Saudi shipper Bahri plans to increase VLCC fleet to 46

 18 Jul 2016 - 0:00

Saudi shipper Bahri plans to increase VLCC fleet to 46
Photo courtesy: National Shipping Company of Saudi Arabia (Bahri)

 

To increase fleet size to 46 by 2018 - exec

Says on course to be world’s largest operator of VLCCs

 

By Marwa Rashad

DUBAI: National Shipping Company of Saudi Arabia (Bahri) is planning to increase its fleet size to around 46 ships by the end of 2018, a senior executive said on Sunday.

The figure would likely make the company, the exclusive oil-shipper of Saudi Aramco, the world’s largest operator of very large crude carriers (VLCCs), Naser al-Abdulkareem, Bahri’s president of oil sector, said.

“Today we are the second-largest VLCC owner in the world with 36 VLCCs, maybe one short of the first, and we have 10 ships on order and the target is to grow,” he told Reuters on the sidelines of a company event.

He did not say which company he was referring to as the largest VLCC owner.

He added that some of the new ships would be used to replace its existing fleet, with others helping it expand its business.

Given that size of Saudi Arabia’s oil reserves, it made sense for it to have the world’s biggest oil shipping company, Energy Minister Khalid al-Falih said at the event.

Bahri has been growing at a significant pace following the completion in 2014 of its merger with the former shipping arm of Aramco, Vela Marine International.

As it has boosted its fleet size, profits have grown substantially, with five successive quarterly profit hikes. It is due to report second-quarter earnings this week.

“Oil prices is one thing but the oil demand keeps growing, so we have a great opportunity to capitalise on the business,” Abdulkareem said.

FUND

He was speaking as Bahri announced a deal with Arab Petroleum Investments Corp. (APICORP) to launch a $1.5 billion investment fund that could buy up to 15 very large crude carriers (VLCCs).

The 10-year, closed-end fund will be seeded with $500 million on three occasions, subject to conditions, Bahri said in a statement, adding that it will subscribe to 15 percent of the fund’s capital.

APICORP will provide the remaining 85 percent, and will be the manager for the fund and responsible for arranging finance, Bahri said.

Bahri, in return, will be the technical and commercial manager for the fleet of tankers owned by the fund.

The two parties expect to complete the remaining processes and undertake the first phase of fundraising at the end of the third quarter of 2016.

Bahri also said it expects the financial impact of the first phase to appear in the first quarter of 2017.

(Additional Reporting by Hadeel Al Sayegh; Editing by David French and David Evans)

Reuters