LLOYD'S: U.S. FIRMS DELAY TANKER REPLACEMENTS

Major U.S. oil companies are delaying replacement of tanker fleets despite phased retirement of single hull vessels operating in U.S. waters as required by the Oil Pollution Act (OPA) of 1990. Majors are taking a cautious approach to new tonnage commitments even as their fleets shrink, says Lloyd's Shipping Economist, London. While further tanker orders are expected from Texaco Inc., Mobil Corp., Chevron Corp., and Exxon Corp., there will be no rush.

Nov. 29, 1993

2 min read

Major U.S. oil companies are delaying replacement of tanker fleets despite phased retirement of single hull vessels operating in U.S. waters as required by the Oil Pollution Act (OPA) of 1990.

Majors are taking a cautious approach to new tonnage commitments even as their fleets shrink, says Lloyd's Shipping Economist, London.

While further tanker orders are expected from Texaco Inc., Mobil Corp., Chevron Corp., and Exxon Corp., there will be no rush.

Lloyd's said Chevron is alone among U.S. majors in having fleet replacement well under way. Lloyd's data show the company has two mid-size tankers on order and is considering refinancing its fleet on a sale/lease-back basis.

Chevron's first vessels to face mandatory retirement under OPA can operate only until 1997, Lloyd's said. Chevron's response to OPA was increased involvement in shipping its crude oil into the U. S.

Besides outlays for new vessels, Chevron is spending $7 million this year on training of supervisory staff. this is a trend among oil companies, which have tightened ship inspections since OPA's passage and are increasingly monitoring personnel (OGJ, Oct. 18, p. 21).

Lloyd's said Mobil has decided OPA will not be a deterrent to shipping crude to the U.S. in its ships. In 1991 Mobil ordered one double hull tanker with an option for a second.

Exxon's U.S. flag fleet will not be affected by OPA's double hull requirements until the turn of the century, Lloyd's said, so the company sees no reason to rush into new buildings.

Since 1990 Exxon's international fleet has been used for non-U.S. trading, with crude imports to the U.S. in chartered vessels. Exxon is said to be seeking more long term charters.

Lloyd's data show Texaco has the smallest and oldest fleet among U.S. majors. Fleet replacement probably will start with the U.S. flag fleet, but Texaco will bide its time.

The International Association of Independent Tanker Owners (Intertanko , Oslo, reported a world tanker fleet totaling 303 million dwt as of the end of October. Vessels on order at the end of September totaled 27 million DWT.

Intertanko said 100 tankers totaling 9.6 million dwt were sold for scrap in the first 9 months of 1993. Tankers delivered during the same period amounted to 92 vessels totaling 11.2 million dwt.