Oil-tanker vetting gets tighter amid environmental safety concerns
The Deepwater Horizon disaster has clear ramifications for the offshore drilling industry, but there is fall out for the shipping industry, too
Oil companies adopting a belt-and-braces approach to environmental safety will herald a stricter tanker-vetting policy.
While the Gulf of Mexico oil spill was not a shipping disaster, the resulting public outcry and the pursuit of firms associated with Deepwater Horizon for financial damages has created a climate where oil companies are desperate to minimise environmental risks across the supply chain – and that includes tanker safety.
Tanker owners have already highlighted evidence of a tougher inspection regime. "Oil company vetting criteria have become more strict," says Jens Martin Jensen, chief executive of Frontline, one of the world's largest supertanker operators. Jensen notes that while this risks increasing operating costs, keeping some vessels from active trade while they are vetted would also have some benefits for the fleet as a whole, by reducing the number on the sea and pushing up day rates.
But for smaller owners, whose vessels are prevented from earning, extra time off the seas may not be offset by the thought of higher rates.
The tanker industry has already gone a long way to improve fleet quality in recent years, having already decommissioned many older, potentially less robust single-hull vessels. A worldwide phase-out of single-hull oil tankers started in 2010, with a ban imposed by the International Maritime Organisation taking full effect in 2015.
"The tanker industry has gone a long way to getting rid of single-hull vessels and is almost there," says Steve Christy, research director at shipbroker EA Gibson. "With the big investments that have taken place, the tanker industry has a relatively modern double-hulled fleet."
Tanker vetting is carried out under the auspices of the Oil Companies International Marine Forum (OCIMF), an industry association formed in 1970 following the 1967 Torrey Canyon disaster off the UK coast – the world's biggest oil spill at the time. Oil firms now routinely run environmental-safety checks based on the Ship Inspection Report (Sire) programme, a standard drawn up by the OCIMF.
Improvements brought about by such measures and technological advancements mean there is little reason for owners of relatively modern fleets to be concerned that vessels could be unexpectedly put out of action. The increased transparency brought about by Sire means the whole industry has been able to see when vessels have had problems flagged, speeding up the retirement of less safe tankers, or entire classes of vessels.
But the worry for some operators is that an oil company seeking a tanker may now tighten the selection criteria, so a relatively small issue may now be regarded as a reason for not selecting a vessel. Age may also come into play, with the possibility that a tanker from one operator may be preferred over an equally well-specified one from another firm, simply because it is younger.
With a surfeit of supply and while safety reporting is fairly transparent, oil companies' chartering decisions are not necessarily public knowledge, so the fleet owners may not even know they have a problem.