Singapore Sees Growth as Much as 3.5% as Lee Reviews Strategies
( Bloomberg ) Singapore Prime Minister Lee Hsien Loong narrowed the government’s forecast for economic growth this year and said the country must review its strategies as its needs evolve.
The Southeast Asian nation’s growth domestic product will probably expand 2.5 percent to 3.5 percent this year, Lee said in a televised message yesterday.
The range is narrower than a previous prediction of 2 percent to 4 percent.
The economy grew 3.5 percent in the first half, the leader said. “We must keep up this growth over the next decade to help you improve your lives,” said Lee, 62.
“We are now at a higher level, from which we can scale new heights. Hence we must reassess our position, review our
direction, and refresh our strategies.”Lee, son of the nation’s first prime minister, is guiding the city-state through a 10-year plan to restructure the economy that includes reducing a reliance on cheap foreign labor and boosting productivity.
The island will mark 49 years of nationhood today with an annual parade where likely guests include 90-year-old Lee Kuan Yew, who guided Singapore from independence to its emergence as Southeast Asia’s only advanced economy.
Having built its economy on a business-friendly environment and strict laws in the past decades, Singapore has increased support for citizens in recent years as the nation adjusts to an aging population and tighter labor supply.
The government has also stepped up efforts to lure new industries such as research and development and casinos.
Pension Program
The government is studying how to make it more convenient for retirees to get cash out of their state-subsidized housing in a “prudent and sustainable way,” Lee said.
The existing pension program can also be improved, he said. Singapore’s GDP (SGDPQOQ) probably fell an annualized 0.1 percent in the three months through June from the previous quarter, when it expanded 1.6 percent, according to the median estimate of nine economists surveyed by Bloomberg News ahead of data due Aug. 12. Initial government figures released last month showed an unexpected 0.8 percent contraction.
The economy probably expanded 2.4 percent from a year earlier, compared with the earlier estimate of 2.1 percent, a separate survey showed.
Why Japan Will Drive Global LNG Growth
There is little reason to expect Japan’s reactors will offset its voracious new appetite for LNG.
There are countervailing arguments right now about the long-term impact of increased Japanese LNG imports on the commodity’s global market.
Certainly in the wake of the 2011 Fukushima Daiichi nuclear disaster Japan has shifted heavily toward LNG as it has shut down all of its 48 nuclear reactors.
The question is to what degree Japan intends to rely on this fossil fuel, and what other sources Japan will use to fill its energy gap.
A look at Japan’s LNG consumption since 2011 is instructive. Since then, Japanese use of LNG has increased by almost 20 million metric tons, or
about 8 percent of global demand in 2013.
The Wall Street Journal writes that this increased demand has led to more than 50 LNG export terminal proposals worldwide.
However, despite surging demand for LNG in Japan (and China) recently, there are reasons to temper expectations. The Wall Street Journal speculates
that a possible Japanese return to nuclear power and China’s staggeringly large new deal with Russia to import regular, piped natural gas should
cause LNG speculators to hedge their bets somewhat.
While the question of China’s future LNG consumption may not be clear, demand will surely rise over the short to medium-term, even if that growth ends up
being less pronounced than the increase in natural gas demand. Even with the prospect of a slowdown in China’s economy, it is simply too large not to
diversify and increase the weighting of LNG in its energy mix, especially as the environmental impact of coal becomes much more problematic in its
mega-cities.
Japan’s future demand for LNG may also be difficult to gauge, but there are indicators as to what direction the industry in Japan will take.
First of all, there are the $10 billion in loans put together by major private banks like Sumitomo Mitsui Banking and Mizuho Bank, along with the government’s
Japan Bank for International Cooperation, to fund LNG projects in North America slated for delivery between 2017 and 2018.
Additionally, by 2020 Japan is expected to order roughly 90 LNG ships worth $19.3 billion.
However, the location of the investments is important, as that will signal the long-term viability of LNG imports for Japan.
Overall Japanese investment in North America has increased substantially since 2011, going from roughly $15 billion to more than $45 billion in 2013.
A significant portion of that investment is being funneled into the emerging shale natural gas industry in both the U.S. and Mexico. Once U.S. shale gas
is online, it is expected to be 20 to 30 percent cheaper than Japan’s other suppliers.
While Japan’s nuclear reactors would still be a less expensive alternative to LNG, not to mention improving the country’s trade balance, the future of that
industry is very much in doubt. Even the two reactors at the Sendai nuclear plant in Kyushu, which recently passed the Nuclear Regulatory Agency’s new
and much more stringent safety inspections and are expected to be the first in the country to come back online, are facing further delays.
Kyushu Electric Power Co. fell behind in submitting paperwork, and now the restart of the two reactors – originally slated for the fall – has been pushed back
until at least 2015, with the company’s spokeswoman stating “we cannot say when the (restart) will be,” and that the company has no timeline in place for a restart. Delays of this sort at the country’s other reactors should be expected as well, while keeping in mind that perhaps only a dozen or so actually have a realistic chance of becoming operational again.
There are two reasons for this: First because the NRA’s new inspection qualifications make it extremely difficult for all but the newest and best designed
reactors to be restarted, and second because the new regulatory guidelines allow local communities to have a say in whether the plants can come back online. With the efforts at Fukushima Daiichi showing no clear path toward a viable cleanup and containment, the population at large is still highly skeptical of a general nuclear restart.
The Japanese government and its largest banks are speaking with their pocketbooks, and indicating which direction Japan’s energy sector is likely to take.
We’ve poured $40bn into local firms, Chevron boasts
( The Australian ) US ENERGY giant Chevron says the two huge LNG projects it is building in Western Australia — Gorgon and Wheatstone — have hit another key milestone, having injected more than $40 billion into more than 600 local companies.
As Chevron Australia continues to fight union claims it had not spent enough on local content, managing director Roy Krzywosinski said yesterday that the $US54bn Gorgon project and the $US29bn Wheatstone project were making a major contribution to the Australian economy.
Gorgon is scheduled to begin LNG exports early next year while Wheatstone is due for completion in late 2016.
“The Gorgon and Wheatstone natural gas projects have injected more than $40bn into the Australian economy as we continue to award contracts to local companies,” Mr Krzywosinski said.
“More than 600 local companies have helped build the Gorgon and Wheatstone projects so far. We are proud to be making such a significant commitment to Australian companies that have created 17,000 jobs and growing.”
One of the biggest local beneficiaries has been Thiess, which was awarded contracts on both the Gorgon and Wheatstone projects.
The Wheatstone contracts have delivered Thiess more than $1.3bn of work and created more than 1000 jobs while Gorgon contracts are worth an estimated $1.2bn to the company.
Chevron came under attack this week after reports one of the contractors building the Gorgon project planned to import 30 foreign welders on section 457 visas despite what unions allege is an oversupply of qualified Australian employees. The Australian Manufacturing Workers Union said the contractor, Chicago Bridge & Iron, claimed to have spent six months in an unsuccessful bid to source the workers locally.
AMWU state secretary Steve McCartney said that after the union launched a campaign on its Facebook page and through email it received 30 applications from suitably qualified candidates in 30 minutes. It is believed that CB&I plans to employ highly specialised welders who are unavailable locally.
McCartney claimed the CB&I incident confirmed the union’s long-held view companies were misleading the community into believing there was a skills shortage to win political support for overseas workers.
Gupta outlines his plans for SCI
SHIPPING Corporation of India ran for two years without filling the chairman’s post before it appointed Arun Kumar Gupta to the role in January 2014.
Mr Gupta was looking after the technical and offshore services division of the state-owned shipping company, India’s largest carrier.
He took up the position of managing director and chairman as the company’s financial performance was sagging after three fiscal years of consecutive losses — a situation that has raised questions about the company’s navratna status, under which India grants financial autonomy to state companies.
Losing that status would force SCI to seek shipping ministry approval for big investments, although the new cabinet formed under Narendra Modi has yet to make that decision.
Meanwhile, SCI swung into the black for the first time in six quarters with a net profit of Rs132m ($2.2m) for its fiscal fourth quarter, ending in March.
Now, more than seven months after taking the job, Mr Gupta has spoken to Lloyd’s List about SCI’s promising association with state-run gas firm Gail India.
SCI signed an agreement in 2013 to charter ships to move the liquefied natural gas that Gail has contracted to transport from the US terminals of Sabine Pass and Cove Point.
Here, Mr Gupta explains why he supports India’s controversial cabotage law and why foreign shipowners “gain nothing by investing in India”.
What is your perception of the state of Indian shipping industry ?
Things are bad; the recession started in 2008 and it is still continuing. We are almost half-way into 2014, and I don’t see any light at the end of the tunnel. I think recovery will now be only in 2017-2018.
Bad times for global and Indian shipping are likely to continue.
India’s shipping industry is affected by the global demand-supply mismatch. What adds to the problems is that we do not have a level playing field, compared to international players.
Our vessels are registered in India; they are flagged here. The tonnage tax, which was introduced in the 2004 Finance Bill, was a positive step. But subsequently, with direct and indirect taxes, the real benefit of tonnage tax is not coming to the Indian shipping industry.
When we are bidding for cargo, Indian tonnage is not competitive. Foreign international players pay between 0%-2%; we pay about 8%-10%.
What are your expectations of the measures announced in the Indian budget ?
The budget focuses on infrastructure, improving the investment climate. We expected in the Indian budget that something should be done about the tonnage tax. So many shipping incomes are affected.
Suppose I sell a vessel, I shouldn’t be paying corporate tax on it. I have tonnage tax reserved: tonnage tax requires that I have certain reserve money invested only for the acquisition of vessels.
On that, I also pay corporate tax. This isn’t the case in other countries. We want to rationalise tonnage tax and make it equivalent to that of other countries.
The government haven’t done this but they have recognised that our industry is passing through a difficult phase. The new government of India has recognised they should come out with proper, encouraging growth of Indian-controlled tonnage.
There is also a commitment to the shipbuilding industry. We had subsidy schemes from 2002-2007 and the shipbuilding industry got a boost, but it has fizzled out since then.
There are signs of a possible revival of the subsidy scheme. Policy announcements have also been made for 16 new port projects; Rs11,000 crore ($2.4bn) has been allocated for that.
Why is there a lack of foreign investment in Indian shipping ?
Despite it being open to foreign direct investment, there has been virtually no investment in the shipping sector. They gain nothing by investing in India. Having ships flagged in India is of no advantage to a foreign player.
What are SCI’s initiatives for the next few years ?
We are passing through a difficult phase; [I] can’t think of any further investments. Our cash reserves are under strain. We would like to conserve our resources to weather this period.
We would like to invest in the offshore market; liquefied petroleum gas, liquefied natural gas — these are the areas we feel we can have good return with a minimum gestation period.
In LNG, we are already there; a fourth vessel has won a tender for Petronet LNG with our Japanese partner consortium.
Tell us about your association with Gail India.
SCI is a consultant to Gail in LNG shipping matters. Gail is going to import a lot of shale gas from the US, and that transportation will start in 2017-218. They will need about nine vessels.
There was a dilemma over whether some of these vessel orders should be given to Indian shipyards. There were some reservations about that. But we have to support our local industry, even though I know there might be some delays and cost escalations.
Now a decision has been taken that at least three of these vessels will be built in India and this tender will soon come up. Whichever consortium wins, SCI will have an option of having a stake of up to 26% , and Gail and SCI will together have an option of taking a stake of up to 49%.
It is a good, steady long-term income and prestigious [business]. From national strategic viewpoint, SCI is the only Indian shipping company competent at managing LNG vessels. At present we manage three LNG vessels.
What are your offshore business plans ?
Nothing tangible. We have a comparatively new fleet; the average fleet age is about nine years old. We have phased out old vessels and now have new vessels. We have invested a lot: there is an interest burden and loan payments, along with high depreciation costs. Our bottom line is under strain.
Are you planning future initiatives with Iran ?
We are trying almost to disassociate ourselves from Iran. Our association was endangering our business. There is some softening of the stance towards Iran in political parlance, but nothing has been finalised. We would not like to expose ourselves by increasing our relationship.
We are trying to wind up whatever relationship we had with our joint venture with IranoHind. That is a cabinet decision. It will be taken this year.
Can we discuss shipbuilding? A number of orders have been cancelled.
Our fleet profile was very poor in 2007-2008. We had ordered a lot of vessels. Today we have 72 vessels from 80 previously. Tonnagewise, we are more or less the same. Shipbuilding is in difficulty. Those vessels were ordered at a slightly higher price. I have resigned 11 contracts. Some money has come in [but there will be] no new orders in the coming few months.
Can you outline your other plans ?
Dredging is something I am interested in venturing into, going forward. In the budget, there is a lot of focus on infrastructure, deep ports. There is lot of potential in dredging. All Indian ports will be focusing on dredging.
Can we discuss SCI’s financial health: are you afraid of losing the company’s coveted navratna status ?
Unless China’s GDP growth touches double figures and we touch around 7%, there won’t be a boost in shipping. I don’t foresee it happening any time soon. Whenever the trade picks up, global shipping and SCI will turn around.
If you go by the books, our navratna status is in jeopardy. We had a bullish period in 2001-2007; we had more than [$214.4m] profit for three consecutive years. But the government hopefully will understand. I would not like the navratna status to go — it is a huge status symbol for SCI.
The only way to retain that status is to show a profit. I have no control over revenues or freight, but I am trying to control expenses. We are making an effort: SCI is curtailing and closing down non-profitable services. In the liner division, some services have already been shut down.
In normal circumstances, we would operate a 24-year-old vessel, but now we are disposing of these. Slow-steaming, onboard energy audios and energy efficiency are some of the other efforts [we are making]. For this financial year, our plans are to break even.
What is your view on whether the cabotage law should be relaxed ?
Cabotage is there to protect our national industry. Being the head of the national shipping line, I wouldn’t want it to go. I would like a stricter cabotage law to be there. Most of the shipping countries have it. If you relax, it means opening up the floodgates.
On one hand, Indian tonnage carries only 8% of our export-import trade; 92% is carried by foreign-flag vessels. If something happens in an emergency, what happens to your energy security? If you open and lift cabotage, the Indian shipping industry will gradually die.
SCI is running three vessels on the container trade. Even in the dry bulk trade, we are on the coast. We definitely need to enhance India’s share.
Is the perception of India’s shipping industry changing outside and is its share of the Asian industry growing ?
Our tonnage will not grow unless we get a level playing field. India is doing a commendable job being a training ground for seafarers. For core shipping, we need incentives and a conducive business environment.
We have the potential: with the new ports that are going to come up, even the non-major private ports are doing well. Mundra port is a shining example of that.
Road and rail connectivity, coastal shipping and infrastructure need to be improved for that potential to be realised.
Top containership owners and operators launch safety drive
( LL ) SEVEN of the biggest names in container shipping have joined forces to improve operational safety across the industry that has a poorer track record than the tanker and offshore sectors .
Lost time as a result of fatalities, serious injuries, or less severe accidents is worse than some other areas of shipping, partly because of the different nature of the business, with many more walkways,
ladders, open hatches, lashing bridges, and other potential hazards for the crew of a containership than, say, a tanker.
But until recently, individual containership owners and operators have not shared details of such incidents and disruptions, nor had a forum in which they could learn from each other, benchmark themselves against peers, and establish best-practice procedures.
That has now changed, with CMA CGM, Costamare, ER Schiffahrt, Hamburg Süd, Maersk Line, Rickmers Group and Zodiac Maritime setting up the Container Ship Safety Forum, with the common aim of improving the safety culture and reducing the number of “trips, slips and falls”, which can result in anything from minor cuts and bruises to the potential loss of life.
Although the founder companies are all based in Europe, the goal is to attract members from Asia, the Middle East, North America, and elsewhere to ensure this is a global safety drive, said steering committee members Aslak Ross, head of marine standards and designated person ashore for Maersk Line, and Claas-Heye Diekmann, ER Schiffahrt’s quality assurance director and head of health, safety, security and the environment.
“We do not want this to be centric around one region,” they stressed.
The initiative dates back a couple of years to when, in Maersk’s case, there were two fatalities within a short space of time and Mr Ross realised there was no container shipping group through which he could talk to others in the same line of business about how best to avoid such tragedies in future.
It soon became apparent that others also felt the need for an industry-wide platform that would enable them to share information on personal injuries, environmental damage, port state control deficiencies, and such like “and to learn from those that are considered to have a good record”, said Mr Diekmann.
Formally launched a few months ago, the forum is now starting to compile data that can be used to identify the danger spots, and allow individual owners and operators to compare their safety record with peers. Secretariat services are being provided by Business for Social Responsibility, the consultancy firm that focuses on sustainability.
Although data collected so far has not yet been properly analysed, discussions across the container shipping industry on lost-time incidents and injuries suggest “our performance is not as good as for offshore and tankers”, Mr Ross and Mr Diekmann agreed in a telephone interview with Lloyd’s List.
Many of these accidents are relatively minor in themselves, such as a crewmember tripping over a rope on the deck, but nevertheless interrupt operations more frequently in the container shipping sector than the oil trades. Risks have to be classified, however, so that just the more serious incidents are shared, rather than every single minor scratch or strain.
The tanker and offshore industries already share safety best practice through established associations.
The new forum for container shipping is separate from the
Cargo Incident Notification System, which focuses on what is inside the container and how best to pack and handle dangerous goods. But the two safety efforts are not unconnected, since the current chairman of CINS, Maersk Line’s Uffe Ernst-Frederiksen, reports to Mr Ross.
In the case of casualties like the MSC Flaminia catastrophe, when several crewmembers were killed after an onboard cargo explosion and fire, the CSSF will be more concerned with advice to seafarers about how to respond, and whether they should try to fight the blaze or abandon ship, rather than how to ensure hazardous freight is correctly stowed and shipped.
Container weights, now the subject of mandatory rules that will take effect in 2016, are also regarded as a separate issue, since the sort of incidents that the new group aims to stamp out are not caused by inaccurate cargo declarations.
Instead, CSSF members will be concentrating on daily shipboard operations and how to ensure that people are not at risk while going about their daily work, and that ships, cargo and the environment also come to no harm.
Members plan to meet twice a year and may invite others, such as the P&I clubs, to share information, or talk to other shipowners about risks they have in common, such as lifeboat drills, which have resulted in several deaths in recent years.
Containerships are considered different from other vessels, in some respects, because of the need for the crew to carry out cargo checks.
“What we see are a lot of incidents and accidents that are related to work on the deck,” said Mr Ross.
“We need to establish what is unique about our industry, what is the safety culture in our industry, what makes it more difficult or easier to create better levels of safety. This is really about getting our people home safely.”
Hapag-Lloyd switches more vessels to Antwerp from Rotterdam
( LL ) THREE more voyages on Hapag-Lloyd’s Europe-Asia Loop 4 service will call at Antwerp instead of Rotterdam as congestion continues to hamper operations at Europe’s busiest box port.
Last month, the German carrier told its customers it would switch the weekly service, operated as part of the G6 Alliance, from August 14 for at least four weeks.
However, with the situation still unresolved, the temporary port call has now been extended until the last week of September.
Falling unit revenue at OOCL offset by rising volume
( JOC ) Hong Kong-listed Orient Overseas (International) Ltd. reported a first-half net profit of $181 million as revenue and volume at its liner shipping division OOCL increased even though revenue per 20-foot container fell more than 5 percent.
Euroseas eyes rate recovery in both containers and dry bulk
( LL ) EUROSEAS, the Greece-based owner of dry bulk carriers and containerships, expects improved rates up ahead in both its sectors of operations and is positioning its fleet accordingly.
Chief executive Aristides Pittas told a second-quarter earnings call that after a “generally static” first half of 2014, he expects prospects for the containership market to improve this year and in 2015, as the market balance swings in favour of demand.
RBS appoints outsider to top shipping job
( LL ) ROYAL Bank of Scotland — one of the largest lenders to the Greek market — has surprised the ship finance world by appointing a person with no industry background whatsoever to head up its troubled shipping activities, currently languishing within its controversial ‘bad bank’ restructuring unit.
Alan Devine, who took up the post following the recent retirement of high-profile predecessor Lambros Varnavides, bills himself on his LinkedIn profile as “a straight-talking Glaswegian”, and has previously specialised in structured finance.
DHL’s box volume growth lags behind European rivals
( LL ) MANY of Europe’s leading ocean freight forwarders managed to grow volumes faster than the overall market during the first half of the year, with DHL Global Forwarding reporting the lowest level of growth.
DHL, the world’s second-largest ocean freight forwarder, saw box volumes climb by 5.2% year on year during the first six months to 1.4m teu, compared with an estimated overall market growth of around 4%-5%.
Labor strife, congestion, rail problems challenge the Pacific Northwest
( JOC ) Troubles in the Pacific Northwest dominated the news this week.
DP World Vancouver said it would stop accepting U.S.-bound rail cargo, although TSI Terminal Systems, the largest operator of container terminals
at Port Metro Vancouver, said it will continue to accept such cargo.
Cold Train, a refrigerated intermodal service linking Washington state with other parts of the U.S., said it was shutting down, citing poor service
from BNSF Railway;
Aagricultural shippers are also worrying about poor rail service to U.S. and Canadian west coast ports as harvest time nears.
And at the weekend, It was reported that the U.S. Department of Agriculture had turned down a request for federal grain inspectors by a Washington state grain terminal operator mired in a year-long dispute with longshoremen, and that the ILWU was said to be hard-timing ICTSI at Portland’s Terminal 6.
Productivity takes a hit in Portland amid ILWU hard-timing
( JOC ) The operator of Portland’s only container terminal charged this week that crane productivity hit a new low of 7.5 moves per hour because International Longshore and Warehouse Union members are stepping up their hard-timing tactics now that there is no longshore contract in effect.
US lawsuit hits Japanese forwarder’s profit
( JOC ) Major Japanese international freight forwarder Kintetsu World Express Inc. saw its group net profit plunge over 50 percent in the first quarter of fiscal 2014
Feeder service to ferry cargo between GOA and Mumbai to commence
( India Times ) In what may take Goa a step closer to becoming Western India's logistics hub, the first feeder service to ferry cargo between Mormugao Port Trust (MPT) here and Maharashtra's Jawaharlal Nehru Port Trust (JNPT) will commence later this month.
Built at the Chowgule Group's shipyard in Loutolim, the brand new feeder vessel has a capacity of 106 TEU (twenty-foot equivalent unit) and will ply between the two ports four to six times a month, depending on demand.
Addressing media persons ahead of a Confederation of Indian Industry (CII) conference in Panaji on Friday, CII chairman Kirit Maganlal pointed out that the coastal feeder would achieve the much-needed shift of container traffic from road to sea. "The service will target export and import companies in Goa, and will specifically benefit the states booming pharmaceutical exports which are currently transported in refrigerated containers to JNPT, which is around 800 kilometers away by road," said Maganlal.
Captain V K Singh, CEO of Shreyas Shipping and Logistics, the company that will operate the service said that the feeder service would boost container trade at MPT, apart from reducing logistics costs and offering increased safety of the cargo.
The service is also expected to be popular among pharma companies that currently ship their exports to Colombo port via a feeder vessel, from where they are sent to the destination ports in Europe or USA, a more expensive and time-consuming route.
Maganlal claimed that Goa had the potential to become an important logistics hub that can also cater to industries in Maharashtra and Karnataka, and can look beyond just shipping services to take on warehousing, transportation and delivery services as well.
"Once this container feeder service begins to function smoothly, we could also consider starting a roll-on, roll-off service to ferry cargo trucks between the two ports, similar to the arrangement between MPT and Konkan Railway," Maganlal added.
Weekly Stockton-Oakland container barge service to end
( JOC ) A weekly container-on-barge service between the California ports of Stockton and Oakland will end Sept. 1, dealing a blow the creation of a U.S. marine highway network by ending one of the three inland waterway container services.
China shows interest in 4th set of locks in Panama
( JOC ) The third set of Panama Canal locks aren't even completed yet, and yet Panama continues to talk openly about a fourth set of locks to handle even bigger ships.
Ghana to build third port ?
( Port Strategy ) Ghana may just get a third port, judging by an announcement made by the director-general of the Ghana Ports and Harbours Authority (GPHA). The country’s official news agency GNA, reported that Richard Anamoo said that the port is needed to boost trade and to promote the socio-economic growth of the nation, although it’s not yet clear where it would be built.
Mr Anamoo was speaking at a forum held by the GPHA to brief stakeholders on the progress of work on the on-going expansion project at the Takoradi harbour which started in December last year. In his speech, Mr Anamoo noted that the limited space at the Takoradi port cannot handle the increasing traffic demand in recent maritime trade which is why it has become necessary to re-develop it to meet the modern trends in the maritime industry.
The expansion project, he said, involves the reclamation of part of the sea through dredging, to contain bigger vessels to facilitate the turnaround business, revamping of access roads and rail lines, creation of space to the oil and gas sector and creation of space got free zones among other projects.
Work should begin in December this year at a cost of US$19m.
With traffic increasing daily, land-locked countries in the sub-region, like Burkina Faso, Niger and Mali are exploring for space for transit trade, which may just help to bolster Ghana’s burgeoning container trade.
Ghana’s first port was built in Takoradi, and the second in Tema in 1962.
Two VLCCs land five-year time charters, avoiding fluctuating spot market
( LL ) TWO very large crude carriers have each been chartered for five years at $29,000 per day, ensuring they avoid the fluctuating fortunes of the spot market.
The 2008-built, 314,016 dwt M.Star and the 2009-built, 297,259 dwt New Creation were both booked by charterer GSC for the lengthy time charters, according to fixture lists.The tankers are owned by Mitsui OSK Lines and China Merchants Group respectively, according to Lloyd’s List Intelligence.
The time charters come as the spot market continues to be characterised by volatility this year, offering decent spikes in earnings for owners but also depressing lows.
At present, VLCC spot earnings on the industry’s Middle East to Asia trade are rising, following a dip.
Earnings on that route now stand at around $18,200 per day, from $11,100 per day last week, according to Baltic Exchange data.
Some owners and charterers choose to avoid the volatile spot market by locking vessels into long-term charters.
In this way, the vessels on long-term charters are guaranteed to earn a fixed amount for the period of the charter, eliminating doubt over earnings.
The current market rate for five-year time charters for VLCCs is $33,000 per day, up from $28,500 per day in January, according to Clarksons.
Offshore rig activity rises in U.S.
( MarineLog ) Nabors currently operates 48 offshore drilling rigs in the U.S. Gulf of Mexico, Alaska, and nine other countries worldwide AUGUST 11, 2014—As of August 8, there were 60 rigs operating in the U.S. Gulf of Mexico, up five from the same period one year ago, according to Baker Hughes rotary rig counts.
Overall, as of August 8, Baker Hughes reports that there were 2,295 rigs drilling on land, in inland waters and offshore in North America, up 159 rigs from a year ago. Of the 2,295 rigs, 1,588 were drilling for oil, 316 were drilling for gas, and another four for miscellaneous.
The five most active states in the U.S. are Texas (908), Oklahoma (211), North Dakota (182), Louisiana (113), and New Mexico (94).
The rig activity in North America far outpaces the rest of the world combined.
The rest of the world combined had 1,348 rigs operating at the end of July 2014 as compared to 1,876 in the U.S. and another 350 in Canada.
Italy takes over EU anti-piracy ‘Operation Atlanta’ from Germany
( Pan-European Networks )The German Navy has handed over Force Command of the EU’s counter-piracy Operation Atalanta to the Italian Navy.
For the last four months, Rear Admiral Jürgen zur Mühlen and his international military staff of 32 men and women have been embarked on board FGS Brandenburg off the coast of Somalia. From there they have deployed EU Naval Force warships, helicopters and maritime patrol and reconnaissance aircraft (MPRA) to patrol the waters of the Gulf of Aden and Indian Ocean to ensure that seafarers remained as safe as possible from pirate attack.
A key role for EU Naval Force warships is to escort World Food Programme and African Union Mission in Somalia vessels in the Gulf of Aden and Indian Ocean.
As a result, since the EU Naval Force was launched in December 2008 every WFP ship has remained safe, and over the past four months 15 WFP vessels have delivered two million tonnes of aid to displaced people in Somalia.
The deputy operation commander of the EU Naval Force, Brigadier General Dick Swijgman, said: “Under the excellent leadership of Rear Admiral zur Mühlen, the EU task force has prevented any successful pirate attacks. Also WFP has delivered much-needed food to the Somalia people. The flagship has also conducted a number of tactical leader engagements with regional authorities, as well as very successful exercises with other counter-piracy forces in the region.”
The new force commander, Rear Admiral Guido Rando, also addressed the ceremony and thanked Admiral zur Mühlen, before stating that under his command “EU Naval Force would continue to protect vulnerable shipping against pirate attacks and the task force will continue to support the EU’s comprehensive approach by working with other EU initiatives in the region.”
Indonesia to intensify joint patrols to address pirate issue in Malacca Strait
( China.org.cn ) The Indonesian authorities, along with their Singaporean and Malaysian counterparts, are highly expected to intensify sea patrols in Malacca Strait due to escalating piracy activities lately that cost international and national shipping business, an international transport workers organization said on Friday. International Transport Workers' Federation (ITF) said that escalation of sea piracy activities in one of the world's busiest waters has entered an alarming situation with some oil and gas tankers reportedly hijacked last month.
Head of ITF Asia Pacific Hanafi Rustandi said that the pirates were moving very fast, taking ship crew as hostages, seizing valuable goods, damaging communication instruments as well as ship engines before they fled from the scene.
"Those sea piracy acts were very worrisome and endanger (the) world's shipping business. They must be stopped," Hanafi said in a statement.
Indonesia, Malaysia and Singapore have engaged their police and troops to carry out joint patrols to address the issue in the strait, which is located in between their territories.
Hanafi identified as areas prone to piracy activities the waters between Indonesia's Rupat island and Malaysia's Port Dickson and waters between Indonesia's Big Karimun, Kundur and Batam islands which are close to Singapore.
Improving the security in those waters should be one of the major tasks for Indonesia's new government as the strait holds a crucial position in facilitating international vessels for international trade and serving as a crucial trade route for Indonesia itself as well.
According to ITF, there have been nine sea piracy cases in Malacca Strait so far this year, with the largest ones occurring on July 4 and 15 in which two large oil tankers of MT Moresby and MT Oriental Glory were attacked.
Gulf of Guinea ambush seen as "game changer"
( MarineLog ) Poole, U.K. headquartered Dryad Maritime is warning that an audacious open ocean ambush of a product tanker could be a "game changer" for Gulf of Guinea piracy.
In the early hours of Saturday 9th August 2014, the radar of a product tanker transiting south, 200 nautical miles off the Nigerian shoreline detected a probable pirate mother ship lying in wait close to its track.
Shortly after detecting the vessel, the crew was engaged by several bursts of automatic gunfire from up to three pirate boats. The pirates then made an unsuccessful attempt at boarding the vessel from the stern.
Dryad Maritime warn that the range at which this attack took place, some 200 nautical miles offshore, and the tactics employed are more commonly associated with Somali piracy methods than those seen in the Gulf of Guinea.
"The attempted boarding of a vessel underway, especially at night and this far out in open seas, is a tactic more usually associated with highly motivated Somali pirates, and only then on a small number of occasions," says Ian Millen, Chief Operating Officer, Dryad Maritime. "Whilst we have seen similar attacks on vessels off the Niger Delta up to 160 nautical miles out, these have been crew kidnap incidents. It is unusual to see an attempted hijack of an underway tanker at such ranges from the shore and the numbers of craft involved suggest that this was an attempt at cargo theft. This could be a real game changer for this specific type of crime if repeated; one that would match the strategic shock earlier in the year when a tanker, MT Kerala, was snatched from an anchorage off Angola
Greenpeace ship Arctic Sunrise returns from Russia
( Marcel Coster ) The ARCTIC SUNRISE has docked in Amsterdam, almost a year after it was seized by Russia following a protest against Arctic oil drilling. Greenpeace said it hoped to have the vessel back on the ocean within two months. The icebreaker had set sail from the Russian port city of Murmansk on August 1. Russia had released the ship in June but then it took around a month to get the vessel seaworthy; Greenpeace said equipment including navigation and communication aids "disappeared or had been severely damaged."
U.S. Shipping Firm Sues Alcoa for $300 Million Over Guinea Bauxite
( Reuters ) A U.S. shipping firm is suing Alcoa for $300 million saying it suffered losses after the aluminium maker breached a contract with the Guinean government concerning bauxite shipments from the world's top exporter, court documents showed. Nanko Shipping and its president Mori Diane filed a civil complaint in the U.S. district court of the District of Columbia last week saying it had been harmed by Alcoa's refusal to honour the terms of the 1963 joint-venture mining deal with the Guinean government.
That agreement established the Compagnie des Bauxites de Guinee (CBG), the largest bauxite mine in the West African country, and gave the government the right to choose a company to ship half of its production, according to a copy seen by Reuters. In its suit, Nanko alleged that Alcoa - which manages the day-to-day operations of the CBG - had refused the government's request in 2011 to let the U.S. shipping firm take charge of the transportation of Guinea's 50 percent of production. Nanko's demand for damages was based on its estimates that the value of the government's shipping rights was some $100 million a year since then.
Alcoa spokeswoman Christa Bowers said the firm had not been served with any legal papers relating to a lawsuit by Nanko. "However, we can confirm that we do not have, and never have had, a contractual relationship with Nanko Shipping," she said. owers declined to comment on whether Alcoa had refused a request from the Guinean government to allow Nanko to handle the shipment of its bauxite. If Nanko's case were successful it would mark a step forward for African nations seeking to wrest greater control of their natural resources from international companies.
Guinean officials said the government had signed a deal with Nanko in August 2011 to transport its share of the CBG's production - a copy of which was reviewed by Reuters.
Tidiane Traore, transport minister at the time of the deal, confirmed he had signed the contract. "We signed this deal with Nanko Shipping because we want Guinea to benefit from its share of the minerals, especially in transport," he said. "This contract is valid."
In 2012, the CBG produced 14.5 million tonnes of bauxite. Bauxite prices are currently around $70 a tonne in the international market.
President Alpha Conde, elected in 2010 after a transition from a military coup, is keen to increase the economic benefits that Guinea reaps from its rich mineral resources.
The former French colony remains one of the world's poorest countries despite the world's largest reserves of bauxite and vast untapped deposits of iron ore.
Alcoa owns its stake in the CBG via a U.S. holding company Halco Mining, which controls 51 percent of the joint venture, with the remainder held by the Guinean state. Alcoa owns 45 percent of Halco, with Rio Tinto owning a further 45 percent and Dadco with 10 percent.
In his suit, Diane, a black U.S. citizen of Guinean origin, also accused Alcoa of racial discrimination for denying his company a contract on the same terms that other shippers had been offered.
Bowers said that Alcoa does not engage in unlawful discrimination of any type in its business activities.
Asked why he had included the charge of racial discrimination in the filing, Diane told Reuters: "I cannot understand why I am being refused while Alcoa is doing business on the same terms with businessmen who are not Africans."