Indian oil refiners issue tanker tenders aimed at boosting domestic shipping

Mercator

04/12/2017 09:27

By Nidhi Verma and Jessica Jaganathan 
    NEW DELHI/SINGAPORE, Dec 4 (Reuters) - Two of India's 
state-owned oil refiners have issued tenders seeking to charter 
tankers for at least five years while giving preference to 
Indian companies, tender documents reviewed by Reuters showed, 
which would boost domestic shipping firms battered by slumping 
tanker rates. 
    India's Ministry of Shipping asked the refiners to issue 
long-term crude import tenders on a pilot basis and include a 
right of first refusal for Indian shipping lines, a government 
source familiar with the matter said on Monday. 
    The shift to the five-year contracts would give millions of 
dollars in tanker contracts to the Indian carriers, the source 
said.  
    This would help companies like Shipping Corp of India (SCI) 
 SCI.NS , Mercator Ltd  MRCT.NS , Great Eastern Shipping Co 
 GESC.NS  and Essar Shipping  ESPL.NS . The global tanker 
industry is grappling with an oversupply of ships that has 
depressed rates, with the benchmark Middle East to Japan route 
for Very Large Crude Carriers dropping 43 percent since the 
start of the year.  
    According to the tender documents sent out by Bharat 
Petroleum Corp  BPCL.NS , they are only seeking bids from 
Indian-flagged Suezmax tankers capable of carrying up to 1 
million barrels of oil for a five-year period. 
    Indian Oil Corp's (IOC) tender document includes similar 
language but is seeking global bids for VLCCs capable of 
carrying Iraqi Basra Light crude for five years and grants 
Indian shippers the right of first refusal. 
    An IOC spokesman confirmed this is the first long-term VLCC 
tender the company has issued. There was no immediate response 
from BPCL. 
    India has in the past two years overtaken Japan to become 
the world's third-biggest oil consumer. 
    The country's shippers are pleased with the move. 
    "Granting five year shipping tenders to Indian companies 
will help the growth of India's fleet.. It will help us in 
arranging funds for acquisition of new vessels," said Capt. 
Anoop Kumar Sharma, chairman of India's top shipper SCI. 
    However, the companies may struggle to meet the tender 
requirements which stipulate that the vessels be no more than 10 
years old at the time of charter. 
    SCI only has two VLCCs that are less than a decade old, the 
Desh Viraat and Desh Vishal, which were built in 2008 and 2009, 
respectively, according to fleet data on its website. 
    Great Eastern Shipping does not have any VLCCs in its fleet, 
according to its website, and Essar Shipping only has one VLCC, 
which is 12 years old.   
 
 (Reporting by Nidhi Verma; Editing by Christian Schmollinger) 
 ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters 
Messaging: nidhi.verma.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA SHIP/OIL