Page 13 - MEOG Week 11

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familiar with the matter, who asked not to
be identified because the information isn’t public. The ships, each able to carry about 2 million barrels of oil, include Dalian, Agios Sostis and Hong Kong Spirit, they said. it’s not uncommon for preliminary bookings to fail.
Saudi Arabia’s search for ships underscores how big a flood of oil it’s planning to unleash on the world, following the breakdown last week of talks between OPEC and its allied producers, particularly Russia. most of the bookings so far have been to the U.S. Gulf, which will only compound the woes for deeply indebted U.S. shale producers that are already battered by a plunge in oil prices.
Next month, the kingdom’s state-owned Aramco has pledged to supply a record 12.3 million barrels a day, 25% higher than in February. Prices slid the most since 1991 monday amid the prospect of additional supply at a time when demand is expected to fall this year due to the spread of coronavirus.
“No one needs that much more oil and that’s why oil prices have collapsed,” said Peter Sand, chief shipping analyst at industry group BimCO. “The current global supply increases isn’t being driven by demand growth, its mainly caused by producers.”
The additional Saudi supply could be destined for storage and not necessarily
to a refiner, since there hasn’t been any incremental demand growth because of the coronavirus outbreak, Sand said. The outbreak that began in China has spread to dozens of countries and the global death toll is around 4,000.
The flood of crude scheduled for next
month will require more tankers, particularly for trips to Asia, Aramco’s largest and most profitable market, said one person. A ship broker involved in booking the vessels said he couldn’t recall Bahri booking supertankers in the spot market for the middle-East to Gulf of mexico route for several years.
Bahri runs a fleet of 41 supertankers, making it among the world’s largest operators of the vessels, according to Clarkson Research Services Ltd. The carriers often transport the kingdom’s crude and have, in recent years, meant the kingdom didn’t need to rely on outside companies to haul its barrels to the Gulf of mexico.
”Before the weekend, it would have been weird to book so many ships in such a short space of time,” said Halvor Ellefsen, a tanker broker at Fearnley’s A/S in London.
Supertanker rates for middle East-U.S. Gulf Coast route jumped by 57% to WS 52.41, according to data compiled by Bloomberg. Daily earnings rose to $50,071 a day, almost triple from monday, according to Baltic Exchange data. Rates were already on the
way up as companies sought ships to use as floating storage.
“This increases demand for tankers at a time when supply is also being soaked up
for floating storage,” said Randy Giveans, senior vice president for equity research at Jefferies LLC in Houston. “We expect rates to strengthen as a result of this Saudi crude surplus, and then again once Asian refineries come back on in a meaningful way.” oILandGasPeoPLe
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Turkey’s 3rd drillship, Kanuni, arrives from UK
Turkey’s third oil and natural gas exploration and drilling vessel, the Kanuni, arrived in Turkey Sunday having journeyed all the way from a port in the U.K., Energy and Natural Resources minister Fatih Dönmez announced.
Dönmez said the personnel onboard would be put under quarantine inside the ship as a preventive measure against the coronavirus. Officials will begin the maintenance and development process for the ship after the end of the quarantine period. Turkey is reported to have bought the drillship for nearly $40 million. The ship, formerly known as the Sertao, is valued much higher than its asking price, but Port Talbot officials were reportedly in a hurry to sell. The drillship, which has been docked idle at the Welsh port town for nearly two years, has an estimated market value of $120 million. The drillship was produced by Samsung in South Korea and used by Brazil’s Petrobras between 2012 and 2015. The marshall island-flagged drillship has a length of 227 meters, a width of 42 meters and a draft of 12 meters. it can reach
as much as 11,400 meters below sea level
and drill to a depth of 3,000 meters below
the seabed. in February, Dönmez said the
new ship would be likely to operate either in the Eastern mediterranean or the Black Sea, where drilling work has been long suspended. daILy sabah
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