank on stronger non-energy exports, a sector the Bank of Canada says is crucial to helping revive an economy hit by low oil prices. Statistics Canada said on Friday that the July deficit was C$2.49 billion ($1.90 billion), lower than the C$3.25 billion shortfall predicted by analysts in a Reuters poll and below the record C$3.97 billion in June. Exports jumped by 3.4 percent, the biggest month-on-month gain since last December, on healthy gains in the motor vehicles and parts…
AUVs: A Bright Spot in Uncertain Times
There are technologies that are finding success – despite the struggles seen elsewhere especially in a difficult time for companies operating in the oil and gas market, finding sectors that are performing well can be a challenge, says Douglas-Westwood London. Autonomous Underwater Vehicles (AUVs) have evolved in the last few years from an emerging technology with niche uses, to a viable solution and an established part of operations in various marine sectors. There are a number…
Maersk Drilling Slashing 140 Norway Jobs
Maersk Drilling, a unit of Danish conglomerate A.P. Moller-Maersk, will cut up to 140 jobs in Norway due to lack of work for two rigs, the drilling company said. The jack-up rigs Maersk Gallant and Maersk Inspirer are expected to have finished their jobs in August and December respectively and negotiations are under way with the employees' union, a spokeswoman said. Maersk Galant is currently hired by France's Total while Maersk Inspirer is hired by Norway's Statoil. The job cuts correspond to four percent of Maersk Drilling's total workforce.
USTC Delivers Near Record Profit
With profit before tax of DKK 480 million, Middelfart-based Selfinvest, which includes the global Group A/S United Shipping & Trading Company (USTC), is yet again filing an impressive set of financial statements. This was generated via record results in several of USTC’s subsidiaries, with the Group thus cementing its position of strength in the global market. CEO and sole owner Torben Østergaard-Nielsen says: “It is characteristic of the financial year just concluded that we…
IBIA Surveys Members on Sulphur Cap Transition
Ahead of the International Maritime Organization’s (IMO) decision on the timing of the global 0.5 percent sulphur cap for marine fuels, the International Bunker Industry Association (IBIA) is advising its members on the potential impact of the shift. IBIA, whose members include marine fuel buyers, suppliers and traders, is concerned that global refining and shipping will struggle to cope, and has outlined a series of options that it believes could facilitate a smoother transition to a lower sulphur cap.
Maersk Profit Plunges
Danish shipping and offshore energy conglomerate Maersk Group reported its profit at US$ 224 million for the first quarter of 2016, a drop of 86 percent compared to $ 1.6 billion seen in the same period a year earlier. Hit by low oil prices and freight rates, the world's largest shipping company AP Moller-Maersk A/S says revenue fell almost 20 percent from a year earlier to $8.5 billion. Maersk Line, the world’s largest container operator by capacity and traditionally the company’s biggest earner…
Pirates Switch to Kidnapping Crew as Oil Fetches Less
Pirate gangs in West Africa are switching to kidnapping sailors and demanding ransom rather than stealing oil cargoes as low oil prices have made crude harder to sell and less profitable, shipping officials said on Tuesday. Attacks in the Gulf of Guinea - a significant source of oil, cocoa and metals for world markets - have become less frequent partly due to improved patrolling but also to lower oil prices, according to an annual report from the U.S. foundation Oceans Beyond Piracy (OBP), which is backed by the shipping industry.
Partners Tap Standardization to Trim Newbuild Costs
Unfamiliar specifications and processes often result in rework, delays and misunderstandings, and are adding thousands of engineering hours to the design and construction of offshore oil and gas installations. Cost savings are delivered by addressing variations in owner, operator, and regulatory requirements during engineering and construction phases. Phase one, led by DNV GL, established new proposed international standards for offshore oil and gas projects and a second phase…
National Oilwell Varco Slashes Norway Staff Again
U.S. oilfield equipment maker and service provider National Oilwell Varco Inc will cut its Norwegian workforce by another 520 people after low oil prices resulted in fewer orders, the company said in a statement on Friday. The latest round of cuts will reduce the company's staff in Norway to less than 2,000, down from almost 5,000 at the height of the oil industry's boom two years ago. "The uncertain market situation means that we cannot say how extensive the downsizing process will be in the long run," NOV said. The cuts announced on Friday were all permanent jobs, the company added.
Cheap Oil Slows Move to LNG as Bunker Fuel
Low oil prices are denting the take-up of liquefied natural gas as a cleaner source of energy to power ships, and it will be a few more years yet before the fuel makes serious inroads into the marine bunker market. The global shipping sector is under pressure from governments to reduce harmful emissions from vessels, including sulphur oxides (SOx), nitrogen oxides (NOx) and carbon dioxide (C02), by using cleaner fuels such as liquefied natural gas (LNG) rather than traditional heavy fuel oil and diesel sources.
Maritime HR Trends: Investing in People
Industry recognizes the need to invest in its people like never before. But are the skills and headcount there? It’s hard to look forward to 2016 without reflecting back on 2015. What an ‘interesting’ year it was. As maritime recruiters, we’re always attuned to what the market’s doing because our sector is immediately hit by the slightest changes in sentiment. We see it and feel it before anyone seems to voice it. Strangely, given the overall dismal feel to 2015, unless you were in tankers/LPG…
Damen’s Offers Solutions for Laid Up PSVs
Damen Shipyards Group has developed a committed response to the increasing number of laid up Platform Supply Vessels (PSVs) resulting from the current predicament facing the offshore oil and gas industry. The Dutch company’s solution involves converting idle PSVs into vessels capable of taking on roles in alternative sectors such as aquaculture, shipping and defence. The situation that the offshore oil and gas industry is experiencing is having serious consequences throughout the sector.
Slowdown, Brazil Impact Hit Sembcorp
The strain of low oil prices on the offshore and marine sector was in full display as the world’s second-largest builder of oil rigs Sembcorp Marine Ltd posted its first quarterly loss in at least 12 years. The company took impairment charges and provisions of S$609 million for projects of its client Sete Brasil Participacoes SA and others. It’s the first quarterly loss since the company started reporting data in 2003, according to Sembcorp Marine’s website. Sete Brasil is a private company set up in 2010 to build, own and lease deepwater rigs to state-run oil producer Petrobras.
Map Shows Kidnap & Piracy Threats
Global risk and crisis management consultancy NYA International today releases its 2016 Kidnap and Piracy Map, accompanied by the Global Kidnap Review, a special report examining kidnap for ransom over 2015 and identifying themes for 2016. Together, the map and report provide a guide on the threats to people and operations worldwide. Intensified civil conflicts in Africa, entrenched criminality in Latin America and the advance of Islamist militancy in spaces worldwide have contributed to “severe” kidnap ratings for 11 countries, up from eight in 2015.