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SCI - Shipping Of India News Story

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Last Trade - 07/08/20

Sector
Industrials
Size
Small Cap
Market Cap £269.4m
Enterprise Value £491.8m
Revenue £449.5m
Position in Universe 442nd / 3003

EXCLUSIVE-India's IOC close to deal for Panama-flagged vessel as Indian vessels fail to match

Tue 2nd July, 2019 7:12am
By Nidhi Verma
    NEW DELHI, July 2 (Reuters) - India's top refiner Indian Oil
Corp  IOC.NS  is close to chartering a Panama-flagged ship
rather than an Indian vessel in its first tender to hire an oil
tanker with scrubbers that remove sulphur emissions, sources
with knowledge of the matter said.
    In December last year, state-owned IOC issued a global
tender and offered Indian shippers a first right of refusal as
the nation seeks to boost its shipping industry. India, the
world's third biggest oil importer, wants to promote the market
share of its vessels in bringing in crude imports.
    But it is the Panama-flagged very large crude carrier (VLCC)
Bright Pioneer, owned by Nissen Kaiun Co Ltd, that has emerged
as the likely winner for a daily rate of $30,000-$32,000, the
sources said. 
    None of the Indian companies could match the bid, they said.
"Indian companies declined the first right of refusal," said one
of the sources. 
    That will be a blow to the federal shipping ministry, which
wants the state-refiners to sign five-year contracts with local
shipping firms in a move designed to shift freight worth
billions of dollars to Indian flag carriers. They include
Shipping Corp of India (SCI)  SCI.NS , Mercator Ltd  MRCT.NS ,
Great Eastern Shipping Co  GESC.NS  and Essar Shipping
 ESPL.NS .
    Indian companies, including SCI, Great Eastern and Seven
Island Shipping  SEVI.NS  participated in the IOC tender, the
sources said.
    The introduction of the scrubbers is important because the
International Maritime Organization (IMO) is introducing the
rules on marine fuels from the beginning of 2020, limiting the
sulphur content to 0.5 percent, down substantially from the
current 3.5 percent, to curb shipping pollution. urn:newsml:reuters.com:*:nL8N1SH60Y
    IOC will be using Bright Pioneer from January for at least
five years, giving its Singapore-based operator Global United
Shipping Company a period of six months to install the
scrubbers. 
    IOC and Global United Shipping did not respond to  Reuters
emails seeking comments.
    By stripping out sulphur emissions, scrubbers allow shippers
to use dirtier fuel oil but still meet new global requirements
for lower emissions.
    The IMO says that when the new rules come into force it will
ban ships that do not have scrubbers from carrying any fuel oil,
making it easier to catch cheaters.
    The duration of the IOC contract can be extended by another
two years to a total of seven.    

 (Reporting by Nidhi Verma
Editing by Martin Howell)
 ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters
Messaging: nidhi.verma.thomsonreuters.com@reuters.net))
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