BRIAN INGPEN TEEKAY THE FIRST 40 YEARS TEEKAY The First 40 Years

Dedicated to the many loyal staff members of Teekay – past and present – who have helped the company earn a position at the forefront of the maritime industry. TEEKAY The First 40 Years

Brian Ingpen

Kattegat Limited Published by: Kattegat Limited 69 Pitts Bay Road Hamilton HM 08 Bermuda CONTENTS http://www.teekay.com/

First published 2013 Text © Brian Ingpen 2013

All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written permission of the publisher.

Editor: Douglas van der Horst Foreword vii project manager: Douglas van der Horst Chairman’s Perspective viii Design and layout: The Nimble Mouse My Brother and Teekay xi Dustjacket design: The Nimble Mouse Proof-reader: Tessa Kennedy Author’s Preface xiii Indexer: Ethleen Lastovica Hirt & Carter Cape (Pty) Ltd Reproduction: 1 A Danish Farm Boy 17 Printing and binding: Tien Wah Press (Pte) Ltd, Singapore 2 American Dawn 29 3 A Cedar Has Fallen 59 ISBN 978-0-620-56155-6 4 Boom Years 93 5 Wider Horizons 153 In 2012 Teekay commissioned the well- known artist Ian Marshall to paint the Afterword 185 watercolours and sketches that appear at Appendix 1: Teekay’s Departmental Structure 187 various places throughout the text. These evocative works have added greatly to the Appendix 2: Recent Changes to Teekay’s Structures and Procedures 190 illustrative impact of the book. Appendix 3: Fleet list 192 Appendix 4: Chronology 199 Appendix 5: Ship Types and Glossary 202 Appendix 6: Typical Areas of Operation 204 Index 206 Foreword

eadership is a service, it is not there to be with its most senior executives – one-to-one as reliability, integrity and teamwork are not L served. It is not a privilege of power and well as many hours with its board of directors the product of some executive team but the authority. It cannot be assumed, but only – I could not help but perceive a feeling of col- expression of enduring and proven ways of granted by those who follow. Highest among lective purpose. All share a sense of service and doing business and working together that the duties of leaders is to ensure that they commitment to a purpose beyond themselves. have been the founding principles of the com- leave a legacy of leadership beyond their ten- All see their role as custodians of the organisa- pany’s success from day one. ure that echoes into future generations. It is tion rather than the simple commercial vul- Perhaps Torben’s most lasting legacy was less about what must be done and more about garity of ownership and control so common to put in place the vision and conditions that the manner in which it should be done. This is in the modern business world. Teekay’s lead- ensured Teekay had choices for its future leadership at Teekay. ers are innovative and ground-breaking in direction and that these choices would be Throughout my own career I have had adapting to their client and market needs yet bounded by two simple and lasting compasses the privilege of observing and supporting the powerfully old-fashioned, traditional and rev- to ensure that the ship does not run aground selection and development of leadership in erent in the way they deliver that competitive or become lost: leadership and values. Teekay some of the world’s most influential corpora- innovation. People like working for Teekay. has these two compasses above its capabilities tions. In few have I experienced the lasting They feel safe there. They feel that the condi- and resources – from the boardroom to its legacy of leadership of any one figure as I have tions exist there for them to succeed whatever offices, the bridges of its ships and among the seen in the impact of Torben Karlshoej. From their role. What an old-fashioned concept so thousands of employees who carry the legacy the inspiration of vision and what might be, impressively packaged and so elegantly and of the Teekay Spirit onwards. Whatever lies to the tenacity to persevere with endurance sustainably delivered. ahead, the company is in good hands because through all challenges, to the driven values Teekay is a truly international organisa- of the strong foundations created by those of doing, above all, what is right and safe for tion. It thinks that way. It respects the world, who built it. employees aboard and ashore at all levels, the its people and its resources that way. So many leadership climate of Teekay remains to this other corporations should and must adopt Stephen Langton day a deeply embedded legacy of the vision this example. Teekay has adapted and evolved of an outstanding leader. Torben may have as any successful long-standing enterprise Stephen Langton has proudly supported Teekay as an created a fine shipping enterprise but his must in order to continue to succeed. It enjoys adviser on leadership and succession. He lectures in real achievement is the carriage of that early the position of setting standards for business senior leadership and CEO succession in leading busi- vision into the future, and the maintenance ethics and service to which thousands of other ness schools around the world. of core beliefs by people who never had the organisations and stakeholders are exposed Jens Torben Karlshoej 1941–1992. Aiko Karlshoej chance to meet him in person. in the hundreds of cities and ports where its When I met Teekay employees, experi- brand is visible every day. Its ‘spirit’ values of enced Teekay environments, spent many days safety and sustainability, passion, innovation,

vi vii Chairman’s Perspective

‘Now this is not the end. It is not even the Ingpen’s fine book captures the essence of Tee- ‘marine midstream’ company, providing a beginning of the end. But it is, perhaps, kay and its remarkable journey over the past broad range of services globally to the world’s the end of the beginning.’ 40 years. I have been privileged to be part of leading energy companies. We are widely Winston Churchill, 1942 the team for much of the second half of this respected in the capital markets. And I believe narrative, in the post-Torben era. that many more exciting and fulfilling chap- orben Karlshoej had a dream, audacious Bjorn Moller was appointed CEO in 1998 ters lie ahead of us. Tfor anyone, but especially for a Danish and I was elected chairman soon after. Bjorn It has been a privilege to work closely with farm boy who had emigrated to the US with led the brainstorming sessions that produced Bjorn Moller, Peter Evensen, and their tal- heroic ambitions, a modest formal education statements of our VISION and BHAG (‘Big ented management teams over the past 15 and very few dollars in his pocket. He dreamt Hairy Audacious Goal’), both in keeping with years. We have always believed that searching of building the world’s leading shipping com- Torben’s dream. We set out to transform Tee- the globe to find the most able and skilled indi- pany, managed to the very highest standards kay from a medium-sized tanker company, viduals to serve on our board of directors gives by the most competent people in the industry. hostage to the ever fluctuating spot market, us a great competitive advantage, and that Although he didn’t achieve this dream in his into a well-diversified and well-capitalised has proved to be the case. I have been most tragically shortened lifetime, the company company with access to capital markets at all fortunate to work with some of our industry’s that he created has provided a platform for points in the shipping and economic cycles. best minds, and I am most grateful for their the achievement of his lofty goal. I think it is fair to say that we were pioneers in unstinting support. I could not be more ex- Torben Karlshoej had the best possible ally this quest; there were no role models or sim- cited about the challenges that lie ahead as we in his quest – his older brother Axel. Staunch ilar shipping companies in the public markets. embark on this journey together, as we move supporters of each other in life, Axel stepped In 2002 we were joined by Peter Evensen, past the ‘end of the beginning’ and into our up at a time of intense grief to declare: ‘Sadly who brought with him incomparable finan- next chapter in pursuit of Torben’s dream! my brother is gone, but his dream will live cial and capital market skills. He has been the on!’ Most in our industry were sceptical; very principal architect of our successful ‘daughter Sean Day few shipping companies survive the sudden company’ structure, which has contributed so Chairman loss of a charismatic founder, particularly in dedicated management team who were ready much to our success in recent years. Teekay Corporation tough economic times and a very depressed to keep driving Teekay forward. Today we are at the end of the second chap- shipping market. But Axel never wavered, Every company history describes a living ter: our entrepreneurially-led tanker com- assisted by Torben’s very talented and entity and its trajectory over time, and Brian pany has been transformed into a diversified

viii ix My Brother and Teekay

t gives me great pleasure and pride to write embargo was under way, was tough. But from throughout his life. Those principles remain Ithis introductory text to a book that celeb- that time – until he died – nothing could hold part of Teekay’s core values. rates Teekay’s 40th year of operations. The him back. There was another reason for Torben’s suc- telling of this story is long overdue. In good times and bad his enthusiasm for cess. He had an incredible talent for picking Although I have spoken about my late the business never stopped. Everyone who the right people for the right job at the right brother many times, this book at long last came in contact with Torben saw that, if time. They all, in one position or another, puts into print the story of Torben Karlshoej anyone could do this, he could. His passion, had the difficult task of picking up the pieces and Teekay. It is no coincidence that it tells his boundless energy and his confidence in after the shock of my brother’s untimely pass- the story of both the man and the company, doing what many would deem impossible ing in 1992. since they are so deeply interconnected. were infectious. From raising capital in hard Captain Jim Hood had the challenging Without Torben, there would be no Teekay. economic times, to aggressively building Tee- task of taking over as chief executive officer, Without Teekay, my brother would have had kay’s fleet, to making sure that his people, and did a tremendous job in providing a a completely different story to tell. both ashore and at sea, were the best – every- much-needed steady hand in the organisation Like so many other great entrepreneurs, thing he did was geared to running a world- as Teekay looked to a future without Torben. my brother was driven by passion, determi- class operation. He held us all together during an extremely nation, and commitment. In Torben’s case, His philosophy was about getting it right stressful time for the company. it was a passion for shipping and all things the first time. About being creative and innov- Equally important in those early post- maritime. He also had a fierce determina- ative. And about going the extra mile for his Torben days were those who sat on our execut- tion to build a world class shipping company customers when trouble came, even if the ive board. Aside from myself were our general and an unyielding commitment to ‘doing it trouble was not the responsibility of Teekay. counsel, Art Coady, as well as Thomas Hsu and right’. He succeeded in all three. Of course, Torben shared other character- Shigeru Matsui. Each in his own way provided As you will learn, his passion for the sea istics of great entrepreneurs. One was his loy- key guidance and stability during the very came early in his life. He loved to go down to alty to his staff. He cared deeply for them and tough economic circumstances that existed the harbour to watch the ships come and go. their welfare. He believed strongly in fair play for the tanker business in 1992. When he began working for a Danish ship- and equitable employment. He didn’t care As our general counsel, Art Coady was ping company in Copenhagen, he fell in love what part of the world they came from. In incredibly helpful in providing advice to Tor- with tankers. And so, at the early age of 21, he that sense, he was truly an equal opportunity ben in all legal matters, including setting up decided to go to America to follow his dream employer. If you run an international tanker the company trusts. Since then, I have contin- to build a great oil tanker company. company, you deal with many nationalities, ued to rely on Art’s wise advice as a trusted Nothing could stop him. After some years cultures and languages. Yet Torben worked friend and colleague. working for other shipping companies, he in a language that anyone could understand. Thomas Hsu, who has been a Teekay direc- threw all caution to the wind and set out to No matter with whom he was negotiating, his tor since 1992, has been a tower of strength start his Teekay Shipping Group. Starting word was his bond, his handshake as good as both on our board, as well as on the opera- such a company in 1973, when the world oil a contract – a philosophy that worked for him tional end of Teekay’s business. He has been

x xi a lynchpin in so many of the projects upon which we have embarked. It is no exaggera- tion to say that we owe many of our ongoing successes to ‘Tommy’. I am very grateful for his ongoing guidance and wise advice. Author’s Preface For his part, Shigeru Matsui provided us with critical and invaluable expertise in deal- ing with the Japanese banks and shipyards. I also owe a debt of gratitude to Sean Day, who took over from me as chairman of the board in 1999. He has provided me, and Tee- kay, with essential support and counsel in our decision-making over the years. I consider him a fine friend and a critical colleague in a role he continues to play to this day. Torben also had great insight in picking the right people to serve in management roles. Bjorn Moller was typical of his choices. had a meeting with Axel Karlshoej and began. My subsequent discussions – with In Vancouver on the eve of his assuming Joining the company in 1985, Bjorn quickly ‘I Tommy Hsu last week,’ Teekay’s chairman Axel and Inge amid homely hospitality in the role of president and chief executive of proved his worth, and, taking over the posi- Sean Day emailed me in December 2010, ‘in Yuba City, California, and with Tommy dur- Teekay, the amiable Peter Evensen found Axel (left) and Torben share a quiet moment at their father’s 75th birthday celebration. Axel Karlshoej tion of CEO in 1998, he was one of the best which we discussed the possibility of having a ing several long and fascinating telephone time amid his hectic schedule to chat about leaders in the international oil tanker busi- history of Teekay Corporation written … They calls – showed me that a book covering the his own career, his time with Teekay and his ness until his retirement in 2011. Under are both enthusiastic about the possibility of Teekay story is no ordinary company history, vision for the future of the company. Bjorn’s direction, Teekay was transformed person, Torben also believed in letting his companies in the world. And that, of course, your tackling this project,’ he continued. And but needed to focus on a very special man and Captain Jim Hood’s fascinating career from being a traditional oil transportation employees get on with doing the jobs they was his dream way back in 1973. that was the start of my fascinating adven- his equally special legacy, steeped in integ- opened to me when I talked on the telephone firm into a global leader in oil and natural were hired to do. Teekay has developed from a regional ship- ture into the world of Teekay. rity, in passion for his work, and in his care to him. As he had worked with Torben in the gas shipping, as well as in offshore oil produc- He was convinced that people prove their ping company into one of the world’s largest Since then, I have been privileged to for his people. Axel’s family photographs dat- early days of Teekay, his insights and anec- tion, storage and transport. He took Torben’s worth by their actions, and to that end he marine energy transportation, storage and meet so many wonderfully friendly, helpful ing back to his childhood years in Denmark dotes provided valuable background to the original dream and through his own vision managed to instil in all those who worked for production companies. In the last 15 years, people, to travel widely, so that I could absorb have added great historical value to this book. company founder and the company itself. grew our company many times over – leading him his own enthusiasm and commitment we have grown ten-fold in assets, created the atmosphere within which this vibrant Bjorn and Rochelle Moller welcomed me Others also sacrificed their time to talk by example with his tremendous discipline, to the Teekay vision and the pursuit of excel- four publicly traded companies, established company developed and within which it now warmly to their Vancouver home when Bjorn about the company’s operations: Vince Lok; skills, and talent. We can rightly praise my lence in everything that they tried to accom- numerous joint ventures and built an envi- operates. provided a valuable briefing on the develop- Bruce Chan; Captains David Glendinning, brother for the great company he started, but plish. He did this because, as much as he able reputation and brand for operational With patience and great encouragement, ment of Teekay, an account that gave me Graham Westgarth and Roger Barber; Peter history will say that Bjorn took over a young loved ‘his’ ships and the resources they deliv- excellence. All in the space of four decades. Chairman Sean Day carried me through the further insight into the remarkable man who Antturi; Art Bensler; Tony Labella; Lois company and, through his own belief in what ered to clients all over the world, he knew the Not bad for a small farm kid from Denmark trials of an author who was acquainting began the company, and the factors that led Nahirney; Lisa Kentel; Cinda Cheung; and was possible, made it a major player on the key to Teekay’s success was service delivery with big dreams. himself with the Teekay story, and he gave to its strong growth in later years. Melissa Spencer. world energy stage. to our customers. I am proud to say that our For my part, I am extremely grateful to all extremely valuable help by filling in many In Palm Springs, California, I met Art A first-hand account of Torben’s -opera Bjorn’s mantel of leadership has now people have been delivering that service of the men and women who have helped build gaps in my knowledge of events, and by vet- Coady, Torben’s trusted legal adviser and tion was given by Mads Meldgaard, who had been passed to Peter Evensen, who continues excellence since the beginning of Teekay to – and build upon – Torben’s legacy. I am as ting text. I also valued greatly the warm and friend, and also the influential shipbroker worked with him in the early years. the traditions established by Torben all those the present day. proud of them as I know Torben was. genuine hospitality he and his wife Ginny Shigeru Matsui, who Torben first met in 1963 Also in Vancouver, Torben’s widow, Aiko, years ago. Teekay remains in excellent hands When my brother died in 1992 we felt we Finally, I want to thank Kattegat for spon- provided for me during my stay in their and who introduced him to Japanese ship- welcomed me warmly to her home and under Peter’s leadership along with the had lost the heart of the company. And indeed soring this project, as well as all those who home, including a surprise helicopter trip owners and charterers from whom Torben shared her perspectives on the company’s current members of the board and the we had. But we soon discovered one thing. We cooperated in providing interview material over Manhattan as my introduction to the obtained much business. founder, as well as opening her family photo- executive team. had not lost its spirit. The foundations Torben to our author, Brian Ingpen, who has worked United States. And I shall always remember I had met Susan Karlshoej, Torben’s sec- graph albums for use in this book. Of course none of Teekay’s success would laid in his few decades at the helm of Teekay so hard on the manuscript for this book. I am their surprise celebration for me when I ond daughter, during her visits to South In 2011 Bjorn was my guide during a most have been possible without the incredible were so solid that the company has entered indebted to all of you. was thousands of miles from home on my Africa in connection with TK Foundation’s memorable time in Scandinavia, where I had talent not only of our senior leadership team the 21st century stronger than ever. His prin- birthday. grant for the reconstruction of the Lawhill discussions with Erik Kjaergaard, Torben’s sib- but also of all those working in our offices ciples remain Teekay’s. I am convinced that Axel Karlshoej I was privileged to meet Axel and Inge Maritime Centre, Simon’s Town. She has also lings (Tom and his wife Karen, Lis, Ruth, and and aboard our ships throughout the world. it is because of his values and work ethic that May 2013 Karlshoej as well as Tommy and Linda Hsu given background information about her Knud and his wife Kirsten) as well as his aunt, Although he was a very hands-on sort of Teekay has become one of the best tanker in South Africa shortly before this project father, as has her elder sister Kim. Johanne Madsen (née Karlshøj), affectionately

xii xiii known as Soester, who provided much of the narrow confines of the harbour, were definite Two wonderful ladies, Theresa Murray detail of Torben’s early years in Denmark. highlights of my visit to Norway. (Teekay, Vancouver) and Dee Smith (Green- With Soester, Tom and Bjorn I walked around In London Tim Horne and John Adams wich, Connecticut), made the arrangements Delhovedgaard, the farm where Torben spent gave me a background to the London broking for my memorable research visits to North his childhood. I walked down a leafy lane to office and the company’s crewing operations America, Europe and Britain in 2011. Brian the tiny beach where he and his siblings once respectively, and John assisted in tracking Shirlaw, Priscilla Shaloun and Gillian Red- swam and launched canoes, and I soaked in some of the seafarers with whom I later held mond (Teekay Vancouver) were most helpful the atmosphere of that beautiful place. I vis- interesting discussions. in sourcing illustrations for the book. ited Faxe-Ladeplads, home port of the fisher- Telephone calls yielded a wealth of back- Despite their busy schedules, Sean Day, men who befriended the young Torben, and ground notes for the book, especially the Axel Karlshoej, Bjorn Moller, Peter Even- I went to the churchyard where his parents, calls to Captain Peter Whittington, who runs sen and Tommy Hsu spent a considerable Poul and Helga, now lie beneath a simply Transmarine, the ships’ agency network amount of time carefully reading through worded, plain gravestone. that Torben owned and that Peter bought; the manuscript and making extremely help- With Bjorn I went to Oslo to meet Anne Anthony Gurnee, formerly Teekay’s chief ful suggestions to ensure the accuracy and Oian and Trond Scheie, both senior vice- financial officer, who worked extremely completeness of the record of the growth presidents of Den norske Bank, which had closely with Torben during the hard times of Teekay. supported Torben and Teekay during the of the early 1990s; and Allan Murphy, who I valued the technical advice of Rob Young, dark, debt-ridden days of 1991 and 1992, and not only had a fine career at sea as a chief who is not only a tanker expert but also a whose support had enabled the company to engineer, but is also a key player in Teekay’s close friend. move forward to an extremely bright future. Australian operations. Douglas van der Horst (production man- Because Statoil was such a key to Teekay’s Sadly, I did not meet Alan Stevens because ager and editor) and Graham Arbuckle involvement in the Norwegian oil industry, of a personal tragedy close to the time of my (design and technical manager) treated my the vice-president, Marit Lunde, and Jon Arnt visit to Vancouver, but I am grateful for his material with great sensitivity and have gone Jacobsen gave their insights into Teekay’s lengthy email giving interesting information many extra miles in order to ensure a most success, while Erling Overland, Statoil’s erst- about his time with the company. pleasing final product. while senior vice-president, related the story Special thanks go to Captain Stephen My wife, Margaret, has been a great source behind the company’s takeover of Navion Tucker (who I met in London) for permission of encouragement and support throughout Shipping. to use many fascinating anecdotes that he this project. Perspectives provided by Peter Lytzen, recorded in A Few Sea Stories from Steve Tucker’s As an outsider who knew only the broad president and chief executive of Teekay Petro- 25 years of Experience in Teekay, an informal outline of the company’s history before the jarl, helped to outline the company’s success- collection of personal writings that cover his start of my research, I have discovered a com- ful move into the FPSO market, while Stein time in Teekay tankers. He also organised the pelling story of the remarkable development Rynning, Ole Christian Fuglestad and Anders photography of activities aboard his vessel, Al of Teekay, which is the result of the incred- Dirdal in Teekay’s Stavanger office rendered Marrouna, and spared no effort to ensure that ibly hard, pioneering work done by Torben assistance as well. I was able to obtain an all my questions were answered. Karlshoej and many others over the years. excellent overview of Teekay’s shuttle tanker Similarly, Captains Hans Schaefer, Harry I hope that my efforts have done justice to operations, especially the company’s move Carlisle (to whom I also chatted in London) everyone who has contributed to the exciting into the Norwegian offshore market, from and Boris Banic provided photographs and growth of this amazing company. Ingvild Saether, who heads up that operation patiently spent time recounting their experi- from her Stavanger office. ences while commanding Teekay ships. Brian Ingpen Apart from meeting so many interesting A fine photographic record of life aboard Cape Town people, the dinner at the Royal Manor Leedal, the LNG carrier Tangguh Hiri came from Cap- May 2013 Stavanger, and the most remarkable naming tain Oleg Dolzikov, who also shared his jour- ceremony of three large shuttle tankers in the ney with the company.

opposite Amundsen Spirit berthing in Stavanger before her naming ceremony in 2010. Teekay Collection xiv xv Chapter 1

A Danish Farm Boy

ot much has changed on the farm where Though it won’t be found on a map, Like other Danish families they listened to NTorben Karlshoej, the founder of Teekay locals know the modest Karlshøj farm well. their radios almost daily from 1938 as news Shipping, spent his first fourteen years. The In the nineteenth century the Nielsen family readers told of the rise of German imperial- gently sloping fields still produce grain, pota- ran the farm, living off the produce of their ism. They heard of the German invasions of toes and sugar beet, while the name of the fields. Known more by the name of his farm Austria and Czechoslovakia and, on Septem- farm, Delhovedgaard, remains visible above since numerous other Nielsens lived in the ber 1, 1939, normal radio programmes were the archway at the entrance off the winding area, Poul Nielsen-Karlshøj and his wife Ane interrupted to broadcast the news that the road from the tiny port of Faxe-Ladeplads to had eight children, the eldest of whom was German army, supported by the Luftwaffe, Praesto, a small market town on the island of Rasmus, born in the summer of 1888. had crossed the border into Poland. Within Sjaeland in eastern Denmark. Johanne, one of the Nielsen girls from two days the Second World War had begun. An area of rough and uneven plaster on the area, became Rasmus’s wife and, mov- As the war began, many Danes feared that the side wall of that archway still indicates ing into a house built in 1853 on the farm their country would be next on Germany’s the spot where the adventurous young Tor- Mariehøj, they had nine children, including expansionist agenda. The government was ben, his older brother Axel and a friend Poul Gunnar (born in August 1913), who equally anxious, for the flat Danish land- crashed the family’s old car during an later shortened his double-barrelled surname scape was ideal for the swift tank-led inva- attempt to drive it while their father, Poul to Karlshøj, which his sons Axel and Torben sion that had characterised the invasion of Karlshøj, was at the market. Although the eventually changed to Karlshoej. Poland, and which the small, ill-equipped boys tried to repair the damage to the wall The First World War and the Great Depres- Danish army had no hope of repelling. before their father returned, his keen eye sion made the long, cold Danish winters even As the storm of war broke over Europe, noticed their unskilled handiwork. ‘He was harsher as farmers struggled to survive. It Poul sought a farm to hire. He heard of a 130- so angry!’ recalled their younger brother was a difficult time for Denmark, and the acre farm – Delhovedgaard – that was avail- Tom years later. ‘But you could tell that he Karlshøj family was forced to endure many able in an area where he used to hunt, and quietly respected them for their reparation hardships. However, resoluteness was a char- immediately knew that this was the place efforts.’ acter trait that ran deep within each family where he and his new wife would settle. Its The Karlshøj story, though, goes back to member and saw them emerge stronger from fields would provide adequate produce for an earlier century when life on Danish farms those demanding years. him to market, he could farm pigs, and the was hard as farmers fought the elements Poul was a determined man who wanted large barns would provide adequate storage for every potato, every ear of wheat and to extend himself in his own way. Some for animal feed during the long winters. He every krone. said it was incongruous that this tough, and Helga moved into the spacious house, even rough, farm boy should be attracted to and although their old radio brought awful Helga Hansen, a sophisticated, elegant lady news of the rapidly expanding war, they opposite Poul and Helga with Torben between them. Axel is sitting in front of Poul. This photograph, taken in about who was two and half years older than him. were extremely happy. 1943, was one of the last of the family before Helga’s Yet he doted on her, and they married in With Norway in their sights, a German death. Axel Karlshoej October 1938. naval force with the minelayer Danzig as

17 the flagship entered Copenhagen harbour before dawn on April 9, 1940, and soon other military units were pouring across the bor- der, quickly subduing any Danish defence. Recognising that resistance was futile in the face of the German military, the Danish government acceded to a German demand to surrender, with King Christian ordering a ceasefire that heralded the German occupa- tion of Denmark until 1945. Despite the Danes’ rapid surrender to spare their country the devastation that had befallen Poland, it was a deeply anxious time that inevitably and severely disrupted daily life for all, including farmers like Poul. It was in these dark days that Axel Karlshoej was born, and just over a year later Helga gave birth to Torben. Poul’s younger sister Johanne, known to all as Soester (Sister), recalls the day Tor- ben was born: ‘I came to the farm to see the new baby,’ she said. ‘He was wrapped in a blanket and was lying on the coffee table in the sitting room. Even then, he was strong for he could lift his head up. I said that he looked like a turtle!’ To help Helga with her two young children, Soester moved in as the housekeeper and the boys’ nanny. The women of the family may have won- dered why Helga did not breast-feed either of her babies, but perhaps she had already dis- covered a tragic secret that had plagued sev- eral Hansen women over the years – breast cancer. Axel had turned four and Torben was two when Helga – then only 33 years old – died after a terrible struggle with the disease. To Poul, Helga’s death was a devastat- ing blow, leaving him a single parent in a hard situation. He had two young boys to care for, faced wartime restrictions on his farming operations, and dealt with the daily threat that, as had happened in other occupied countries, men could be trans- ported to Germany to work as labourers in factories and steel mills to keep the German ABOVE Rasmus Karlshøj and his wife Johanne, the grandparents of Axel and Torben, at the farm Mariehøj. This was the family war machine running. His concern was such home where Poul, the boys’ father, and his eight siblings were raised. Axel Karlshoej that he became depressed, forcing the rug- ged farmer to seek the counsel of his doctor opposite, top Mariehøj farmhouse, photographed in 2011. Brian Ingpen and friend, Dr Petersen. ‘You need a new opposite, Bottom The rural church near Mariehøj where several of the Karlshøj family were laid to rest. Rasmus Karlshøj challenge to occupy your mind,’ Dr Petersen assisted financially in its construction. Brian Ingpen told him. Fortunately, Poul was given just

18 Teekay: the first 40 years Chapter 1 • A Danish Farm Boy 19 such a challenge: the opportunity to take to his sons, taking them for walks across the F ar left Helga and Poul with Axel, circa 1941. Axel Karlshoej left Helga with Axel sitting on the farmhouse over another farm, Fedgaarden, which was fields, and, from the farmhouse, down a nar- steps at Delhovedgaard. Torben, aged about one year, is in nearly four times as big as Delhovedgaard. row path to the shores of the Baltic Sea. The the foreground. This is the earliest known photograph of Though the farms were close enough for Poul woods, the fields, the sea and farm life in gen- Torben. Axel Karlshoej to run them concurrently, he had no money eral presented wonderful opportunities for for equipment for the new farm, where the the young energetic boys to play, to explore, buildings needed to be upgraded. Further- and to develop enquiring minds that pre- more, to produce enough rye, oats and pota- pared them for their later business successes. toes to make the effort worthwhile, he would The German occupation, however, made need to move a large amount of compost and life very uncertain, One day a stranger rich soil to counteract the poor ground of arrived at Delhovedgaard and asked to stay that part of Sjaeland. To make Fedgaarden a for a while. As Poul was not one to deny success, Poul would need more money. hospitality, even to a stranger in suspicious Unfortunately, his father Rasmus would times, he offered the man a room. However, have to guarantee any loan, and in those fearing that he might be an agent working hard times such guarantees were difficult to for either the Danish collaborators or the Torben, aged about seven years, and Axel. Axel Karlshoej adhere to. When Dr Petersen visited Poul, he Germans themselves, no one in the house dis- shared his problem with the wise medical cussed the occupation or politics or listened practitioner, who wrote to Rasmus: ‘I hope to their secret radio while he was there. The you can see that this young man needs some- man soon left without incident, much to thing for the farm, and,’ he added, ‘perhaps I Poul’s relief, and their radio again provided can share the burden.’ updates on the war’s progress. Helga Hansen was born in 1911 and married Poul Karlshøj in October 1938. After a battle with cancer she died on The loan was secured and Poul began Poul had been approached by the Danish July 8, 1944, less than three years after her younger son, his newly extended farming operation. This resistance movement to work with them, Torben, was born. It is said that her death when he was added responsibility kept him very busy at but much as he would have liked to join still a small child may have contributed to his occasional turbulence during his teenage years. Axel Karlshoej Fedgaarden for most of the week, enabling their operations, he declined, not wanting him to return home to Delhovedgaard only to endanger the two small boys in his care. at weekends. Though work was an important However, the occupation and resistance still part of his life, Poul devoted his weekends affected the daily lives of the Karlshøj family.

Delhovedgaard was the first farm rented by Poul Karlshøj. The entrance to the farm was through the narrow archway shown in the middle of the building. Brian Ingpen

An ardent member of the Danish resistance, leader immediately ordered the young man Dr Petersen had a son in his early twenties to be arrested and shot. who, unknown to his father, had become a At Delhovedgaard Poul kept turkeys in German sympathiser. Without Dr Petersen’s a wire enclosure from which the birds fre- knowledge his son had sent a letter to the quently escaped. One day he called Axel and German command giving the names of those Torben to help him hunt for the turkeys that he knew to be Danish freedom fighters – had headed for the woods a few hundred including his own father. metres across the road and on the edge of Thinking it strange that someone in his a field. Naturally this was exciting for the area should be writing to the German com- two energetic boys, but as they scrambled mand, the local postmaster intercepted through the woods on their turkey hunt, the letter and, appalled by what he read, they heard a series of gunshots ring out. divulged its contents to the resistance leader. Poul told his sons to run back to the safety of After reading the letter, the Danish resistance the farmhouse while he went to investigate

20 Teekay: the first 40 years Chapter 1 • A Danish Farm Boy 21 The farmhouse at Delhovedgaard photographed in 2011. The exterior of the building has changed little since the days when this was the family home where Axel, Torben and their six half-siblings grew up. Brian Ingpen

Now a little overgrown, one of the barns on the – the shots were those that had executed Dr he was suddenly challenged by a German left Tom Karlshøj, Torben’s younger brother, at Faxe- farm at Fedgaarden that Petersen’s son. soldier who shone a torch in his face. Poul Ladeplads in 2011. At this small harbour, where Torben would watch the ships come in to load gravel, he Poul rented from 1946 Denmark’s collaborators were furious was holding a pitchfork with which he could to 1955, when the family made friends with local fishermen in whose boats he moved to another farm, at the killing of the Petersen lad, and when easily have impaled the soldier, but thought occasionally went to sea. Brian Ingpen

Fugelsoe, near Havndal they heard that Poul had been in the woods better of it – and rightly so, because when the in Jylland (Jutland). Brian Above Johanne Madsen, née Karlshøj, Poul’s youngest Ingpen at the time of the execution they came to the man lowered the torch Poul saw that with sister in a family of nine children, was known Karlshøj house. Having recently lost their his other hand the soldier was pointing his affectionately to the family as Soester. Photographed in 2011. Brian Ingpen mother, the young boys became hysterical rifle at him with his finger on the trigger. when they realised that the collaborators The challenge had been merely a formality, were taking their father away at gunpoint. and the German allowed Poul to return to ‘Your father will be back,’ they said and drove the farmhouse. off. Thankfully, Poul was brought back a few Throughout the German occupation farm hours later. life continued, although there were disrup- On another occasion the boys met several tions and dislocations of the usual marketing strangers during a visit to their grand- system for produce. Morale – particularly in mother’s farm. Suddenly, someone rushed Copenhagen – was strengthened by the daily into the dining room and whispered to the sight of King Christian riding his huge horse strangers, who ran to hide in the hayloft. through the streets of the capital city to dis- Only later were the boys told that their play his commitment to his people, and as grandmother had operated a safe house for word spread of the king’s action even rural Danish Jews en route to Sweden. folk took heart. As the war continued all the crack German Their secret radios were the only regular regiments were sent to the Russian front, link that Danes had with the events beyond leaving mostly older or inexperienced sol- their borders, and the Karlshøj family lis- diers in Denmark, which, it was perceived, tened intently to news bulletins. They heard was not really a threat to the Reich. One British broadcasts telling of Allied landings night Poul was returning from the barn when in Normandy, of the relentless bombing of

22 Teekay: the first 40 years Chapter 1 • A Danish Farm Boy 23 Egersund Poul and Esther on German cities, and of the advance of Allied things would have been far better!’ It was a board Kisuca in Norway. forces across Europe. comment he regretted bitterly, and, despite Although Torben and his father had some Daffodils, crocuses and marguerite daisies the occasional clashes, Esther’s tenderness stormy encounters, their heralded the onset of the spring of 1945 and, and devoted attention weaned him from his relationship warmed 0 100 200 Kilometres greatly in later years and as the days grew longer, Danish spirits lifted, anger so that he later confided in one of his Kisuca provided a happy for liberation was at hand. On May 4, 1945 siblings that he loved his stepmother dearly. Hjørring 57° environment where father the German occupying troops surrendered Later in life, Torben would take exceptional and son could enjoy S k a g e r r a k Bjohum SWEDEN good times together. to the advancing Allied forces and jubilant care of Esther as she grew older. (1963–84) Esther was a calming Danes crowded the streets in celebration. Whenever he returned home, it took Jylland Ålborg influence on Torben in his Perhaps now the farmers could obtain better Torben time to open up about his experi- Fugelsoe formative years, a role (1955–60) Torben acknowledged prices for their produce and families could ences, but family members noted the easy Holstebro Viborg Randers Kattegat and demonstrated in the resume normal daily life. relationship he had with Esther, with whom care he gave her. Axel Ringkøbing Kalbygard (1960–63) Karlshoej Farming activity increased in fervour, he talked for hours about a range of subjects. Århus for while a local market for produce could Those close, intimate encounters between DENMARK Horsens bring reasonable profits to farmers, the Torben and Esther upset Poul, who once Esbjerg Copenhagen dreadful bombing of German cities and the remarked, ‘Why can’t I talk to him like that?’ Kolding Sjaelland destruction of much of that country’s food Perhaps at the back of Poul’s mind was the NORTH Odense Faxe-Ladeplads Roholte Bornholm SEA Svendborg Delhovedgaard production capability had created a new fact that he, too, had not enjoyed a close Fedgaarden (1940–55) and extensive market for Danish food in Ger- relationship with his father, who also had a (1946–55) The Karlshøj siblings. Baltic Sea Left to right: Axel, Ruth, many. Times began to ameliorate, and Poul’s serious, task-orientated approach to life. Torben, Lis, Tom, Inger, farming activities were boosted by the new Although they fought on many occa- Knud and Laila. This 54° photograph was taken in demand for agricultural products, not only sions – possibly to be expected since both 1988 at their father’s 75th in the local markets but also further afield. had strong, unwavering characters – the two birthday celebration. Axel With the war over, Soester left Delhoved- siblings became extremely close, a product of Karlshoej gaard to marry, and a young woman, Esther their family circumstances and the fact that GERMANY Larsen, took over the housekeeping and au they spent so much time with each other and pair duties of the Karlshøj farm. A country complemented each other in many ways. 9° 12° 15° girl whose father ran a brick and tile factory, Despite Esther’s attention, Torben’s resent- Denmark, showing the various farms on which Poul and his family lived: Delhovedgaard (1940–1955); Fedgaarden (1946– she had worked for Poul’s grandmother, ment regarding his mother’s death boiled 1955; Poul farmed here but continued to live and farm at Delhovedgaard); Fugelsoe (1955–1960); Kalbygard (1960–1963); and who, it is said, contrived that the young over occasionally when something went Bjohum (1963–1984). Also shown are Faxe-Ladeplads where Torben learnt the ways of the sea from the local fishermen, and Esther should work at Delhovedgaard in the wrong. He was terrier-like in his approach Roholte, the village where Poul and Helga were buried. Torben and Axel left for the United States when Poul and Esther and the boys’ younger siblings were staying at Kalbygard. hope that Poul might fall in love with her. to sport – losing was anathema to him – and ‘That poor man needs a new love in his life,’ sometimes he became aggressive towards she would often say. Axel and Torben were other children, often causing big brother delighted at the arrival of the tender-hearted Axel, who had a more sanguine disposition, Esther in their home, and also when, in fulfil- to calm him down or to come to his defence ment of Poul’s grandmother’s plan, Poul and when his younger brother become involved Esther married late in the summer of 1947. in a fight. Axel was always there to fix a bro- Torben (left) and Axel (right) with Esther and Over time the house became quite full as a ken bicycle or simply put an arm around Poul at his 75th birthday further six children were born – Lis, Tom, his angry brother and lead him away from celebration. Axel Ruth, Knud, Inger and Laila. a threatening situation. Throughout his life, Karlshoej Yet Esther had a difficult time raising Torben found Axel a source of great encour- them for they were strong-willed despite agement and a wise confidante. their tender ages. Torben, still brooding Yet his younger half-brother Tom, with occasionally over the death of his mother, whom Torben shared a bedroom for years, needed the special care that he received from remembers a gentler brother who never the warm-hearted Esther. There were stormy fought with him; on the contrary, Torben times, especially during his teenage years. A was the epitome of a caring older brother – particularly unsavoury battle between Esther as Axel had been for him – and he and Tom and Torben showed an uncharacteristic forged a strong bond that continued even The Baltic Sea, a short walk down a narrow woodland trail from the Delhovedgaard farm. Torben and his siblings would mean streak. ‘My father says,’ he shouted at when their adult lives took them down separ- often wander to the pebbly beach to swim and play in the cold water. Brian Ingpen her, ‘that if my real mother had been around, ate roads.

24 Teekay: the first 40 years Chapter 1 • A Danish Farm Boy 25 Like his brothers, Torben was a tough farm suit him more than farming. In these fish- and create soil drainage systems that were his father, who had instilled in him values boy who loved the outdoors and whose adven- ermen he found kindred, adventurous and difficult to plan, given the flat topography of that he adhered to in every business deal he turous nature was inhibited by the classroom. intrepid spirits. In his veins – as in theirs – Jutland and the incessant winter rains. This ever struck. Among those values was absolute As a result, and despite his obvious intelli- ran the blood of Viking seafarers who, legend knowledge would stand him in good stead for integrity, which, in the difficult times that gence, he became a nuisance to his teachers has it, crossed the Atlantic in small craft long the business ventures that lay ahead. lay ahead in the early 1990s, would be re- and frequently disrupted the class. Exasper- before Columbus, discovered Greenland, and Torben’s adventurous spirit kept his mind cognised by many people in whose hands his ated by Torben’s behaviour on one occasion, ventured even further into Arctic waters. alert to opportunities, even those presented company’s future lay. his teacher took him to the school principal, In 1955 the family moved to Jutland where overseas. The boys’ horizons were broadened Though Torben’s eyesight would prevent who yelled at him and slapped him in the Poul had bought a farm called Fugelsoe, near by visits with their father to Copenhagen, him from pursuing a life at sea, he resolved face. Without flinching, Torben turned his the town of Havndal. Probably because he was where they met grain dealers and saw ships still to make it part of his life and decided to face and retorted, ‘Now hit the other cheek!’ a typical outdoor lad Torben was physically that traded all over the world, while even in enter the shipping business. The joint owner Although no one knows what happened after very fit and took to cycling, later starting to the local market town a few kilometres from of Dansk-Fransk Shipping Company, who that ultimate display of defiance, Torben’s compete in races. On one occasion Poul could the farm they saw fine American cars and used to rent the house at Fedgaarden for his school record indicates that he advanced so not take his son to a race, leaving Torben with were exposed to elements of the American summer vacation, offered Torben a trainee’s well that he skipped ahead a year. However, no option but to cycle eight kilometres to the culture that was sweeping through post-war position in the Copenhagen office of Dansk- that move may have been ill-advised, for he start. Despite this obstacle, he came third in Europe. Within the impressionable teenager Fransk, which operated ferries and bulk car- later had to repeat a year, during which he the race! there arose a desire to move away and experi- riers. Torben jumped at the chance to work became even more frustrated with school life. Later on Torben became caught up in ence a different and seemingly more attract- in a shipping office and enjoyed his first expo- The outdoors and sports gave Torben playing football. He had a natural talent and ive, flamboyant lifestyle. People who had been sure to the fascinating and dynamic world chances to expend his energies in a healthy excelled at the game. Typically, it got to a across the North Atlantic told of exciting pos- of ship management and chartering. Apart manner. As youths, he and Axel built a canoe point where the game became all-consuming sibilities for those who were prepared to work from the business experience he would gain, out of canvas and planks from an old chicken to him and, a few years later, he realised that hard and seize opportunities that came their it was also his first opportunity to make his The simple stone marking the grave of Poul and Helga is symbolic of the unpretentious lives enjoyed by the Karlshøj family. coop and put to sea on an unintended adven- Brian Ingpen he would have to choose between playing way. To the Danish farm boy, hard work was own way in life and live apart from his family. ture. They paddled for hours along the Baltic football and a business career; he realised second nature. After three years at Dansk-Fransk, Torben’s coast and when they became exhausted they that there was not room for both in his life. Poul and Torben both had similar strong- entrepreneurial spirit became frustrated by landed close to a farm belonging to a friend Reluctantly, he decided to give up playing willed personalities and often clashed, the working for someone else and his restless- of their father. Taken aback by their unan- football. latter feeling that his father’s narrow outlook ness was stoked further by the growing lure nounced arrival, the farmer telephoned an Axel began to work on other farms and had inhibited the opportunities that may of what seemed like infinite opportunities in equally surprised Poul. ‘You need to come returned home for weekends. This work otherwise have arisen for him, including his the United States. Not one to mull too long and fetch your boys,’ he said. ‘They came here proved valuable experience for his later wish to work for a local grocer. Denmark, over an issue, he resigned from the company by canoe but will need to be taken home.’ entry to the earth-moving sector, in which Torben remarked to a sibling at the time, was in 1962, found a ship to carry him to America, In the winter the family dog was harnessed he became extremely successful. On those too small for both of them, and the young and left Denmark. to a home-made sled and hauled the boys farms he also learnt the techniques used by man wanted to move on. However, he later Encouraged by his brother’s move, Axel across the snow-covered fields. And, as farm the farmers to build dykes along river banks acknowledged the great respect he had for followed two years later. n boys do, they chopped firewood, ploughed fields, helped with the harvest, tended an- imals, fished and hunted in all weathers. At the tiny harbour at Faxe-Ladeplads, a few kilometres from Delhovedgaard, Torben watched the shallow-draughted ships that had come to load limestone or to discharge aggregate, and those memorable times along the wharf engendered a lifelong love for ships. He also spent time with the fishermen whose tiny craft brought in eel, cod and sal- mon from the Baltic Sea. He helped carry their catch ashore and learnt their ways, occasion- ally going to sea with them. This he enjoyed, though sometimes his prolonged absence raised his parents’ anxiety. Over time, Torben The churchyard at Roholte near Faxe-Ladeplads where Poul and Helga were buried. Brian Ingpen began to wonder if their livelihood would

26 Teekay: the first 40 years Chapter 1 • A Danish Farm Boy 27 CHAPTER 2

American Dawn

n initial disappointment awaited the the job entailed loading trucks, and again he – for discharge in parcels at various refiner- Anew arrival in America. Torben sought walked out. ies in California. As this practice reduced in vain for work in New York’s busy shipping He searched through the telephone direc- shipping costs, refiners used Plato’s services sector, then dominated by large trans- tory for potential employers and found the more often and his business prospered. Atlantic passenger liners berthed at Manhat- Sun Coast Petroleum Company. He walked Shigeru Matsui, the son of a major Jap- tan, while the Brooklyn Quays, those further to its office and met its Swedish owner, anese shipbroker who had assisted Plato along the Hudson River, and numerous docks Gerald (‘Gerry’) Plato, who ran an established in chartering Japanese ships, was due to and wharves on the waterways were bustling oil broking and trading company that also arrive at Long Beach, California in August with freighters from far and wide. Indeed, involved tanker operations. In the fresh- 1963 aboard the tanker Kosei Maru to begin the young Dane had been amazed to watch faced young man Plato recognised qualities his studies at the University College of Los large ships, barges and tugs towing lighters he needed in an assistant, and in a move that Angeles. Plato told Torben to meet Matsui at constantly moving through New York Bay led indirectly to Torben’s later success he the harbour and to drive him to the office. and along the waterways to work cargo at offered to employ him. Matsui recalls that Torben was easily re- various terminals. Plato’s own success had begun when he cognisable – apart from a few officials and Surely, he reasoned, with all this activ- found a niche in the growing North American dock workers on the wharf, he was standing ity there should be something for me here energy sector. The 1960s had been character- next to a beautiful convertible and had to be – but the more he searched, the greater his ised by rapid advances in technology and in a Plato’s representative. Immediately they met, disappointment, which made him wonder number of individual industries – including the two young men with similar energetic whether he had done the right thing by vehicle manufacturing, petro-chemicals and characteristics became instant friends, a leaving Denmark. Although he eventually in power generation, where oil was becom- relationship that came to fruition later when found employment in a Connecticut ship- ing an important source of energy, especially Torben began his own chartering business. ping office, he left in disgust after a matter important during the cold North American Torben’s personal life took a new turn of weeks, bought an old car and headed for winters. Since these expanding industries when he met Gail Downing: they married in Miami where he thought he could work with were absorbing increasing volumes of crude July 1964 and moved into a small house in another Dane. oil or its products, the collective effect of this Long Beach. Their first daughter, Kimberly, That trip, however, was in vain as there growth on the demand for oil was phenom- was born a year later, followed by their sec- was no job for him. With mounting frus- enal, and oil refineries were operating at full ond daughter, Susan, in May 1968. With a tration, he sold the car and bought a bus capacity to meet the demand. growing family, times were tough financially ticket for Los Angeles, where he hoped there Unable to accept full cargoes of crude for Torben and he needed a new challenge. would be a suitable opportunity. Soon after oil from increasingly large tankers, smaller When an opportunity arose for him to join his arrival in California he met a girl whose refineries preferred receiving smaller- par Stolt-Nielsen, the famous Norwegian chem- father, she told him, was in shipping and she cels of oil, a practice that Plato exploited ical and product tanker owners who had a suggested that Torben should go to his office by chartering 60,000-deadweight tankers to large office in Connecticut, he jumped at the the following day as there was a job for him. load full cargoes of crude oil in Indonesia – chance to earn more money and gain wider To his further disappointment he found that rather than the more distant Arabian Gulf experience in tanker operations. While there

28 29 Torben and Gail Karlshoej with Kim, their first daughter. this time – when countries were trying to involved in tanker operations, a number of Kim Karlshoej increase their stockpiles ahead of more wide- factors combined to erode the fortunes of spread hostilities that many perceived would the shipping world in general and the tanker have apocalyptic potential – the growth of market in particular. Stolt’s product tanker business was remark- Until the early 1960s, tanker trades had able. Given the extremely positive trends in focused for the most part on exports from the global tanker markets, it took hard work countries bordering the Arabian Gulf and to keep abreast of developments and deploy on Libya, Algeria and a few other sources, the fleet optimally according to changes in notably Venezuela and the United States global demand for various products. Some itself. Then big news broke: announcements attribute part of Stolt’s success at the time to were made about exciting discoveries of oil Torben’s astute management of the tankers and gas in the North Sea. Although oil had under his control, and word among indus- been discovered in Alaska years before, the try stalwarts was that founder Jacob Stolt- North Sea discoveries were on even more Nielsen was grooming him for a senior extensive fields than had been found in the position in the company. forty-ninth state. Both of these new areas of In the course of his duties Torben spent huge potential were closer to the areas of much time away from home, including a greatest demand – Europe and the United spell in Japan where he renewed his friend- States respectively – a factor that would ship with Shigeru Matsui. Though he began influence the tanker trades. Financial centres to find professional success, the extensive across the globe were abuzz with reaction to foreign travel and long hours in his Con- the news of these large oil and gas discover- necticut office placed an enormous strain on ies, and the new fields attracted substantial his marriage to Gail, which sadly ended in investment in further prospecting and pro- divorce in 1970. duction. For the littoral countries around Torben with his daughters Kim (left) and Susan at were similarities between Plato’s operation canal’s closure during the conflict meant Despite the strain on his personal life, the North Sea, which had been struggling in Christmas in the home of Axel and Inge. Axel Karlshoej and that of Stolt, he began to learn many that, apart from oil piped from the Arabian Torben’s entrepreneurial fire continued to near-recessionary conditions, the prospect of new facets of the tanker business, including Gulf to the Mediterranean coast, oil bound burn. Although his time with Plato and Stolt a rapidly expanding energy sector provided a the products sector. These, like the valuable from the Gulf for Europe or North America had been extremely stimulating, he became bright economic outlook. experience he had gained during his time had to be moved via the Cape of Good Hope, frustrated working for others and was When the Norwegian field Ekofisk began with Gerry Plato, would be of great help to increasing the shipping costs. Because the anxious to begin his own business and have production in 1971 and others were poised to him later. ships took longer for each voyage via the the chance to apply his accumulated know- come on stream as well, economists realised Draught limitations in the Suez Canal Cape, more vessels were brought onto the ledge of tanker operations. He met with Jacob that, although the North Sea and Alaskan prevented its use for the movement of larger trade to ensure a steady flow of Arabian Gulf Stolt-Nielsen. ‘I am tired of all the bull here!’ fields would not provide all the oil required consignments of oil from the Arabian Gulf oil to the West. Torben told him. ‘I need to do my own thing.’ by Europe or North America, changes would to the Atlantic basin, and owners looked The first tankers with a deadweight over The older man looked at Torben. ‘I disagree occur in the volume of west-bound long- increasingly to the Cape of Good Hope as the 300,000 – ordered in the mid-1960s to meet with you about your first statement,’ he haul oil shipments from the Arabian Gulf. alternative route for tankers with greater the economies of scale for the longer Cape said quietly, ‘but I agree with your second. Alaska, they noted, could also replace some cargo capacity. The move towards very large haul – were in service by the end of 1968, Now get out of here.’ Torben left Stolt amic- of the long-haul oil supply from the Middle crude carriers, which had begun with the and shipyards, particularly those in Japan, ably in 1972 and finalised plans to form his East, offering a viable alternative to three- ordering of 300,000-deadweight vessels in thrived as owners rushed to order more own company. week tanker voyages from that area, not to the mid-1960s, was stimulated greatly by the ships to take advantage of the oil trans- In 1973 he began his operation in New mention shortening a five-week voyage from closure of the Suez Canal within hours of the portation bonanza. Tanker sizes increased York by founding the Teekay Shipping the Arabian Gulf to a five-day voyage along outbreak of the Six-Day War between Israel to the extent that within four years the first Group, incorporated in Liberia, the name the U.S. west coast. and the neighbouring Arab states on June 6, tankers exceeding 400,000-deadweight were ‘Teekay’ derived from the phonetic spelling Tanker owners became concerned that 1967. Tanker rates rose sharply in the wake due for commissioning and the world’s larg- of his initials T K. Then, teaming up with a the economists’ forecasts would translate of that war as oil importers scrambled for est floating object, the 564,763-deadweight, Greek ship operator, he began to move oil on into fewer larger tankers being required to supplies, fearing that the entire Middle East 460-metre tanker Seawise Giant (later Jahre less serviced routes in chartered vessels, but service the Alaskan and North Sea oilfields, would be drawn into a major conflagration, Viking), entered service in 1979. the timing of this venture was unfortunate which, instead, would need an increasing cutting off the loading terminals and pos- Since the movement of oil products for the tanker market was about to change number of medium-sized, so-called Aframax, sibly dislocating the tanker routes. The also became exceedingly important during considerably. To the consternation of all tankers to move their oil. They also noted

30 Teekay: the first 40 years Chapter 2 • American Dawn 31 Alarmed brokers realised that the surplus partners, and the situation was aggravated headed initially for San Francisco and then of tankers was growing very rapidly. The when a ship they had chartered to Petro- for Los Angeles. He had let Gerry Plato know resulting surplus of ships – including some bras ran aground. Amid the declining rates that he would be back in town and to his extraordinarily large vessels – translated and the grounding, his partners simply left eternal gratitude Plato – although he had no into declining freight and charter rates, and, him to operate on his own. With huge odds position to offer him – gave Torben space in as cargo volumes declined beyond anyone’s stacked against him and financial struggles the office and helped him resume operations expectation, the tanker sector crashed to mounting, Torben quit, and telephoned Axel as Palm Shipping Incorporated with two mil- unprecedentedly low levels. in Yuba City, California. ‘I’m coming to see lion dollars as capital. Torben called on his Caught by the weak markets that showed you,’ he said, and arrived a few days later. friend Shigeru Matsui to help with the ship- no promise of recovery, many owners char- It was obvious to Axel that something had broking side of the resurrected operation. tered out their ships at rates that were less gone terribly wrong, for his usually good- Plato agreed to liaise with the refineries on than the daily operating costs; others laid up natured brother was quiet and withdrawn. Torben’s behalf, while Torben would handle ships, while a few tankers were converted to However, Torben soon began to unload his the shipping operations himself. bulk carriers, OBOs or floating storage facil- anguish – his new venture that had prom- An interesting strategy lay behind his ities. A number of older ships went to the ised so much now lay in ruins and his part- proposed operation. Back in the 1960s the scrapyards, and, in extreme cases where cash ners had gone. ‘So I’ll just stay here,’ he said oil majors were Euro-American, and most of flows had simply stopped, some owners even quietly to Axel, ‘and work for you.’ Axel these oil companies operated large tanker resorted to scrapping relatively new vessels was wiser than that. ‘Oh no you won’t!’ he fleets to move crude oil and oil products, rather than suffer long-term losses. However, retorted firmly. ‘You’re a shipping man, and mostly to European destinations. The Japa- because of the number of ships heading for you’re no quitter. You go on down to Los nese oil sector was self-contained in that the scrapyards operating along the beaches Angeles and start again!’ The elder brother most of the imported crude oil and products of Alang or Gadani, scrap prices dropped con- who had helped him out of adverse situa- were moved by Japanese tankers on behalf of siderably, a further blow to those struggling tions in their younger days had hit the right Japanese oil companies, while the potential that some of the North Sea and Alaskan oil 1973. Bunker prices soared, and, as operators Shigeru Matsui, Gerald (Gerry) Plato and Torben Karlshoej, shipowners who had hoped that their vessels chord with Torben, who resolved to return to of Korea as an industrial giant had still to be could be piped to its destinations, further passed on the additional costs to shippers, the team who established Palm Shipping when Torben would realise enough money from the scrap- Los Angeles and succeed in his second ven- realised. Torben believed that in the longer returned to Los Angeles and asked for help in supporting affecting the tanker markets. the landed cost of all cargoes – including oil – his new project to transport parcels of crude for refineries pers to see them through the crisis. ture in shipping. term he could tap into the movement of Far In addition to the news of vast volumes of also increased, with a negative impact on the along the United States west coast. This photograph The consequent collapse of the tanker Driving a car that Axel had given him and Eastern oil. was taken at the Onomichi Shipyard during the naming oil becoming available from the new fields, global retail and industrial sectors. This ceremony of Luzon Spirit, shortly before Torben’s death in market was too much for Torben’s Greek with a loan from Axel in his bank, Torben Although the likes of Shell, Chevron sudden political events again affected the caused a worldwide reduction in the demand 1992. Shigeru Matsui and ARCO were major players in the Pacific entire tanker industry. for consumer goods, further affecting most region, a significant part of their work In the early hours of October 6, 1973, Arab shipping sectors. focused on moving larger volumes of oil to air forces turned the tables on the Israelis by Nimble political negotiations by the vessels whose draught was formerly too deep their major refineries along the west coast of attacking Israel on Yom Kippur, one of Juda- Americans with the Arab countries culmin- for the canal transit were able to pass through. the United States. Smaller refineries – the so- ism’s holiest days. During the ensuing war, ated in partial Israeli troop withdrawals Although the really large vessels still had to called teapot refineries – received their oil via Israelis again fought their Arab neighbours from some areas in the Sinai Peninsula and round the Cape, tankers up to about 160,000 pipeline from these larger refineries, often at with great ferocity, sparking deepened fears from some areas along the Golan Heights deadweight with draughts within the greater an inflated price. Torben realised that a niche among oil importers that the regularity of in Syria, both of which had been overrun capacity of the deepened canal did not need market existed for tankers to move parcels of their supplies would be disrupted – and the by Israeli forces. Negotiators also paved the to make the long haul via the Cape, thereby crude oil from fields in Indonesia directly to realisation dawned that the Middle East cri- way for oil exporters to increase oil prices reducing the number of vessels required to these smaller refineries – and, from his time sis would not be resolved in the foreseeable in the longer term, leading to the lifting of service the oil demands of Europe and North with Gerry Plato and at Stolt, he was well future. Oil prices rose further and the war the oil embargo in March 1974. Although oil America. A further complication increased the versed in the concept of parcel shipping. The catapulted tanker rates to new, but short- began to flow again, the tanker market was difficulties for tanker owners: the oil majors, Japanese tanker fleets, he reasoned, could be lived, heights. to remain depressed for many years to come. who had reduced their own involvement in the source of the ships to bring the oil. Responding to the American decision to When tankers had been in great demand oil transport and also their reliance on long- To enter the Japanese shipping world was reinforce Israel’s military might, which had during the succession of Arab-Israeli wars, term charters, switched to using spot tanker not easy, as Torben was an unknown entity taken quite a beating in the first few days of owners had placed a corresponding number charters on a larger scale to meet the stockpile to Japanese shipbrokers and to shipowners the Yom Kippur War, Middle East producers of orders for new vessels. These were in service needs of their refineries. As a result, spot char- who needed to be convinced of his credibility announced an oil embargo, reducing the num- by 1973, creating a surplus of ships. The situ- tering – a high-risk, high-reward approach to if they were to charter ships to him or to use ber of tankers required globally, and unleash- ation was aggravated when the Suez Canal tanker operations – was in the ascendancy his services to move their cargoes. With his Launched as Japan Peony, the Aframax tanker White Peony was the first to be chartered by Torben in his new venture based ing a meteoric rise in the oil price from below – deepened and widened to accommodate and accounted for a growing percentage of in Los Angeles. The charter was fixed by Shigeru Matsui, who had introduced Torben to the Japanese shipping fraternity. wide circle of contacts in Japan and his own $20 a barrel in 1970 to $42 a barrel late in larger ships – reopened in 1975, and many the market. The tanker was built in 1975 in the Koyo dockyard in Mihara, Japan, and was owned by Risuke Takebayashi, who traded the impeccable integrity, Shigeru Matsui assured 245-metre vessel under the banner of the Sunny Corporation, registered in Panama. Shigeru Matsui

32 Teekay: the first 40 years Chapter 2 • American Dawn 33 his Japanese shipping associates that Tor- the job. When he called and offered him the ing events in Iran and their influence on oil ben would be an excellent and trustworthy position of operations manager Hood needed supplies from the rest of the Gulf had also business partner. This was valuable support little persuasion and began work in Torben’s affected the oil price, which increased by Captain Jim Hood indeed from a shipbroker who was highly Los Angeles office in August 1977. It was hard nearly $20 dollars a barrel in a matter of respected in his native land. work, as illustrated by a note written some months. As had happened during other times Finding a suitable ship to launch Tor- years later by Captain Hans Schiefelbein: of uncertainty, tanker rates climbed sharply, idshipman was the term for a cadet two years later returned to Los Angeles ben’s venture took time, but late one evening and further developments in Iran would boost Mserving in Blue Funnel Line ships in and then to Long Beach. Matsui called him and from the tone of his In the summer of 1978, I met Mr the market even more. 1951 when 16-year-old Jim Hood boarded The company’s move to Vancouver in Karlshoej in Long Beach, California, for friend’s voice Torben could tell that the Japa- Huge crowds gathered outside the Amer- the first time when he boarded my Sanko his first vessel, the six-hatcherBellerophon , 1991 was like a homecoming for him as nese shipbroker was excited. ‘I have a ship vessel Northern Victory while [we were] ican embassy in Tehran, culminating on which had come from the Caledon ship- he had visited the city on numerous occa- for you!’ he bubbled. It transpired that Mat- discharging an oil cargo from Indonesia November 4, 1979 in an attack on the build- yard in Dundee the previous year. Thir- sions during his seagoing days and knew sui had found an owner who was struggling … He told me that he is the founder of ing and the capturing of embassy staff, who teen years later, he held a master’s ticket it well. Adapting to his new environment Teekay Shipping and the charterer of my to fix a charter for his 87,433-deadweight vessel … He is operating Teekay Shipping would be held captive for 444 days. Tension and had moved up the promotion ladder was therefore easy and was a stabilising tanker White Peony, and, when approached by himself with three more people … continued to rise in the Gulf region, adding in Blue Funnel to second mate on one of factor at a time when the company might formally by Matsui, was delighted to sign Captain Jim Hood, his son-in-law and to the uncertainty of how the crisis would the company’s ships based in Hong Kong. otherwise have struggled to maintain the Dave Carr. Mr Karlshoej and his staff were the deal for the charter with Palm Shipping. develop. Inevitably these events pushed oil During the period after the Cuban momentum it had gained in the latter handling 14 chartered vessels at that time That telephone call was the beginning of a … They all were doing a very big job with prices to around $60 per barrel, and tanker Revolution, China was one of the island’s years of its tenure in Long Beach. remarkable period in Torben’s life, for Matsui very long working hours. rates also moved further up the scale to the major trading partners, generating con- Jim Hood’s attention to detail con- had opened several doors for him in Japan. benefit of the owners. Torben benefited sig- siderable cargo volumes. Hood joined Jeb tributed significantly to building the With little delay and armed with a guar- In time, Torben gained a deeper understand- nificantly from this upturn in tanker rates Mai Shipping, a small fleet whose ships company’s reputation for operational antee from Plato, Torben secured the tanker ing of the trans-Pacific tanker business niche with his fleet of ships in-chartered at rock- drydocked in Hong Kong once a year. excellence and customer service, fac- for a year from January 1976 for $1.35 per than his competitors, in part due to his re- bottom rates. He sailed in Sea Amber, one of the many tors that helped to keep it afloat during ton deadweight per month (approximately lationship with a number of leading Amer- Like the tanker market, Torben’s per- ships on the China-Cuba trade, carrying the company’s financial troubles before $3,800 per day) to bring low sulphur heavy ican oil traders. One of the successes that set sonal life experienced a roller-coaster ride. railway lines and other steel cargo on the Torben’s untimely death in 1992. But Captain Jim Hood crude oil from Indonesia to ports along the him apart was his ability to capitalise on the To help with the ever-increasing amount of outward voyage and loading grain in Van- perhaps his major contribution was to Pacific coast of the United States for refining emerging back-haul cargoes from the Pacific secretarial work in his Los Angeles office, couver or La Plata for the return voyage hold the company together when he was or for use in power stations. Supplementing coast of the United States to the Far East dur- he had employed Cathy Stuck, whom he to China, after which she headed back to to command Texada, which was carrying appointed president and CEO of the com- the vessels that Gerry Plato operated, White ing the 1980s. In the early 1980s, tighter air married in 1977 and with whom he had a Cuba, down to her marks with the next iron ore to Japan. pany immediately after that sad event, Peony began to make money, most of which emission standards meant that utility com- daughter, Caroline. Unfortunately, as had cargo of steel. By 1970 he had come ashore as the for he was the epitome of stability and his Torben ploughed back into the business. panies on the U.S. west coast could no longer happened before, the pressures of his work Aboard the 1939-vintage banger Uni- company’s marine superintendent in experience provided the continuity the He exercised great caution in the deals he burn the high sulphur residual fuel oil that were too great for his marriage to last. To versal Mariner, Hood got his promotion Oakland, California. While Hood was company needed at that time. made, preferring to fix short-term charters was a by-product of refining Alaskan crude be available for calls and telexes from Japa- to chief mate. He recalls that the British- having lunch with the officers aboard Forty-seven years after his first tent- for tankers as he did not wish to be tied into oil. As a result, oil traders developed new nese brokers and agents during their normal built ship had staggered Sampson posts, the chartered ship San Sinina II, which ative steps up the gangway of Bellerophon, longer-term operations, especially as he had export trades to Asia for this oil, enabled by working hours, Torben would leave home an attempt by her designers to confuse was discharging her cargo at Long Beach, Jim Hood retired, although his work was experienced first-hand the volatile nature the Reagan government’s relaxation of the for the office at four o’clock in the morning, enemy submarines, but such was her she caught fire and a tragic explosion fol- not done. Teekay had initiated a study to of the markets and did not want a repetition export ban on petroleum products from west and, after a hectic day keeping up with the condition that there were times when he lowed, killing a number of people, blow- determine the best way to promote seafar- of the earlier collapse of his business into coast ports. These back-haul cargoes subsid- latest trends in the markets, he would often wished a torpedo would hit the old ship! ing out part of the accommodation, and ing in the Bahamas and to bring Bahaman which he had put so much effort. This time ised the long and expensive ballast passage return home late in the evening. This tax- With a Chinese crew and under charter shattering windows in the adjacent build- seafarers to the levels required in terms world events – and a small team – would on the ships’ repositioning voyage to load in ing schedule was one of the reasons why the to Kawasaki, she took rice from China to ings. Hood was uninjured, although he of the International Maritime Organisa- help him to build a successful tanker char- Indonesia or the Arabian Gulf, and, of course, couple’s marriage collapsed, and their Ceylon (now Sri Lanka), where she loaded did have to climb down a rope into the oil- tion’s code regulating the standards for tering business. also earned additional revenue for Torben’s divorce in 1978 was partly responsible for his manganese ore for Japan, which was then soaked harbour waters and swim ashore. the training and certification of seafarers. He was extending his charter operations company. move to the Bahamas. in the throes of extensive expansion in its He later met Torben Karlshoej. As the In response to that research programme, to the point where he needed an experi- Charter rates had come off the boil in 1977 The main reason for the move, however, steel, shipbuilding and vehicle manufac- August vacation time got into full swing with which he had been involved ear- enced, competent person to assist with the when unexpected demonstrations began in was the decline in the tanker markets, which turing industries. in California in 1977 the former bulk- lier, he went to Nassau to start a training operation of the tankers he had on charter. Iran, where Shah Mohammad Reza Pahlavi were suffering from over-tonnaging as Japa- While home on compassionate leave carrier master took up his position as school for seafarers. Back in 1973 he had met Captain Jim Hood, a had entrenched his power over many years. nese yards – and indeed yards in other coun- during his wife’s illness, he responded operations manager in Torben’s tanker Three years later he finally retired to seasoned master mariner who had served Such was the violence and persistence of the tries with a rising shipbuilding sector such to an advertisement for masters for Pan- company, then with a small staff comple- New York after an illustrious career at aboard Blue Funnel Line ships and bulkers, demonstrators that the Shah went into exile as South Korea – were still delivering ves- amax ships belonging to a subsidiary of ment but beginning to build a name for sea and ashore, which had included his and more recently had come ashore as 18 months later, leaving a power vacuum sels ordered during the halcyon days of the the Kaiser Group of California. A few days itself in North America and Japan. He fol- crucial role in stabilising Teekay at vital marine superintendent for the Kaiser Group that was filled with the return to the country tanker boom a few years earlier. In addi- later he heard that he had been appointed lowed Torben to the Bahamas in 1979 but times. n in San Francisco (see page 35). Jim Hood, of the fundamentalist Islamic cleric, Aya- tion, the re-opening of the Suez Canal was Torben reasoned, would be the ideal man for tollah Khomeini. The uncertainty surround- continuing to influence the markets, which

34 Teekay: the first 40 years Chapter 2 • American Dawn 35 were taking a long time to adjust to post- tug. He passed on this information to Torben, of a run-down fishing vessel, which he sent to Suez trends. Fearing that the tanker surplus whose company soon took over the shipment Norway for a complete modification into his and the subsequent drop in charter rates, of the rice, retaining the tug-and-barge opera- beloved Kisuca (2) (see page 56). similar to the scenario that had destroyed his tion. On arrival at Puerto Rico the barge was Torben’s main interest remained in operations earlier in the decade, would frus- used as a floating granary for about three tankers – after all, he had learnt the trade trate his efforts again, Torben downscaled months while the rice was discharged as under the careful tutelage of Gerry Plato and his tanker fleet significantly and moved his required by the importers. At the time, Jim had extensive exposure during his time at office to his boat Impetuous moored in the Hood thought that Torben may have wanted Stolt to that company’s operations. He thus Bahamas (see page 54). to test the dry bulk market, particularly as began a strategy to move back into the tanker Jim Hood followed Torben to the Bahamas he had employed Palle Bistrup, who had market in earnest. His intellect, energy and and, while the tanker market slumbered for experience in that sector, and had begun to business acumen would not let him continue nearly two years, the team – Hood, Vinay Pat- operate a few more barges as the rice aid car- his leisurely ways aboard his boat. He longed wardhan and Palle Bistrup – were involved in goes increased. However, the development for new challenges: ‘I need to get back into an unusual operation. of larger scale operations, including the con- the shipping business that others manage so Through his earth-moving business, tainerisation of bagged rice cargoes, reduced badly,’ he confided to a friend, and, having which had expanded beyond his wildest the opportunities for the barges to carry rice lain awake for several nights carefully plan- dreams, Axel Karlshoej had become a prom- exports, and the original barge was laid up ning his business strategy, he leapt into action. inent figure in the Sacramento Valley, the and later sold. ‘I am going to build the best shipping com- home of extensive rice production. He had At this stage, with Palm semi-dormant, pany in the world,’ he excitedly announced noted that rice exports from the Valley as aid Torben decided to embark on a more per- to Axel over the telephone one day late in cargo to Puerto Rico were carried by a barge, sonal project – to acquire a more substantial 1984. ‘The markets are down, and it’s the owned by a local rice company, towed by a private yacht – that resulted in his purchase right time to get back into tankers.’

Shigeru Matsui Documentary Committee of the Japan Shipping Exchange. Despite his demanding career, Shi- tanding next to a smart convertible on geru has squeezed his much-loved sport Sthe dockside in Long Beach, Califor- of golf into his busy schedule. nia, in August 1963, Torben was readily His experience and personal creden- distinguishable from the dock workers. tials opened many doors for Torben, who He started by moving the company back tankers from Sanko at prevailing low mar- Built in 1975 at the Onomichi shipyard where Torben Thus it was easy for Shigeru Matsui, the thus gained the confidence of a number to Long Beach, and established Viking Star ket rates but with six months’ charter paid later built a series of tankers, Golden Gate Sun (82,543 deadweight) was the first vessel to be owned, managed son of a distinguished Japanese ship- of leading figures in Japanese shipping Shipping Incorporated to buy and own high- upfront, a provision that was intended to and crewed by Teekay under whose banner she traded broker, who had come to the United circles. This enabled him to charter or quality tankers that would be used as part entice and assist a cash-strapped Sanko. The from 1985 to 1995, when she was sold to Greek interests who renamed her Golden Gate. Shigeru Matsui States to study, to find the man Gerry buy ships, and to find charterers for of Palm Shipping’s chartering operations. deal was shunned initially by Sanko; how- Plato had sent to meet him. tankers within the Teekay fleet. Torben’s Again he went on the hunt to secure ships to ever, as the Japanese company was fighting Torben and Shigeru became instant fine reputation among Japanese banks time charter for his concerted effort to move for survival in an over-tonnaged market, they friends and, on completion of his stud- and shipbuilders – nurtured by Shigeru back into the American crude oil trade. eventually agreed to the terms and a deal Shipowning, though, was Torben’s dream ies, Shigeru returned to Japan and joined – was one of the factors that promoted Because he was highly respected in was struck. and for this he planned endlessly. Finally, in the family shipbroking business, quickly Teekay in the Far East, and also saved the Japanese shipping circles, Shigeru Matsui’s ‘Delivery was set for April,’ the respected 1985, he took delivery of his first ship, the earning himself an excellent reputation day in 1992 when, following the collapse opinion counted a great deal. Thus, when maritime journal Seatrade wrote later. ‘As 232-metre Aframax tanker Golden Gate Sun for among Japanese shipbrokers and owners. of the tanker markets, Torben obtained he mentioned Palm Shipping in glowing Sanko’s plight worsened, it realised it would slightly above $4 million. Because of the low Becoming president of Matsui & Com- special dispensation from the banks terms, Japanese brokers and owners took need the advance cash by the end of March level of the market at the time, he had not Shigeru Matsui pany in 1971, Shigeru Matsui is a leading regarding his large debts, and the post- note. Among the subsequent inquiries that … Karlshoej agreed, and it was this flexibil- been able to secure finance to purchase the figure in Japanese shipping, serving on ponement of delivery dates for some of Shigeru fielded was one from the huge Sanko ity that enabled Sanko to struggle on …’ By tanker, and in the absence of any assistance the board of the Japanese Shipbrokers’ and a member of the Tokyo Maritime the tankers on order (see page 68). company, which operated and owned one of May, Palm Shipping had chartered a dozen from banks he paid for her himself. She Association (and chairman of that board Arbitration Commission from August Shigeru’s assistance played a major the world’s largest fleet of bulk carriers and Sanko tankers, and, with limited overheads, had spent ten winters at sea since she was from 1997 to 2000), managing direc- 1980 to October 2004, when he became role in launching Teekay in 1973, and in tankers. Palm Shipping had previously done Torben’s company was moving ahead very commissioned in the Onomichi shipyard in tor of the Japanese Shipping Exchange, its vice-chairman. He also serves on the saving it in 1992. n business with Sanko in the late 1970s on a satisfactorily on the back of a tanker market Japan. With her 23,000-bhp Sulzer engine smaller scale. Towards the end of 1984, Palm that had improved a little since the initial using 73 tons of heavy fuel per day, she Shipping offered to charter twelve Aframax offer had been made to Sanko. would prove rather expensive to operate. She

36 Teekay: the first 40 years Chapter 2 • American Dawn 37 entered service on the trans-Pacific crude oil response came the next day from another shuttle that had proved successful for Torben master, Patwardhan called Torben in the when he was using chartered ships. early hours of the morning with the news An interesting story surrounds the first that two masters had declined to sail in the voyage of his second – and larger – vessel, rundown tanker. The irritated owner’s voice which bore the imposing name Grand Wis- rose impatiently. ‘If the [next] captain does dom. Having bought the vessel unseen at not show up before tomorrow morning, you an auction, Torben sent Captain Vinay Pat- take her to the shipyard!’ he bellowed. In the wardhan to Bilbao in Spain to take delivery early hours of that morning (Spanish time), of the 1976-built vessel. Vinay soon realised the papers were signed in New York and the that the previous owners had ploughed ship was transferred officially to Torben’s little money into her maintenance, leav- ownership, but every minute that she lay ing her in extremely poor condition. When alongside not earning revenue counted. Pat- Torben was informed about the vessel’s con- wardhan was preparing to leave for the ship dition, he promptly cancelled her original when a figure emerged from the darkness. lucrative maiden voyage, scheduled to load ‘I am Captain Alan Hayes, and I have been in Sullom Voe in the Shetland Islands for asked to report to take command of a tanker Texas. He decided instead that she would go called Grand Wisdom.’ Patwardhan wondered straight to the Lisnave yard in Lisbon, Portu- whether this fellow would also storm off the gal, for an extensive refit to bring her up to vessel once he saw conditions aboard, but he the standards that he envisaged for his ships. admired the man’s confident approach that As the winter winds drove rain across the cut through the howling wind. In an under- northern Spanish port in November 1985, powered launch, the two men plus the agent Patwardhan showed the newly hired prospect- ploughed through the darkness of the choppy Of resilient spirit and reliable in difficult situations, Captain Alan Hayes was highly regarded by Torben. Despite the ive master around the ship. ‘I am not sailing waters of the harbour to board the tanker. inferior condition of the tanker Grand Wisdom after her in this rustbucket!’ he raged, quitting on the ‘Captain,’ said Patwardhan, ‘this is not like A logo on the funnel long lay-up before her purchase by Torben, Hayes decided spot and leaving the ship. When the same anything you have ever seen or sailed in. You to commit himself to command the vessel – Torben’s second addition to his fleet - from Bilbao in Spain to the Lisnave shipyard in Lisbon, a voyage that had been hen Torben decided to own ships, nian shipping fraternity. ‘It could in- approved by the maritime authorities so that the ship he instructed that a logo be cre- crease the chances of litigation.’ ‘I want could be refitted to Teekay’s high standards. As Torben W did not forget that kind of gesture, he appointed Captain ated. Since the company’s name was people outside our organisation to Hayes to stand by several of Teekay’s newbuildings and derived from his initials, it seemed obvi- know that we are here,’ growled Torben to command them on their respective maiden voyages. The goodwill that existed between Torben and his senior ous that the letters T and K should be in response, ‘and I want everyone in master was acknowledged by the Karlshoej family when prominent in that logo, and the current the company to know that our brand is they invited Captain Hayes to give a eulogy at Torben’s funeral in Vancouver in October 1992. Axel Karlshoej logo was born. ‘You’re stupid to put important, as is accountability for one’s your name as the logo on the funnel,’ actions.’ n commented someone in the Califor-

In a brief foray into the VLCC market, Torben bought three vessels, the first of which he proudly named after must see her first before I would have you enough. With my crew, I am taking her to Kimberly, his first daughter. While visiting Kimberly with assume command.’ The launch came along- the shipyard where Teekay will spend what- her father when the ship was in a Nova Scotian port, Kim became concerned when the alarms went off and side the tanker, and the three men heaved ever it takes to make a safe, dependable, live- the ship blacked out. Her mind went back to a previous themselves onto a make-shift gangway for able and proud ship out of this junkheap!’ experience when she had been injured while participating in school sport, and was taken to the emergency room the all-important tour of the ship that hope- And he sailed the old tanker from Bil- at a Long Beach hospital. As she lay awaiting attention, fully would satisfy the master-elect. To most bao, coaxed her through the wild seas of the trauma teams began bringing in the injured survivors of people the dark engine room, the cockroach- Bay of Biscay, and made her gas-free before an explosion aboard San Sinina II, a tanker that by pure coincidence had Teekay’s future CEO, Captain Jim Hood, on infested accommodation and the generally arrival in Lisbon, where the shipyard rapidly board. (At the time he was visiting the ship as part of his run-down appearance of the ship would have transformed the rust-streaked and rather duties for the tanker’s agency.) Fortunately the emergency aboard Kimberly was short-lived and relatively minor. Kim been a major deterrent, but not to Captain decrepit tanker into a well-found vessel that Karlshoej Hayes. ‘Cut the noise!’ he said. ‘I have seen served Teekay for eleven years before retiring.

38 Teekay: the first 40 years Chapter 2 • American Dawn 39 Torben never forgot the remarkably positive The 1976-vintage Aframax tanker Brilliancy joined the embryonic Teekay fleet in 1985 and was sold ten years approach displayed by Captain Hayes on that later. Like her consorts at the time she bore her original A clear message to other masters wintry morning in Spain. He was always name, with Yamato Spirit being the first to have the regarded as Teekay’s senior master and was Teekay suffix Spirit. Shigeru Matsui a valued confidant to Torben. orben was not only determined that drove from the office to the port. When Despite Torben’s initial assistance and the This ships should operate safely, but still a half-mile away from the dock, Tor- efforts of its own personnel, Sanko was not was also very particular about their ben caught a glimpse of the accommo- out of its financial difficulties. Six months cosmetic appearance. In particular, he dation block of the ship in between the after the initial twelve-ship charter deal with liked the proud and conspicuous fun- various towers and storage tanks at the Sanko, Torben agreed to extend the duration nel, emblazoned with his initials, to be refinery where she was berthed. Horri- of the charter period, as well as increase the in pristine condition. As this was widely fied at seeing rust streaks on the funnel, number of vessels to eighteen. Thanks to this known in the fleet, the master of any he abruptly turned the car around and restructuring of the charter arrangements ship scheduled to call at Long Beach headed back to the office. He explained Sanko was able to comply with a court’s and likely to encounter Torben would to the bankers that he had seen a sign requirements for its financial rehabilitation spare no effort to ensure that the vessel at the refinery indicating that there was programme. was well maintained. no access that day. Once he had said The Seatrade article continued: One day a new captain who was a goodbye to the bankers, he drove back couple of months into his first Teekay to the ship, walked on board, briefly Imagine then the consternation and tors and crews, the Iran-Iraq war ushered in the conflict, in which 546 ships were dam- downright amazement felt by both men contract brought Golden Gate Sun along- surveyed the paintwork on the deck a new, dreadful threat to their ships as each aged and over 400 seafarers killed. [Matsui and Torben] when in February side a discharge terminal at Long Beach. and the accommodation block – which 1986, Sanko announced out of the blue country sought to cripple the other’s lucra- Among the ships that were to escape the That same day, Torben was meeting in he decided was not up to standard – that it had agreed to charter ten of tive oil exports. attention of the aircraft and warships of the the office with a group of bankers he went to the captain’s cabin and fired these ships to Shell on their redelivery Early in 1984 Iraq attacked Iranian tank- belligerent countries was Teekay’s Golden Gate from Palm. Karlshoej vowed revenge. He was cultivating in order to obtain a loan him on the spot. Golden Gate Sun was the called on Matsui to help him build new ers and the loading terminal at Kharg Island, Sun, commanded by Captain David Glendin- for Teekay. He invited them to join him last rust-streaked Teekay ship to visit ships and to buy all Aframaxes available an action that brought retribution from ning, whose wife and daughter were accom- on a visit to Golden Gate Sun and they Long Beach. n … This marked the beginning of what Iran when Iraqi installations and tankers panying him on board the tanker. As soon must be one of the most audacious new were attacked. In this so-called tanker war, as the vessel was scheduled to load a cargo building programmes ever conceived by one man, who had determined that [a] the number of attacks escalated and neutral in the Arabian Gulf, Torben demonstrated particular market sector should be his … tankers and indeed other merchant ships his care and concern for people when he Just three months later, with the market were not exempt from attack, thus endanger- contacted Glendinning by telephone. ‘You’re at rock bottom, the first new building ing all vessels in the Gulf. American warships going into a war zone,’ Torben had said, ‘and deal had been agreed in South Korea for two 100,000-deadweight tankers at were ordered to escort Kuwaiti tankers, pro- your wife and daughter must leave the ship $21 million each. Over the next six years, vided they flew the American flag, and even and go home.’ They disembarked and Cap- as the market took off and prices soared Russian warships began escort duties after tain Glendinning set course for the Gulf. It to $58 million for the last double-hulled units … these two men arranged nearly Russia had offered to charter all Kuwaiti tank- was an anxiety-filled voyage: on approaching 40 newbuilding contracts totalling over ers. When a missile from Iraq hit USS Stark the Gulf the ship was blacked out at night, $1.4 billion as well as 14 second-hand in May 1987, killing 37 crew members, the radio silence was maintained, watches were purchases. world waited with considerable anxiety for a doubled, and all on board the tanker – which fiery American response, but none came. was not gas-free – were conscious that, at any In the interim a political storm that later Iraqi leader Saddam Hussein hoped that minute, an aircraft or a fast gunboat could grew into violent conflict had arisen between Iran would close the Straits of Hormuz, attack, unleashing unbelievable terror. Golden Iran and Iraq. The Shatt-al-Arab waterway, a move that would have brought a rapid Gate Sun loaded at the Kuwaiti terminal Mina important to both countries, was the centre response from the international commu- al Ahmadi and, to avoid the main area of of the dispute, which triggered a bitter war nity, including several Gulf states whose oil potential attack en route to the Straits of late in 1980. Newspapers and television and exports would have been disrupted. Such an Hormuz, Glendinning set a course along the radio bulletins carried news of the conflict, action, Hussein thought, would have awak- western side of the Gulf, where her relatively as aircraft from each country struck at stra- ened America from its passive role in the con- shallow draught, even when loaded, enabled tegic targets and dust clouds marked large flict to launch an attack on Iranian positions her to hug the coast. The Teekay emblem on the funnel is well known throughout the shipping world. This photograph, taken in 2007 from Seletar Spirit, shows Hamane Spirit and Poul Spirit astern. Nikolay Daragan columns of tanks rolling steadily across the and force it to open the straits, weakening A Danish radio station told the story of desert landscape, while troops fought intense Iran in the process. Although shipping was another Teekay vessel, Grand Wisdom, which battles in the war that would kill thousands harassed by Iranian warships and aircraft, had a far less fortunate experience during of people in each country. For tanker opera- the straits remained navigable throughout the conflict. In spite of the Aframax tanker

40 Teekay: the first 40 years Chapter 2 • American Dawn 41 being escorted by an American warship, a returned to service, she continued trading as later, the marisat phone went and it was mess with Torben Karlshoej’s people of its oil industry until the end of that war in tion when the Iran-Iraq war began in earnest, missile hit her stern, ripping a gaping hole in Mihara Spirit. Torben, calling to say he was pleased we unless you are willing to take him on too, 2002, when it boomed. Closer to both Europe the effect of that war on tanker markets were safe. Maybe no big deal, except it and we loved it to pieces. He was there the hull and setting her on fire. Fire parties Another seaman who endured the stress and North America than the Gulf, these new was not as pronounced as had been the case was four in the morning in Long Beach with you all the way … mustered, and Chief Mate Kari Laine led the of passages through the Arabian Gulf during … Torben was waiting up to see all his rich gas- and oilfields had already received during earlier episodes of Middle Eastern fire-fighting operation that saved the ship. the Iran-Iraq war was Captain Alan Hayes, people were safe and mine wasn’t the The eight-year Iran-Iraq war emphasised the considerable investment, but with pressure conflict. Her master managed to get her to Dubai who later wrote: only ship he waited to see out … it was a vulnerability of oil supplies in the Arabian mounting to find alternative sources – includ- Going into 1985, the tanker market regular feature with Torben – this deep for repairs, where a local photographer cap- caring for those who sailed his ships. Gulf, and western oil interests – particularly ing the search for sub-sea oil at greater ocean remained depressed, with charter rates tured the essence of the war with an image The war was raging in the Persian There were other calls too, like asking the American oil majors – thus continued depths – growth of the offshore industry es- stuck around $3,000–4,000 per day, below of the damage to the stern, illustrating how Gulf [Arabian Gulf]. Armed attacks my thoughts about placing his Kisuca their quest to develop other sources of oil. calated at an unprecedented pace. In Africa the daily operating costs. The absence of close the encounter with Iraqi missiles had on defenceless merchant ships were outside the Gulf to arm his ships inbound For a solution they looked to West Africa, investment, expertise and even labour (in the new cargo requirements being quoted in the increasing. and give them something to fire back come to destroying the ship. The photograph We were there then, on Frontier Spirit with, rather than sitting there and taking where oil had been discovered in Nigeria and case of some Chinese-funded projects) helped market meant that the telephone lines in the also conveyed the indefatigable nature of and cleared out around Quoins and sent, it, even to hiring trained personnel and several other West African countries, includ- to develop new sources of oil and gas. Because recently established Teekay chartering office the crew, for it showed a crew member peer- as required, our telex saying we were out placing them aboard the ships to handle ing Angola, although a bitter civil war in the an increasing number of North Sea, Alaskan in Copenhagen remained silent for hours [of the Gulf]. A couple of minutes the weapons. Loved that. No, you don’t ing through the huge hole! Repaired and latter country inhibited the natural growth and West African oilfields were in produc- at a time. During these quiet days there

ought by Teekay in 1986 for $3.75 mil- war when we also had to watch out for mis- extremely rigorous pre-charter surveys con- Blion at a time when the tanker market siles in the Arabian Gulf!’ ducted by every oil major, a far cry from her was very unfavourable for shipowners, the En route from the loading port of Esmer- ‘blacklist’ status under her previous owners. Aframax Sunrise (ex-Sunrise Trader) had already aldas in Ecuador to make the first call at In those early days of Teekay, she held the been trading for 11 years since her launch- Long Beach by a Teekay-owned vessel, Cap- record earnings ($280,000) for a single short- ing in Japan, and the wear and tear showed, tain Tucker had to take her into Acapulco term charter, fixed by the Tokyo office when for here was a ship that had worked hard. To as a place of refuge to get 600-volt wiring for she carried a cargo for Mobil from the Beilun ensure that she met the high standards Tor- engineers to fix the defective main switch- terminal in Ningbo to Singapore. ben required for his ships, repairs while in board. And once she was alongside in Long Having commanded her for six months drydock at Jurong cost $350,000, a large sum Beach, lingering problems manifested them- subsequent to her purchase by Teekay, in those days and nearly 10 per cent of the selves again, requiring engineers to shut Captain Tucker handed over command to purchase price. Yet there were still defects down the ship to repair generators and other Captain Harry Carlisle, and Tucker noted at that manifested themselves at the most parts of the electrical system, much to the the time that she was valued at $9 million, inappropriate times and required running disappointment of office staff members who an appreciation of over $6 million thanks to repairs while the ship continued to trade. had come aboard for a meal to celebrate the the hard work of many during that time to Compounding the issue was that four differ- arrival of the first Teekay ship to berth at her meet Torben’s high standards for the mainte- ent Chief Engineers had attempted to tame home port. nance of his ships. her engine, but had given up. Thus, she still And within days she was proceeding up Renowned for his energy as well as his eye had a tendency on occasion to not go astern, the Santa Barbara traffic route with the turbo for an opportunity to promote the company’s such as the time when the old tanker was alternator stoked up for the first time when image, Captain Carlisle was on the foredeck approaching the Exxon berth in Singapore the lube oil-caked lagging for the governor of the tanker during a protracted period at and as Captain Steve Tucker rang for full caught fire. ‘A very excited Chief Engineer anchor off Fujairah while the ship awaited astern, she continued to head directly for the Bill Gray rang the bridge to tell me what I orders. His eye passed over the forward side berth. Second Mate Boni Tespoer who was in could smell already!’ related Captain Tucker of the accommodation block. ‘It’s a bit bare,’ charge of the fo’c’sle party at the time, had later. The fire was extinguished quickly with he thought, and his fertile mind produced to rely on all his seamanship knowledge and no major damage to the machinery or the an idea. ‘Why don’t I paint the company logo experience to let go both anchors in quick electrical systems. The Pacific crossing to up there?’ His careful planning developed a time to avoid a most costly accident! Korea was otherwise uneventful although scale design of the logo which he, standing On her first loaded voyage she was car- the ship passed through the Unimak Passage on a stage lowered from the monkey island, rying A380 heated fuel oil from Kuwait to into the Bering Sea, leaving a force ten storm personally painted on the accommodation. Singapore when she had to anchor for a few astern. The logo was subsequently painted on the days off Fujairah while the engineers scram- But credit must go to all those who superstructure of every Teekay ship. bled to effect repairs. ‘Remember,’ wrote worked tirelessly on the old tanker to get After eight years of very profitable trading Captain Tucker, ‘this was during the tanker her shipshape so that she passed all the for Teekay, Sunrise was sold. Shigeru Matsui n

42 Teekay: the first 40 years Chapter 2 • American Dawn 43 Teekay ships’ names

n the early days of Teekay the nomen- a lot of ‘Yamato Damashi’ (Yamato Iclature of the company’s ships was to spirit). Impressed, Torben accepted the maintain the existing names of acquired proposed price and advised Matsui that second-hand tankers, but in 1985 when he intended to name the vessel Yamato Torben was negotiating the purchase of Spirit. the Aframax tanker Sanko Prestige it was Subsequently, most of the Teekay clear that the ship’s name would have ships bore the suffixSpirit . Captain Alan to be changed. The negotiation was Hayes recalled a function aboard Kisuca tough and drawn-out; despite Sanko’s when his wife asked Torben why he had desperate financial condition the Sanko chosen that particular suffix for his manager in charge of selling the ship ships. ‘Because of them,’ Torben replied, was holding out for a higher figure pointing across at the group of officers than Torben was willing to pay. Shigeru he was entertaining. Hayes added: ‘As Matsui, who was brokering the deal, long as there’s a Teekay emblem on the advised Torben that the latest Sanko funnel, that’s how it will stay, except offer was the best obtainable. Matsui … his [Torben’s] was the Spirit and he right Another of the early Teekay fleet was Koyo Spirit, which was already 12 years old when Torben bought her said that the Sanko man was showing wasn’t aware of it.’ n in 1988. Shigeru Matsui top ‘Flying out to Hong Kong where I joined Asiatic Spirit (ex-Geiko Maru and Sanko Hope) from a launch at Huangpu on the Pearl River in June 1990 was fun,’ wrote Captain Steve Tucker. ‘With the first group of 12 Filipino cadets aboard, we went to some interesting ports: Sriracha, Singapore, Long Beach, Los Angeles, Fos, Tranmere, and Rotterdam. Donald MacDonald from Inverness was the cadets’ training officer, known as El Professor. Many of those cadets passed their licences within the top 20 in the 1991 national board exams. Asiatic Spirit had a service speed of 18 knots in ballast. Boni Tespoer began the voyage as first officer, and was promoted to chief mate in December 1990. Two years later he was one of the first Filipino senior officers to gain command.’ Captain Steve Tucker above Torben had a share in two 480-teu containerships, China Express and Teekay Hunter. He always maintained that to be successful, a shipowner should concentrate on one type of ship, and, since his operation focused on tankers, his involvement in these two containerships was a short-term project from 1987 to 1989. This photograph shows him aboard one of the vessels in the shipyard. Axel Karlshoej were even times when the newly recruited Hsu asked his broker, Victor Reachi. ‘There is ‘I’ll take her east!’ he announced to his As early winter snow was falling in Den- The plans that Torben had discussed with between Torben and Tommy Hsu was to play head of the office, Bjorn Moller, and another only one person,’ Reachi replied, ‘who can team, paid for the Suez Canal transit himself, mark about a year after chartering his tanker Hsu and Reachi included ordering three an important role in Teekay’s future some new Danish employee, Mads Meldgaard, take her.’ ‘Who is that?’ inquired Hsu. ‘Tor- and traded her, with other tankers, on the to Torben, Hsu and Reachi visited Torben in vessels from the Uljanik yard in Yugoslavia years later. resorted to whiling away the time by play- ben Karlshoej,’ the broker responded, ‘a guy successful run from Indonesia to the Ameri- Denmark. ‘We found him very friendly,’ Hsu with an option on a fourth tanker. While With the tanker market beginning to ing soccer in the office, using a ball made of from Long Beach who runs Palm Shipping.’ can west coast. commented when describing his first meet- Hsu ultimately did not participate in that turn, and with the expanded Sanko deal rolled up telex paper held together by pack- Within two days the tanker was fixed at a For six months World Horizon lost money ing with the great tanker man, with whom he newbuilding order, the Hsu family did enter negotiated via Shigeru Matsui, Torben was aging tape. rate equivalent to the operating costs, and but, true to his hunch, global rates improved struck up an immediate close friendship and into another joint venture with Torben over gaining recognition from the market for During this period, Hong Kong-based delivered to Palm Shipping a week later in and for the next six months she became a for whom Hsu developed enormous respect. time, including two newbuildings from a the emerging Teekay, which one commenta- shipowner Tommy Hsu found it difficult to the Mediterranean. money spinner for him. That her operation ‘He even divulged his plans for the develop- Japanese yard. These ventures were subse- tor described as ‘powering its way into the secure a fixture for his 125,000-deadweight Torben felt that the market would was successful was hardly surprising, consid- ment of his tanker fleet,’ Hsu remarked later, quently crowned with success when the market’. tanker World Horizon, for which the best offer improve before the end of 1985, but the ering that she was managed by Bjorn Moller, ‘which showed me that he trusted me, a tanker markets improved, with an associated In the summer of 1986 the Copenhagen entailed a daily hire of less than the operating Mediterranean was an overcrowded place for one of the sharpest minds ever to work with- relative stranger at that time, and I respected steady increase in charter rates. More impor- office moved to London, one of the global costs. ‘What can we do with her?’ a perplexed tanker owners at that time. in the Teekay organisation. him greatly for that.’ tantly, the close friendship that developed shipping hubs, where it was perceived that

44 Teekay: the first 40 years Chapter 2 • American Dawn 45 Captain Harry Carlisle remembers Musashi Spirit Captain Steve Tucker and Pacific Spirit aptain Harry Carlisle is a colourful char- Here is my card,’ he continued, ‘and if there Cacter who began his seagoing career in are any problems, you call me on this num- 1954 when he boarded Bank Line’s freighter ber. It’s my direct line. Now let’s go and buy pending three months in the Marmara Sea and Dardanelle Straits Beaverbank and signed on as an apprentice. A this ship!’ Hyundai shipyard in Ulsan, Korea, passage. Bosphorus pilotage was of course S compulsory, and I was quite glad of the in 1988 before the commissioning of fascinating career followed, which included The problems were soon resolved, repairs Turkish pilot’s advice as that is a very busy time aboard one of the first VLCCs with a were effected and the ship was eventually the 244-metre tanker Pacific Spirit was waterway … deadweight of over 300,000. passed to Teekay. Torben told Carlisle to a pleasure for Captain Tucker, who During my second tour of duty in He joined Sanko Line in 1977 and his first order whatever stores were needed in Rotter- wrote: Pacific Spirit in 1991, the ship underwent the guarantee drydocking in Mipo, Ulsan. command there was in the VLCC Sanko Stresa. dam, and then to take the ship through Suez Among other work that had to be done While he was in command of Mint Prosperity, to the Arabian Gulf, where she was on char- Perhaps the leather jacket and the during that drydocking, shipwrights cut NASA baseball cap I wore and a karaoke another Sanko tanker on charter to Teekay, ter to move two oil cargoes, before sailing 89 millimetres off each of the propeller rendition of [the] Righteous Brothers’ blades to lighten the load on the main she had sailed in July 1985 from Long Beach, under another charter that would be made ‘You never close your eyes anymore’ in engine, and the vessel performed much California, in fog. Captain Carlisle noticed known at a later stage. That turned out to be our favourite bar had something to do better after that. a large target on the radar, among numer- a six-month charter to the German steel com- with the good time we had, but looking On a voyage from San Pedro and Los after the newbuilding inspections on both ous smaller craft that were probably fishing pany Krupp to carry iron ore from Saldanha Angeles to the Far East, the ship was Pacific Spirit and Namsan Spirit could have loaded to her full scantling draught of vessels. Bay, South Africa, to Germany. been another reason. The Koreans called 115,000 deadweight (normally 100,020 The large target, which he had contacted As Musashi Spirit passed through the me ‘Mr Reject’ because I would never pass deadweight) and she had a very low their work without it being near-perfect. and ascertained was a United States warship, entrance of Saldanha Bay harbour on her freeboard, but luckily, the weather held On Pacific Spirit, we went into Long Beach continued approaching and collided with first ore-carrying voyage to Germany, she for the Pacific crossing. Stowage of the (the home port for Teekay) and enjoyed a cargo was interesting – normally she the tanker. Fortunately no one was injured in began to roll in the well-known Cape rollers maiden voyage party which is stored in carried three different grades, but on that the accident, but both ships needed repairs. – those long, heavy swells that build up as the memory banks with Jim Hood, Bjorn voyage, six grades of fuel oil cargo were Moller, Vinay Patwarden [sic], David Carr, Carlisle turned his ship and headed back they cross the South Atlantic Ocean towards aboard, and as many bills of lading were and most of the office staff enjoying our required. to Long Beach, where Teekay’s Captain Jim the South African coast. Carlisle had just hospitality. Hood came on board to discuss the accident, handed the con to the officer of the watch Richard Gladwin was Chief Engineer listening to Carlisle’s explanation of the when the radio officer gave him a message. and Nigel Horsfield was First Engineer While transiting the Singapore Straits [shortly before his promotion to Chief measures he had taken to avoid the collision. This contained just five words: ‘Salaries have one night, Pacific Spirit was boarded by top left Captain Harry Carlisle top right The OBO Musashi Spirit (1) that Torben bought from French owners in 1987. Captain Engineer]. We had a great team on there. Before he left, Captain Hood surprised Car- Harry Carlisle above Chief Officer John Burton (promoted to master in the LNG fleet in 2008), Captain Hans Schaefer, Chief been raised. Karlshoej.’ Captain Carlisle later Our voyage to Constantza in July pirates. Fortunately the chief engineer lisle: ‘I’ve got a job for you,’ he said. ‘I want Engineer Sveto Franovic and First Engineer Milan Corak at Christmas time. Beginning as a deck boy in the bulk carrier Bernd wrote: 1988 during their troubled times was raised the alarm when he found them Leonhardt, Captain Schaefer had a long and most interesting career in the German merchant navy. The ships in which he an education too. Pilots demanded jars you to relieve Steve Tucker, the master of trying to break into a cabin. With the sailed traded across the globe, carrying minerals or grain, and he also served in a reefer vessel on the Canary Islands–Europe of coffee which was a banned import Then I knew I was working for a man of Sunrise, one of our tankers.’ As Sanko had cut banana trade. Company rules at the time specified that one had to sign on and sign off one’s ship in Germany, a practice during [President] Ceausescu’s austerity crew responding to the alarm, the his word. I was working for someone who salaries by 25 per cent in an effort to reduce that invariably meant a long time away from home. An introduction to tankers came when he joined Esso Bremen and at regime. The Rumanian authorities kept pirates hurriedly left the ship. Pacific would trust me, support me, and listen to once realised that conditions aboard were luxurious compared to his experience of some other ships. Here the entire crew all the ship’s trading certificates until their costs, Carlisle jumped at the opportun- were issued with sheets, and fresh milk and fruit were part of the daily menu. His first command came in 1987 aboard the my comments upon which, providing they Spirit’s complement were fortunate our London office managed to arrange tanker Barbara Brask on a voyage from New York to Goteborg with fuel oil. Schaefer was introduced to Teekay by Captain were reasonable, he would act should he that the incident did not have the ity to earn more and a few months later he the bank transfer for port disbursements, Hans Schiefelbein, one of Torben’s trusted superintendents. His first Teekay command was Shilla Spirit in September 1990. be able to. I was proud to serve Teekay. characteristics of more recent acts of took over the command of the tanker from After two years ashore in Manila as a training consultant, he returned to sea, retiring from Mayon Spirit after 15 years of the offer of my own surety being an Captain Tucker. service with Teekay. Captain Hans Schaefer insufficient guarantee. Twenty-three piracy off the Somali coast and in the Late in the summer of 1987, Captain Torben enjoyed visiting his ships. When the cartons of cigarettes was the currency for Gulf of Guinea, which reflect a serious getting in and out of that archaic place … Harry Carlisle went to the Verolme shipyard new Frontier Spirit arrived on her maiden call We saved $18,000 during that voyage escalation in the threat to ships and in Rotterdam to take command of a 1973-vin- before her arrival in Rotterdam, all her cer- low wage scales as the Sanko officers had in Long Beach the following year, he hurried when I declined pilot service for the their crews. n tage 262,411-deadweight ore-bulk-oil vessel tificates were in order. been when that company was in such dire down to the ship. She was the first of six sis- that Teekay had bought from a French com- When Torben came aboard to inspect the financial difficulties that it had been forced ter ships (the others were Namsan Spirit, Pa- pany. To be named Musashi Spirit, she had ship before signing for it, he took Captain to cut the portage bills to save money. Filipi- cific Spirit, Pioneer Spirit, Ulsan Spirit and Shilla discharged a cargo of crude oil, and before Carlisle to a quiet place on the ship. Their dis- no crew members were getting their original Spirit) built in Ulsan, Korea, between 1988 Teekay took delivery, she had to undergo a cussions covered a number of issues, includ- pay, which was far less than they would have and 1990 (see page 48). Carlisle showed him number of repairs, including the replace- ing a memorandum that Carlisle had sent received had they been employed by other the vessel and pointed out a number of items ment of the port anchor and chain that had to the office while in command of another companies, including Teekay. that needed attention. ‘I did not see him tak- been lost during a previous voyage. As she vessel. In that memorandum, he had pointed ‘Look,’ said Torben, ‘if you give this ship ing notes,’ Carlisle recalled, ‘but all of the had gone through a special survey shortly out that the Teekay officers were on the same your best, I will review the wage situation. items were attended to.’ n

46 Teekay: the first 40 years Chapter 2 • American Dawn 47 Extract (1) from Let There be a Yard by Sung Hyuk Hwang, former executive at Hyundai Heavy Industries, Korea

orben started visiting Korea in the mid- not only from having building berths in con- with the highway between Seoul and Busan. view of Toham Mountain and Gyungju Teighties. His frequent visits to Korea and stant use, but also a marginal but nonetheless There are around forty valleys spreading out Field … continuous ordering of ships were greatly significant income deriving from the repeated in every direction, and each one harbours the The following week I got a call from helpful to our shipbuilding industry in those building of ships. Torben ordered six identical spiritual remnants of the Shilla Kingdom, California. days of recession. He was also a regular cus- ships in series. which prospered in this area thousands of ‘Sung, is all going well with Nordic tomer of Mitsubishi and Onomichi Shipbuild- A day after the crisis of the labour dispute years ago. The rise and fall of the kingdom and Spirit?’ It was the name of a soon-to-be ing in Japan. at the yard had passed I was walking around the joys and sorrows of its people are carved delivered ship of his. He built ships throughout the recession. the shipbuilding site with him. The site was in on each and every broad rock of those valleys. ‘Absolutely. She will be delivered in He built Aframaxes at a price of more or less disorder and productivity had not yet recov- We arrived at Poseokjeong with the two weeks.’ 20 million dollars that had cost 40 million ered. ‘Sung, look at those men; I mean their contract administration staff at around ‘I have a problem.’ dollars before the recession. He was an espe- working attitude. Don’t they look serious? I two o’clock. We climbed towards the top ‘What problem? It’s almost finished.’ cially important customer during these years like them.’ … of Namsan, turning around to the right of ‘I know it’s hard, but there is a small because he was not someone who ran away On the Sunday of that week, Chairman Poseokjeong. The road was newly constructed technical thing that needs changing.’ after building one or two ships; rather, he Karlshoej and I climbed Namsan Mountain in and the terrain far from difficult to walk, but ‘Technical change? Now? I’m not built many ships consecutively with the same Gyungju. I used to climb it whenever I was in Torben was soon soaked with sweat from lack sure I want to hear about it, because Palmstar Cherry, another of the eight fast sister ships of around 100,000 deadweight that Torben ordered from the Onomichi technical specifications. Ulsan for the weekend. It always left me feel- of exercise. He looked serious as we explained whatever it is I’ll not accept it.’ shipyard in the late 1980s for delivery between 1989 and 1991. All were sold by 2005. Teekay Collection At that time, Hyundai Shipyard was operat- ing both refreshed and warm, like being with the history of the last two thousand years to ‘No, you have to accept it.’ ing under a survival plan: contracts would be an old friend … him. While standing there we enjoyed the ‘Go on.’ signed at a price below the level of the produc- Namsan is a broad, rocky mountain, eight ‘It’s the ship’s name. I think I have to Torben and Teekay would enjoy a greater the opportunity to buy an ex-Sanko Aframax tion cost by sacrificing a considerable number kilometres long, four kilometres wide, and change her name.’ exposure to customers, tanker owners and that was being sold by a court in Hawaii. of the fixed cost items. As with those orders about five hundred metres high at its peak. It Palmstar Rose, one of the eight sister ships built by Onomichi Now I was irritated. other shipping industry people. The catalyst Torben explained that, knowing his own from Teekay Shipping, the shipyard benefited looks over Gyungju Field and sits in parallel shipyard, entered service in 1990. Teekay Collection ‘It’s already finished. You saw for for the timing was that Sanko, as part of its competitive streak only too well, he was con- yourself that the painting had been bankruptcy, was shutting down its London cerned that, if he himself attended the auc- completed and the steel plate cut and office at short notice. Torben agreed to take tion, he would chase the bid to whatever it welded in the right place.’ over their lease and instructed Moller and would take to win. Instead, he had sent Jim ‘I know, but I ask it as a favour.’ Meldgaard to pack up the office and move Hood to the sale carrying $400,000 in cash ‘What would you like to change?’ it to London. They left Copenhagen on a – the required 10 per cent deposit on the ‘I want to change Nordic to Namsan. At Friday night with a few boxes of important expected purchase price – but the hammer least the number of letters is the same.’ files stowed on the back seat of Bjorn’s small fell when a slightly higher bid was made by I felt knocked out. How could I dis- Renault 5, drove across Denmark to Esberg, another shipowner and Jim could not find agree with such a wonderful idea? where they caught a ferry for Harwich; and the extra cash. ‘Well,’ Torben retorted, ‘we I immediately delivered Chairman on the Monday morning Teekay’s London couldn’t win them all.’ Karlshoej’s words to Managing Director office opened in the old Sanko office in With tanker markets looking reasonably Jang Won-gap in charge of design. He Knightsbridge, with another newly hired favourable, Torben continued to increase was someone who would never agree to employee, Nick Wright, as the managing the size of his fleet and, re-mortgaging many anything if it contradicted fundamen- director. of his older tankers, he placed orders with tal rules or principles; but he was also Most of the early second-hand Aframax Korean, Yugoslav and Japanese shipyards to someone who enjoyed exploring Nam- tankers in the fleet were bought for $4–7 build several other ships. He developed a par- san, and he readily concurred with the million, which in retrospect were bargain ticularly close relationship with Sung Hyuk suggestion. prices, seeing that a couple of years later in Hwang and his Hyundai yard in Ulsan, Korea Torben named all of his ships with a one-month voyage carrying Indonesian (see page 48), and with the Onomichi ship- two words, and Spirit always followed crude oil to Barber’s Point or El Segundo, a yard in Japan. Working to Torben’s specifica- the first word. The names of his next tanker could earn more that $1.2 million. tions, the latter yard created a special design ships were Ulsan Spirit and Shilla Spirit. During a dinner party aboard Torben’s for a 245-metre 100,000-deadweight tanker, He liked to express his love for Korea in yacht Kisuca (2) some years later, someone known as the Onomax class, that became the many different ways … n reminded Torben of the time he had missed major type of vessel in his fleet. The first of

48 Teekay: the first 40 years Chapter 2 • American Dawn 49 these ships, Palmstar Orchid, was delivered in A letter informing senior 1989, its name a guarded poke of fun at an officers of the company’s progress, and exhorting them oil major that had ships with similar names, to introduce their seagoing and with whom Torben had had an earlier friends to Teekay so that the officer corps could be quarrel. Over the next two years, other sim- expanded by employing ilar ships followed from the Onomichi ship- those recommended yard: Palmstar Cherry, Onozo Spirit, Palmstar by currently employed personnel. Captain Boris Poppy, Palmstar Rose, Palmstar Thistle, Teekay Banic Spirit and Palmstar Lotus. They proved their worth for they were fast, well-built vessels whose tank, cargo pipe and manifold config- uration allowed them to be versatile in terms of the cargoes they could carry. Having a fleet of identical, inter-changeable vessels was a key element in Torben’s trading strategy; it allowed for flexible scheduling and higher overall utilisation. In a letter to all masters in the fleet dated July 5, 1988 he mentioned 19 ships that would be added to the fleet, which he expected to grow to 35 ships before the end of 1989. That he was building a significant number of ships propelled Torben into a new league among shipowners, and when additional fleet expansion programmes were announced the Teekay operation was seen to be a force to be reckoned with in the tanker industry. In August 1988 he acquired the Afra- max tankers Teekay Vigour (ex-BP Vigour) and Teekay Vision (ex-BP Vision) from BP in a bare- boat swop for his two small Onozo-class product tankers, Onomichi Spirit and Nakata Cathay Spirit Spirit, which were renamed BP Advocate and BP Architect. The company’s manage- ment office in Glasgow, Teekay Norbulk, a aking over some of the older acquisitions fine addition to the rapidly expanding up for so long) and the high standards of prior to the delivery of Tokyo Spirit, he circles where he was a respected broker. joint venture between Torben and Norbulk was challenging, as Captain Steve Tucker fleet. This included modifications to Teekay’s operations. reminded me of our chat back at Bayway While visiting a vessel he was climbing a T restore the ship to her full deadweight While the ship was alongside regarding concerns of mounting costs in Shipping, operated the two former BP tank- recalled: gangway extremely slowly, much to the capacity in the CBT mode, she had dual discharging at Bayway Terminal, New ship-shore telex communications. ‘We’ve ers, as well as other newly acquired ships – certificates, tanks had been coiled, and Jersey, I received a call from the chief kept it short, sir,’ I said, ‘but what about annoyance of Torben who happened to be Flying Clipper, Flying Cloud and Scotland. We took delivery of Cathay Spirit (ex-White the numerous tests had been carried officer. ‘Captain, TK is here.’ Torben the office?’ boarding the vessel at the same time. ‘Move Gardenia) from Japan Line in June 1987. Then, on March 24, 1989, came a major out. As usual, the drydock repair list had had arrived to view his new acquisition. JTK was a boss you looked up to faster,’ Torben yelled, ‘we haven’t got all day!’ She had been laid up in the Verolme been professionally vetted by our visiting His good friend Eric Hallman preceded and admired for his total commitment disaster that would have very serious reper- shipyard, Rotterdam, for 14 months technical supervisor, Nagaosan. ‘the boss’ up the stairway to my cabin. I to excellence. His intimate knowledge of Hallman responded by throwing one of his cussions not only for the American tanker with a skeleton Korean crew. In Tank 5C, The classification society, Exxon and opened a Dutch refreshment for each as all things relating to ships and the sea, prostheses at the impatient man, and when sector but also for international shipping the Teekay crew found 400 tons of hard then flag state inspections followed her these were the ‘old days’. [and] his intelligence, vision and integrity Torben arrived at the top of the gangway he sludge that had to be removed poste in general. The 209,836-deadweight single- handing over to Teekay at the Verolme Among his many visits to ships, I shall were some of the many qualities we shall quietly said, ‘Shall I throw the other one at haste as Exxon had already booked a yard. With all systems go, we loaded never forget JTK’s intense interest while always remember. hull tanker Exxon Valdez had loaded a cargo cargo for the ship. They had to hot-blast her to the tank tops with VGO and AGO walking through the entire ship down you as well?’ Never one to make fun of those of crude oil from the Alyeska Consortium’s the sludge with fresh water and transfer and sailed across the pond to New York. below and on deck to get a feel of things with disabilities, Torben was acutely embar- pipeline terminal in Valdez, Alaska, and it into a slop tank for discharge at Before lightering in New York, she came and pass on his comments no matter how Note: Torben’s association with Eric Hall- rassed for he had no idea that the man was Bayway, New Jersey. through the usual rigorous U.S. Coast scathing, constructive, or complimentary. sailed for Long Beach in California. In fair man dates back to the early days of Teekay. handicapped. Despite this incident, the two Budget constraints had not restricted Guard Inspection with flying colours, He never forgot a conversation. Two years weather the fully laden vessel grounded on her fitting out with new mooring wires, testimony to the hard work done by all later whilst proudly giving me a tour of Despite losing both legs during the Vietnam men became firm friends. n Bligh’s Reef in the picturesque Prince Wil- full stores, and all the equipment staff (especially since she had been laid Kisuca berthed at Onomichi yard in Japan war, Hallman’s resilient character made him necessary to render her a liam Sound and the subsequent oil leakage where I was standing by at the shipyard a most popular man, especially in shipping

50 Teekay: the first 40 years Chapter 2 • American Dawn 51 Mendana Spirit was the largest in American history at that and also by promising the introduction of two reasons for halting this trade: (1) to stage. Although the amount of oil was less tough laws to prevent a recurrence. avoid criminal prosecutions of personnel (whether on board or ashore) in case of than that spilt in some other less publi- The immediate effects of the Exxon Valdez In the wake of Exxon Valdez an accident, and (2) to avoid massive uilt in Japan in 1980 as Nachi Maru and sub- cised incidents, the accident caught the grounding were felt by those aboard Golden unlimited liability claims for oil pollution. sequently bearing the names Arcadia Spirit media spotlight because it had occurred in Gate Sun, as told by Captain Steve Tucker: Last year, I wrote about the Exxon Valdez. I B am sorry to say that the book has not been and Bayani Spirit, the Aframax tanker Mendana such a pristine environment, abounding hen Torben decided to cease trad- relationship-building dinner; Hood and written as yet on what exactly happened. On the second trip in Golden Gate Sun, Spirit was off the Yemeni coast early on the with wildlife. ing his ships to United States ports Moller knew it would be a much more As we see it, everything and everyone [Chief Engineer] Alan Murphy and I had W morning of February 10, 1991 when she col- The oil slick extended far along the coast in the aftermath of the Exxon Valdez oil fateful evening and they were waiting was whitewashed in the eagerness to a run ashore in Nikiski, Alaska during bang the Captain. Be that as it may, what lided with the Turkish ore carrier C. Eregli, and the Exxon Valdez grounding immedi- the same week-end that Exxon Valdez ran spill in 1989, Teekay had to advise their for an opportune time in the evening to has transpired in the interim is quite aground. I recall that the agent Annette which was fully laden with a steel cargo. The ately became the subject of what some have customers that they could no longer break the bad news. incredible. Saling took some photos of us on the ingress of water into the bulker was such that called a media feeding frenzy. Apart from serve them on certain routes. Finally, towards the end of the meal, Essentially, twenty-four U.S. states bridge wing and even though it was 4 – have been released to write their own she sank quite quickly, settling with only the financial recompense sought legit- degrees C, there was Alan in typical Kiwi One memorable dinner took place in Phil Garrett of Tesoro had just ordered laws with respect to oil pollution clean up the top of her main mast protruding above imately by dozens of litigants, the political style, with no shoes or socks! When we 1990 when Jim Hood and Bjorn Moller coffee from the waiter when Hood and liability. In effect, already 17 states got back to LA [Los Angeles, the vessel’s the water. implications of the accident were signifi- met with U.S. refiner Tesoro with whom blurted out, ‘Phil, we are pulling out of have on their books statutes relating to discharge port] it was a USCG [United The Dutch frigate Wielingen was on patrol cant, particularly as politicians sought to Teekay enjoyed a long-standing contract the Kenai contract!’ Garrett’s only reac- totally unlimited liability – and equally States Coast Guard] nightmare, with bad for us – criminal liability. Not to be in the area and responded to the Mayday call appease their constituencies by promising those guys checking everything. Oil to ship heavy fuel oil from Alaska to tion was to turn to the waiter and say, outdone, the Federal Government is now from C. Eregli, rescuing 25 crew members tough measures against those responsible, trading would never be the same again. Japan. This was a difficult-to-serve trade ‘Hold the coffee – and bring me a dou- shortly voting on a raft of different laws from the bulker. Tragically, the only man lost and Tesoro was somewhat dependent ble Scotch!’ In the event, Tesoro took the which will include the foregoing and in the accident was the ship’s master, who on Teekay carrying the monthly cargoes news well. They found alternative ways then mandate all sorts of new regulations, was on his last voyage before retirement and to keep their refinery in Kenai, Alaska, to move their fuel for a few months, fol- including double hulls. Our only defence has been to declare whose wife was also on board for the occasion. running. Tesoro expected that the func- lowing which Teekay resumed trading the U.S. a ‘war zone’ and then decline to Mendana Spirit had sustained a large hole tion would be just another regular and returned to serving Tesoro. n continue trading. Quite a switch from our in the bow and, since an inquiry was to occur, attitude during the Middle East War! [The the authorities detained her and placed her last sentence was a reference to Teekay’s continued trading into the Arabian Gulf Korean master under house arrest. When the during the so-called Tanker War of the court hearing took place, $11 million was paid His words were prophetic. As had happened being a core trading area for Teekay, Torben 1980s.] into ‘chambers’ and the ship was released. after the Titanic disaster in 1912, many temporarily withdrew from trading his ships Captain Roger Barber and 13 crew members amendments were made to vessel construc- to the United States for he feared that in the A development that stemmed from allega- arrived in Yemen to relieve the crew, who had tion and onboard practices and a range of backlash following the Exxon Valdez disaster, tions of inebriation among some of the of- been on the ship since the collision. In the lat- new guidelines were introduced – all of any of his ships causing the slightest oil pol- ficers aboard Exxon Valdez was the demand ter stages of their confinement they had no which were imposed on tanker owners call- lution – even by accident – would be targeted from Exxon that any crew members aboard hot water, while the food store was depleted ing at U.S. ports. Among the provisions of the by the judicial system; his seafarers, whom any vessel chartered by them could be tested of its usual range of supplies. When news harsh Oil Pollution Act of 1990, which also he treated as close colleagues, would receive randomly for drug or alcohol use. Torben res- came that the ‘chicken boat’ (a vessel bring- stemmed from the Exxon Valdez accident, was harsh treatment from the law; and even the olutely opposed this demand, affirming his ing thousands of frozen chickens and other the extension of existing strict liability laws most trite litigants would declare open sea- steadfast belief in the high levels of profes- reefer produce to Aden) had arrived, Barber pertaining to oil pollution incidents, and son on the company, as had happened in the sionalism of his officers. Any such tests, he rushed ashore to buy food. the criminalisation of seafarers or others re- Exxon Valdez saga, potentially exposing the felt, would be an intrusion into their privacy He also obtained a seaworthy certificate sponsible for pollution, even if it was totally company to unlimited liability and financial and an insult to their professionalism, for for the ship to make a one-way voyage to accidental. In its reaction to the incident, the ruin. which he had the highest respect. Dubai for repairs to the damaged fo’c’sle area. International Maritime Organisation intro- Torben expressed his thoughts to his However, he had to concede defeat on In Jebel Ali she berthed opposite the berth duced comprehensive marine pollution pre- ships’ masters in a memorandum dated that issue as all the oil majors, fearful of the frequented by United States naval vessels, vention rules (known as MARPOL and IOPP) July 12, 1990: ramifications should a similar accident befall many of whose crew visited Mendana Spirit that were ratified by IMO member countries. any of their chartered ships, made the same during her stay in the port for repairs. Of The overall result was that onerous respons- Once more, I implore all on board to demand, which meant that if Teekay was to realise the importance of the Company special interest to any visiting engineer was ibilities were placed on tanker owners to en- hope for any charters from the majors the rules and regulations. Read the book – go the ship’s unusual engine, which had a chain- sure that their vessels’ construction, fitting by the book [his underlining]. Remember company would have to comply. On October driven system that was very difficult to clean. out and operation complied in all respects the world is looking at us and we shall 26, 1990 he sent a message to all his ships, Mendana Spirit was sold to a Greek owner The in-house publication Teekay Log carried this piece, in which Torben discusses the issues with a raft of these new and expanded regu- all be judged by the actions of those on informing them of the change in policy, and of the Iraqi invasion of Kuwait and the draconian Oil Pollution Act promulgated by the board. in March 2000, and under her new owner United States in 1990. Fearing that some of his officers would land in jail because of even lations. Teekay was not immune from the This brings me to the subject of concluding with the remark, ‘ o n ly e xc u s e i caught fire off Oman after another collision the slightest accidental oil spill, he decided that his ships would cease trading to the U.S., a implications of these new regulations and non-U.S. trading of which you have been c a n o f f e r i s t h a t w e w e r e l a s t m a j o r c o m - decision he later rescinded (see page 53). four years later. n introduced new guidelines. In fact, despite it advised by telefax. There are essentially pa n y t o c av e i n – j t k a r l s h o e j ’. n

52 Teekay: the first 40 years Chapter 2 • American Dawn 53 Yachts

hile in the Bahamas, Torben’s great walked into his office and disdainfully dir- where he was, she noticed that a large school W delights were boating, fishing and ected him to a younger salesman, who showed of barracuda had arrived, swimming around diving, initially in his motor yacht Impetu- him several boats, none of which fitted the the reef, and, since their small but jagged ous, which he had first seen on the cover of specifications that Torben was wanting. ‘What teeth can inflict serious injuries, Torben had a yachting magazine. He hunted for her, about this one?’ asked the salesman, taking elected to remove himself from harm’s way located her, and made the owner an offer him on board an 18-metre Bertram that Tor- by climbing onto the reef. ‘For once,’ Kim he could not refuse. Once the sale had been ben immediately liked. A sea trial confirmed reflected later with a chuckle, ‘he appeared completed, he promptly moved his office his feeling and he bought her, leaving behind vulnerable.’ from California to the rather cramped quar- a very happy young salesman. Torben took Kisuca (1) along the eastern ters aboard Impetuous (see page 36). He had given the name for his new boat American coast to New York, where Kim and A James Bond fan, Torben would watch as much thought. ‘Why did you name her Susan joined him for the passage through many Bond movies as possible, and offered Kisuca?’ his friend Captain Peter Whitting- the Hudson River and canal system to the St Impetuous to the director of the film Never Say ton, the marine manager for the Bahamas Lawrence Seaway and the Great Lakes. ‘There Never. He was very excited at the prospect of Water Corporation, asked Torben one night. was so much beautiful scenery, much activ- having his boat in the movie, but the contract The tanker man gave him a withering look, ity as we passed through the locks, and lots was not adhered to and Impetuous remained and blew a wisp of his cigar smoke into the of shipping.’ In a marina, the boys on a boat alongside. air. ‘Kim, Susan and Caroline, my daughters’ alongside the same jetty went windsurfing, His daughter Susan recalls time spent on came the simple response, with the empha- and Kim, never one to stand back, went with the yacht: sis on the first syllable of each name. Kim got them in a freshening wind. When the wind her horse later. speed increased, the boys could manage their We had lots of fun in the Bahamas on Torben, Kim and their various guests spent windsurfers and continued sailing further board Impetuous. We went diving and carefree days boating, fishing, waterskiing out. Kim, however, struggled in the strength- waterskiing, we visited the different islands, like Allens Cay with its wild and generally enjoying life in the Bahamas. ening wind and was very soon in the ship- iguanas. We’d go fishing sometimes (Kim While her father was spear-fishing along a ping channel! Her anger that the boys had did this more than I did with Dad) but I reef one morning, Kim suddenly noticed left her was more than matched by Torben’s remember we had a fish on the line that was fighting like mad and then suddenly that he was standing on the reef, waving. She fury that his daughter had gone out on her the line was heavy, but no fight. We waved back, but when his waving became windsurfer in a strengthening wind. She was reeled in the fish – well, it was half a fish. more frantic, she knew that something was confined to her cabin for several days! The rest had been taken, probably by a wrong. As the water became troubled close to Continuing the voyage, Kisuca entered the barracuda. We sliced up the fish and that was my first sashimi. canal system to reach the Mississippi River. ‘Kisuca hit the bottom perhaps over 100 times As he was running his office from the boat he during the voyage!’ Kim recalls. Yet the tiny required a bit more space and began to look craft completed the remarkable journey and for a larger vessel. His friend and shipping returned to the Bahamas. magnate Arne Naess and his partner Diana In 1985 Torben was on board Kisuca en Ross, the famous singer, were frequent vis- route from the Panama Canal to the Pacific itors aboard Impetuous. At the time Torben’s coast of Mexico in international waters. The eldest daughter Kim, who was staying on master noticed on the radar that another ves- top Torben’s beloved private yacht Kisuca (2), which a the boat, badly wanted a horse. When Naess sel seemed to be following them and pointed Norwegian shipyard converted according to his plans heard that, he gave her money to start her this out to Torben. When Kisuca entered from a laid-up fishing vessel. When commissioned, ‘horse fund’, but Torben quietly mentioned United States territorial waters some hours she had luxurious accommodation and a carefully laid out wheelhouse. From Norway Torben took her to that he would first need to buy another boat later, they were hailed on the VHF radio, Copenhagen, where he berthed her close to the A.P. Moller before the horse. ‘This is the United States Coast Guard, please headquarters. Axel Karlshoej above Torben was always in touch with the office while aboard Kisuca, although Dressed in his customary jeans and T-shirt, identify yourself.’ Torben initially instructed there were times when he was secretly delighted that the Torben went to Fort Lauderdale to look for a the master to ignore the approach but after a vessel was out of range of communication systems. Axel Torben and his father Poul on the jetty in the Bahamas. In suitable boat. A salesman at a yachtbroker’s repeat broadcast from the Coast Guard vessel, Karlshoej left On board Kisuca. Left to right: Bjorn Moller, the background is his first leisure yacht Impetuous. Axel Aiko, Torben, Susan and Kim. Aiko Karlshoej office looked askance at the figure who had Karlshoej Torben responded on the VHF in his irreverent

54 Teekay: the first 40 years Chapter 2 • American Dawn 55 style, ‘This is the Russian submarine Santa ‘Yes,’ Torben replied, ‘but may I ask why you know so much?’ Dad answered, ‘Because Captain Steve Tucker wrote about Kisuca, left Teekay when we moved to Vancouver, Claus, over.’ ‘Please repeat,’ the Coast Guard want this arrangement?’ It transpired that I’m the deckhand.’ That story makes me recalling the time when Torben brought her but was very influential in the early days, smile because, in a nutshell, it tells a bit putting our hard earned dollars to good vessel ordered. ‘This is the Russian submar- the seller’s wife needed the money for a visit into Onomichi harbour while Tucker was of who my Dad was. Despite his success at effect. ine Santa Claus,’ Torben repeated. It was not to the casino that night! the time, he was tremendously down to standing where Tokyo Spirit was being built: long before a launch from the Coast Guard Torben began to plan a more colourful earth. You got the feeling that he’d be the Torben used Kisuca to promote his business vessel came alongside, demanding to board future for the rust-streaked vessel. ‘I’m fin- exact same person – that wealth wouldn’t Our team went on board for a lovely party and, in rare cases, to reward loyal employees change him. Kisuca. Torben resisted but soon decided it ished with tankers,’ he declared to a friend, the night before delivery [of that tanker] with a good holiday – one recalled that he in July ’89. The boss gave us a personal was wise not to antagonise the Coast Guard and his quest to own a luxurious private and his wife were treated like royalty, with grand tour of his fine yacht. She had a officers further. Upon boarding, they advised yacht took hold. Amazon Express had seen bet- During a long voyage across the Pacific,Kisuca truly magnificent interior, but rolled on personal service, during their time on board Torben that they were doing drug enforce- ter days, and although a refit would cost a lot arrived in Honolulu from Tahiti on the same wet grass and could have done with some Kisuca. Torben also provided his wider family ment operations and requested permission of money Torben took the plunge as he felt day that Captain Schiefelbein was inspecting stabilisers. One fact I remember was that with really leisurely holidays. His half-sisters there was three months’ stock of food and to search Kisuca. Knowing that he had noth- that this opportunity might not arise again. a Teekay tanker at the Barber’s Point single drink aboard, and a fuel range of 17,000 Lis and Ruth travelled from Denmark to Nor- ing to hide, Torben agreed. Unfortunately, Peter Whittington was taking the island’s buoy mooring, near Honolulu. As soon as he miles. Nearly every one of our tanker way in Kisuca, and his other siblings Tom, during a detailed search of the ship, a small water barges for maintenance to Fort Lau- saw the white vessel coming from the south purchase contracts during those days was Knud, Inger and Laila also sailed in her, some packet of marijuana was found in a drawer in derdale and Torben asked him to look for a he recognised her as Kisuca and exchanged signed on Kisuca, Shigeru San [Matsui] of them being on board for a trip via Iceland being the broker each time. a crew member’s cabin. With great glee the specific fishing vessel that was lying there. greetings by radio with the Teekay owner, She had a 40-foot Hatteras sport- to the United States. Axel, his wife Inge and Coast Guard impounded Kisuca and escorted Whittington found her, a rather dilapidated who was on board his special yacht. ‘Come fishing boat stowed in the forward hold, their sons also enjoyed the delights of cruis- her to Long Beach where she was held for craft. ‘What do you think of her?’ Torben over to visit us,’ came the warm invitation named Jack in the Box. This was launched ing aboard Kisuca. via a cage and lifted by a stainless steel three weeks at a dock in a far corner of the asked when Whittington returned. ‘She’s a over the airwaves and later that morning Often, family members recall, voyages wired hydraulic crane, with the hatch port before a very agitated Torben, working wreck,’ Whittington replied. ‘I know,’ Torben Schiefelbein boarded Kisuca. On the bridge covers acting as balance. Scuba gear was aboard Kisuca were the most memorable through a lawyer, was able to negotiate her responded, ‘I bought her!’ of the yacht Torben showed him a relatively also in evidence, as were a couple of jet times spent with Torben, for invariably he release after paying a sizeable fine. He arranged for Amazon Express to be towed new piece of equipment, a hand-held GPS skis. Fun toys aplenty! would open his heart to them and reveal Diana Ross and her beau Arne Naess Although such trips and the boating life to Copenhagen for a total refit and commis- that Schiefelbein immediately tested by tak- [the shipping magnate and mountaineer intimate feelings about life, in particular his were an invigorating escape from the stress- sioned a Danish naval architect to convert ing various visual bearings, and, fixing the who died tragically during an early tough childhood. These were moments to ful world of the tanker business, Torben the run-down hulk into a luxurious yacht. ship’s position on the chart, he remarked to morning mountain climb in South Africa] cherish, for they were cathartic for both the desired a larger vessel from which he could When he compared the quotation from a Torben, ‘Your GPS is quite accurate. Now you were frequent guests, particularly, I listeners and for Torben himself. understand, sailing around the Bahamas. operate an office that was growing busier Danish contractor with that of the shipyard must supply all our ships with this modern I remember seeing our VP (finance) Al His father Poul and stepmother Esther each day. His generous nature also moved at Horten, near Oslo, he sent her to Norway GPS machine!’ A month later Teekay Tokyo Stevens coming back from one of those were regular visitors to Kisuca, with Torben him in that direction as a larger vessel would instead. ‘Much cheaper!’ he remarked to his supplied the first Teekay vessel with a GPS set. jaunts – red as a beetroot. Perhaps they usually paying for their airfares from Den- had run out of sunscreen. Allan [Stevens] enable him to entertain family members, family later. mark to join the yacht. A most significant friends and business associates on board. The shipyard gutted the old fishing vessel and essential step – and one that put both Torben had made a lot of money during and modified every part of her so that when men’s minds at rest – occurred when Poul the 1979–1981 tanker market mini-boom, she emerged from the yard in the summer and Torben resolved their differences during and while he had lost some of it in the ensu- of 1984 she was all that he had hoped for – a one of these voyages, with Poul conceding ing year of low tanker rates he still had suf- beautiful, luxurious vessel of which he was that his second son had ‘come good’, and ficient left, he thought, to build a luxury immensely proud, especially since, at that with Torben acknowledging that, while he top Torben on Jack in the Box, a large motorised vessel that he stowed in the hold of Kisuca (2). Axel Karlshoej yacht and sail around the world. Captain time, she was the world’s fifth largest private may have viewed his father’s strictness and middle Torben and his brother Axel aboard Kisuca (2) Hans Schiefelbein wrote that during a boat yacht. Susan Karlshoej wrote: refusal to help him financially to start his during a cruise in Chilean waters. Axel Karlshoej above tour of the Jacksonville River in 1983 Tor- business as the actions of a cold, harsh man, Kim (Torben’s eldest daughter), Axel, Poul and Torben in the Bahamas. Axel Karlshoej opposite Kisuca (2) in Tahiti. ben saw the former long-line fishing vessel Kisuca (2) had just been delivered from Poul’s stance had moulded in Torben a deter- Jack in the Box and a small yacht are alongside. Aiko Amazon Express. She had beautiful lines and Horten, Norway, and we’d sailed over to mined spirit without which he would not Karlshoej Denmark to start our first voyages in her … he immediately fell in love with her but the have succeeded as he had done in the tanker Anything that may seem that one is trying owner was unwilling to sell. ‘When you are to be any better than others is frowned world. As a tribute to Poul, Torben brought ready,’ Torben told him, ‘give me a call.’ upon in Scandinavia, and at that point my Kisuca to the small Danish port town of Had- Some time later, while he was in the Baha- Dad had become quite wealthy and now sund on the occasion of his father’s seventy- had a bright new shiny enormous yacht mas, the owner contacted him and said that on which we were all going to sail around fifth birthday. he was open to negotiation. Lest the man the world. We had docked in Copenhagen In the dark days after October 3, 1992, should change his mind, Torben rushed to and Dad was fiddling with something up when Axel and others planned a way forward his house to conclude the deal. ‘Can you pay forward. An old Danish man on the dock to save Teekay from hostile adversaries, Kisuca started asking questions about Kisuca, and me $100,000 in cash now,’ the man asked, Dad was answering his questions. When was sold, but the family’s recollections of the ‘and transfer the rest into my bank account?’ the old man asked, ‘How come you beautiful times spent aboard her linger on. n

56 Teekay: the first 40 years Chapter 2 • American Dawn 57 CHAPTER 3

A Cedar Has Fallen

il markets and tanker rates climbed fearing either that their own oil exports or filmed missiles being launched from the Osteadily until mid-1990. The tanker war would be compromised by a localised war at giant United States battleship New Jersey, or had ended and the Gulf States were trading the northern end of the Gulf, or that Hussein aircraft taking off from aircraft carriers in normally. It was then that a new crisis hit had plans for further expansion, were unan- the Gulf to sow destruction on Iraqi forces. tanker operations. imous in their condemnation of the unpro- Hussein responded by ordering missile Smarting after significant losses at the voked invasion of a sovereign state. strikes on Saudi Arabia and Israel, and televi- hands of Iran during the war in the 1980s, The United Nations responded within 36 sion viewers also saw these missiles striking Iraqi leaders looked for ways to divert atten- hours, calling for an immediate and total Israeli towns and crashing into parts of Doha tion from the economic crisis in their coun- Iraqi withdrawal, a warning that Saddam in Saudi Arabia. Suddenly, war had become a try, which was deep in debt after the war. Hussein ignored. A subsequent United grim reality, even in the sitting rooms of the Some of its oil terminals, installations and Nations’ motion gave the green light for a world, further increasing global anxiety that pipelines had been wrecked, inhibiting for- coalition force to expel the invading forces the conflict could escalate considerably, for eign earnings, and some of its major clients, from Kuwait. no one outside Iraq knew how many missiles who had sought more reliable sources of Again the Gulf region was thrown into were available to Hussein’s forces and no one oil elsewhere during the war, continued to turmoil and the world oil markets became could predict how long the conflict would import from their newly found suppliers. jittery. War became inevitable when Iraq last. However, the coalition forces proved too Thus a new ‘enemy’ had to be the focus of continued to defy the United Nations’ resolu- strong for the Iraqi army and by February 25 Iraqi attention, and allegations were made tions, and no one could predict where this Kuwait had been liberated. that Kuwait was using slant drilling to extract latest destabilisation would end, driving the One effect of the Iraqi conflict was the some Iraqi oil. In addition, Iraq accused the oil price from about $21 a barrel in 1989 to closure of the Dortyol Pipeline, which moved tiny emirate of overproduction of oil to keep over $30 per barrel, and, lest oil supplies 1.5 million barrels of oil per day from Iraq the prices relatively low to attract buyers. from the Gulf became totally disrupted, to terminals in Turkey for onward shipment. Iraqi forces mobilised and observers noted another scramble for oil occurred that With that pipeline closed and 1.5 million bar- a large military build-up along Iraq’s border increased tanker rates. Insurance surcharges rels of oil not being available for shipment with Kuwait. for tankers entering the northern part of the from the eastern Mediterranean to Europe, Most diplomats believed that this was Gulf also increased the shipping costs. at least two additional VLCCs were needed simply a show of force – until August 2, 1990, After months of careful planning and mil- per day to move oil from the Gulf or else- when, with very little warning, Iraqi forces itary build up, the eventual invasion by the where to replace the volume usually piped to swept across the border and invaded Kuwait. United States-led coalition force in January Turkey. Even that seemingly small additional Two days later Iraq’s President Saddam Hus- 1991 was preceded by the bombing of Iraqi demand for tankers increased the rates. sein claimed the tiny – but rich – oil produc- military installations and supply lines. ‘Mid- At the beginning of the 1990s the structure ing state as the nineteenth province of Iraq. East War’ or ‘Gulf War Begins’ cried news- of Torben Karlshoej’s tanker operation was From Riyadh to Rome and Washington paper billboards, while television viewers rather complex. Viking Star Shipping was the to Wellington, the world was aghast at the across the world watched the war unfold as ship-holding company, buying vessels and move. Significantly, the Gulf States, probably media teams accompanied troops into battle, time-chartering them on a break-even basis

58 59 to sister company Palm Shipping, which was the commercial arm of Torben’s empire. A third component was Teekay Shipping, an Doing things properly A growing fleet agency through which charters were fixed for the vessels operated by Palm Shipping. Taxation was a big issue to Torben, as were orben was a stickler for doing things properly. In June 1987 his circular to masters ‘At this time, Viking Star still has aspects of the Jones Act that related, inter Tcontained yet another exhortation to all: 11 tanker newbuildings to take de- alia, to the shipment of cargoes between livery of through September 1990. American ports. Also troubling him was the Whilst the past fiscal year result was • Deliberate and unnecessary pumping of We are working on more but can- acceptable, I would like to point out that slops on the sea American stance on tanker operations and not go public with this informa- several million dollars were lost due to the • Unsafe navigational practices oil pollution following the Exxon Valdez acci- grounding of Oshima Spirit and the bulkhead • Collision tion as yet. I personally expect a dent, whereby personal prosecutions of the repairs and off-hire on Flying Clipper. Besides • Avoidable engine damage 40-ship fleet by this time next year officers aboard an offending ship and even those major problems, we were faced with and around 50 by mid-1991. The a litany of irritants all of which [reflected] … Gentlemen, it is quite simple: nothing leading figures in the associated corporates on the performance and reputation of our less than being the best is good enough growth will naturally start slow- could follow. In addition, crippling sanc- Group. Those which come readily to mind and then once we have achieved this goal, ing as we must now look at the tions could be applied, even in the case of an include: we shall have to go for the next one – possible sale of some of the older unavoidable accident. To him – and indeed absolute excellence. These things are to units with a view to eventually [be- • Oil spills through sheer negligence be accomplished while we are expanding. to many in the industry – such blanket pros- • Oil spills through equipment failure Easier said than done – I know, but it must coming] the first major owner with ecutions smacked of unfairness and unwar- • Avoidable crew injuries be done. n a full SBT fleet.’ –Circular to masters, ranted draconian power in the hands of the June 27, 1989 n Coast Guard or others who might be more concerned with retribution for oil spills, per- haps to appease public sentiment, than with fair justice. In response, he decided to move his busi- ness out of the United States and considered relocating to London, Denmark, the Baha- mas (where he had been earlier) or even to South Africa, which was emerging from its dark days under apartheid and seemed to be heading for new heights. Another country on his list was Canada, where the maritime sector and a group of Chinese shipowners were lobbying the government to investigate ways to attract shipping business. Canadian shipping leaders reminded their govern- ment that ‘Hong Kong is shortly to revert to Chinese rule, and some shipping companies there may wish to relocate. Because of its location on the west coast, Vancouver will be ideal for them.’ In Ottawa Torben, Art Coady (the com- Torben and Bjorn Moller on board a Teekay tanker in Long Beach, California. Teekay Collection top Completed by the Onomichi shipyard in February 1992, the Aframax tanker Mayon Spirit (shown here in Melbourne, pany’s legal adviser) and Tommy Hsu negoti- Australia) was Teekay’s first double-hulled tanker. Despite that safety measure, the ballasting of these ships proved to ated with Canadian officials, who told them be difficult because they had a large centre tank with perforated bulkheads fore-and-aft, and were susceptible to listing that an imminent announcement would con- – as had been experienced when Mayon Spirit heeled six degrees during sea trials. A similar tanker belonging to another company had listed so far during discharge that she damaged shoreside installations. (Captain Boris Banic recalls that when firm that shipping companies incorporated decided to move his office from Long Beach only had Long Beach been a happy place for Palmstar Poppy did the same manoeuvre during her trials, she listed less than two degrees.) Banic sent a message to Torben or operating outside Canada could move to Vancouver. Torben in terms of his business success, but explaining the problem and suggested that masters of these vessels include reference to the problem during their handover of command procedures. Subsequent ships were given solid bulkheads, which seemed to solve the problem. their management to the country and would ‘That was the best decision I have made,’ he also had to retrench a number of people Mayon Spirit was also the first ship in the company to have a system that filled ullage spaces and empty tanks with inert pay no tax on international profits. The Torben told Axel later. But there was also who, for various reasons, could not relocate gas, thus reducing the risk of explosion that had claimed many tankers and lives. Captain Hans Schaefer day following that announcement, Torben heartache associated with the move. Not to Canada. Then came the big move: on above left and right Connecting the cargo hose to the manifold. Captain Hans Schaefer

60 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 61 November 15, 1991 Teekay began to oper- Shipping, remained incorporated in the ate from Vancouver. About 15 employees Bahamas. Tokyo Spirit moved from Long Beach to Vancouver, some Anthony Gurnee, a former United States of whom had to change their sunny Califor- naval officer, had completed a degree at nian lifestyles to suit the colder weather of Columbia University in New York before he newbuild 39,545-deadweight British Columbia. A further 60 Canadians beginning a career with Citibank. Teekay was clean products tanker Tokyo ‘T were employed in the new office. one of his clients and he established a good Spirit was a real beauty. She had strengthening above the upper deck Apart from the corporate financial ben- business relationship with Torben, whose and fully coated tanks, with both vac- efits offered by the Canadian tax system, style of operation he admired. This was strip and eductors to help drain the Torben was personally very happy in Vancou- reinforced during a visit with Torben to the white spirit grades she carried. She was probably my personal favourite ver. On his 50th birthday in November 1991 Aframax tanker Nagasaki Spirit on her maiden of all the Onozo tankers, the most Aiko, his companion for about eight years call at Long Beach in 1989, where he observed fun to operate, and she called at a whom he had met in Tokyo, had organised Torben’s genuine interest in his ships and variety of excellent ports. She was a surprise birthday party at a Vancouver those who manned them. ‘He engaged warmly time chartered to Navix and after delivery we steamed around the world restaurant. Present were his senior manage- with them,’ Gurnee enthused later. He also in her during my seven months away. ment team with their spouses, and Axel and found that the tanker owner was very willing Arriving in Singapore on the nation’s Inge Karlshoej. Everyone present was amazed to discuss his approach to shipping. ‘Why are birthday during our maiden voyage, when the otherwise shy Torben rose and you concentrating on one type of ship?’ he ensured we were dressed-overall. Voyages on her also included berthing made a long, impromptu speech in which he asked Torben as they chatted informally. ‘If at Honolulu’s container berth to highlighted to each person present in turn you have one ship,’ Torben replied in meas- discharge jet fuel to the Japanese what he appreciated about them. They had ured tones, ‘you are regarded as an idiot. If Airline facility through an eight-inch never seen him so happy and relaxed. Aiko you have ten or more of one type, you get the hose. During our two days in port, we An article from Vancouver Sun published on March 1, had a chance to go ashore to enjoy wanted to settle down. ‘I can’t keep living business.’ 1991, announcing that Teekay would set up its office in Waikiki Beach and the other tourist in hotels,’ she told him. ‘I need a home.’ He When Gurnee was offered a position in a the Canadian city. (Copy provided by Aiko Karlshoej, with delights of Hawaii. obliged, married her in April 1992, and made shipbroking firm he called Torben for advice. acknowledgement to Vancouver Sun.) ‘We transited the Panama Canal to load more jet fuel at Shell’s Deer Park Vancouver their permanent home. ‘No, don’t go there,’ Torben advised, ‘but if in Houston, and returned to Japan. The Teekay Corporation, formerly Viking you want a job in shipping give me a call.’ In January 1990, Tokyo Spirit was the first Teekay ship to enter Manila Bay, a joyous occasion as most of our crew Chief Financial Officer Anthony Gurnee and Bjorn Moller. were Filipinos and we enjoyed having Teekay Collection their families aboard during our four days in port to load reformate and naphtha. We served over 140 extra meals during our time in Manila. top Built by Hyundai in 1988, the Aframax tanker Pioneer Spirit was converted to an FSO in 2002 and renamed Karratha Having worked with Filipinos since Spirit. Teekay Collection above left Onozo Spirit, one of the ships ordered by Torben from the Onomichi shipyard in Japan, 1977 it gave me the opportunity for was commissioned in 1990. She traded in Teekay colours for 15 years until her sale in 2005. Teekay Collection above right my first view of their amazing country. Apache Spirit, a newbuilding in Croatia, was close to completion in November 1990 but major problems arose in the area. Manila is such a vibrant city, and full Although two vessels of the three-ship order had been delivered, the Rijeka shipyard was under extreme financial pressure of charming people with a unique as no money was coming to it through Belgrade in Serbia, with the result that the workers had not been paid for a while. colourful lifestyle. ‘We finally got out,’ wrote Captain Harry Carlisle, ‘and went down to the Bay of Kotor to enter a floating drydock to have our ‘Passing through the archipelago launching brackets removed from the hull, the bottom of the ship painted, and the vessel made ready for sea trials. To get cash to the needy [shipyard workers] a special arrangement had to be made, and Eric Hallman of tin-leg fame travelled out with a helpful current pushing us with the cash so that the workers could get some money for Christmas.’ Apache Spirit was delivered to Teekay at the end of out into the Pacific through the San January 1991. The first Gulf War had begun and there was talk that the new ship would be chartered to carry 100,000 tons of Bernadino Strait, we recorded 21.2 fresh water to the Gulf for the coalition forces. That charter was cancelled in favour of what Carlisle called ‘an old rusty ship’, knots on that ship.’ Captain Steve much to the disappointment of the Teekay crew, who then prepared to load the usual consignments of crude oil. Teekay Tucker n Collection

62 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 63 left Seraya Spirit was completed in 1992 and was sold with her sister ships in 2004. Captain Hans Schaefer Above Completed in 1989, the 97,163-deadweight Sentosa Spirit was sold in 2004. Captain Hans Schaefer

‘Our Lyondell-Citgo time-chartered ships Seraya Spirit, Sentosa Spirit (shown above), and Senang Spirit were a pleasure to command as we were assigned to such a pleasant trade: loading in Venezuela (Puerto la Cruz and ports in Lake Maracaibo) and discharging at Oil Tanking in Houston or Arco in Texas City. Although the accommodation on these early ships built at Imabari or Koyo Dock was cramped, we enjoyed our time aboard. ‘On those ships with insufficient horsepower, crossing the bar at Lake Maracaibo through the “fluff” at San Carlos with a 13-metre forward draught was problematic, while the so-called Texas-chicken manoeuvre in Houston Ship Canal was always interesting – to say the least – and sometimes downright scary. Sentosa Spirit held the pumping record at Oil Tanking until Kiowa Spirit was taken on time charter. ‘During a voyage to Covenas in Colombia, Sentosa Spirit broke down when the turbo-charger self-destructed and we drifted for two days off the Cayman Islands. Our engineer superintendent, Nagao San, arranged for us to pick up a new impeller off Kingston, Jamaica. ‘I was asked to introduce the crew in Sentosa Spirit to SEP – Safety & Environmental Protection, the forerunner of the International Ship Management Code of the International Maritime Organisation. That was quite a challenge, and it would be a year before the fleet received the final introduction package. After much proof-reading and trials, the DocMap system of 2000 proved easier to implement. ‘After the Lyondell time charter, we carried some cargoes from Pajaritos and Cayos Arcos in Mexico to ports in the U.S. Gulf, always an interesting voyage that on some occasions involved a ship-to-ship transfer of cargo. ‘Twice, we took full cargoes of carbon black feedstock, loaded from interesting places with rickety berths along the U.S. Gulf coast, via the Cape to Port Elizabeth, South Africa. We discharged at Port Elizabeth’s manganese terminal whence a pipeline carried the cargo to the Alcoa factory on the eastern side of the city whose economy is based largely on its motor vehicle assembly plants.’ Captain Steve Tucker

Above left Luzon Spirit in heavy weather. Captain Hans Schaefer Above right After the naming ceremony of Leyte Spirit at the Onomichi shipyard in 1992, Torben and Anthony Gurnee returned to their office in Tokyo where they studied the company’s financial statements. Such was his stress at what he saw, that Torben’s hands began to shake. Financially, the company was in a bad way, and, true to his character, Torben decided to face the banks to whom he owed millions of dollars to ask for a rescheduling of the loan repayments (see page 68). Captain Steve Tucker

64 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 65 Not long thereafter Torben phoned Gurnee. at which they would be informed about the remarked. Despite the perilous situation, After a most pleasant naming ceremony ‘How would you like a real job?’ he asked. company’s predicament and his plans to he showed little emotion, perhaps bottling of the Aframax tanker Leyte Spirit at the Gurnee did not need a second invitation and Torben in Japan meet his commitments. up his frustration that the market had col- Onomichi shipyard in Japan in 1992, Torben joined Teekay in Vancouver in May 1992. As Torben and Gurnee pored over sets lapsed, that all his hard work and his dreams and Gurnee returned to the Teekay office in In the build-up to the Gulf War most coun- of accounts and other financial documents might have been in vain, and that within Tokyo where they downloaded the company’s tries had accumulated extensive stockpiles of aining the confidence of Japa- comply with their expectations of the in preparation for that crucial meeting, the months he could be in the same situation cash flow statement. As the two men studied oil, fearing a serious disruption of supplies Gnese shipbrokers and shipowners lifestyle of a shipowner, she decided to tanker boss sat back in his chair, drew on he had been in only years before. Indeed, at it, Gurnee recalls, Torben’s hands began to from the Middle East if the war developed into was a major step forward for Torben, order a taxi to take him to the office. his cigarette, and slowly blew the smoke least two incidents were perhaps portents of shake, such was the rise in his stress level a protracted regional conflict. Tanker owners, thanks largely to the tireless efforts of In keeping with his simple lifestyle, he upwards. ‘Exciting stuff this, isn’t it?’ he things to come. as he realised the desperate financial straits including Teekay, had benefited from that Shigeru Matsui to convince that tightly took only ten dollars per day for incid- and other favourable conditions prevailing knit shipping community that his friend ental expenses. at the time. Although the Gulf War had been was worthy of their trust. Neverthe- Michihiro Machida of the Sumitomo ferocious with great loss of life, it lasted only less, deals with Sanko and other ship- Corporation wrote in 1996: a few weeks and did not become the regional owners to charter or buy vessels, and Saving the boss’s conflagration that many had feared. Tankers with various Japanese shipyards to build I distinctly remember – it was the bacon Marine Club, Ginza, where I first were able to trade normally (and make good tankers for his expanding fleet, took met Torben. He was then [late 1988] money) during the hostilities, with the obvi- time, as did his quest for cargoes. To smiling from ear to ear because ous exception of loading at Kuwaiti and Iraqi handle much of the Japanese business, of the mini boom in the Aframax aptain Harry Carlisle’s record of the terminals. Yet the fact that oil had been stock- Torben established an office in Tokyo, tanker market. At the time, I seem post-launch party of Nagasaki Spirit to remember he was operating in C piled reduced the demand for oil shipments where he spent a lot of time. the region of 20 vessels. Thereafter, reveals Torben’s personal attributes: after the war, and therefore the demand for He had a small apartment in the he concentrated on increasing tankers quickly declined. city and cycled to the office, his trou- his fleet, mainly on the basis of I was appointed next to the first of the big ships to be built in Japan in December/ Compounding the problem of declining ser legs secured with rubber bands. His newbuilding contracts. I was pleased and honoured to have been January 1989. The ship I took out [of the tanker demand was an oversupply of ton- employees were horrified at this prac- given the opportunity to assist in shipyard] was the ill-fated Nagasaki Spirit. nage. On the strength of the buoyant mar- tice, viewing cycling as inferior when the expansion of his then little Torben and Aiko attended the function, ket up to the middle of 1990, owners had other shipowners travelled in upmar- known fleet. We were successful as well as Jim Hood and his wife, who in coordinating more than 15 was to name the ship. At the large party, ordered ships, many of which were coming ket chauffeur-driven cars. When they Aframax tankers, [which] to me was shipyard bosses, our Japanese Tokyo office into service in 1992 and 1993, thereby flood- approached Aiko to persuade Torben to a tremendous achievement. n superintendents, [and] Torben’s associates ing the market with surplus tonnage. Tough were there for this happy occasion. After times lay ahead for tanker owners – includ- the dinner, we all sat cross-legged on the floor with much toasting. Some boss was ing Teekay – as charter and freight rates fell nominated to sing and whoever sang could by around 50 per cent. Heavy weather was signs of decline. (At the time of the order, commissioned contributed nothing to his nominate the next singer. Eventually (I looming for the international tanker sector. US$1 was worth Y135 and Torben had based reserves; some were actually draining those think it was Shigeru Matsui) called on Torben to sing. I could see that he was The problem for Torben lay in the fact his financial projections on the dollar being reserves by trading at rates below the oper- devastated but everyone kept calling his that his fleet was suddenly generating zero worth Y150 when most of the ships would ating costs. The company was in serious name and very reluctantly he walked cash flow in the weak freight market. Ser- come into service, thus reducing their cost trouble. When Tony Gurnee, by now the towards the microphone. When he came vicing current debt was eating into his cash price in dollars.) However, the yen surprised company’s chief financial officer, raised the past me, I said to him, ‘Do you want some support?’ ‘Yes,’ he replied, ‘come on!’ Four reserves, and with his cash resources soon to most economists and shipping executives possibility of bailing out the company with of us from the ship were in uniform, and I be depleted Torben Karlshoej was heading and strengthened considerably to Y105 some of the cash that had been kept in the indicated to them to join us on the stage. for a financial crisis for the second time in against the dollar, increasing the dollar cost Bahamas, Torben looked at him and said qui- Torben handed me the microphone. We his life. It transpired that, in the heady days of the tankers. etly, ‘I’ve spent it on my new tankers.’ sang ‘Green, Green Grass of Home’, and ‘When the Saints go Marching In’. After of a booming market, he had ordered a sig- The debt Torben owed to the banks that Never one to shirk his responsibility, that, it was the dragon dance. nificant number of new tankers from Korean had financed the loans therefore escalated at Torben accepted that, besides the unfavour- At the launching ceremony the next and Japanese yards, several of which had yet a rate of $7 million for each Y1 increase in able trading conditions that were beyond his day, Torben whispered to me, ‘You saved my bacon last night!’ Then I noticed a bit of to be financed, and construction instalments the exchange rate. Alarmingly, the exchange control, this grim situation was the result of paper stuck to his face, and he nonchalantly on these vessels were becoming due. To add rate continued to increase in favour of the his own doing. He had simply over-ordered [went] to the launching podium. He had cut to his woes he had, perhaps unwisely, agreed yen, and in July 1992 instalments were and had misjudged the trends in exchange himself shaving – he said it was excitement to pay yen prices for the Japanese ships, due for about a dozen tankers. As a result rates completely. He sprang into action, writ- when some message had come in to say he had made a million dollars! n gambling on the yen weakening against the of the depressed tanker market, even some ing letters to all the banks involved, inviting dollar as the Japanese economy was showing of Torben’s new tankers that were being them to a meeting in Vancouver on July 2

66 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 67 through which his company was steaming. far left Anne Oian, vice-president of Den norske Bank, who cautioned Torben about the financial state of Teekay On a later trip to London to discuss the com- and suggested that he appoint a board to assist in its Art Coady pany’s finances with banks, Torben’s escalat- operation. He took her advice, and she was one of the ing stress level manifested itself in the onset leading bankers to support Teekay during its darkest hours after his death. Brian Ingpen left Trond Scheie, vice- of a panic attack, which, some suggested, president of Den norske Bank, photographed in 2011. He Nova Scotian, Art Coady graduated may have been a heart attack. Certainly, the and Anne Oian supported Teekay, enabling the company’s loan repayments to be rescheduled. Brian Ingpen A from law school at Dalhousie Uni- severe strain under which he was working at versity, Halifax, in 1960, and on com- the time was a major contributor to a later, pleting his degree moved to a general sad event. law firm in Calgary. He and two of his With its forested hills, the purple moun- law school classmates later established tain peaks in the background, and the spark- their own firm that specialised, inter ling waters of the Sound dotted with yachts alia, in oil and gas law. Among his cli- and other pleasure craft, Vancouver in mid- ents was Tiber Energy, a small oil and summer is a most agreeable place. Into that gas company in which Torben Karlshoej delightful city flew 22 bankers from a num- had bought shares, mainly to learn ber of countries, each eager to hear what about the upstream part of the oil and Torben would tell them about the state of gas business. his company’s finances and, perhaps more When Torben became a member importantly, how he intended to rectify a of the board of Tiber Energy, Coady particularly precarious situation. Most were met him and such was the immediate under severe pressure themselves as the mutual trust between them that he financial world was in turmoil and banks Art Coady, photographed at the Palm Springs house subsequently became a legal adviser to where Torben died. Brian Ingpen generally were scrambling to find every Torben and to Teekay. Indeed, the two dollar they could. They assembled in the almost impossible solution to the crisis. Had One of the leading banks involved was men also became good friends. Tor- boardroom and, after polite exchanges, Tor- even one of the banks called in its debt, the Den norske Bank (DnB), whose relationship ben hosted a Tiber board meeting in as one of Torben’s legal advisers. After ben told them – with disarming frankness Teekay operation would have been forced to with Torben stretched back to February 1986 the Bahamas in 1983, and Coady took Torben’s death, the sustaining struc- – of his company’s predicament: the tanker close, but without any immediate dissension when the respected Norwegian shipowner a week off to enjoy a fishing trip with ture that Coady had established secured operations were suffering severe financial the bankers hurried back to their offices to and Torben’s friend Arne Naess suggested Torben. When Tiber was sold in 1988, the continuity of the company and losses, he had too many ships on order, each assess the request and obtain credit approval. to Anne Oian, later the bank’s senior vice- Torben asked Coady to join Teekay Baha- also demonstrated to the banks (to of which had instalments due, and he had no mas as the managing director and also whom large debts were owed) that a ready cash with which to service the rapidly to head up a small bank, Ocean Bank & sound structure was in place to meet escalating debt. A grounding and a collision Trust Company. A specific part of his the company’s future requirements. Writing on a whiteboard, he spelt out job description was to establish a sound (The trust structure has been modified his rescue plan that involved raising cash to sustaining ownership structure for the twice since then.) service his debt by selling a number of ships, he Aframax tanker Oshima Spirit was built in Nagasaki, Japan, in 1976 as Diana company and its affiliates, which until Apart from being a close friend of including his beloved Kisuca. To give him TProsperity. Two serious accidents marred Teekay’s proud safety record. She grounded then had operated rather independ- Torben, the genial, unassuming Art time to settle the debts, he asked the banks in the Magellan Straits and had to have extensive repairs to her bulbous bow. In June ently. Apart from the corporate struc- Coady was a tower of strength to Teekay for a year’s deferral on debt repayment and, 1990 she collided head-on with another ship off Sri Lanka, incurring great expense as ture, Torben asked Coady to ensure that in the years immediately after Torben’s importantly for the bank officials at the part of her upper bow had to be replaced. In his circular to masters dated July 12, 1990, the structures he put in place would death. His meticulous handling of the meeting, he placed his own reputation on Torben referred to the latter incident: also secure the education of his daugh- intricate nature of the legal side of the the line by his commitment to settling the ters. Via the establishment of trusts, company before it went public in 1995 debts. (Anthony Gurnee recalls that Torben Oshima Spirit collided because of the this incident was the worst, we have had most blatant disregard for regulations, several others – which by the exercise of both objectives were achieved: Teekay’s was of immense value in ensuring that left instructions that the whiteboard on instructions and common sense- due diligence, could have been avoided. ownership was handled within a more Teekay could forge ahead, safe in the which he outlined his rescue plan that day seamanship exhibited by the watchkeeping Once more, I implore all on board to formal structure, while the future edu- knowledge that its financial and legal should be sprayed with a special chemical Chief Officer in particular, and others on realise the importance of the Company cational needs of his daughters were framework was sound. to preserve it. ‘Everyone should see it,’ he board in general. To make matters worse, rules and regulations. Read the book – the personnel on board then put their story go by the book. Remember the world is secured. ‘I wouldn’t have missed this for the remarked at the time.) together amounting to one big lie. They all looking at us and we shall be judged by the Art Coady later concentrated on the world,’ Art commented later when It was a well-constructed plan but, when lost their jobs! The saga has cost about actions of those on board. n company’s legal matters but continued reflecting on his time at Teekay.n one considers that the banks themselves $5 million and three months’ time. While were struggling with the economic down- turn, Torben had asked them to accept an

68 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 69 Progress and an omen

llan Stevens, who worked as Athe vice-president, finance, from September 1987 until Febru- ary 1992, said that when he arrived on his first day in the Long Beach office, he found that his desk had been placed inside Torben’s office so that he could have ready access to financial information. ‘It was that way for over a year,’ wrote Ste- vens. ‘It was my good fortune and the happiest days of my life!’ At that stage, the Viking Star fleet had eight tankers and the balance sheet showed $40 million in equity and the same amount in debts. Within five years, Stevens recalls, Torben had acquired 57 tankers, and a 51 per cent stake in Baltimar Over- seas Shipping (a short-lived joint president, that she should consider doing about the tanker markets and they valued Maintenance is an important aspect of Teekay’s ship venture with the Dane, Stig Jensen), business with Torben Karlshoej. Working the fact that he was easily contactable and management programme. Captain Hans Schaefer had contracted Chinese yards to with Trond Scheie, another bank official who would immediately provide any informa- build 20 containerships in the late also rose to senior vice-president, Oian con- tion the bank required. When Trond Scheie 1980s, while another 10 tankers ducted an assessment of Torben’s operation, visited Torben’s Long Beach office he found a were on order at a total cost of over which included his Baltimar Shipping (see professionally operated and expanding busi- $1 billion. Debts totalling $785 page 70). Torben met with them in London to ness. Armed with his findings at Long Beach million had been spread over 26 discuss the possibility of the bank financing and a generally favourable picture of the lenders. n the construction of ships in a Chinese yard, Teekay operation, financial assistance for the but, despite Torben’s obvious knowledge construction of several more ships followed, of shipping, Den norske Bank declined to although the Norwegians remained uneasy become involved at that stage. The fact that about some aspects of Teekay’s operation. In those would have been among the first ships July 1991 Oian and Torben met again in Lon- to emerge from a Chinese yard for a western don. Over dinner she told him that the bank owner, and the general decline in shipping had difficulty in accepting the fact that his markets at the time, did not encourage the company had no board of directors. ‘Why do bank to offer the finance for them. I need a board?’ Torben asked. ‘If something Since he could not obtain the backing of goes wrong,’ she replied firmly, ‘we need to banks, Torben had financed the acquisition be able to refer our inquiries to more than of several of his earlier ships himself but, des- one person, and,’ she continued quietly, ‘you perate to have a reputable bank involved, he do owe a lot of money.’ had invited Anne Oian to be the ‘godmother’ A few weeks later Torben told Oian that of the Aframax tanker Pacific Spirit, which was he had established a trust, appointed trus- above right Torben’s last contribution to the in-house named at the Hyundai Heavy Industries’ yard tees (his brother Axel, Tommy Hsu, Shigeru publication Teekay Log before his untimely death. Teekay in Ulsan in 1988. Over time, Den norske Bank Matsui and Art Coady – see page 68) and had Collection right A Teekay vessel in silhouette. Teekay Collection found Torben to be extremely knowledgeable drawn up a will.

70 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 71 Oian mentioned later that, at the time, ordered from Hyundai Heavy Industries in he said. ‘One of our ships has exploded in the there was little cause for concern as Torben Ulsan, South Korea. Malacca Straits and we can’t find the crew … had fixed charters for his newbuildings In an attempt to alleviate the extent of the I must get the loved ones back for their fam- before they were completed – albeit it to the debt, Torben approached some of the Japa- ilies …’ Although they had arranged to meet related group company Palm Shipping – thus nese shipyards with whom he had placed on October 4 in Palm Springs, this was the assuring himself, and the bank, that the new orders for ships, requesting that some con- last time that Kim spoke to her father. ships would be earning revenue from their tracts be cancelled and others postponed. ‘We ‘I can’t stand this!’ he confided to Tommy first day in service. know you’ll be back when times improve,’ Hsu during one of the many calls he made to Den norske Bank gradually increased its one yard responded to his request. his friend in those dark days after the acci- funding to Teekay, growing into one of the The protracted stress of handling the dent. ‘I’ll go to Palm Springs to play some two largest lenders to the company, based company’s financial crisis had taken its toll golf.’ on the trust that the bank’s senior officials on Torben’s health. To compound the strain Playing golf was one of his relaxations, had in Teekay’s ability to manage its own under which he was operating, another and having heard that the banks would affairs well, and, perhaps more importantly, major blow came on September 19, 1992 that assist, he decided to spend some time at their trust in the integrity of the tanker distressed him in the extreme. the house he had bought on one of the owner himself. That integrity carried the day When Tony Labella arrived for his duty at golf courses in Palm Springs. He and Aiko for Torben during the crisis of 1992. Trond the Vancouver office on that Saturday morn- travelled down to Palm Springs on Friday Scheie gave Oian the details of the meeting ing, another employee was leaving. ‘Nagasaki October 2 and he played a round of golf with in Vancouver and Torben’s survival plan. ‘Go Spirit has been hit!’ he told Tony and gave Shigeru Matsui that afternoon. ‘I’ll play you ahead,’ she said to Scheie, ‘tell him that we him an outline of the events that had led to again at 6 o’clock tomorrow,’ Torben said to will support him.’ the tanker colliding with a containership in Matsui as they finished the round, ‘but it will Golf and the Palm Springs house Apart from a small Danish bank, all the the Malacca Straits, an incident that resulted be over 36 holes, and I’ll beat you!’ banks – including major Japanese lender in the fiery death of all on board both ships, When Torben returned to the house, Aiko Sumitomo – whose representatives had except for two Teekay men who had been res- had something important that she had been ne of the most memorable things smart German car and drove from Long attended the crucial briefing agreed to a cued (see page 75). bursting to tell him. Later that evening she ‘O I remember was Torben’s newly Beach, but when he arrived at the Mat- temporary moratorium on Teekay’s debt ‘Go up to the office,’ the man said, but whispered to him that she was pregnant, acquired love of golf, though this was sui house, he simply commented, ‘I like repayments for one year. Scheie flew to warned him to stay out of Torben’s way. news that he received with great excitement. not easily ascertained. After many this view!’ Within a day, he had bought Copenhagen to meet the chief executive of ‘He’s not in a good space at present.’ Labella When Aiko woke up the following morn- years of gentle persuasion by Mr Mat- a house adjoining one of the fairways at the dissenting bank, and managed to per- walked into the office to find a pall of deep ing she realised that Torben was late for his sui, Torben’s stubborn temperament the golf estate. suade him to follow the rest of the banks in gloom hanging over normally cheerful peo- golf game with Matsui and tried to wake was finally subdued and he had utterly Matsui challenged him to golf, and supporting Torben. Although most of the ple. Torben as well as Jim Hood, Vinay Pat- him, but he did not respond. Then, to her fallen under its spell,’ wrote Michihiro although Torben accepted he conceded banks had been forced to reduce the extent wardhan and David Glendinning were very absolute horror, she realised that her much Machida of the Sumitomo Corporation that his friend was a far better player. of their involvement in shipping, all saw in focused on trying to get updated information beloved husband, Teekay’s giant cedar, had in 1996. ‘My fondest memories of Tor- ‘Tell you what,’ Torben said to Matsui, Teekay a glimmer of hope. from their agents in Singapore, on organis- died in his sleep. ben were those we shared on the golf ‘I bet you that I will beat you at golf Letters bearing the good news began to ing search and rescue, on reaching the fami- Aiko phoned Axel Karlshoej at his home course. I knew instantly that, with a few within a year, provided I can play off a come into Torben’s office. By the end of Sep- lies of the crew members and, throughout in Yuba City, north of Sacramento, Califor- more lessons, he was destined to be a 50-stroke handicap.’ tember 1992, he had learnt that the board their sad tasks, on keeping their own emo- nia. ‘Something’s wrong!’ she cried, ‘I can’t very good golfer.’ ‘What will you bet?’ inquired Matsui. of every bank to whom he owed money had tions in check – for they knew each of their wake Torben!’ It took a while for Axel to real- In common with many shipping ‘A thousand dollars a stroke,’ re- approved the rescheduling of debt repay- crews so well that a loss like this assumed ise what she had just said to him. ‘Get 911!’ people, Torben loved golf. Despite his torted Torben confidently. The deal ments for one year. His impassioned pleas personal proportions for them. he told her, but when the paramedics arrived wealth and in keeping with his natural was struck, Torben hired a professional had been heard, and, above all, the bankers The loss of the ship was bad enough at the Palm Springs house they could not humility, Torben would often queue at coach and he worked extremely hard at had placed great store on his track record of for Torben, but to have lost so many crew resuscitate him. municipal golf courses to play a round, his technique, determined to beat his absolute integrity and his ability to meet his members – people who he knew well – in The cumulative strain of the previous but when Shigeru Matsui bought a con- friend. The envisaged match did not commitments. such a frightful way was a burden he found few months – the financial crisis, as well as dominium situated on a golf estate at happen, for, in October 1992, fate inter- Such was the confidence that Den norske extremely hard to bear. When Trond Scheie the loss of Nagasaki Spirit and her crew – had the popular Palm Springs in California, vened in a cruel way. Bank had in Torben and his tanker opera- of Den norske Bank contacted Torben to offer exacted the ultimate price on a man who was Torben went to the desert town for the Michihiro Machida concluded his tion that, even after Teekay’s financial dif- his condolences on the loss of the ship and so dedicated to his work and his staff. Jens housewarming party thrown by his reminiscence of Torben: ‘His enthusi- ficulties had become known to them in the her crew, Torben was at home, weeping. ‘It’s Torben Karlshoej was 50 years old. close friend and business ally, who had asm for the sport having been carried spring of 1992, they took up the mortgage like losing twenty-two sons,’ he said. On his little yellow notepad Axel listed opened doors to the Japanese shipping right to the end, as I am told, his last on Victoria Spirit and Vancouver Spirit – both Torben telephoned Kim, his eldest daugh- all those who he should contact imme- markets for Teekay. Torben bought a thoughts must have been of golf.’ n 103,200-deadweight OBOs that Torben had ter, to share his distress. ‘Hi, it’s your father,’ diately to convey the devastating news;

72 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 73 Nagasaki Spirit

uilt in the Mitsubishi Heavy Indus- Hood: Where are you? was following me so I decided to go on and when I arrived on the foredeck, the Btries’ shipyard in Nagasaki in 1989, the Mackereth: South of Blang Langcang, wiper [probably A. Tabucan] was already 95,997-deadweight Nagasaki Spirit traded between Blang Langcang and One Fathom there. I decided to throw overboard the across the Pacific Ocean and occasionally Bank. foredeck liferaft so we did it. When the liferaft was already activated and floating took parcel cargoes elsewhere. Hood: What ship is it? properly, the wiper jumped to the water. With her Sulzer engine pushing her along Mackereth: I don’t know. Before I followed him, I looked back on at 15 knots, she was in the northern end of Hood: How did it happen? the accommodation’s starboard side the Malacca Straits shortly before midnight Mackereth: [Hood could not recall whether but I can’t get a nice visibility due to big smoke and fire was engulfing the whole on September 19, 1992. Most of the crew Captain Mackereth prefaced his next accommodation. I immediately jumped were asleep, some were watching a movie, statement with any remarks nor the con- and upon reaching the water, I saw the and Third Mate Candolesas was preparing tent of those remarks if he did.] We kept wiper not far from me. I looked back to hand over the watch. Captain Alan Mack- trying to warn her but she just kept com- from both side and found that fire in the water was so fast approaching on our ereth was also on the bridge as the ship ing on. position so I told wiper that we have to moved through the crowded straits. Hood: What’s your position? leave this liferaft. I swam away from the The weather was fair and the sea calm, Mackereth: 4˚33’ N 98˚43’ E [Handwritten next fire but after few minutes, I looked back to him but I can’t find anymore the wiper an idyllic night that would soon turn to to this entry is the following: Accurate/Satnav and fire was only a meter away from the absolute horror. confirms.] liferaft, so I presumed that wiper came Coming towards Nagasaki Spirit was the Hood: Did you get off a distress signal? aboard the raft and very impossible to 1,466-teu containership Ocean Blessing, a Mackereth: We sent an RCC. save. So I continue swimming for my own safety. After 20 minutes of swimming, I unit of Orient Overseas Container Line. The Hood: OK Captain, good luck, we’ll try to get looked back [at] the whole ship and I came officer of the watch on another ship in the help to you as quickly as possible. to realise that there was another ship area (possibly the Hapag-Lloyd containership burning which finally I recognised it as Hawaiian Express) tracked the containership’s The phone then went dead. Another report a containership, so all I done after that was waiting for a rescue and so happen passage on radar and, as the area is notorious indicated that Mackereth had issued a May- that after more than an hour, I found that for pirate attacks, he believed that she may day call. ‘Have been fired upon and now have fishing boat were the only near on us so I have been trying to avoid pirates for she was fire in Numbers 5 and 6 centre tanks,’ he is just waited and hoped that they will find me so finally at around 0045Hrs, one of moving in an erratic manner, zigzagging and quoted to have said. ‘Abandoning vessel im- the Thai fishing boat located my position also changing speed. Then, making about mediately and into two 16-man liferafts and so they picked me up from the sea and at 21 knots according to her engine-room log will activate EPIRB in lat 4˚33’ n 98˚43’ E at 0100Hrs I was on board the fishing boat. repeater that was found intact, Ocean Blessing 1623 GMT Sep 19. No time to report further All the fishing boats continuously went around on the vicinity to search hit the port side of Nagasaki Spirit, carving a as abandoning vessel.’ for any survivors and after an hour, huge indentation. The sequence of events is a Whatever the cause of the dreadful colli- another fishing boat went alongside us little confusing for Captain Alan Mackereth, sion, both ships were entirely gutted in the and transferred another survivor which master of Nagasaki Spirit, called Jim Hood by huge fire and, tragically, the crews of both so lucky that it was my 2nd cook [Flores] so we were together by that time in one radio telephone. The duty vessel operations ships died in the accident, except for Naga- fishing boat. After that at around 0300Hrs co-ordinator, Carlo Herras, took the call, and saki Spirit’s Third Engineer Maximo Balasbas we passed very near on the ‘Nagasaki transferred it to Jim Hood’s extension. and Second Cook Harry Flores who, when Spirit’ starboard side and I found that the lifeboat davit was down so all I presumed burning oil began spreading beneath the that they are able to release the lifeboat. Hood: Captain, this is Jim Hood. What has starboard side lifeboat, ran forward and both But from my own analysis during the happened? jumped overboard. Part of Balasbas’s state- height of the fire in the first two hours I’m Mackereth: We’ve been hit on the port side ment regarding the tragedy reads (quoted quite sure that the starboard side lifeboat Top Nagasaki Spirit. Teekay Collection left Nagasaki Spirit was not able to make it for safer area and was named by Karen Hood, wife of Captain Jim Hood, by a containership and we’re on fire. verbatim): eventually it was reduced to pieces. So who was the company’s vice-president: operations at the I think she hit us at Numbers 5 and 6 by then we continue for our search and time. Left to right: Captain Hood; Aiko Karlshoej; Karen tanks. We’ve got spiked crude on board I immediately run to the foredeck then rescue, but we found nothing except some Hood; Torben Karlshoej; Mrs Kagachi and Mr Kagachi when I was in the starboard manifold burned oil soak debris which were all (representing the Mitsubishi shipyard in Nagasaki). Captain and the inert gas is breached. I’m afraid section, I looked back presuming that beyond recognition and around 0500Hrs, Jim Hood above Karen Hood about to name Nagasaki we may have an explosion and we’re they [the rest of the crew] were moving Spirit. Captain Jim Hood I spotted a big commercial vessel in the abandoning ship. their direction to foredeck but nobody vicinity so I instructed the Thai fishing

74 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 75 boat to go near, and for God’s shake [sic] that the falls of the starboard side lifeboat The tug operator Semco mobilised several I found that the ship is also owned by TK ‘were extended to just above the water and tugs to fight the fires aboard the two ships, Extract (2) from Let There Shipping, so after a few minutes we were the blocks and bottom gear showed nothing but the oil cargo in Nagasaki Spirit burnt until transferred to M/T ‘Mihara Spirit’ together be a Yard by Sung Hyuk with our 2/cook. to indicate other than a normal release of September 26, whereupon the Malaysian The last thing I would like to say is we the boat’. As neither the lifeboat nor any of authorities ordered the badly damaged vessel Hwang are on board M/T ‘Mihara Spirit’ on the its occupants were found, speculation was to be towed away from the coast to minimise morning of September 20, 1992, safe and sound but with another with regards our that it had been caught in the raging fire and any pollution threat. Semco anchored her off belongings specially our papers. the boat plus its occupants were incinerated. Belawan in Indonesia, where she remained orben called me by telephone soon after (The portside lifeboat had been burnt to ash for nearly a month, during which time the T the crash. He was amazingly calm as Mihara Spirit had been about 50 miles astern while still in the davits.) remaining oil was trans-shipped to another usual, and I could not find the proper words of Nagasaki Spirit at the time of the collision Investigators found human remains vessel. Only on December 12 was Nagasaki to console him. He brought the subject up and, as she was the first vessel on the scene, aboard Ocean Blessing. Some reports indicated Spirit tied up at the shipyard in Singapore. first. He did not say anything about the loss had been the search co-ordinating vessel until that more remains were found on the vessel She was sold ‘as is, where lies’, her new of the crew members. those duties were taken over by USS Niagara than the number of crew on the crew list, owner had her repaired, and she returned to ‘They are talking too much. What are Falls, which arrived some hours later. perhaps lending credence to the notion that service in 1994 as Neptune Leo. After three sub- they saying about the tanker market? Tell me A helicopter operating from the Amer- pirates had indeed been aboard the contain- sequent owners and name changes, she went about that.’ ican warship plucked the body of Captain ership, which may explain the erratic course for scrap as Ross Sea in 2003. ‘They are only talking about what every- Mackereth – mysteriously showing no burns she was steaming before the collision. Since they seemed to have complied with body already knows. They are complain- – from the sea and put it aboard Mihara Spirit. Media speculation was that Ocean Bless- all the requirements, Semco applied for a ing about how hard it is to survive. They are No human remains were found on Nagasaki ing was carrying a consignment of weapons salvage award but, rather than deciding on worried that because Teekay owns many oil Spirit, suggesting that the crew had indeed and ammunition for various groups in the the traditional salvage award, the salvage tankers, it will be more painful for you.’ abandoned ship in the starboard side life- Arabian Gulf region; if true, this would arbitrator calculated their award based on ‘Sung, what do you say to that?’ boat, a point confirmed by Captain J.W. explain the ferocity of the fire that engulfed the ‘special compensation’ remedy provided ‘To be honest, I’m not entirely without Rogers, master of Mihara Spirit, who reported the containership. under article 14 of the 1989 International worry either. I’m sure that it will be no prob- Captain Jim Hood participating in the celebrations to mark the naming of Nagasaki Spirit. Captain Jim Hood lem for you to settle the matter, Torben, but the market situation is terribly bad.’ His tone was balanced. Convention on Salvage (London Convention), loud bark was his genuine care for the wel- ‘Sung, you know me well. Don’t worry. which is part of the Lloyd’s Open Form 1990. fare of his crews and their families. It thus It’s terribly hard, but it’s no problem. Take a Not surprisingly, Semco appealed that troubled him enormously that the men from closer look at us. And tell everybody Torben decision, claiming that they were entitled Nagasaki Spirit had simply disappeared with- will overcome.’ to recover expenses incurred during the out trace, while the horrific manner of their He died just a few days later. n salvage operation, over and above the usual demise added greatly to his distress. n provisions of the Lloyd’s Open Form agree- ment. Their claim was dismissed by the appeal court, and, after a protracted process that went to the British House of Lords, the Nagasaki Spirit postscript tug operator was left empty-handed. How- ever, the case provided a legal landmark in earing a cheque to give to the wife of that the terms of SCOPIC were subsequently Bthe deceased Captain Mackereth, Allan improved considerably in favour of salvors. Murphy went to his funeral service in Although the hull and machinery insur- St Johns, New Brunswick, where the ers agreed to declare the vessel a constructive captain was interred in a churchyard that total loss and paid out the full insured value overlooked the Bay of Fundy. After the service of $55 million, Teekay did not measure the Murphy returned to his car and only ten loss of Nagasaki Spirit in dollars, but in the minutes later heard the news of the death of depth of the human tragedy that surrounded Torben Karlshoej. the frightful accident. So many families had It is said that the insurance payout lost their loved ones, who had also been their following the loss of Nagasaki Spirit (about breadwinners, but none at Teekay was more $55 million) breathed life into the strug- burdened by the fiery loss of so many men gling, debt-ridden Teekay, but the tragedy Guests and officials at the naming ceremony of Nagasaki Spirit and her sister ship Koyagi Spirit in Nagasaki in 1989. Captain Jim Hood than Torben Karlshoej. Behind his occasional killed its founder. n

76 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 77 obviously family members were on the list. problems, which had manifested themselves Attending Torben’s funeral in ’92 and the Thomas (Tommy) Hsu Susan Karlshoej described the moment she on several occasions: even in the office, reception afterwards in our Waterfront office will remain a defining milestone and her sister received the news of their Moller remembers, Torben had been in pain, for me. Seeing so many people from father’s death: while other employees mentioned instances our industry paying their respects, and orn in Shanghai, Tommy Hsu was when he had experienced discomfort or had representing the fleet (in full regalia) four years old when his family arrived Kim had been visiting in California. She suffered what seemed to be either cardiac was an honour. Jim’s and Axel’s eulogies B and her husband had gone out for the should have been recorded for posterity. in London where he grew up and was difficulties or panic attacks. Yet, despite the evening with my husband and me, and The entire week went by in a whirl. schooled. From childhood he was exposed we had expected to visit Dad and Aiko the pressures under which he worked, he had When departing for the airport after to shipping and its intricacies for, in 1951, next day out in Rancho Mirage [at Palm refused help, had declined to take some of Shigeru Matsui’s evening event, that was his father founded the Expedo Shipping Springs]. We got the news from Axel that the medication prescribed by doctors, and the first time a CEO (Jim) hugged me.‘ Tell Dad was dead. Our world went tilt – this the boys it’s business as usual,’ Hood said. Corporation, which is a successful shipown- was just impossible, but yet it was true. It had continued to smoke and enjoy a few [Because of the events surrounding and ing and management company that prizes was a bizarre and confusing time. I don’t glasses of liquor each day. following Torben’s death, the] next 3 years the quality of its ships, safety at sea, and imagine that it was any different from Jim Hood had reached the office before were quite difficult for us all though, at least until the Initial Public Share Offering meticulous management practices. anyone else’s experience when a loved one Moller arrived and was already putting into passes away suddenly. We knew somewhat in 1995. In 1963 Tommy Hsu went to the Mas- that there would be difficulties with the place an emergency system of communica- sachusetts Institute of Technology to study company, but that was not foremost in tion to inform as many people as possible Torben’s body was laid to rest in Capilano engineering, his successful time there fol- our minds – it was just such a devastating – including the ships’ masters – about the View cemetery in Vancouver, his tombstone thing to have lost our Dad. I still miss lowed by an equally successful period at Har- untimely and totally unexpected death of bearing only his name and an engraved pic- him very strongly, and it is almost 20 vard University. He met his wife, Linda, in years later. the company’s founder. While the impact ture of a tanker. ‘It conveys his simple, unas- the United States, and shortly after marrying of Torben’s death on the company was seri- suming style,’ said one observer. they returned to London, where he began to Also on Axel’s list of people to contact ur- ous, his passing was an intensely devastat- Focusing on the death of Torben as the work with his father at Expedo, quickly gain- gently on that sad Saturday morning were ing experience for the Karlshoej family. His end of Teekay, the maritime media believed ing experience in all aspects of shipowning, Jim Hood, the company’s president at the pregnant widow, his brother Axel who was that a takeover was imminent and that ship management and operation. time, as well as Tommy Hsu, Bjorn Moller also his closest friend, his three daughters, with debts of about $300 million owing to In 1976 Expedo supervised its first new- and other leading figures in the company. and other members of his wider family were Den norske Bank and $500 million to Sumi- building in Japan and other newbuilding It was Sunday in Hong Kong when Jim grief-stricken, as was every employee to tomo Bank, among others, the company was assignments followed, including the con- Hood reached Tommy on the telephone. whom he had been a mentor and role model. ripe for the picking. Speculation abounded struction of two double-hull VLCCs. With a ‘Bad news, Tommy,’ he said, ‘Torben’s dead!’ Axel and his wife Inge invited Aiko to concerning possible companies that would reputation to match its engineering capabil- It took a while for Tommy to assimilate the their home in Yuba City to allow her time target a ‘weakened’ Teekay for purchase on ities, Expedo developed a new generation of news he had just heard – the man who had to recover from her awful experience, and what some called ‘a fire salvage sale’. An- tankers to specifications that exceeded com- been such a good friend was dead! to discuss funeral arrangements. Axel sug- other believed Teekay to be as good as dead, monly accepted class requirements and yard Moller recalls that he was playing golf that gested that Torben be buried at sea from his with the comment ‘The vultures are circling’. standards, and which led the way in aspects morning in Vancouver. He and his partners, private yacht Kisuca, but Aiko wanted him Some believed that Torben was a lone opera- of hull design. Tommy Hsu was stamping his Captain David Glendinning and Mads Meld- buried in Vancouver, the city that had been tor whose extensive tanker operation would own mark on the company that he would gaard, were quite far into their game when his home. collapse, while a Greek shipowner remarked, Tommy Hsu Teekay Collection later lead. a small truck came speeding towards them Apart from his family and Teekay em- ‘Karlshoej built us our new fleet of tankers’, His friendship with Torben began in 1985 on the golf course. ‘Which of you is Bjorn ployees, leaders in the tanker industry and implying that the fleet would be sold, and when Torben wanted to charter one of Hsu’s Torben’s untimely death was a blow to He enjoys a full life attending to his own Moller?’ the driver asked. When Moller iden- bankers came from far afield to pay their that Greek tanker owners could secure excel- vessels. Such was the immediate spirit of Hsu for the two men had become extremely shipping business, Teekay’s affairs, and tified himself, the breathless driver barked, respects to this remarkable man whose roots lent ships at bargain prices. trust between the two men that, during their close friends, as well as mutual business con- undertaking a range of charitable work. And ‘You must phone home urgently!’ Believ- lay in the simple life of a farm boy in Den- Those who peddled such notions had not first meeting, Torben shared with his new fidants. Because of this, he was one ofthe family time is important, for he and Linda ing that a member of his family had taken mark, but whose mark had been made in reckoned on the resilience of Axel Karlshoej friend his ideas for the future development of people who Torben had nominated, shortly have three children and three grandchildren. ill, Bjorn rushed to the clubhouse to tele- the cut and thrust of the worldwide tanker who, fearing that others would try to buy Teekay, a gesture of absolute trust that Hsu, before his death, to be a member of the new Tommy Hsu’s inherent modesty allows him phone his wife. ‘Phone Axel immediately,’ trades, leaving behind one of the world’s out the fleet by hook or by crook, simply himself a man of the utmost integrity, appre- Teekay board. neither to seek the limelight nor to claim any she told him. largest private tanker companies with a but forcefully remarked, ‘We’re not selling. ciated greatly. Hsu’s remarkable partnership with Axel credit for Teekay’s successes. Yet his advice – ‘Torben’s dead,’ Axel said when Moller reputation for safety, superior quality and We are going forward!’ One of the Japanese Hsu learnt that Teekay was not an ordin- Karlshoej in those dark days after Torben’s based on years of experience in the shipping phoned. ‘Please get to the office straight service. His personal involvement in every bankers drew Axel aside at Torben’s funeral. ary company: woven into every development death when the company appeared to be ripe industry – was crucial to the development of away.’ The news stunned Moller, for to him aspect of the company’s operations and his ‘I don’t know you,’ he said, ‘but if you’re any- were the underlying values of integrity and for a buy-out is perhaps one of the key ele- Teekay, for he is highly respected as a person Torben had been not only the central cog personal interest in the training and welfare thing like your brother, we’ll stand behind industriousness that he shared. He also found ments that led to Teekay’s later success. As and as a shipping personality of note. Indeed, of Teekay but also his mentor and friend. of his staff were aspects mentioned in eulo- you.’ Another figure to underline Axel’s role in Teekay the traditions that he cherished, he had been to Torben, Hsu became a trusted the company has benefited greatly from his Reflecting on that dreadful day, Moller real- gies both at the funeral service and in the in the resurgent company was Captain Alan and there was a special attitude towards busi- adviser, mentor and friend to Axel who, like continued role as a board member over the ised that Torben had suffered earlier medical media. Captain Steve Tucker later wrote: Hayes, who called him ‘one big powerhouse’. ness with which he felt very comfortable. his brother, respected Hsu’s wise counsel. past 20 years. n

78 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 79 Extract (3) from Let There be a Yard by Sung Hyuk Hwang

n October 5, 1992, the phone was ring- I arrived in Vancouver on October 9, the Torben’s coffin lay on a platform next to O ing as soon as I got to work. It was a day before his funeral. I dropped by at the where he would be buried. It was time to say phone call from Shigeru Matsui, the most head office of Teekay Shipping to see Pres- goodbye forever. His close friends stepped successful shipbroker in Japan. A lot of ident [Jim] Hood and the people concerned up one by one to pay silent tribute. When newspapers and documents were piled up with [the] funeral service, but I could not my turn came I put my hands together in on my desk because it was the following bear to go and look at Torben’s face. I refused prayer but my mind was blank. As I could Monday after the National Foundation Day to accept anything but his smiling face. not bring myself to just turn away, I placed holiday. I did not even have the chance to In the evening I felt the need to get out my hand on his coffin. His coffin lowered touch anything before the phone rang. In of my hotel room. Despite being heavily jet- slightly because of the spring mechanism a choked voice, as if he was being chased, lagged I was kept awake by many troubling that supported the platform. As I drew my Matsui said, thoughts. What is death? Is it any differ- hand back in surprise, the coffin moved, ‘Sung, don’t be surprised. Don’t be ent if it comes in your early fifties? What and all the hairs on my body stood on end. shocked.’ is death when one is in the prime of life? For a few moments I was overwhelmed by From his panic-stricken voice I could tell These thoughts filled me with confusion. the illusion that he had woken up. But my something awful had happened, but I did If I had stayed alone in my room, I would wishful vision quickly passed, and I gazed not know what, I said, have burst into tears, so I went to the hotel at the deep green grass and the gloomy ‘Ok, Shigeru, tell me. I feel alright. I’ll bar. There was a lot of noise and conversa- woods that formed a fitting backdrop to the not be shocked.’ tion, mostly from the employees of Japa- scene … He mumbled hoarsely, sighing as if in nese trading houses who had provided ship Travelling back from the burial in a pain: finance for Teekay Shipping. bus with other mourners, I looked out of ‘Sung, don’t be shocked. Don’t be Everyone seemed to be worried about the window and leant my head against the shocked.’ the future of Teekay Shipping because glass. The other passengers were murmur- My heart started to freeze and my voice they had financed it for sums of tens – and ing, but I could not hear anything clearly. was shivering: sometimes hundreds – of millions of dol- In the garden of a house on a luxurious ‘Yes, Shigeru, I’m listening. Tell me. lars. And Teekay was managed by only one residential street facing the sea, the last What happened? Shigeru, what happened? person: Chairman Karlshoej. There was a flowers of that year were smiling feebly. Tell me.’ gathering for people like me. Shigeru, Stig, Some old men were preparing the gar- He shouted roughly, as if spitting some- Gerald, Jim, Tom, Sam and Evan were sit- den for the coming winter. They ignored thing from his mouth: ting around a large table. They had all come the long procession passing by their gate. ‘Torben’s dead. Sung, Torben’s gone. It because they missed him. We sat and drank The trees and flowers were living in their was a heart attack, yesterday. He died of a toasts to his memory until the waiters even- own season, and the sky over Vancouver heart attack.’ tually drove us out of the bar … remained very grey. Nothing had changed Even before he had finished I started yell- On the day of the funeral, the sky above in the time we had been at the cemetery. ing as though he was responsible for what the beautiful town of Vancouver was cov- Has his death left the world so unmoved, had happened: ered with dark and heavy clouds. The ser- so untouched? Does his death mean noth- ‘No, no! What? Torben, Torben. What? vice was held at a small church. Afterwards, ing despite the fact that he left us suddenly, Torben’s dead? I talked to him by phone a long funeral cortège marched to a grave- abandoning so much unfinished business only last weekend.’ yard located at the centre of a cosy grass and at such an important time of life? Is He kept on repeating that I should not be field surrounded by woods. From the edges this how life is? Does it really just carry on top The pall-bearers – Axel, Tom (Torben’s younger shocked, and I continued to yell meaning- it looked like an everyday field or meadow, regardless? brother), Eric Hallman, Captain Jim Hood (obscuring less words. And then we were tongue-tied, but the barely visible, horizontally placed There was nothing but the grey sky. I felt Captain Vinay Patwardhan) and Bjorn Moller – carry only listening to the sound of each other’s gravestones, one of which was carved with incapable of further thought or action. Torben’s casket to the grave. Aiko Karlshoej RIGHT Esther and Poul (Torben’s stepmother and his father), Caroline breathing … Torben Spirit, revealed it to be a cemetery. Adieu, Torben! (Torben’s third daughter), and Aiko (Torben’s widow) at the graveside. Aiko Karlshoej above Representing Teekay’s sea staff, Captains Andrew Phillips and Steve Tucker salute the great man. Aiko Karlshoej

80 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 81 Unquestioned integrity a A man with vision and a mission model to all count myself among the many individuals If that was all that could be said of Torben orben Karlshoej was a leader in the tanker I who Torben Karlshoej befriended in the Karlshoej he would have been just another Tindustry and his unquestioned integrity course of his busy career. We cannot imagine spectacular star of the shipping world of was a model to competitors and colleagues that any one of us should expect to see the like which there have been many. Our memory of alike. of him again, in our personal or business lives. him is more enduring. As some know, he was The bad tidings of his early death gave His untimely passing was a terrible shock, and in the habit of describing himself as a simple a deep sense of loss to us all; for a group of a loss that cannot be diminished by time. Danish country boy. It was in part a natural shipping executives assembled in Scotland, Our personal feelings though are not one and charming modesty, but also an uncon- the immediate reaction was to commemorate of emptiness. It was impossible to meet this scious expression of his inability to explain him with a period of silence and reflection. man and not be affected permanently by the the insincerity and cynicism which he saw Torben Karlshoej became a legend in his example he set in his unique approach to around him, and his disappointment when own time, by building a fleet of more than 50 work and life. He had a lifelong passion for faced with them. He was devastatingly percep- tankers not only in a remarkably short period, the sea and ships, which began with visits to tive, but always straightforward and open in but also in a turbulent and challenging period the harbour as a child in Denmark, and which his business dealings, preferring simplicity for our industry. became ever more a reality rather than just to complexity. What mattered most to him Unlike some in our industry, he did not a dream. With his natural curiosity, a quick though, was that he and his company kept spend his time talking, he acted and his mind, great instincts for markets and inex- their word, whether written or not, and met The cover page of the programme for the funeral service showed Torben in his fishing gear. Aiko Karlshoej actions display an uncanny ability to turn haustible energy, he could have turned his their commitments to all their commercial problems into opportunities. mind to almost any industry or technology, partners, come hell or high water. I was privileged to meet him for lunch last and been equally successful. Naive, some would say, but it was surely Reflection on 1992: Industry much poorer year in Oslo and to discover the man behind His concern and respect for all those who the very foundation of his particular success. the legend. Obviously his phenomenal success worked for his companies engendered fierce People from all nations, cultures and back- the lowest point of my 25 after untimely death was no coincidence. Not only did he have the loyalty amongst his staff. Rather than make grounds trusted him and his company, and years with Teekay energy to follow the market and opportunities decisions for a particular individual, he would felt secure doing large amounts of business our Shipping Editor Jim Mulrenan wrote wherever his presence was required, but his share in the decision-making process, impart- with him. Ethics always came before every- Ya thoughtful and informed article on the incisive mind showed a keen understanding ing his special brand of rigid, disciplined thing else. We must hope they teach this in eyond doubt,’ wrote Captain Steve late Torben Karlshoej and the company he of the events that actually moved the market, commonsense, and ultimately allow that indi- business schools as well. ‘BTucker, ‘1992 was the lowest point of founded. as opposed to those that conventional wisdom vidual to make the decision. The result is a It is, for his friends, the quiet moments of my 25 years with Teekay. Not only did we In pointing out that Torben achieved a held to be the reason. company that makes decentralised decisions each day when a cold unspeakable sadness lose Torben, but at the same time, we also level of discretion about his affairs perhaps He possessed a unique combination of with a common tightly focused goal. Such descends. We reflect. We sustain ourselves by lost a good friend, Chief Engineer George highlights the basis of a number of speculat- market understanding, and hands-on know- are the organisational ingredients for com- the warm memory of that simple, pure and Thompson, [who] lost his fight with cancer. ive pieces about Teekay’s future. ledge of what happens on board a ship. mercial success, a textbook case of a company principled Dane. And go forward once more, ‘We were also all still reeling from the I obviously do not know what the future In a period where ‘absentee landlords’ with vision and a mission, one to be studied invigorated. tragic loss of Nagasaki Spirit with only two holds for Teekay (much less the market – were increasingly common in the shipping by future generations of students in business survivors. I had sailed with three of the of- more’s the pity) but what I would like to put industry, he was a man who knew what qual- schools. Thomas K.Y. Hsu ficers who perished in that awful explosion on record is that BP Shipping enjoys a close ity in operation of his own ships was all about. and fire. Some say that because of the insur- business relationship with Teekay. It was obvious that to Torben Karlshoej ance paid out for the constructive total loss This relationship has been based on com- ‘building a business was more fun than hav- of Nagasaki Spirit we survived financially. patible business objectives together with a ing fun’, so in that sense he was fortunate in ‘Our former MD in London told me that large slice of trust by both parties. having his kind of fun to the very end. an oil major had not offered any condolence It is also worth adding that we would not But it is a tragic loss to us all that such a over the loss of our founder, but instead have countenanced such a relationship with, pleasant colleague and challenging compet- asked if we wanted to sell off the entire fleet. as your headline implies, a ‘one man band’. itor leaves us just at the time when his ex- ‘Their letter was apparently unceremon- That said the industry is much the poorer ample in turning problems into opportunities iously dumped in the waste bin. for Torben’s untimely death. is so strongly needed. The obituary in Vancouver Sun emphasised the ‘business ‘I believe there was very little love lost as usual’ approach that the company adopted after between Teekay and that company in those W. Luff, BP Shipping, Harlow, Essex Jens Ulltveit-Moe, Haugesund, Norway Torben’s sudden passing. (Copy provided by Aiko Karlshoej, days …’ Published in Lloyd’s List, October 23, 1992 Published in Lloyd’s List, October 23, 1992 with acknowledgement to Vancouver Sun.)

82 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 83 Those assessments of Axel – coming from for his own money. Among the details that was escalating, the banks that had agreed to 1992. They only just managed to clear this completely different quarters – were entirely had drawn his close scrutiny was the future a deferment of debt payment wanted clarifi- hurdle, in part by selling a few million dollars correct, for the older Karlshoej brother had security of his daughters, although he didn’t cation on the succession plan as they feared worth of accounts receivable. Miraculously, a personal crusade to honour Torben’s mem- want to spoil them in any way. ‘We don’t that with the owner gone the company the trustees also managed to clear all debt ory by brushing off the tirade of negative want anybody wasting money and then com- might unravel, while the clients who regu- due for repayment by the end of 1992, but press surrounding Teekay’s future. He would ing to beg for more,’ he had said. ‘And what larly chartered Teekay ships feared that the in the process a nostalgic piece of Torben’s ensure that others kept their hands off Teekay about the distribution of assets in the event service they had enjoyed when dealing with life was also sold – his beloved yacht Kisuca, and launch a clear plan that would allow the of your death?’ Art asked him. ‘The assets,’ Torben would be eroded. which had been his home, the showpiece for company not only to continue its operations Torben had responded, ‘should be held in Mindful of their enormous responsibility his company, and aboard which several diffi- but also to expand them to the point where trust and dedicated to charitable works in to continue and expand on Torben’s hard cult relationships had been ameliorated, not Torben’s dream of creating the world’s lar- the maritime industry.’ work, the trustees made several important the least of which was his previously stormy gest tanker company could be realised. As he Torben and Art had agreed on a flexible decisions at their first meeting. Teekay would relationship with his father, Poul. had defended his younger brother so many structure whereby Torben would download go ahead, they agreed, and they handed the Negotiations with Onomichi shipyard times in that rural community in Denmark, his assets into three separate, firewalled position of chief executive officer to Captain in Japan yielded an agreement to delay the Axel would now defend Torben’s reputation trusts in different jurisdictions, with a pro- Jim Hood, whose penchant for orderly opera- delivery dates of some of the tankers on and his dream. tecting trust to ensure that each trust oper- tion, his professional approach to his work, order, debts were being paid off according Apart from dealing with his personal ated according to its constitution. He had and his vast experience in shipping inspired to plan, and, in time, all agreements were grief at losing someone so close and dear to carefully selected the trustees for that over- much confidence. He was the epitome of the honoured, including outstanding payments him, Axel had to make rapid and vital deci- arching body, ensuring that the future care stabilising figure needed by the company, its to Gerry Plato, without whose help in the sions concerning the future of the company. of his company and the trusts would be in clients and its staff at that critical period in early years of the company Teekay might not His unswerving commitment to ensure the the hands of people he trusted implicitly: its history. have made it into the big league of tanker future success of the company was clearly Axel, Tommy Hsu, Art Coady and Shigeru Teekay owned or operated a fleet of 75 operators. the driving force that propelled the company Matsui. ships and the trustees agreed that they would Torben had ordered a VLCC at the top from what many believed to be a tenuous The work had been complex, but when have to dispense with the ships that were not of the market but without suitable finan- situation towards a very bright future. His Coady had completed the extensive task part of the company’s core business, which cial cover. The vessel was due to be com- strong, confident intervention at that time Torben was satisfied. ‘I have disposed of all lay in the Aframax and products markets. pleted in January 1993 and the board was also gave much-needed assurance to the Tee- my assets,’ he had said, ‘and I don’t own a However, contrary to speculation that the desperate to have the ship, later named kay staff that, based on Torben’s hard work thing!’ The foresight of both Torben and Art ships could be snapped up at bargain prices, Musashi Spirit, operational as soon as pos- in the past, good times lay ahead. Coady to restructure the company’s finances Teekay demanded market-related prices for sible because the markets were turning for The ‘one-man-band’ perception that many and his own assets provided the basis for the the tankers they chose to sell. Among others, the better and she would be a good revenue outsiders had of Teekay until Torben’s death future success of Teekay. three Yugoslav-built ships were sold for $76 earner – and improved income is what the had overlooked not only Axel’s strong char- The four trustees had immediate difficul- million, raising critical cash, but more cash company required urgently. Working hard acter, but also the formidable team that Tor- ties to address in order to ensure the survival was needed. to secure financing for the ship, Shigeru ben had established around him. In people of of the company, and shortly after the funeral To meet a commitment made to the Matsui brought to the table an offer from a the calibre of Jim Hood, Bjorn Moller, David they met as a group, Teekay’s new board of banks as part of their agreement to a twelve- bank to finance her, but the trustees felt that Glendinning, Vinay Patwardhan and Tony directors, for the first time to discuss the seri- month deferral, Teekay had to have at least the bank should have offered more. Matsui Gurnee, together with their respective teams, ous situation facing the company. The debt $25 million of cash in the bank by the end of approached them again and managed to the company had staff with vast experience, ingenuity, professionalism and integrity – all Torben had ordered a VLCC at the top of the market but the right ingredients for success. without suitable financial cover. After his death, the As regards his own assets and the busi- newly formed board managed to secure a loan – an indication that the finance houses were beginning to ness itself, Torben had been far smarter than note that the company had turned the corner. The board the media or his competitors realised. Back was determined to have the ship, later named Musashi in December 1991 – probably in the light Spirit (2), operational as soon as possible because the markets were turning for the better and she would be of those secret moments when his health a good revenue earner – and improved income is what alarmed him, and also in response to the the company required urgently at the time to repay loans according to a tight schedule. Once delivered, company’s spiralling debt – he had called Art Musashi Spirit (shown here in Fujairah in 1993) did earn Coady. ‘Art,’ he had said, ‘we need to talk.’ the expected revenues during the tough times as Teekay When Coady arrived Torben had said that began to emerge from the depths of financial despair. Captain Hans Schaefer he needed to restructure various aspects of To meet Teekay’s high safety standards, regular emergency drills are carried out. Chief Engineer Kanwar Deep Ghei the company and also to formulate a plan

84 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 85 Torben Karlshoej Working with the great man – JTK

rom the farm in rural Denmark to the ore than most seafarers in the Teekay nobody would rejoin a ship so quickly, vacation on board this yacht is over and I particularly after a 20-month contract. am putting you back on normal ships.’ Fbustle of North American cities, Torben Mfleet, Captain Benhur Villavicencio had On arrival in Manila after signing off, In 1988, I joined the MT Brilliancy which Karlshoej adjusted far more quickly and close contact with Torben Karlshoej, particu- I called a friend at Panfilco Agency who was the start of my tanker career at Teekay. completely than many would have expected. larly during his time aboard Torben’s yacht asked if I was interested in joining a luxury It was a challenge being one of the pioneer yacht as Chief Officer. I had just enough Filipino senior officers at Teekay but The values of industriousness and integrity Kisuca. In an article written for an in-house time to unpack my luggage and wash my following hard work and perseverance, I that he had learnt as a farm boy were applied publication shortly after Torben’s death, clothes before I was on board the Kisuca in was promoted to Master in 2000. in his new surroundings so that he quickly Captain Villavicencio recalls those times and Singapore, only six days after I had signed Whether that palm reader was correct earned a favourable reputation as a hard- tells of his own career in Teekay tankers. off my previous ship! or it was coincidence, I am thankful I spent two memorable years aboard for ending up with Teekay. This year I working man of his word. the Kisuca (named after Torben’s daughters) celebrate my twenty-fourth anniversary After being left in the lurch in a diffi- My path to Teekay and working with the … and worked directly with Torben. Our with the company and I will always be cult time by his first business partners, he great Mr J. Torben Karlshoej started as an voyages included sailing to Japan for the loyal to this great company through thick remained true to his word and, assuring a unbelievable story. In 1986 while on board inauguration of Teekay’s Tokyo office and and thin; our One Team can weather any a chemical tanker as second officer, I was to Croatia (then Yugoslavia) where Torben storm. I also believe that Torben is smiling ships’ agency to whom his fledgling com- due to sign off after 20 months on board. signed for the building of the Shoshone at this great and successful company that pany owed money that the debt would be While waiting at the southbound convoy Spirit, Navajo Spirit and Apache Spirit. During bears his initials. repaid, kept his promise. As they had been at the Suez Canal, we tied up at Port Said a call in Greece, I met Mr Bjorn Moller, Why did I choose a career at sea? and welcomed various merchants aboard. then Chartering Manager in the London Not only is it in my blood but when I patient with him at that desperate time, he Back then, before the International Ship office, who has been the only Teekay was young and watched the big ships appointed them as Teekay’s agents wherever and Port Facility Security (ISPS) Code employee I’ve known to stay on board passing by, I always imagined myself on he could when his company restarted. was introduced [in 2001], this was quite while on holiday! one. I also believe that seafaring is the This highly intelligent man had an entre- common. I value knowing Torben, his family noblest profession … Seafarers manage the One merchant was a palm reader and many others I have met. Torben was a ships that carry … oil, gas, automobiles, preneurial flair and competitive spirit that who told me that after signing off down-to-earth man who treated and cared steel, lumber, electronics, construction occasionally would drive him to take risks, I would be offered a job that I couldn’t for his crew as if they were family, and materials, etc. in huge volumes that result such as the decision to order more ships than refuse and would be on board within a knew his ships inside out. Before I left the in the development of many places. n his resources at the time would cover, a move week. I dismissed his prediction since Kisuca, he said, ‘Ben, your two-year that drew the company into significant debt and may indirectly have contributed to his death. Bjorn Moller who worked closely with Tor- ben in the days when his office was in Long At the helm of his beloved Kisuca. Axel Karlshoej Beach and later in Vancouver, believes that Torben felt guilty when not working hard, especially when on his beloved yacht Kisuca. on one occasion to have dismissed senior someone with his resources. Associates tell Yet he enjoyed his leisure time, and was per- officers when he found that they had not fol- of occasions when he would not pay expens- haps secretly overjoyed when his voyages in lowed the required maintenance programme ive fees at upmarket golf courses, but often, that yacht took him to places where there for their ship. However, to those with whom early in the morning, took his place in the was little contact with the outside world and he worked he was a role model of dedication queue to play at public golf courses, rather therefore with his office. and determination. Many developed their than exert his considerable influence on the He was more than a shipowner – he had shipping knowledge under his patient men- course officials to give him a tee-off time a passion for ships and visited his vessels torship as he was keen to share his know- ahead of those before him in the queue. whenever he could. Captain David Glendin- ledge and experience with even the youngest Although his personal life suffered as he ning recalls that when Torben visited Golden employee. strove relentlessly and kept exceptionally Gate Sun and was introduced to the chief en- A humble man by nature, he wanted no late hours to realise his dream of building gineer, a seasoned man with years of experi- fanfare, and preferred to operate incognito, a the largest and most efficient tanker com- ence at sea, the man was silent for a minute characteristic aided by his wont to dress very pany, he managed to achieve his goal, and and then said quietly, ‘You’re the first ship- casually. Since he always remembered his even after his untimely death the foundation With his daughters Kim, Susan and Caroline and his wife Torben with his catch of the day. Axel Karlshoej As Torben was camera shy, this is one of the few portraits owner I have ever met!’ roots, he was uncomfortable with anything he had laid was the basis on which his succes- Aiko in August 1988. Aiko Karlshoej of him, and it was taken at the naming ceremony of To some he was an intimidating figure, that might tag him as ‘elite’ and did not sors built an even larger company of world Nagasaki Spirit in 1989. Axel Karlshoej insisting on high standards, and was reputed behave as might have been expected from renown. n

86 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 87 Flags flown aboard a Teekay tanker arriving in Venezuelan arrival the Japanese invasion forced him word. That approach brought him great Management’s discussion and waters. Chief Engineer Kanwar Deep Ghei to flee to Shanghai, where he became the respect among the Russian shipping fratern- analysis of financial conditions and police chief. He entered shipping after the ity, who gave his company as much business the results of operations, 1996 war, focusing on the humane movement of as possible. A few months before accepting refugees, many of whom had endured ter- nomination for the Teekay board he had rifying hardship and destitution during the retired from OSG. he Company is a leading provider dreadful conflict in Europe and Asia. His An entrepreneur of note and a colourful Tof international crude oil and petro- work brought him to New York where, while character, Michael Dingman worked at the leum product transportation services to walking in the street, he heard a woman call New York Stock Exchange but left to run his major oil companies, major oil traders, his name. To his astonishment it was one of own business, the Henley Group, which spe- and government agencies, principally the refugees he had helped and who, in the cialised in buying and consolidating compa- in the region spanning from the Red Sea interim, had married a wealthy shipping nies. At one time the Group consisted of 35 to the U.S. West Coast. The Company’s personality. She negotiated a position for cast-off companies from the Allied Group, and fleet consists of 42 tankers, including Feder in her husband’s company – Overseas the operation became known as Dingman’s 38 Aframax oil tankers and oil/bulk/ Shipholding Group – where, starting from Dogs! It proved to be a highly successful oper- ore carriers, two smaller tankers, one the bottom, he worked his way to the chief ation and led to one of the largest launches VLCC and, through a joint venture, a commercial officer’s chair. His fluency in on the New York Stock Exchange. He served 50% interest in an additional Aframax Russian provided an opportunity for him to on several boards, including that of the Ford tanker, for a total cargo-carrying capa- demonstrate his integrity. At a key meeting Motor Company. Axel met him in the Baha- city of approximately 4.2 million tonnes. Russian charterers would converse in their mas and immediately detected that Ding- Approximately 80% of the Com- secure the full, required loan, an indica- average of nearly 14 years. Sixty per cent own language, unaware of Feder’s linguis- man shared Torben’s business principles. It pany’s net revenue is currently derived tion that the financial world was regaining of our fleet is less than five years old. tic abilities. Rather than eavesdrop on their took a simple act on Axel’s part – showing from spot voyages. This dependence on confidence in Teekay. And Musashi Spirit did conversations – which may have been to his him the Teekay prospectus published ahead spot voyages, which is within industry earn the expected revenues during the tough That succinct summary of the company’s po- advantage – he addressed them in Russian, of their own launch on the stock exchange norms, contributes to the volatility of times as Teekay began to emerge from the sition illustrates its strength compared with warning them that he understood every – to convince him of the company’s worth. the Company’s revenue, cash flow from depths of financial despair. the precarious situation only nine months operations, and net income. The balance To meet its obligations and also to expand earlier, testimony to the hard work of many of the Company’s revenue is generated at a time when the tanker market was show- to ensure its survival and its independence. by two other modes of employment: ing upward trends, the board needed to have Hood followed that up with a concluding time charters, whereby vessels are char- long-term finance in place. Rather than close comment in his circular to all masters in tered to customers for a fixed period at a offices, sell more ships, and in the process October 1993: fixed rate; and by contracts of affreight- retrench staff, it had invited participation ment, whereby the Company carries via a bond issue that had the advantage of Torben died a year ago yesterday. We’ve an agreed quantity of cargo for a cus- no repayment of any principal for ten years, come a long way since then and while tomer over a specified trade route over he would not have been happy at having thus reducing the crushing burden of imme- a specified period of time. Management to sell-off seven new ships and would diate debt repayments that were required by probably have disagreed with some of believes that the Company has a com- the banks. This bond issue raised capital of the decisions we have made, I think petitive advantage over other tanker around $200 million and was the product of that he would have been proud of our owners in the Aframax spot market. achievements. six months of extremely hard work by every- Historically, the fortunes of the one, led by Tony Gurnee. In a letter to all the tanker industry have been cyclical, company’s masters in July 1993 Captain Jim To reach the goal of listing on the New York experiencing volatility in profitability Hood wrote: Stock Exchange, however, required even resulting from changes in the supply of more late hours and since the board needed a and demand for tankers. Additionally, This is an exciting development and more diverse face, a couple of leading figures tanker markets have exhibited seasonal confirms our standing as a viable, mature were invited to join. Each of the new- variations in charter rates. Tanker mar- shipping group. We are not complacent about our situation or about market comers had an interesting history of endeav- kets are typically stronger in the winter prospects. Nevertheless, we believe that our that both enriched and extended the months as a result of increased oil con- the worst is behind us … In fact we are board’s perspectives. sumption in the northern hemisphere very bullish [about] our future prospects. Of Czech-Jewish extraction, Morris Feder and unpredictable winter weather pat- We control approximately 9% of the had worked for a shoe manufacturer before terns which tend to disrupt shipping world’s Aframax fleet. The average age of Celebrating the successful listing of Teekay Corporation on the New York Stock Exchange on July 19, 1995 are Art Coady, Jim our fleet is 7.5 years versus an industry heading for Hong Kong. Shortly after his Hood, Bjorn Moller, Anthony Gurnee, Axel Karlshoej, Morris Feder, and a stock exchange official. Teekay Collection operations. n

88 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 89 times. ‘Because we knew that Jim Hood was Teekay. Serious negotiations with Day began one day,’ he had told her, and several senior at the helm,’ commented an employee later, but there were complications. He told them Teekay people remember him passing sim- ‘we knew the company was on course, and that he would only accept the position if they ilar remarks at other times. that meant so much to us all.’ bought Navios, because all of his own net A telephone call to Moller in December The question on many lips centred on worth was tied up in his 30 per cent owner- 1996 was the first step in a period of dynamic his successor. Axel Karlshoej and the rest of ship of that company. Although he and Art change for Teekay. ‘I need to see you,’ Jim the Teekay board felt that they needed to Coady discussed the matter at length, Day Hood told him. ‘I’ll come to your house in a find a replacement with experience in the broke off the negotiations when they could short while,’ and within an hour he arrived operational and financial sides of shipping. not agree on a price. Nevertheless, since the at Moller’s home. A bemused Moller ushered To that end they briefed a Vancouver-based board had been impressed by his track record him to his study where the chief executive executive search company in the fall of 1996 and the manner in which he had conducted went straight to the point. ‘The Board,’ he to find a new chief executive. Axel had heard negotiations with them, they offered him a said, ‘has decided to appoint you as chief about the South African-born Sean Day, who directorship in 1998, which he accepted. operating officer with effect from 1 Janu- at the time was president and chief execu- The search for a successor to Jim Hood was ary.’ He paused while he waited for Moller tive officer of Navios Corporation, a large resumed. They considered Tony Gurnee who, to absorb the news before continuing. ‘They bulk shipping company based in Stamford, in his role as chief financial officer, had been also want you to understand clearly that this Connecticut, and asked the executive search very close to Torben, particularly as they had appointment is a prelude to the eventual company to approach him. Day flew to Lon- worked long hours together, poring over succession plans for chief executive when I don to meet the Teekay board – the first columns of figures as they tried to resolve retire. In other words, Bjorn,’ he said, ‘the time that he had met Axel, Art Coady and the company’s debt crisis, and in the opin- Board is signalling that you will eventually Tommy Hsu, as well as Michael Dingman, ion of some he had the credentials to take succeed me.’ Morris Feder, Steve Hsu and Jim Hood. It over from Hood. On the other hand, a young Moller was surprised at the news and felt Nassau Spirit off the Venezuelan coast in July 2011. Chief Unfortunately, the US Stock Market its own challenges, not the least of which was an interesting meeting from both sides, Dane who had not had the benefit of much a tremendous responsibility to carry forward Engineer Kanwar Deep Ghei dropped by around 7% just as we were was the transition from the private, close- but despite Feder assuring the board that he formal financial training, but whose résumé the vision that Torben Karlshoej had for the about to place the issue in the market knit, free-spirited operation where decisions ‘knew everybody in the shipping business’ showed that he had plenty of hands-on ship- company, a feeling that was ameliorated and interested potential buyers quickly evaporated. Rather than sell off too were made quickly, to the tightly structured and that they were ‘wasting their time con- ping experience, was also in the running for by Axel’s unwavering support for him and At Axel’s invitation he immediately agreed to cheaply, we have postponed this deal public company that had to bear in mind its ducting a search’ because there was nobody the chief executive’s position. During the all that the company stood for. The board join the Teekay board. until the stock market firms up … When wider ownership. suitable to take over Teekay, they decided naming ceremony for Shoshone Spirit in 1989, appointed Moller as chief executive from this IPO is eventually floated, all senior A prominent figure in Hong Kong ship- sea staff with minimum two years’ service Since its inception Teekay had been more that, with his long track record in both ship- Torben had pointed out Bjorn Moller to his April 1, 1998, and a new phase in the com- ping circles, Steve Hsu knew Tommy Hsu but in the Company will participate in an than a company interested in the bottom ping and finance, Day would be ideal to run daughter Kim. ‘He will take over from me pany’s history was about to begin. n was not related to him. He had met both Tor- Employee Stock Option Plan, details of line. Several people recall instances where ben and Tommy in 1991 during the negotia- which you will receive in due course. Torben had used his own money to meet tions between Chinese shipowners and the an obligation, rather than default on a pay- Canadian government that paved the way for Teekay Shipping Corporation was admitted ment, or where he had rewarded hard work the creation of a favourable climate for for- to the stock exchange on July 19, 1995, af- privately. Although the public operation eign shipowners to register their head offices ter a successful share offering, an event that required a greater degree of structure, the in that country (see page 60). Although his provided much-needed capital to reduce debt original spirit and values of Teekay were still expertise was mainly in the dry bulk market, and create a basis from which to consider fu- discernible in the manner in which employ- he provided new and very useful insights ture expansion at a time when tanker mar- ees operated and in the relationship between into global shipping. kets were strengthening. It also cast Teekay the company’s leadership team and others. With a high-powered board in place and firmly into the public eye, which benefited Having played a crucial role in stabilis- balance sheets that had improved remark- the company greatly for the listing demon- ing Teekay during the period immediately ably, the staff at Teekay felt that the crisis strated clearly that it had survived the loss of after Torben’s death and during the time of was largely behind them and that new hori- its founder and had moved upwards steadily public listing, Captain Jim Hood was due for zons beckoned. One goal was to become since that tragic event. retirement by 1998. Although his was not a listed on the New York Stock Exchange. Teekay’s energetic team and the fleet of flamboyant style of management, he had a Failure greeted its first attempt in 1994 to high quality, modern ships at its disposal personal aura that brought deep respect and offer shares that would total 27 per cent of certainly promoted the company among trust from all and he became the embodi- the company, prompting Jim Hood to inform investors and prospective investors. How- ment of security and continuity for both staff the fleet of the reasons: ever, entry to the public domain also created and clients during those extremely uncertain

90 Teekay: the first 40 years Chapter 3 • A Cedar Has Fallen 91 CHAPTER 4

Boom Years

ith a new chief executive in place, Axel urging him on several occasions to accept for Teekay. No board in the industry can WKarlshoej was satisfied that the com- the chairmanship, he contacted Axel. match ours – in relevant experience, in stra- pany was in a stronger position and that ‘Axel,’ Day said, ‘I have sold my stake in tegic perspective and in responsiveness when he could now step down as chairman of Navios. Have you changed your mind about we call upon them to consider complex the board to devote more of his time to his the chairmanship of Teekay?’ ‘No,’ came transactions at minimal notice.’ work with the Teekay trusts as well as his Axel’s terse response, ‘I don’t change my In Moller, Teekay had the benefit of own company. ‘After all,’ he said later, ‘we mind.’ Day succeeded Axel as chairman in someone who knew Torben’s philosophy survived against all predictions to the con- 1999, and also agreed to take over the busi- first-hand. Having already played a major trary, and Torben’s hard work had given us ness interests of the various trusts that were role in building the company’s commercial a great foundation for future development.’ associated with Teekay and its activities. success since 1985, he was now preparing to After careful thought he approached fellow After discussing the matter with Moller, undertake a major strategic review of Tee- director Sean Day with a view to Day succeed- Day concluded that it was also necessary to kay’s future potential in his role as CEO. He ing him. recruit several new board members with first turned his attention to making sure he During his years as chairman Axel had broader experience and skills that could had the right leadership team in place. As elected to play a distinctly non-executive contribute to the future success of the com- often happens with a change in a company’s role, leaving Jim Hood with the responsibil- pany. The new chairman set out to find the leadership, some members of the team left ities as chief executive officer of Teekay. best talent available from around the world Teekay, and several new faces joined, each Axel’s intention was that Bjorn Moller and gradually strengthened the board with bringing expertise and fresh perspectives, should have similar executive powers as a number of hand-picked independent direc- and creating a cohesive executive group. CEO, but while the board had high hopes tors, each of whom brought complementary The new team started by reviewing the for their young new CEO they recognised and relevant talents. The board of directors competitive strengths that had allowed the that Moller was relatively inexperienced in now included people with years of shipping company to achieve its current market posi- some of the more strategic aspects of the and energy industry experience as well as tion. Through a focused strategy over the role. Axel astutely saw the potential to set up vast resources of business acumen that would past decade, Teekay had established a pre- a somewhat different working relationship guide the direction of the company. It would eminent position in the Aframax market in between Moller as the new CEO and Day as continue to be inspired by the indefatigable the so-called Indo-Pacific Basin that extended chairman. Axel and the rest of the board had Axel Karlshoej, in whom the flame of Tor- from the Red Sea to the oil-thirsty west been hugely impressed when they first met ben’s passion for his tanker fleet continued coast of the United States. Teekay’s area of Day in 1996, and they saw the potential for to burn, exemplified during those dark days operation included the major oil-producing him to take on the role of strategy mentor for after his brother’s death when he brushed off areas of the Arabian Gulf, Indonesia, Malay- Moller, thereby creating a strong Teekay lead- potential buyers and would not countenance sia and Alaska, and among its customer ership duo. It was difficult for Day to accept the sale of a company that his brother had base were clients within the dynamically Axel’s invitation as he was still involved with worked so hard to build. expanding economies of Japan, Korea, Singa- Navios, but shortly thereafter he and other Moller later commented, ‘I always re- pore and Australia. Operating a uniform investors sold Navios and, with Tommy Hsu garded our board as a competitive advantage Aframax fleet nearly five times the size of

92 93 Chief Executive and President Bjorn Moller (left) and Aiko Karlshoej, Torben’s Chairman Sean Day formed a new team to lead Teekay widow, launches the from the late 1990s. Teekay Collection Aframax tanker named after her late husband. The ship was built at the Onomichi yard where Torben had built a number of other tankers over the years. Aiko Karlshoej

Rain had threatened the nearest competitor in the region helped the ships, and the equally experienced and throughout the day of Teekay achieve higher vessel utilisation committed shoreside personnel – many of Torben Spirit’s launching, and provide superior customer service in a whom had been hand-picked and mentored and Teekay Log reported on the day’s events: charter market that often required ships to by Torben himself – who operated the fleet ‘Just as Aiko Karlshoej be interchanged at short notice to meet the efficiently, using in-house expertise that prepared to cut the cord for the launching, needs and specifications of the charterers. reduced costs. With a strong board, a formid- the dark clouds parted, A second competitive factor was the relat- able team in the office and on the ships, a the ship was bathed in ively young age of the Teekay fleet (around strong competitive position in Teekay’s core sunlight ever so briefly. At the peak of the tide, and eight years on average, compared to the market, and a strong balance sheet, there amidst a deafening shout industry average of closer to 14 years), a prod- was an enhanced positive mood and sense of “Banzai!”, Torben Spirit roared down the slipway uct of the daring construction programme of anticipation in the air. Analysts who had into the waiting circle that Torben had launched in the last few originally made gloomy predictions that of tugs in Onomichi Bay. years of his life. This modern fleet, with long the company would be swallowed up after Some guests quipped that Torben had ordered the sister-vessel series and fuel efficient engines, Torben’s death were now taking note of the sunshine and had stalled was very cost effective. Standard equipment truly positive characteristics and competit- the rain! … It was a fitting tribute to a friend, and machinery facilitated the training of ive advantages of the company that could brother, father, husband, sea staff and made fleet maintenance pro- propel it to new heights. With its remarkable a man who had lived and grammes easier to manage, resulting in oper- strengths, Teekay had a distinct advantage loved ships his whole life long.’ Aiko Karlshoej ating costs below the industry average. over many competitors – and as its financial Perhaps the most valuable advantage, woes were behind it, the company had all however, was Teekay’s people. As one com- the right ingredients for the rapid develop- mentator noted, Teekay’s secret weapon, and ment and extension of its operations. What one of Torben’s key legacies to the company, it needed now was an ambitious strategic were the seasoned, loyal seafarers who ran vision to soar to its full potential.

94 Teekay: the first 40 years Chapter 4 • Boom Years 95 Axel Karlshoej

hroughout the story of Torben Karlshoej Axel’s insistence was the tipping point for Tand Teekay, the resolute figure of Axel, Torben, who did return to shipping and Torben’s elder brother, has played a prom- began to build one of the world’s most suc- inent role. They shared the grief of the early cessful tanker operations. death of their mother, and forged a close The close relationship between the broth- relationship, not only as brothers, but also as ers was perhaps most evident during those playmates who wandered down the path to dearly remembered times aboard Torben’s have fun in the shallows of the Baltic Sea, or private yachts as the two enjoyed water to build rafts – one of which took them fur- sports or simply walking on remote beaches ther along the coast than they had expected – or talking through the night. or to hunt for turkeys that had escaped from Torben’s sudden death was a severe blow their enclosure. These were farm boys who to Axel, who had lost not only a brother but spent time together, and, as young boys do, also a dear friend and soulmate with whom they even fought on occasions. he had shared so much. The tragedy pre- left Erik Spirit during her sea trials. Teekay Collection As the older, more sanguine brother, Axel sented Axel with an opportunity to share in above The naming ceremony of Erik Spirit at the Samsung came to Torben’s aid in schoolyard disagree- his brother’s dream of building that vibrant shipyard in Korea in 2005 was a particularly poignant ments, often simply pulling his younger tanker company, and his resoluteness in the occasion as the family reflected on the life and tragic death of Erik, the second son of Axel and Inge Karlshoej. brother away from ominous situations, a face of a possible hostile takeover of the com- Some said that Torben had viewed his nephew as a characteristic of their relationship that came pany saved the day for Teekay. Those who possible successor in later years as the younger man had displayed a special interest in ships and the wider to the fore again during Torben’s tough time thought that the company could be bought maritime sector. Left to right: Flemming Eversby, Jens when his initial foray into shipping failed. out at that fragile time in its history had not Karlshoej (Axel and Inge’s eldest son), Stacey Karlshoej Axel, who had moved from Denmark, reckoned on Axel’s determination to see Tee- (Jens’s wife), Axel and Inge, Poul Karlshoej (Axel and Inge’s youngest son), and Matt Stevenson (Erik’s best friend). In married Inge, and set up his own earth- kay come through its difficulties and expand front is Anne Eversby (Inge’s sister). Axel Karlshoej moving business near Sacramento, Cali- to the heights that Torben had envisaged. fornia, was adamant that Torben return to ‘It will be business as usual,’ Axel shipping when the latter wanted to quit. announced, ‘and watch this company grow!’ And it did as he gathered around him ex- perienced shipping and business people to serve on the board, and people with incred- ible energy, far-sightedness and integrity to operate it. To his credit, once he was satisfied that the company was on the right course and that the right people were proving their worth, he stepped down from the chairman- ship of the board and left that role to others. Axel and Inge had three sons – Jens, Erik and Poul – but further tragedy struck when Erik was killed in a motor accident not far from their home in Yuba City, California, a terrible loss to this closely knit family. In honour of their late son, an Aframax tanker was named Erik Spirit in 2005. Jens runs the earth-moving business, while Poul is in the Top Axel Karlshoej. Teekay Collection above Axel and Inge with their three sons, Jens, Erik and Poul, circa Teekay office in Singapore. 1988. Axel Karlshoej right Commissioned in 1995, the The amiable, highly principled Axel 105,351-deadweight Poul Spirit was named after Axel and remains on the Teekay board and plays an Torben’s father. It was also a clear confirmation that the rift between Torben and his father had been healed. Chief important, patriarchal role in the company Engineer Kanwar Deep Ghei and in the Karlshoej family. n

96 Teekay: the first 40 years Chapter 4 • Boom Years 97 Built to Last: Successful Habits of Visionary Com- shipmasters and senior shore staff, exhorting Opposite, top Commanded by Torben’s friend and his senior master, Captain Alan Hayes, the 244.8-metre panies, a best-selling business research book them to raise the bar in performance and Torben Spirit was commissioned on January 28, 1994 as by Jerry Porras and Jim Collins, was on the operational excellence. the company’s third training ship. Chief Officer Harsh reading list for a four-week executive devel- Another recurring theme noted by the Yagnik Opposite, bottom left During a voyage to Chiba, Japan, in November 2008, the officer of the watch aboard opment course Moller had attended at the authors was that all of the successful com- Torben Spirit sighted what he thought initially was a Kellogg School of Management at Northwest- panies covered by their research had articu- fishing marker. As the ship steamed closer, he saw that the object was a makeshift bamboo raft to which eight ern University shortly before being named lated an aspirational Big Hairy Audacious men were clinging. Torben Spirt hove to and rescued the CEO. He was captivated by the book, struck Goal, or BHAG, to generate excitement and men, Filipino fishermen whose fishing boat had partially by its findings that the most visionary com- directional focus within the organisation. sunk when she was battered by swells on the outskirts of a typhoon. They were landed in Chiba. Chief Officer Harsh panies share a belief in two central tenets, Again, Moller recognised the parallels to Yagnik Opposite, bottom right Torben Spirit steaming into ‘preserving the core’ and ‘stimulating pro- Torben who, in the mid-1980s, had famously a head sea. Chief Officer Harsh Yagnik gress’. ‘It almost felt like the book was talk- declared to his brother that he had decided ing about our company,’ he mused, for those to build the biggest and best tanker company attributes of a successful company advanced the world had ever seen. Now, that sort of by Porras and Collins coincided with many of BHAG was something to get one’s teeth into, Torben’s keys for success. Moller thought. It spoke of a company’s success being Although it had many of the ingredients dependent on its adherence to core values for success as the pre-eminent operator in its and its striving to stay true to its core pur- Indo-Pacific Aframax business, Teekay would pose, both of which it described as ‘sacred’. have difficulty in substantially growing what When he reflected on his time with Teekay was, after all, a niche business. To move and his close relationship with Torben, upward at a greater pace the company would Moller recognised that there were a num- have to find adjacent or new businesses to ber of such core principles on which Teekay pursue. But what realistic BHAG could the had been run, although some of these had company embrace? After months of intense never been explicitly stated or committed to discussion in strategy meetings with his lead- writing. ership team, Moller went before the board in The authors also found that visionary 1998 to present management’s distillation companies are always in search of continu- of Teekay’s Core Purpose statement and its ous improvement – another of Torben’s oft- list of Core Values. He also unveiled an excit- stated messages in his circular letters to his ing proposed BHAG for Teekay ‘to attain the

‘I was back again at the [Onomichi] shipyard in 1997 for the delivery of the double-hull Aframax Hamane Spirit, the last of our Onozo ships,’ wrote Captain Steve Tucker. ‘Chief Engineer Alan Holmes, his wife and I had the chance to visit Hiroshima and the atomic bomb museum and peace park – a very solemn place.’ Once delivered to Teekay, the tanker called at ports all over the Pacific – Australia, the west coast of the United States, Far Eastern ports and more. ‘We were off Honolulu later that year, waiting to discharge at Barbers Point during the time of Princess Diana’s funeral,’ Captain Tucker continued. ‘The event was broadcast on all the local television channels, and, as the former Sandwich Islands, the Hawaiian state flag has the [British] Union flag prominent in its design. Throughout the island, the flags were flown at half-mast. Some of us went ashore to visit Pearl Harbour and the Arizona Memorial, which we found to be a very sombre experience.’ The vessel is shown here in Liverpool. Teekay Collection

98 Teekay: the first 40 years Chapter 4 • Boom Years 99 etroCanada awarded a contract to Tee- Pkay to transport oil from Newfound- land to Canadian and United States ports from 2002 to 2005. Three Canadian shuttle tankers would transport the oil from the Grand Banks offshore oilfields Hibernia and Terra Nova to the terminal at Wiffen Head in Newfoundland. Teekay was to deliver this oil from Wiffen Head to Portland, Maine, from where it would be moved by pipeline to Montreal refineries. To meet Canadian cabotage requirements, the oil had to be carried in a Canadian-flagged vessel, causing Teekay to re-flag the Aframax tanker Nassau Spirit from the Bahamian flag to the Canadian flag, to rename her Avalon Spirit, and to replace her multi-national crew with Canadians. She was commanded by Cap- tain Oleg Dolzikov for over two years; Steve Nowell from Nova Scotia was the chief engin- eer, while Chief Engineer Roman Kanarek also did several trips in Avalon Spirit. For Captain Dolzikov and the rest of the ship’s complement, this was a very chal- lenging but interesting experience. The ship operated in extremely harsh North Atlantic weather conditions – frequent severe storms, ice in winter, and almost continual fog dur- ing summer – and yet had to maintain an Reverting to her original name once the Canadian charter had been completed, the Imabari-yard Aframax vessel Nassau Spirit continues to trade in the Teekay fleet. Kanwar Deep Ghei extremely tight schedule to undertake three to four voyages each month. When the ship arrived in Canaport (St John, New Brunswick), an occasional discharge port, after a particularly cold winter passage from Wiffen Head, the increased ship’s draft indicated that 1,200 tons of ice had formed on deck. De-icing was a continuous 24-hour operation during winter voyages, carried out by deck hands (mostly from Newfoundland) working in six-hour watches and using sea water, heated by the Butterworth cargo tank washing system, and pumped through the ship’s fire hoses while the ship was steaming to her discharge port through freezing spray and the so-called Arctic smoke. At times the air temperature reached –20 degrees Celsius. Despite the hardships for the crew, the venture was successful and at the end of the Top left As the spray flew across the foredeck, it froze, turning the deck piping into a winter wonderland. Captain Oleg charter Avalon Spirit was re-flagged to the Dolzikov top right When Avalon Spirit arrived in Canaport on Christmas Day 2002, she was greeted by the pilot disguised as Bahamian flag, she reverted toNassau Spirit, Santa. Captain Oleg Dolzikov Centre The Canadian-flagged Aframax tanker about to sail from the Portland Pipeline Terminal Chief Engineer Roman Kanarek aboard Avalon Spirit. Second Mate Judy Ash aboard Avalon Spirit. Captain Oleg A.B. Leroy aboard Avalon Spirit. Captain Oleg Dolzikov and the Canadians were replaced by the usual in Maine, USA. The oil that she discharged was pumped from Portland to Canadian refineries via pipeline. Captain Oleg Dolzikov Above The ship’s complement in their immersion suits during a lifeboat drill aboard Avalon Spirit. Captain Oleg Captain Oleg Dolzikov Dolzikov multi-national crew. n Dolzikov

100 Teekay: the first 40 years Chapter 4 • Boom Years 101 Luck and determination involved in winning Teekay’s first FSO same pre-eminent position as currently held an important customer’s supply chain. It was in the Aframax Indo-Pacific in three new the first of many examples of Teekay extract- contract, creating the cornerstone for future offshore business markets by 2010’. Essentially, the team was ing tangible value from the brand it had built proposing a goal of quadrupling the business through its customer focus and operational over a twelve-year timeframe. The presenta- excellence. It also provided the first of many hen Teekay was formulating its first mobilise all necessary resources to go after tion included a listing of examples of poten- profitable, long-term fixed-rate charters. Tee- WBHAG to broaden its business in the project and that same day a team of ten tial new markets, which included expansion kay took the opportunity to become closely 1997/1998, Apache Energy requested pro- senior Teekay people from Vancouver, Glas- of the Aframax business beyond the Indo- involved in Caltex’s Australian operations, posals seeking a ten-year charter contract gow and Tokyo, led by Bjorn Moller, travelled Pacific region, and diversification into further exposing the brand to the market in for an FSO (floating storage and off-load to Bluewater’s office in Amsterdam. During product tankers, gas shipping and offshore the wider Australasian region. tanker), including the provision of a CALM- the following week – including a number of marine (including shuttle tankers, floating The second Australian project that Teekay buoy (catenary anchor-leg mooring) for the all-night sessions – teams of Bluewater and storage and floating oil production). The tackled around that time was its first bid for Stag oilfield in north-west Australia. With no Teekay people worked side by side to develop growth plan envisaged a combination of the operation of a floating storage and offtake experience in CALM buoys, Teekay initially detailed conversion and operating budgets, organic growth and expansion through the (FSO) vessel for Apache Energy on the Stag joined forces with Dutch offshore company offshore procedures and financial models, acquisition of existing companies in the oilfield off the north-western coast – another Bluewater with the idea that the latter would eventually producing the four thick binders various sectors, the latter being especially project that enabled the Australian oil and be the main contractor to Apache while Tee- that made up the contract bid. The binders appropriate if entering a business area where gas sector to become familiar with Teekay’s kay would be a subcontractor to Bluewater were hand-delivered to Apache in Perth, Teekay had no direct experience. well-managed operations (see page 102). In for the provision of a converted tanker hull. Western Australia, just before the deadline. Importantly, with Moller’s first-hand the context of the company’s progress, it One week before bids were due, Blue- Eventually, after an exceptionally compli- knowledge of how Teekay had nearly gone also gave impetus to the BHAG campaign as water advised Teekay that they would not cated negotiation that lasted more than six under in the early 1990s because of over- employees could note and be encouraged by be bidding. Bluewater had concluded that months, Teekay was declared the successful ambitious growth, he and the leadership the new development (see page 99). it would involve too much risk from them, bidder. team analysed the financial viability of their Moller’s desire to move the BHAG cam- considering that providing a CALM buoy was Instrumental in the award was Teekay’s plan, and made sure that this remained a paign ahead in earnest experienced an only a $5 million scope for them, whereas operational reputation, the credibility of watch point at all times. apparent setback with the onset of the Asian Teekay’s scope of work was worth $20 mil- the company’s negotiating team, and the The board was energised by the ambitious economic crisis that crippled the economies lion for providing the vessel. Teekay was left experience with Australian seafarer unions vision and expressed support for the growth of many of the Asian ‘tiger’ countries in 1997, in the lurch, and as it would be impossible emanating from Teekay’s simultaneous trajectory it implied. With that, Teekay offi- with a commensurate negative effect expect- to find another partner in one week it faced entry into Australian operations through the cially entered a major growth phase for the ed on shipping the following year. However, the choice between dropping the project and Caltex Australia deal (see page 103). The deal first time in nearly a decade. it coincided with an OPEC decision to export attempting to go for it on its own. The latter that almost never happened became the com- Around the time of formulating the more oil, a move that both reduced the price would require putting together a compliant pany’s first foray into the offshore marine BHAG, Teekay was pursuing two deals involv- of oil to below $10 a barrel and boosted bid to Apache, not to mention overcoming sector, an area that was to develop over time ing Australian operations. In light of the tor- shipments in 1998, to the advantage of the challenge of being awarded a contract into a key pillar in the company’s successful rid pace of growth that was to follow later, tanker owners. with no proven FSO track record. growth. In a poetic twist, the vessel selected these early opportunities may seem relat- Teekay, sensing that the strength in the Bluewater agreed to assist Teekay in pre- to be converted into Teekay’s first FSO was ively minor in scope; yet, at the time, each market was only temporary, took the oppor- paring a bid, provided that if Teekay were Frontier Spirit, the vessel that had joined the one represented a potential breakthrough tunity to issue more equity in anticipation of successful it would purchase the CALM buoy fleet a decade earlier as the company’s first beyond Teekay’s existing activities. Caltex future attractive buying opportunities. True from Bluewater, plus pay them a success fee newbuilding. She was renamed Dampier Spirit Australia, a long-time Teekay customer in the to its prediction, the good time did not last of $100,000 for their efforts. Time was of the and, following a number of contract exten- conventional charter market, wanted to out- long. Faced with a flood of oil on the global essence. After a few hours of soul-searching, sions, she remains in service at the Stag field source its sub-scale tanker-owning business markets OPEC reduced production in 1999 the Teekay management team decided to in Australia. n to reduce risk and concentrate on its refiner- and the tanker market fell sharply, open- ies. It conducted an auction among a list of ing a window for Teekay to use its strength- marine companies that were invited to bid to ened finances to make counter-cyclical buy Caltex’s four-ship tanker fleet and char- investments. They were able to order the TOP LEFT In 1997 David Glendinning was the driving force behind the conversion of Frontier Spirit to Teekay’s first floating ter it back on long-term contract to Caltex to Aframax sister ships Kanata Spirit and Kareela storage and offtake (FSO) vessel, a project that was completed the following year. She had been commissioned ten years earlier at Hyundai’s Ulsan yard as Teekay’s first newbuilding. Now, with bow-loading gear and an enlarged capacity, she move its products along the Australian coast. Spirit from Samsung Heavy Industries at low took up station off the Australian coast as Dampier Spirit. In 2003 Teekay tendered for and won the contract to manage and After a lengthy period of due diligence, prices. Moller saw the downturn as a golden crew four LNG carriers for BHP Australia, a role that increased Teekay’s Australian profile. On the Australian oil trades, BHP had been a good client for Teekay, so that entry into the gas trade strengthened the company’s relationship with one of the Caltex selected Teekay as its long-term opportunity to get Teekay’s bold expansion world’s premier mining houses in terms of energy-related business. Teekay Collection Top right The FSO Karratha Spirit, marine partner. It was a major seal of plans under way as soon as possible, and he formerly Teekay’s second newbuilding Pioneer Spirit. After her conversion to a floating storage and offtake vessel in 2001– approval: for the first time, Teekay’s reputa- turned his attention to the Atlantic basin, 2002, she was chartered to Woodside Petroleum of Australia. Teekay Collection. Right Pattani Spirit was built as the Aframax tanker Namsan Spirit in 1988 and converted to an FSO in 2004 when she took up station off Thailand. Teekay Collection tion had earned it a trusted, integral role in and in particular to Norway.

102 Teekay: the first 40 years Chapter 4 • Boom Years 103 Kanata Spirit was built The company’s focus fell on Bona Ship- Last minute tensions arose on the Sun- in the Samsung Heavy Industries yard in Korea ping with its fleet of ten Panamax OBO ships day evening when the Bona board made in 1999 at a time when and fifteen relatively modern Aframax tank- some upward adjustments to the ‘golden shipbuilding prices were ers, the second-largest Aframax operator in parachute’ compensation packages for their low. Teekay Collection the Atlantic trades. A couple of years earlier, senior staff, adjustments for which Teekay Bona had absorbed another Aframax opera- would have to pay. Following a robust dis- tor, Smedvig Tankships, in competition with cussion between Moller and Hoegh, tensions Teekay. With the Bona fleet, Moller and his were defused. ‘It’s still a good deal,’ the Tee- team reasoned, Teekay would have the per- kay team concluded, and agreement was fect portal to expand its operations into the reached on a friendly takeover. Recognising Atlantic tanker trades. Previous overtures to that this deal was being consummated at a combine Teekay and Bona had not material- low point in the cycle, Hoegh chose to bet on ised, but this time Bona’s main shareholder a subsequent upturn in the tanker market, and chairman, Leif Hoegh, appeared more taking Teekay shares in exchange for his 40 motivated. However, hard work lay ahead to per cent ownership in Bona and, as an added secure a deal and, because of the disclosure benefit to Teekay, he also joined the Teekay rules associated with Bona as a company board. The remaining Bona shareholders listed on the Oslo Stock Exchange, the entire were happy to accept cash payment for their due diligence investigations by the Teekay investment. team, led by Moller and Chief Financial The $450 million transaction was an- Officer Peter Antturi, had to take place dur- nounced before the stock market opened ing long hours over a weekend in Oslo in the on the Monday morning. Simultaneously, spring of 1999. The team was working with Hoegh, Moller and Antturi walked into the the law firm BAHR whose Oslo offices were Bona offices where a town hall meeting had Kareela Spirit undergoing sea trials off the Korean located on the Aker Brygge, the waterfront been called without prior notice. Hoegh coast. Teekay Collection street that was also the home of major tanker announced he had sold the company to Tee- owner Frontline and Den norske Bank. This kay because he viewed it to be too small to meant that the senior Teekay people were succeed on its own in a market where major confined to the BAHR office lest they should oil companies were merging to form mega meet someone who might recognise them entities, and would demand more of their and guess their reason for visiting Oslo. As suppliers in the future. a result of the need for secrecy, the Teekay Bona staff were shocked. They thought team ate a lot of take-away meals in BAHR’s the company’s strategy was to grow to chal- offices that weekend! lenge Teekay for market position, and now

The Aframax tanker Seletar Spirit (ex-Pacific Mercury) was not in good condition when Teekay took her over at Busan in 1998. After her ten years under other owners, some ballast lines were leaking, as was the main circulation pipe in the engine room, and the freon piping to the freezer rooms was crumpled in parts. The galley was a mess, fit for cooking for only 17 crew members, and the galley exhaust trunking was coated with grease. It took the master two weeks to clean ten years of cigarette-smoke grime off his cabin deckhead. There were no carpets until she was refurbished a few months later. The crew had to dispose of all the mattresses, sheets, towels, and about $3,000 worth of inedible food. An extra oven was installed in the galley, which made the chief cook’s job much easier. The crew really worked hard to get the tanker shipshape according to Teekay’s high standards. Following the initial refit and subsequent refits, she traded in the Teekay fleet until her sale in 2004. Teekay Collection

104 Teekay: the first 40 years Chapter 4 • Boom Years 105 they had been absorbed by Teekay without I wasn’t even awake when they served the mobile force to be reckoned with, position- Captain Andrej Vlasimsky prior warning. Beluga caviar during the flight!’ ing the company well for future involvement To ensure that they could meet with The purchase of Bona Shipping proved to in that country, particularly in the North Sea key Teekay investors in New York on the be a big success. Teekay had become the lar- oil industry. n exceptional seafarer is one who not experiences, the sea constantly reminds us of same day, Moller and Antturi flew aboard gest operator of Aframaxes globally and, In early 2000 Teekay noticed that the how small and insignificant we all are. Aonly has expertise in navigation, sea- To achieve something in life, you need the Concorde from Paris at noon on Monday, when tanker rates began to rise significantly share price of the venerable Danish product manship or marine engineering but who help of others, which brings me to my fellow arriving in Manhattan by 10 a.m. local time in late 1999, the enlarged fleet brought good and dry bulk shipping company Torm was also takes note of the beautiful, fascinating seamen. Without their help, their teamwork Monday. This was the only time that Teekay profits to the company. The integration of languishing, despite the fact that shipping and effort, I, as Captain, am nothing. There is and ever-changing environment through employees used the expensive supersonic air- the two organisations was very smooth. A rates were in a recovery phase. Sensing the no better place to show you this than the ship which he moves. Captain Andrej Vlasimsky, that sails the oceans. On board the ship, I am a craft in the course of business travel. Bjorn significant side benefit from the deal was to possibility of a bargain opportunity, Moller who has been with Teekay from cadet to mas- company representative, business manager but Moller later commented, ‘I was so exhausted put Teekay’s name on the map in Norwegian first obtained permission from the board to ter, is one of those with a deep philosoph- also a parent, friend, doctor, coach and priest to after a weekend with almost no sleep that shipping and energy circles as an upwardly acquire up to 4.9 per cent of Torm’s shares those on board. The rules must be obeyed and ical interest in, and awe for, the waters that the hierarchy is known, but it doesn’t take long give him his livelihood and challenge him for the sea to show us how together we stand, to retain that beauty. In ‘The Blue Planet’, divided we fall. Although we appreciate the an article written for a Teekay in-house pub- acknowledgement of 2010 as Year of the Seafarer, to those of us on board, it is a lifetime, and we Erika and Prestige – disasters that affected tanker operations lication and reproduced below, Captain have chosen it because we love the sea and want Vlasimsky captures some of the feelings to spend our lives on it. engendered by his seagoing career: For the young people who want to start this nternational developments would The weather deteriorated, however, Spanish and French coasts, causing wide- career I say: You can travel the globe and see also play a significant part in the com- and amidst what one commentator called spread pollution. millions of places, but have you been in the I Since I was little, I have been fascinated by our middle of the ocean on your blue planet? I have, pany’s march forward. In December 1999 ‘the storm of the century’ even stronger Like the earlier accidents involving Captain Andrej Vlasimsky Teekay Collection planet’s beauty and diversity. As I grew up, I and I will be there again. Will you? the aged tanker Erika loaded a cargo of winds drove the extensive slick ashore, Exxon Valdez and Erika, this incident had began to realise how everything fits together As for those who wonder how you can be in heavy bunker oil in Dunkerque, France, polluting much of the Brittany coast. several effects on the shipping industry. in perfect harmony. Nothing was more obvious love with the sea and still transport oil with a and headed for Livorno, Italy. The syn- Although the authorities managed to Her master, Captain Apostolous Man- than the fact that the globe is comprised of a Captain. Why? To be a Captain was considered tanker, my answer is simple. I am a protector of immense seas and oceans, and all of the planet’s a privilege and is something that only the most the planet, a keeper of the blue. As long as there optic chart for western European waters clean up the coast, the ramifications of gouras, was arrested for allegedly disobey- diversity comes from both. dedicated, brave and knowledgeable were given a are people like me who are in charge of the ships showed a deep depression, its ominous the oil spill for the tanker industry – like ing the orders of the Spanish authorities, This is, and will always be, a blue planet. chance to become. However, it does come with a and companies like Teekay that appreciate and isobaric pattern leading meteorologists those in the aftermath of the grounding an action, they claimed, which led to the You can believe anything you want, but the great sacrifice; you have to give a lot to the sea in understand the planet, your blue planet is safe in fact remains: the sea is a creator of all life on return for all it gives to you. our hands. We will cherish it like a gentle ocean to forecast that gale force winds, generat- of Exxon Valdez on the Alaskan coast a dec- break-up of the tanker. This drew the ire this planet. This led me to a career at sea since I started my career as a cadet and my first phytoplankton. ing heavy seas, would prevail as the ship ade earlier – were significant, including of seafarers’ unions, who protested vehe- nothing is more important to this planet than choice was to work at Teekay. This decision gave moved through the Dover Strait and the calls for the phasing out of single-skinned mently against the criminalisation of me a chance to live my dream to its full potential. This is my planet. the sea that covers it. English Channel. tankers and for more stringent surveys, seafarers, especially in cases where the For me, becoming a seafarer was the best Over time I realised that no matter how much I am a sea creature. n path to the sea and I set my sights on becoming growth I, the company or our civilisation On the morning of December 12, including very rigorous checks by char- master was trying to save his ship. French and British helicopters were terers, classification societies, flag states Although several European countries scrambled when the ship broadcast a and port state surveyors. slapped an immediate ban on single-hull distress message indicating that she had The hand of the International Mari- tankers entering their waters, the Pres- fractured in the wild seas, so common in time Organisation was forced when a tige saga also led to the IMO phasing in the Bay of Biscay. similar accident occurred nearly two a ban on single-skinned tankers, which As the helicopters plucked the crew years later. meant that all such vessels would be out members from a lifeboat and from the The Greek-owned Aframax tanker Pres- of service by 2010. Since most of Teekay’s stern section of the tanker, it was obvious tige had loaded 77,000 tons of two grades tankers were double-skinned – and the that large amounts of oil were already of heavy fuel oil in Riga for Singapore. remaining single-skinned vessels would leaking freely into the sea from tank Off the Spanish coast her hull cracked be withdrawn before the relevant phase- ventilators and the damaged hull, and and, despite the pleas of her master that out date – the step by the IMO did not authorities on both sides of the English the weather was worsening and the sea- impact negatively on the company’s oper- Channel prepared to counter a major oil worthiness of his ship was deteriorating ations. On the contrary, oil majors sought pollution incident. Broken in half, the in the increasingly heavy seas, she was out double-skinned tankers even before ship sank and the slick increased in size, refused entry to Spanish, Portuguese their use became compulsory, raising Tee- but initially only pockets of pollution or French ports. She sank on November kay’s status and therefore increasing the occurred along the French coast. 19, spilling oil that came ashore on the possibility of securing long-term charters.

106 Teekay: the first 40 years Chapter 4 • Boom Years 107 that point]. … Panfil did their best for us and we are grateful to them for that. We Crewing merely believe that we can do better on our own, considering that we must get involved more in direct recruiting and ever heard of them,’ was a frequent As he had married a Dutch woman, Tsut- training – with all that entails, both in Manila and on board. ‘Nretort in the 1970s and even in the sumi did not want to return to Japan when early 1980s when a seagoing officer was asked Sanko closed the recruiting office and he Another letter told his seafarers of a further whether he wanted to work for Teekay. One remained in Rotterdam but continued crew- development: of these was Captain Boris Banic, who tells ing ships. Since Tsutsumi knew many Sanko that in a moment of idleness when he was the officers, Torben offered him a job to recruit From the late 1980s, Teekay employs every crew member directly, rather than depend chief mate in a Sanko tanker, he broadcast on officers for his ships, instructing him to use on the discretion of crewing agencies the ship’s VHF radio in the Yugoslav language former Sanko men wherever possible. to appoint crew members. Like so many simply to see who would respond. Seconds Because of a problem regarding payment other shipping companies, Teekay ships later, a Yugoslav officer responded from the of the correct salaries to his seafarers, Torben have a preponderance of Filipino crews, as, for decades, that archipelago has been tanker Grand Wisdom, Teekay’s second ship, was quick to improve the entire system of the world’s leading supplier of seafarers, giving Banic his first introduction to Teekay. recruitment, appointment to ships, and pay- and its largest export is its seafarers. The After making further enquiries about the ment to his crews. He transferred all the Philippines-based Mayon Marine provided company, he joined Grand Wisdom on Septem- officers to Teekay itself by opening Teekay crews, but to avoid any unhappiness among Teekay’s seagoing employees, ber 15, 1986 as chief officer. Norbulk (Glasgow), which would administer Teekay took over the Filipino company and To crew his ships Torben used Azalea Man- the officer complement. renamed it Teekay Philippines. ning Agency in Rotterdam, which was run by He would visit as many ships as he could a Mr Tsutsumi, who worked in the Rotterdam and numerous anecdotes have been told of His quest to employ seafarers directly was to office of the Japanese bulker and tanker opera- those visits. One officer said that while his draw loyalty from them, which one would tor, Sanko, with whom Torben worked closely ship was in port in Long Beach he was read- not get if each person was on a contract that in the chartering of ships. It was Tsutsumi ing in his cabin late one Friday evening when terminated with his tour of duty, leaving the who also supplied officers for some of the there was a knock on his door. In came Tor- person with no guarantee of re-employment. Sanko ships. ben, who after working late in his office had ‘That’s no way to gain their loyalty,’ he said. In August 1985 Sanko was faced with boarded the ship simply to say hello and greet ‘We will have our own people.’ serious financial difficulties that resulted in the crew before going home. To ensure that the best Filipino officers several of its offices closing, including the During a visit to Sunrise in 1988 Torben and ratings came to Teekay, Captain Hans Rotterdam recruiting office. The company noticed that despite the valiant maintenance Schaefer was sent to Manila from 1996 to was forced to sell a number of ships, some of work done by the crew there was still a back- 1998 to help improve training facilities for which Torben bought and, if he found that the log. ‘Want more crew?’ he asked the master. seamen and, in the process, to understand ships’ officers shared his attitude and work ‘Yes,’ the master replied, ‘that would be very Filipino customs. Among his findings during ethic, he offered them jobs with Teekay. Other helpful.’ ‘Just call Vinay [Patwardhan] and ask this valuable time in the Philippines was that Sanko officers wanted to leave the company in for extras,’ Torben told him, and in due course seafarers’ children were the most important case its financial woes caused it to close com- the additional crew members arrived to join beneficiaries of the wages the men earned pletely, and when Sanko announced a reduc- the ship. as most of them saved a significant amount tion in salaries a number of very competent Teekay’s Filipino officers and ratings to provide a better education for their chil- officers sought employment with Teekay. were employed via the Manila-based crewing dren than they themselves had experienced. Because he believed in a family-like atmos- agency Panfil. In June 1989 Torben wrote in Although many sons followed in their fathers’ phere, company collegiality and loyalty, his circular letter to masters: footsteps and embarked on maritime careers, Torben often exhorted his senior officers to others became university graduates, made encourage their seagoing friends to join Tee- I was advised that our new crewing agency possible by the savings accrued from their in Manila – Mayon Marine Management kay. Again, provided they were competent fathers’ wages. Inc. – finally had the full fleet transferred and shared the work ethic and other values to it from Panfil. This is very happy news as To find suitable crews for its rapidly expand- expected by Teekay, they were offered employ- it will further our aim of quickly becoming ing fleet, Teekay had to look for other reliable ment. Service in Sanko ships was a significant a totally independent organisation. I sources of well-trained officers and ratings. further wish to express my hope that Photographs taken aboard Teekay ships by Chief Engineer entry portal to Teekay and many seamen were senior fleet officers help us to train our Kanwar Deep Ghei and also sourced from the Teekay With its maritime training based on the Brit- recruited in this way, some rising to com- Filipino officers and crews, keeping in Collection ish system, Indian training institutions were mand or chief engineer level in the growing mind that in this Group we treat everyone producing well-trained, competent officers and Teekay fleet. as an equal [his underlining to emphasise good crews. Indeed, many well-known British

108 Teekay: the first 40 years Chapter 4 • Boom Years 109 shipping lines had employed Indian ratings for are crewed entirely by Norwegian, Australian generations, establishing a large pool of good or Spanish seafarers for operational reasons. and experienced seamen. Teekay recruited Pay scales were originally the same for all hundreds of excellent seafarers from India, officers, irrespective of their country of domi- many of whom have gained command or chief cile, as Torben believed strongly that only engineer status in the company, and some competence mattered and thus refused to dif- have moved to various shoreside positions. ferentiate. Eventually, in keeping with inter- As the domination of eastern Europe faded national trends, Teekay was forced to change and more democratic systems were estab- the system, which now reflects their domicile lished in former ‘Eastern Bloc’ countries, sev- and cost of living, not their nationality. eral state-owned and state-subsidised shipping To comply with the international require- lines collapsed in the face of open competi- ments for crewing, emphasis is placed on tion from within those countries and from updating the expertise of all seafarers through the international shipping sector. This led to simulation exercises, courses, and exposure serious unemployment among hundreds of to the range of ships within the fleet. This is well-trained officers from those former state- especially true as new technology is devel- run shipping lines, and from the late 1980s oped, such as dynamic positioning systems into the following decade western and Asian on shuttle tankers and other types of vessel. companies sought out the best among them Increasing the number of gas ships in the fleet for their own fleets. meant that the Spanish officers aboard the For that purpose John Adams and Captain company’s first gas carriers that were bought Steve Tucker undertook two remarkable trips as part of the deal with Tapias could train to Novorossiysk in Russia, and the Latvian cap- other members of Teekay sea staff to crew the ital, Riga. Soon after that it was back to Japan new LNG ships, for these are specialised ves- again to stand by the construction of Samar sels requiring specialised training. Before his Spirit during which Tucker had the temporary own deployment to the LNG vessels, Captain title of port captain, but having to work with Steve Tucker attended a Lloyd’s course on and supervise the full crew from Latvia was a their construction in Vancouver, completed particularly memorable challenge. the Warsash gas ship familiarisation course Although most Teekay ships carry cadets, that included simulator training, and later the concept of a specialised training ship came joined the former Tapias vessel Catalunya Spirit to fruition when Asiatic Spirit, commanded by for a voyage from Trinidad to Boston and back Captain Andy Phillips, was converted to carry to Puerto Rico, followed by three further voy- twelve cadets and Tasman Spirit was converted ages aboard Galicia Spirit. Time in the shipyard to a training ship for engineer cadets and in Korea during the construction and sea pumpmen. Torben Spirit was the first custom- trials of Al Areesh concluded most of the built cadet ship with accommodation and training, although before he took command training facilities for twelve cadets, most of of the new Al Marrouna, he joined the vessel whom were British. They were given an induc- at her first loading port, and only took over tion course in Glasgow, where they received after several days of introduction to his new their cadet training books, after which they command. visited the Teekay offices in London, Vancou- Teekay’s pioneering SCOPE programme, ver and Tokyo before going to a shipyard. the only internationally accredited com- Then they boarded the famous bullet train petence management system – encompassing to join Torben Spirit. This extensive introduc- not only matters relating directly to safety, tion to Teekay was intended to develop in the seamanship and engineering, but in addi- cadets a sense of loyalty to a large, global com- tion to important issues such as leadership pany that offered them much. and personal development – commenced in Photographs taken aboard Teekay ships by Chief Engineer Kanwar Deep Ghei and also sourced from the Teekay Collection top Ongoing engineering work is a part of Teekay’s maintenance plan for each ship. Teekay Collection above Chief Officer Although Teekay crewing has been dubbed Tomislav Gospic. Chief Engineer Kanwar Deep Ghei 2005 and is now central to ensuring that all ‘transnational’ and most ships have crew seafarers in the fleet have the opportunity to members from a number of countries, others develop to their full potential. n

110 Teekay: the first 40 years Chapter 4 • Boom Years 111 harbour installations and the deliberate or (just below the 5 per cent filing require- board in early 2001 to consider how it might September 11, 2001 unwitting importation of weapons of mass ment), and began acquiring shares in the raise its sights beyond an already ambitious destruction into the hearts of ports and cities. open market. In March Axel Karlshoej, Sean BHAG. It was around this time that Teekay In addition, they had to become aware of the Day and Moller visited Torm’s chairman, started looking more closely at the shuttle n a clear, late summer morning in the potential for prospective terrorists to enter a Sven Gullev, and its CEO, Erik Behn, in tanker business as its next stop. OUnited States, a new horror was beamed country by posing as crew members aboard a Copenhagen with a clear message: as Torm’s Starting in the late 1960s Norway had across the world’s media. A television crew ship or by stowing away on a ship. These fears shareholders seemed disenchanted and there played a significant role in the offshore ex- filming the work of firefighters checking a gas led to the imposition by the International were rumours that some large shareholders ploration work for oil and gas reserves leak in New York City, inadvertently captured Maritime Organisation of the United States- were looking to sell, the company would be beneath the North Sea. Questions regard- the moment when the first of two passen- inspired International Ship and Port Security better off trying to control its own future by ing the best way of bringing the North Sea ger aircraft, hijacked by Islamic extremists, Code, a set of regulations that forced ports all combining forces with Teekay. Torm gave oil and gas ashore arose, and with their crashed into New York’s World Trade Centre over the world to install high-security systems a guarded response, denying any unrest in rich maritime history Norwegians assumed on September 11, 2001. Minutes later, another to prevent intrusions into the world’s dock- their shareholder ranks and asking Teekay to tankers would be used. However, fears of aircraft hit the other tower, a third hit the Pen- lands, while ships had to comply with equally give them several months to consider their tanker off-take stoppages at the offshore tagon in Washington, while a fourth crashed restrictive measures to prevent unwanted options. Later the same day, Villy Panayo- installations because of the wild winter sea in a Pennsylvania field after its passengers people from boarding. tides, a Greek ship owner, conducted a ‘street conditions and frequent gales sweeping engaged the hijackers. This was horror on a The consequences of the enforced imple- sweep’, mopping up more than 30 per cent across the North Sea caused them to recon- scale not experienced in the United States mentation of the ISPS code were serious for of Torm’s shares in one afternoon. Teekay sider the medium for bringing oil to shore- since the attack on Pearl Harbour in 1941. shipping companies, including Teekay, who had to recognise that its instincts to first try side refineries. Concerns were also expressed The 9/11 event created an immediate had to extend their existing security systems the friendly route by initially approaching that as Norway could not provide all the tightening of security in the airline industry to ensure compliance with the new regula- Torm’s board had lost out to Panayotides’ shuttle tankers to bring the oil ashore, the and caused an already jittery world to won- tions. As the new regulations came into force, hostile approach, especially since the events country might soon become dependent on der what the American reaction would be. shipmasters steeled themselves for an ava- made it clear that Torm’s management had foreign-flagged vessels, a situation that many After all, this was the first time that Ameri- lanche of paperwork. More detailed crew lists been oblivious to their shareholders’ dissatis- regarded as a potential threat to the national cans had been attacked on a large scale since and other documents had to be submitted faction with the company. security of the Norwegian oil and gas indus- Pearl Harbour. ‘We will smoke ’em from their to port authorities at least 96 hours before As an aside, the following year Teekay try, and therefore to its economy. These argu- caves,’ announced President George W. Bush, a vessel’s arrival, and as implementation opportunistically acquired a bloc of some 17 ments prompted an initial political decision warning that the perpetrators of such horren- day dawned the masters of numerous ships per cent of the shares in Torm at an attractive to bring all of Norway’s oil and gas ashore dous deeds could run, but there would be no arriving off American ports were confronted price. It resold the shares within one year at a by pipeline. However, this decision proved place for them to hide. This was an expected by Coast Guard officials. Similar experiences profit of $95 million. impractical to implement, partly because of response from the president, who needed to awaited vessels calling at ports in several Having concluded and integrated the the remoteness from land of some oilfields promise his anxious nation that retribution other countries. Australian and Bona deals, as well as having and also because of the nature of the seabed, would follow, and that his countrymen would For the crew of ships many obstacles were made a well-timed re-entry into the new- especially since the Norwegian Trench (up to be safe as measures were put in place to pre- imposed, including stringent visa regulations building market after a lengthy hiatus, a 95 kilometres wide and 700 metres deep in vent further attacks. for nationals of many countries who could session was convened among the senior lead- parts) runs between the mainland and the As had happened during previous times of formerly enter most countries, including the ership team – joined by board members Sean principal production area. Thus, some of the global anxiety, importers scrambled to ensure United States, on the internationally recog- Day and Leif Hoegh – to brainstorm what the emphasis switched to using shuttle tankers that their oil stockpiles were sufficient in case nised ‘seaman’s book’. For Teekay, with its next steps should be for Teekay. Understand- to bring the oil ashore, provided the ships the usual supply chain was dislocated by the multi-national crews, this curtailment of the ably proud of their recent achievements, the were equipped with state-of-the-art techno- American zeal for revenge and to counter any freedom of movement of seafarers was a par- young leadership team felt they were on a logy to allow station-keeping in all but the further attacks by terrorists. The tanker spot ticularly troublesome intrusion. In addition, promising path. Yet, Day and Hoegh offered most extreme weather conditions. With their market bounded upwards, and new, longer- restrictions on shore leave in United States the thought-provoking strategic perspective long maritime tradition and expertise, Nor- term fixtures reflected higher rates, all favour- terminals made life difficult – even unpleas- that perhaps the company’s competitive posi- wegian tanker companies soon developed a ing owners, including Teekay to an extent, ant – for those on board as they suddenly tion was even stronger than the leadership near-monopoly in providing these sophist- although most of its ships were already fixed faced the reality of little, if any, shore leave in team realised and that the company might icated tankers. on charters. American ports. consider raising its sights even further than The logistics surrounding a large part of Almost immediately after the 9/11 attacks, As the demand for oil increased, the oil the BHAG. They challenged management to that country’s oil industry – its development, the oil price began to increase, creating an price also increased, spurred on by simul- consider how to get out of the ‘commodity the shipment of crude oil and oil products, increased interest from tanker owners. In the taneous economic growth in Asia and a weak trap’. ‘It is not good enough to be the best of as well as refining – were the domain of the wake of the attacks on New York and Wash- United States dollar. The combined effects of a bad bunch,’ commented Hoegh. state-owned Statoil, whose refineries were ington the shipping industry had to examine all of these factors caused the tanker markets Highly energised by these discussions, the located throughout Scandinavia. The system The 9/11 Memorial, New York. Gallo Images/Getty Images/Michael Orso its own security to avoid terrorist attacks on to surge. n leadership team went back to the drawing worked very well and extended the capacity

112 Teekay: the first 40 years Chapter 4 • Boom Years 113 of Norwegian shipping, which in turn pro- Navion owned a number of highly sophist- about 25 shuttle vessels, some on time char- quickly learnt through his contacts of vided employment for Norwegian seafarers icated shuttle tankers in its own right ter to Statoil, its biggest customer, and others Teekay’s purchase and realised immediately and developed a pool of local expertise across and also leased-in a number of other ships to Esso Norway. Its involvement in long-term that Teekay was planning a takeover. He many of the oil and shipping sectors. These under long-term charters from independent charters to major oil companies, and in par- swung into action to foil Teekay’s plans of a fed off each other and expanded beyond all Norwegian ship owners. Utilising the unri- ticular to a state entity, had not escaped the hostile takeover, announcing Teekay’s inter- expectations after the late 1970s, when the valled scale of its shuttle fleet in a complex attention of Teekay and Bjorn Moller. In fact, est to the Oslo Stock Exchange, causing the first oil and gas came ashore from some of scheduling programme to service more than in 1996 Moller had organised a pleasant din- share price to increase markedly and defeat- the most promising fields that fell within the 30 oilfields, Navion allowed no room for ner in London with Andreas Ove Ugland, ing the approach by making a deal extremely Norwegian economic exclusion zone. tanker owners to play a role except as sub- chairman and large shareholder in UNS, expensive for Teekay. The Teekay team, who In the 1990s Statoil reorganised its ship- contractors. A small number of other oil seeking his help in finding a way for- Tee had travelled to Oslo in anticipation of clinch- ping activities, creating a subsidiary, Navion companies were handling their own logis- kay to become involved in the shuttle trade. ing a deal, had no option but to withdraw Shipping, to oversee all of its shipping needs. tics on a smaller scale using a few leased-in Despite the cordiality of the evening Ugland and return to Canada with little to show for Navion was considered by many as ‘the shuttle tankers, but Navion was the ‘big fish made it very clear that UNS had no interest in their efforts. crown jewel of Norwegian shipping’, for it in a small pond’. helping a potential competitor like Teekay to While Teekay was smarting from this held all of the state-sponsored contracts to The growing North Sea shuttle tanker enter this lucrative niche. unsuccessful attempt to gain entry to the move oil from the offshore installations. niche had allowed the Oslo stock-listed, The increased involvement in the con- Staying ‘undercover’ in Sandefjord shuttle tanker sector, another, unexpected Sandefjord-based company, Ugland Nordic ventional tanker trade in the North Sea development changed the scenario sig-

Asian Spirit (a Suezmax tanker) was commissioned in Shipping (UNS), to become the largest of that came from the Bona acquisition gave nificantly. A few weeks later, Johan Ugland 2004. Teekay Collection these subcontractors, building up a fleet of Teekay a front-seat view of the shuttle trade, imilar to the acquisition of Bona in usual two. That raised a few eyebrows! announced he had sold his shareholding to S1999, and because Ugland Nordic The team was able to complete their due the Kristiansand-based Rasmussen Group, Shipping (UNS) was a publicly listed diligence investigation by Sunday night. who declared it was their intention to build company, Teekay had to conduct all of What remained was for each member and maintain a large minority position in its confidential due diligence studies of the team – covering financial, legal, UNS. Rasmussen, which had owned a 20 per in the UNS acquisition process during accounting, technical, and other aspects cent stake in Navion Shipping (Statoil had a single weekend. UNS’s offices were – to report his findings promptly to Van- the rest of the shares), was locked in a feud located in the small Norwegian town of couver to allow the preparation during with Statoil over Navion’s late delivery of the Sandefjord, two hours’ drive by car from Sunday of a board presentation to seek drillship West Navion and the cost overrun Oslo. UNS CEO Herbjorn Hansson (seen approval to proceed, and then prepare in its construction, resulting in what they here with Teekay CEO Bjorn Moller) was press releases and investor presenta- considered to be unsatisfactory returns on expecting a Teekay team of three to five tions in time for Monday morning. To their investment in Navion. Increasing ten- people, but some 20 arrived, conspicu- save time, the debriefing of the team in sions between the two parties led Rasmussen ously made up of the typical Teekay melt- Norway took place while they drove in to declare an intention to take their dispute ing pot of ethnic backgrounds. When a five-vehicle convoy from Sandefjord with Statoil to arbitration. (Statoil later pre- Hansson called Bjorn Moller in Vancou- to Oslo. Simultaneously connected to a empted the arbitration route by offering Ras- ver to express his concern about blow- conference call with Vancouver, every mussen a good price for their shares, which ing their cover, Moller assured him that member of the team delivered his find- they accepted, giving Statoil total control of his team would be discreet. Ironically, it ings verbally. Undoubtedly, this was one Navion.) was Hansson himself who almost blew of the stranger sights seen on the road Hansson quickly realised that UNS’s new the team’s cover when, on Saturday to Oslo, not to mention one of the most majority shareholder – Rasmussen – was in morning, he went to his local bakery expensive cellphone bills in Teekay’s a bitter feud with UNS’s biggest customer – shop and ordered 40 rolls instead of his history! n Statoil. This was not a tenable situation, from a customer perspective as well as having a depressing effect on his future share price. He decided that perhaps the better bet was to reaffirming its interest in this growth area. cent shareholding in UNS, Teekay promptly talk to Teekay. However, breaking into the ‘club’ of shuttle opened up discussions with him. At the same While in Japan, Moller received an unex- tanker owners was proving a challenge for time Teekay bought a 10 per cent share in pected call from Hansson. ‘I have talked to a newcomer. When in early 2001 the com- Ugland Nordic in the open market through all of my key shareholders and I can deliver pany picked up a rumour that another large a Norwegian brokerage firm. Although a minimum of 50 per cent of the UNS shares, shareholder, Andreas’s brother Johan Benad this was supposedly confidential, Herbjorn if you are still interested,’ he told an excited Ugland, was considering selling his 30 per Hansson, UNS’s energetic chief executive, Moller. Hansson proved true to his word and

114 Teekay: the first 40 years Chapter 4 • Boom Years 115 The shuttle tanker Nordic established Norwegian companies were also Laurita, one of the Ugland Nordic fleet that was vying for the purchase of Navion. Moller was taken over by Teekay in North Sea shuttle tanker operations also acutely aware that business circles were 2002, in the Cape Town buzzing with speculation regarding the ulti- anchorage, awaiting a crude oil cargo from the mate purchaser of Navion, and that the local Sable oilfield off the uge seas and high winds are charac- hose fast, and begin loading. Frequently view was emphatic that a Norwegian com- southern coast of South teristic of the North Sea, yet it is the the wind was strong and whipped spray pany should operate this vital service that Africa. She had a year’s H charter to move the crude environment in which the oil and gas off the sea, and despite the warm and was so important to the nation. oil either to Saldanha rigs operate, and in which shuttle tank- protective clothing worn by those up in Moller was joined by Sean Day and Peter Bay or to the offshore mooring buoy at Durban ers are required to link up to loading the bow the cold somehow penetrated. Antturi in a series of formal meetings with for onward delivery to the buoys to ferry crude oil ashore. One master installed a coffee machine Statoil teams, including Statoil’s CEO, Olav respective oil refineries by pipeline. Brian Ingpen Among the first shuttle tankers to and a sink in Bergina’s forward mini- Fjell. As Navion was an important employer operate in the North Sea was Bergshav’s bridge. Initially, she had an elementary in Stavanger, Moller and Day also visited Bergina, ex-Jarena, built in 1982 and pur- dynamic positioning system that was Stavanger’s influential mayor, Leif Johan chased from the Kosmos Group in 1991. later upgraded. Sevland, several times, gaining his confid- She was on charter to Statoil to load On older ships the hoses had to be ence and support. Advantageous to Teekay’s cargoes at their oilfield Statfjorn and connected and disconnected according approach was Moller’s Scandinavian back- also at Gulfaks, for discharge in Wil- to changes in the weather, a laborious ground, and, of course, Teekay’s Scandina- helmshaven, British ports, Rotterdam procedure that has since been semi- vian heritage. Moller also addressed the town and Norway. automated and can be operated from council, which was particularly anxious that She was a well-constructed vessel the bridge. the company should remain in the city, that with some very comfortable accommo- All modern shuttle tankers have jobs would be secure, and that any new buyer dation for her crew. Wooden panelling, state-of-the-art dynamic positioning would commit itself not only to Norway but long since prohibited in ship construc- systems as well as the latest equipment also to Stavanger. By the end of the meeting, tion, made her a cosy ship in which to and systems for loading. A host of safety Moller had provided all the assurances they sail, but when she arrived at the load- procedures and equipment have also required, including vital promises that Tee- by the next day he had managed to line up 54 although there were dissenting voices that range of issues – the price tag, the dangers ing buoy all traces of cosiness were left been fitted, including sophisticated kay would leave the operating headquarters per cent of the UNS shares for Teekay, who pointed to the strategic role the company’s of moving the Navion fleet operation out of behind as control of the ship had to be shutdown equipment that can be activ- in Stavanger and would grow the business. reacted immediately by acquiring the shares fleet played in the Norwegian oil industry. Norway, the development of offshore load- passed to a mini-bridge up forward, and ated at the press of a button. After all, Such was the rapport between the coun- and launching a public offer for the rest of Nevertheless, the board decided to start pre- ing technology, and more. Overland later the fo’c’sle party, including the master environmental considerations are cillors and the Teekay delegation that the the shares at a price that valued UNS at $700 paring to sell its shipping arm, and the word revealed that he had had a similar conversa- and mate, trudged to the bow to take extremely important to the oil indus- meeting paved the way for future close co- million, an offer that Rasmussen eventually, quickly spread. tion with Moller’s counterpart at the lead- control of the ship, make the loading try, and to Teekay in particular. n operation between the city and the company. albeit reluctantly, accepted as their object- Immediately realising this would be an ing Norwegian company competing for the There was also good news for Teekay on ives had been defeated. Unlike the unsuccess- opportunity never to be repeated, Moller purchase of Navion. ‘I needed to get to know the bid front. One of the local companies had ful Torm project the previous year, where went to Norway even before the official these men more,’ Overland commented later. withdrawn from the race to secure Navion, a hostile suitor had won out, here the hos- announcement by Statoil to express Teekay’s ‘After all, we were entrusting the movement believing that the price was too high and tile approach of Rasmussen was ultimately strong interest in the purchase of the of Norway’s oil to one of them.’ the process too long. With other potential defeated by a friendly deal between UNS and Norwegian company. He brought with him When the announcement of the proposed bidders from Sweden, Denmark and further Teekay. Teekay was now in the happy posi- a team of four other senior Teekay executives sale of Navion was officially made, many top- afield having already dropped out of the race, tion of owning UNS, making it a significant and they gave a three-hour presentation about class companies displayed a keen interest. only one major Norwegian owner and Tee- player in the Norwegian oil transportation every aspect of Teekay to a team from Statoil, Not only would their 30 shuttle tankers and kay were competing for the ‘crown jewel’ of sector. And another major opportunity on led by Statoil’s executive vice-president and 20 conventional tankers provide a strategic Norwegian shipping. Statoil approached the the shuttle tanker front was to follow within Navion chairman Erling Overland, a key platform for any purchasing company, it Norwegian military for their views, but the a year. figure in any decision to be made regarding would also provide valuable fixed revenues response revealed no major concerns that a In 2002 Statoil was reviewing its owner- Navion’s future. through contracts of affreightment with a reputable foreign company might operate ship of Navion. ‘Why should Statoil have its In the following weeks, Moller and Over- reliable customer at a time when rates had Navion. capital tied up in a shipping company when land developed a good understanding and collapsed in the wake of the terrorist attack Teekay’s compelling presentations to Stat- there are several excellent shipowners who mutual respect. The Statoil man invited on New York’s World Trade Centre. oil had showcased Teekay’s international could do the job?’ was the question being Moller to an unusual meeting in the small Teekay knew it would be difficult to per- reputation for sound management, safe- asked by the Statoil board. Others suggested harbour town of Tananger. Following lunch suade Statoil to hand to a foreign company ty, meticulously maintained vessels, and that, through Navion, Statoil was compet- at the restaurant Hummeren, the two men the important role of transporting most of highly professional seafarers, as well as its ing with Norwegian shipping companies, walked along the beach, discussing a wide Norway’s oil, especially since at least two strong balance sheet and strong corporate

116 Teekay: the first 40 years Chapter 4 • Boom Years 117 governance. With Statoil’s ambitions to grow the competition in terms of track-record. sat back in his chair and looked at the Tee- its business outside the North Sea, Teekay’s Nevertheless, recognising the risk of the out- kay men, who were joined by Hans-Petter Aas global reach offered the ability to follow come being influenced by nationalist senti- of Den norske Bank. ‘How are you going to Statoil wherever required. These were key ment, Moller knew that it would be a close pay for this?’ he asked. Aas leant forward and factors for the Statoil board to consider, par- decision for Statoil’s board, prompting him pushed a document across the table. ‘Here’s ticularly as the North Sea operation involved in the final meeting with Overland to pre- $500 million of it,’ he said, referring to a high-risk loading from offshore platforms via sent a final purchase offer that was $10 mil- proposed loan agreement that was contained hoses to tankers, often in dreadful weather lion higher than the $750 million the Teekay in the prepared document he had tabled. conditions. Teekay felt it had the edge over board had originally sanctioned. Overland Understandably, Overland was impressed. This was one of the largest single loan com- mitments that Den norske Bank had ever Navion gift exchange revealed the closeness of the competition issued, and was based on the relationship of trust that Torben had developed with the bank, a relationship that was reinforced by n December 2002 a team of Teekay When it came to exchanging gifts at the the team led by Axel in that uncertain period Iexecutives travelled to Oslo in antici- celebration dinner on Sunday night, after Torben’s death, and by Teekay’s honour- pation of a decision by the Statoil Bjorn Moller stood up and presented ing of the subsequent repayment of debts to board about the sale of its shipping the silver platter to Erling Overland. that bank and other creditors. The deciding arm, Navion. According to tradition, Moller said, ‘Erling, we didn’t know the Statoil board meeting took place the follow- Teekay had brought a corporate gift to exact date of the signing, so the date ing week. be presented in the event of success – a says “December 2002”.’ Overland got up, A large Teekay team had travelled to Nor- silver platter engraved ‘Statoil – Teekay handed over his gift to Moller, and stated way to be ready to spring into action in the – Navion; December 2002’. After Teekay with a wry smile, ‘Well, Bjorn, you may event of a successful outcome. The team had was declared the successful bidder for not have known the date. We knew the convened in a meeting room at offices of its above The Aframax tanker Axel Spirit was built at the Samsung shipyard, Korea, in 2004 as one of a series of Navion that Friday, the team travelled to date, but what we didn’t know was who PR consultants in Oslo, and the mood was a four vessels, each bearing the name of a Karlshoej family Stavanger to meet Statoil officials over the winner would be! So our gift to you combination of excitement and apprehen- member, the others being Esther Spirit, Erik Spirit and Helga the weekend to prepare for the official is simply inscribed “Navion Transaction, sion. Everyone remembered having to travel Spirit. Chief Engineer Kanwar Deep Ghei Right Peter Antturi, Sean Day and Bjorn Moller played a major role in Teekay’s announcement on Monday morning. December 15, 2002. Congratulations!”’ n back to Vancouver empty-handed after the acquisition of Navion. Of Finnish origins, but Canadian first, failed attempt in the UNS deal just one by birth, Peter Antturi went to Vancouver University from Toronto, and after completing his business studies degree year earlier. Finally, in the late afternoon, he returned to Toronto to work for Upper Lakes Shipping. Moller’s cellphone rang. It was Overland. ‘The On his first day an old hand took him through a vessel in board meeting is over. I don’t know what you port, crawling inside some of the narrow spaces and tanks, an experience that engendered in Antturi a fascination were worried about – Teekay won!’ It was Fri- with ships. Returning to Vancouver to work for a company day December 13, 2002 and the greatest prize that was involved in the shipping of phosphates, he learnt from the local press that Teekay would be relocating its in Norwegian shipping had been acquired by head office from Long Beach, California, to Vancouver, Teekay (see page 114). and believing that it would be preferable to work in a ‘I remember vividly,’ Sean Day remarked corporate head office than in a branch, he sent his résumé to Captain Jim Hood in Long Beach. ‘You’re hired,’ Hood told later, ‘how the Teekay team then worked him on the telephone, and for the six weeks before the right through the weekend in several hotel company’s move to Vancouver he had on-the-job training in Long Beach. Several years after the move to Vancouver, rooms in Stavanger to prepare all the press Antturi wanted to leave Teekay. Determined not to lose releases and to prepare for the press con- a person of this calibre, Bjorn Moller took him out for a ferences, investor conferences and other meal. ‘Congratulations!’ Moller told him during the evening. ‘You’re the new chief financial officer.’ And Antturi was in meetings that were planned for the follow- his early thirties! He played a major role in the expansion ing Monday.’ One of the important appoint- of Teekay, notably in the various deals that brought the company into the Norwegian tanker sector and, in a most ments was with Navion employees and important role, he moved to Stavanger, Norway, to oversee other interested parties, who were invited Teekay’s initial years of involvement in operating the to a meeting in the employees’ cafeteria in ‘floating pipeline of Norway’s oil’ (see page 121). Antturi wanted to return to Canada and retire from the company, the Stavanger office at which the new owners The Teekay and Statoil teams in Vancouver in 2003 to celebrate the agreement whereby Teekay took over but when Axel Karlshoej heard about this he persuaded Statoil’s subsidiary Navion Shipping. Navion was of strategic importance to the Norwegian economy, moving a would address them. Day, Moller and Antturi him to become involved in one of the family trusts through large share of that country’s oil from its offshore oilfields. Teekay Collection which he retains contact with the wider Teekay operation. admit to being a bit anxious about the recep- Teekay Collection tion they would receive from the audience

118 Teekay: the first 40 years Chapter 4 • Boom Years 119 when they walked into the auditorium. ‘The wearing identical white shirts and red ties; The hard work continued. Loose ends they valued the company, the Teekay team Thus by the end of 2002 Teekay had taken pipeline of Norway.’ Because Navion had employees had no idea who had bought the however, although this was by pure coincid- were tied up to provide security of tenure for had put a conservative value on the large over both Ugland Nordic and Navion as going such a large number of assets and personnel company,’ Day continued, ‘and I will never ence, some Navion people thought it was a Navion’s employees, to give assurances for fleet of conventional tankers that Navion concerns, and, apart from having the largest in Norway, Moller asked Antturi to relocate forget how they stared at us as we came in, kind of uniform! In their address, Day, Moller many other aspects of the company’s opera- had time-chartered in to serve part of their fleet of Aframax tankers, Teekay had also to Stavanger as president of Teekay-Navion and then an excited whispering broke out and Antturi talked freely about Teekay, its tions, and to meet existing contracts, which export requirements. However, contrary to become the largest owner of shuttle tankers. Shuttle Tankers (TNST) and to manage the as they tried to identify us before we made ideals and its dreams. The audience gradually included not only the shuttle tanker busi- the team’s assumptions, the tanker market These two acquisitions made the company integration of the two companies. Since pub- the formal announcement.’ A Navion staff warmed to the newcomers, the ice had been ness but also the chartering of conventional boomed over the next few years, making the official carrier of more than half of Nor- lic opinion had been so strongly in favour member later commented that the first thing broken, and new horizons began to open for tankers to move Statoil’s cargoes, an unex- this what Sean Day called ‘a very nice upside way’s oil, leading one commentator to write, of a Norwegian company taking over the he had noticed was that all three men were both the Navion personnel and Teekay. pectedly profitable part of the deal. (When surprise!’) ‘Teekay now has the keys to the floating oil national oil shipments, it was essential that

Far left The 148,729-deadweight shuttle tanker Navion Stavanger in the port after which she was named. Teekay Collection Left Built in 1999, Navion Anglia was one of the vessels that were absorbed into the Teekay fleet after the takeover of Navion. Teekay Collection

120 Teekay: the first 40 years Chapter 4 • Boom Years 121 Alliance Spirit, a total loss

are meteorological systems, similar to that the ship’s course over the ground was 250 engulfed by another huge wave. On the beach and me until the protection and indemnity Rtropical cyclones and known in Spanish as degrees. To make matters worse there was a a crowd of onlookers, which included mem- club had guaranteed that costs would be met.’ medicane, occur over the Mediterranean Sea, change in wind direction from north-west to bers of the Algerian Coast Guard and Teekay They even invited the two men, the insurers bringing high winds, extremely heavy seas, north, and the tanker was being pushed side- shore staff, were horrified to see the boat and the agent to dinner at a restaurant, but and driving rain. Records show that such sys- ways towards the shore. During the struggle disappear as the wave swept past the stern of for them it was not a pleasant experience tems occurred in September 1947, September to keep her from the shore the propeller came the ship. ‘It’s gone!’ someone shouted. ‘The because they could see the ship from their din- 1969, January 1982, September 1983, January out of the water, thus reducing propulsion, boat’s gone!’ ner table and also hear the occasional screech 1995, January–February 2003 and October and the engine tripped 27 times! To aggrav- Suddenly the boat bobbed up behind the of steel as the sea moved the parts of the now 2006. The most recent occurrence, in Novem- ate the situation the visibility was reduced wave, but the swirling wind and the fright- cracked hull. ber 2011, was classified officially as a tropical by heavy rain, which became a serious prob- ful eddy that had formed landward of the Teekay, Banic also said, had been most storm. Some have the ‘eye’ that is characteris- lem as all the ships were trying to leave the stranded ship pushed the lifeboat out again, supportive, even while the crew were still tic of tropical cyclones, and, on that occasion, anchorage simultaneously. throwing it against the ship. The occupants aboard the ship. Captain Graham Westgarth a ship recorded winds of 85 miles per hour Banic managed to keep Alliance Spirit clear were jolted by the impact and the boat again co-ordinated Teekay’s response from Vancou- (140 kilometres per hour) and an atmospheric of a rocky area, where she would have been became trapped against the hull. Banic once ver while two highly experienced men, Allan pressure of 975 millibars. smashed by the heavy seas and lives might more managed to free the boat and headed Murphy and Raffaele Paturzo, were dispatched Arriving in ballast from Philadelphia at have been lost. However, because of the heavy for the beach, but then the inexplicable hap- to Algeria immediately. They arrived within a Skikda, Algeria, on January 15, 2003, the roll and the seas that swept over the deck, pened. When it was only about 100 metres day of the grounding to take charge of the sal- Aframax Alliance Spirit anchored off the port it was too dangerous to order the fo’c’s’le from the beach someone opened the hatch vage operation from Teekay’s side. ‘They took to await a berth to load crude oil. Also in the party forward to drop anchor. The ship was and the boat immediately became flooded great care of us,’ glowed Banic as he recalled anchorage were two other tankers in ballast. thus at the mercy of the storm and at 06:00 and the engine died! Fortunately the wind the incident. ‘Graham [Westgarth] even told When the port authorities gave a storm warn- she grounded on the beach, bow-first. A par- and waves carried the boat towards the shore, me that the two representatives would not ing all three tankers moved out of the anchor- ticularly large wave lifted her and turned her where Coast Guard officers scrambled into the leave Algeria until the chief engineer and I age to ride out the storm at sea, and once the through 90 degrees, exposing her starboard surf to attach a line and the crowd, which had were on an aircraft heading for home.’ worst was over they were allowed to return to side to the waves. grown as word of the drama spread, rushed to Smit International was contracted to re- Captain Boris Banic photographed aboard Alliance Spirit off Cape Horn on July 26, 2002. Cape Horn is the southernmost anchor. No more storm warnings followed, yet headland of the Tierra del Fuego archipelago of southern Chile, and is on the small Hornos Island, although it is not the most Banic alerted the Algerian Coast Guard to pull the boat ashore. Once it had grounded, move the fuel oil from the tanker, and then the wind increased to such an extent that all southerly point of South America. A passage via Cape Horn can be particularly hazardous as it is a zone of exceptionally the grounding. ‘Don’t worry, Captain,’ the eager hands opened the hatch and helped to remove the wreck. Their team chartered three ships left the anchorage twice of their strong winds, heavy swell, powerful currents and even icebergs, a combination that has put fear into the hearts of the most radio operator said, ‘this happens every year. the crew ashore, their terrifying ordeal now a small tanker to take off the bunkers, and intrepid seafarers, and killed hundreds, perhaps thousands, over the years. own accord and returned on each occasion While in command of Alliance Spirit, Captain Banic passed Cape Horn five times. The first was during a voyage from We’ll pull you off this morning.’ But the storm behind them. mobilised a barge, a crane-barge, and various when the wind had subsided. However, there Sydney to Argentina to load a cargo for Los Angeles, and a week later his laden ship rounded the Horn again en route to Los continued, carrying the starboard side lifeboat A total of three Aframax tankers were other salvage craft and equipment. In a major Angeles. The vessel returned to load in Argentina via the Horn again, and, bound for San Francisco, passed Cape Horn for the were now 17 ships in the anchorage and when fourth time. On that occasion, he says, they passed Cape Horn at night in rough weather. His fifth transit of the notorious from its davits and driving it ashore. Using a driven ashore in that appalling weather, one project lasting more than two months, they the wind began to strengthen for the fourth passage occurred when the ship was steaming from San Francisco to Argentina, where he was initially instructed to load rubber duck, the Coast Guard tried to rescue grounding on the beach, ahead of Alliance cut off the superstructure and managed to time the Alliance Spirit’s master, Captain Boris again for the Californian port, but he received an amendment to the voyage instructions that sent the ship to Philadelphia the crew, but after one trip through the wild Spirit. A salvage team from Smit International refloat the wreck in two pieces – the forward instead. On his final voyage via the Horn the weather was good, despite the fact that it was winter. Yet the officers had to Banic, ordered the anchor weighed shortly be wary of icebergs that had been seen in the area. Captain Banic was fortunate – not many ships round that notorious cape sea – carrying two seamen – the rubber duck boarded the ship but, contrary to the optimis- section was towed to Turkey for demolition, after midnight on February 1. Similar steps five times in winter, encountering heavy weather on only one occasion! capsized during the second attempt and they tic comments of the Coast Guard official who while the after section was taken out to sea Young Boris Banic’s dreams of a sea-going career and his broad interest in ships began when he accompanied his father were being taken aboard the other vessels, to sea in naval vessels in his native Yugoslavia, dreams that became a reality when he joined his first ship, the Yugoslav abandoned the rescue. promised to tow the ship off the beach later and sunk. resulting in considerable confusion and fran- Liberty ship Konavli, as an apprentice in 1967, obtaining his master’s certificate eight years later. During his subsequent naval Banic decided to abandon ship and that day, the wild conditions deteriorated The special weather forecast that had been tic radio calls between ships in the crowded service he was initially a training officer for the navy and was later assigned to the Yugoslav presidential yacht until his naval ordered the port side lifeboat to be prepared further and lasted nearly eight days. Slowly provided for Skikda during the grounding was service ended in December 1976. anchorage. When the port control called an Returning to serve in merchant ships, Banic did several tours of duty before joining Sanko Line, where he sailed with for launching, a procedure the crew had prac- the ship began to succumb to the incessant very different to the reality: south-west winds Aframax tanker to warn that she was too close several officers who later joined Teekay. His first promotion to chief officer was in Sanko Stresa, commanded at the time by tised many times. He took the ship’s papers pounding of the sea: the engine room became of 15 to 20 knots with a light swell was the Captain Harry Carlisle, while the ship’s second mate was David Glendinning, both of whom later joined Teekay. to the breakwater, her master replied that his His first Teekay ship was Grand Wisdom and despite other offers he ‘could not imagine leaving Teekay,’ as he later and the crew boarded the covered lifeboat. flooded, her single hull cracked in various forecast, yet the area was ravaged by 85-knot ship was already aground! wrote, and took command of Sunrise in June 1988. For the next 21 years Captain Banic remained in command, and from the From inside the lifeboat the crew lowered it, places, and she listed heavily to starboard, winds that created a monstrous swell. As Alliance Spirit began to move ahead, the Onomichi yard in Japan he brought out two ships, Palmstar Poppy and Teekay’s first double-hulled tanker, Mayon Spirit. released the hooks and the painter, and Banic leading insurers to declare her a total loss. Captain Banic and the chief engineer were He particularly enjoyed the North Sea trade between 2003 and 2009 before he retired. Captain Boris Banic wind strength increased substantially within took the con to try to clear the ship. How- ‘The Algerians were excellent,’ Captain called to Vancouver to provide an account of minutes, the sea became wild and confused as ever, at a crucial moment an eddy pushed Banic said later. ‘They treated us with great the grounding, while an external investiga- an enormous swell started running, and the the crowded boat against the stern, where it respect and courtesy, but of course they were tion declared that, given the prevailing severe low-powered engine simply could not cope. became trapped. Banic’s skilful boat handling concerned about the oil in the ship and they weather conditions, corroborated by meteoro- Banic turned the ship to steer 310 degrees, saved the day as he managed to ease the craft wanted a guarantee that the wreck would be logical reports at the time, the accident had but such was the strength of the elements away from the ship’s stern, only for it to be removed. So they detained the chief engineer been ‘an act of God’. n

122 Teekay: the first 40 years Chapter 4 • Boom Years 123 Teekay should demonstrate its commitment in 12 years. The company was becoming a As the country industrialises and begins to capitalist society, said, ‘It doesn’t matter Tenth anniversary in Vancouver to Norway by sending one of its most senior renowned global shipping company and, build steel mills, power plants as well as the whether the cat is white or black, as long executives to run the company. Antturi’s role more importantly for shareholders, greater infrastructure and buildings to house new as it catches the mouse!’ The trajectory had thus became more than that of a manager of profits had been accrued than expected. arrivals in the cities, a consumer economy been steadily upward for 30 years, with a few a shipping entity: he was Teekay’s ‘ambassa- Teekay could have rested on its achieve- starts to develop as incomes rise to a level disruptions along the way, but in the early dor’ to Norway, a vital role at that time. ments, but the strategic perspective recently where the population can afford durables 2000s China began the phase of rapid indus- Across the road from the Norwegian provided by board members Day and Hoegh – such as vehicles, household appliances and trialisation and growing consumer demand, king’s state summer residence stood a fine that Teekay should consider raising its ambi- other personal items. As the swing towards leading to an exponential need for raw ma- old house that had been built between 1910 tion level beyond the initial BHAG – now greater industrialisation gains momentum, terials, including vast amounts of steel and and 1912 by a sailing-ship owner. Now it was looked particularly relevant. Moller shared the country experiences a rapid increase in cement required for the booming construc- being acquired by Teekay to be the residence the view that more could be gained. ‘We demand for basic raw materials such as iron tion industry. of the Antturi family. The beautiful building must raise our sights,’ he told his leadership ore, coal, and other minerals. The pace of development, according to had thick walls and teak doors, floors, cup- team. ‘Instead of a big, hairy, audacious goal, China had embarked on its period of some observers, had been spurred by regain- boards and panelling, some of which had we now need a big, hairy, scary goal!’ Follow- rapid growth in the early 1980s when Deng, ing control of Hong Kong in 1997 when the burn marks as the wood had come from an ing a number of leadership team strategy referring to a potentially rapid change from Chinese had realised that, instead of envel- old sailing ship. However, it was in serious discussions over several months, with many the arch-communist economy to a more oping the thriving city in the dour shrouds need of renovation. The public needed re- diagrams and figures on flip charts, the team assurance that the newcomer to Stavanger eventually formulated a new, broader BHAG: would respect the house, for many had mar- ‘To become the undisputed leader in marine ried there over the years or had attended services to the oil and gas industry by 2010.’ Another career in Teekay functions in the grand old building. Permis- ‘The purpose of this audacious goal was to sion was granted for the house to be renov- broaden the size of the challenge we were set- ated, but its original beauty was enhanced by ting ourselves,’ commented Moller later. ‘We eginning as a wiper, Chief Engineer As a remembrance to our company, I the careful and meticulous restoration work were looking to redefine the level of ambition Bacalando tells of his career with named my second child Therese Kaye with To celebrate the tenth anniversary of the move to Vancouver, Teekay provided a grant to the Vancouver Maritime B the nickname of ‘TK’ to let everybody know that Teekay undertook out of respect for that for Teekay, and this new goal certainly did Teekay, which has meant more than Museum for the construction of the J. Torben Karlshoej Gallery, which depicts, inter alia, the history of the company. how proud I am to be a member of the At the function to open the new gallery were: Axel, Poul and Inge Karlshoej, Jens and Stacey Karlshoej, Bjorn Moller important piece of local culture. this. We did think about whether the term simply a job, as he confirms in the Teekay team. (Teekay’s chief executive and president), Aiko Karlshoej (Torben’s widow), and Yumi Karlshoej (Torben and Aiko’s daughter). Axel Karlshoej Having taken over the Navion offices right “the undisputed leader in marine services” names given to his daughter: There are always downsides in life next to the water in the extensive harbour, might have sounded a bit arrogant but it – failing examinations and missing promotions are only a few – but life goes Teekay became an integral part of Stavanger’s actually sprang from our customer focus. We As I initially dreamed of being an airline on as they say. It was my father who always waterfront area, so that when a gathering of recognised that our customers would only pilot, being a seafarer was not my original encouraged me to take examinations and tall ships took place soon after the acquisi- permit us to reach this goal if we delivered ambition – but this turned out to be the grab opportunities for promotion, and it is career that has moulded me into who I am tion of Navion, Teekay provided sponsorship flawless and value-added service to them.’ sad to say he never made it to the rank of today. 1st Engineer as I have – but he always gave for the event. Teekay, in a way, was adopted Once again, Moller received the support It was not easy applying to the me the motivation to pursue my dream. by the sailing ship fraternity for the com- of the board for the idea of raising the com- company, but as part of the full selection Working with my shipmates on board pany had become the owner of the beauti- pany’s ambitions. When rolled out to the process, I took the engineer cadet is the main focus – aiding them with examination with Teekay, and started in their work, hearing their opinions and fully crafted replica of the 1910-vintage Stina rest of the organisation the new BHAG was November 1989 as a wiper. suggestions, and [helping them with] the Mari, a schooner-rigged wooden vessel that greeted with great enthusiasm. Spending countless days and nights at paperwork that we need to attend to, and to this day is usually moored adjacent to the sea for 20 years is already my life – battling just as importantly, joining with them on the raging waters of the deep sea, storms, Stavanger office, and she has taken part in the ◆ occasions which make us forget the rigours and pirates are only a few of the hindrances of life on board. We do have fun with video tall ships’ race on more than one occasion. of being a seaman, not to mention the games, karaoke, and watching movies … Adding to the team’s satisfaction that their owards the end of 2002, maritime ana- time spent away from your loved ones, I am happy to say that I was able to go efforts had been rewarded with the purchase lysts had begun to project a more positive and missing special occasions that are as to different places worldwide, [and even T important as my life. I am blessed with of such an important company, the leader- tone for global shipping. In the East, a new if I have] only a few hours I still enjoy the three children, a loving family who really breathtaking scenery of every place that ship team was particularly pleased because economic giant had awakened. Like Japan in need my care and fatherly love which I I’ve visited. I bet that’s the best advantage another milestone had been reached. Teekay the post-war period, and South Korea a few can only provide during the days of my we seafarers enjoy most, while meeting had achieved market-leading positions in decades later, all agrarian economies that vacation. But mainly with the help of my relatives and friends that we haven’t seen wife, we have been able to raise loving and for a while is also very special. But above all two new sectors – Aframax Atlantic and shut- develop and industrialise experience phases respectful children – what we expect them of this is the power of prayer to our Creator tle tanker operations – over a period of only of development, resulting in a decade or two to be – hoping that they too will become who guided me in making [me] what He four years since the launch of a BHAG which of rapid, above average economic growth, professionals and successful as I have been. wanted me to be … n originally called for ‘only’ three new sectors usually characterised by rapid urbanisation. Aiko unveils a portrait of her late husband at the gallery in the Vancouver Maritime Museum. Axel Karlshoej

124 Teekay: the first 40 years Chapter 4 • Boom Years 125 left The Suezmax tanker European Spirit, seen here sailing from New York, was completed in 2003. Teekay Collection Top The 111,920-deadweight Aframax tanker Americas Spirit joined the fleet in 2003. Teekay Collection above The Aframax tanker Australian Spirit entered service in 2004. Teekay Collection

126 Teekay: the first 40 years Chapter 4 • Boom Years 127 of communism, Hong Kong’s recipe for In 2004 analysts wrote that China’s steel financial and commercial success could be production was expanding at around 9 per replicated elsewhere in China. Indeed, the cent annually, stimulated by the demands of smooth handover from the British and the a booming construction industry engaged in continued prosperity of the former colony as massive projects, including new dams and a financial, commercial and shipping hub in power stations, expanding transport systems, the Far East surprised all, and also made an high-rise blocks for offices or apartments, impression on Chinese leaders. and shopping malls. Chinese urbanisation In addition, the prospect of entertaining alone was said to be at a rate that would hundreds of thousands of visitors before, dur- require extensive construction projects in ing and after the 2008 Olympic Games gen- virtually all of China’s cities and large towns, erated in the Chinese a different approach generating an ongoing demand for steel, tim- to economics and politics, paving the way ber, aluminium and cement. for an extraordinarily rapid opening of the Photographs of a typical scene in down- formerly reclusive country to trade and tour- town Beijing a decade or two ago show ism, so that an unparalleled expansion of the hundreds of bicycles and pedestrians; more Chinese economy began. recent images reflect a significant change as While economic and shipping projections cars now form traffic jams and large buses began to sound more positive for Asia – and have replaced most of the informal trans- indeed for world trade – no one could have port. Associated with the transport boom has foreseen the rate at which the Chinese giant been a surge in the Chinese vehicle manufac- would awaken to unleash broader economic turing industry, which grew further as the growth that caused shipping rates, within a global economy recovered, increasing the matter of months, to rise to unprecedented need to import steel and vehicle parts and levels. The phenomenal changes that began generating a vibrant vehicle export trade. late last century were more akin to a new re- The Chinese thirst for oil and oil-related volution sweeping across China – but one products unleashed a global demand that, that moved faster than the revolution of within a few years, would cause the oil price 1949, which had plunged the country into to increase to a record level of over $141 a communism and shrouded it behind the barrel. These dynamics set in motion a boom Bamboo Curtain for nearly 50 years. period for tanker owners, although it also The huge population of China, now increased the price of bunkers with a com- emerging from the isolation of the past dec- mensurate increase in operating costs. ades and flocking to the urban areas, pre- Again the shipping companies rejoiced sented an attractive market for a wide range as Chinese imports swelled the volume of of products, ranging from perfume and container traffic, while the dry bulk markets clothing to vehicles and construction mater- – already bullish – soared to new heights ials. In turn, Chinese industries realised the as brokers scrambled to fix vessels for these potential of the massive European and North windfall cargoes. American markets for products such as elec- Apart from building vessels for their coun- tronic equipment, textiles, machinery and try’s growing ocean-going merchant fleet as household goods, which they could produce well as hundreds of coasters and river craft, at much lower prices than rival countries the Chinese shipbuilding industry had not such as Japan or Korea. In contrast to the one- been on a globally competitive footing. Yards way flow of cargo to western markets during were relatively small, parochial and ineffi- the Asian economic crisis a few years earlier, cient in their operation, and some produced a new horizon for shipping dawned as con- low quality vessels. However, as they looked at tainerships carried goods both to and from neighbouring South Korea and Japan, where China, prompting a wave of shipbuilding shipbuilding had become a mega-industry in Bjorn Moller and Eileen Mercier at the naming ceremony above Some of Fuji Spirit’s crew during the naming ceremony. Captain Hans Schaefer middle Fuji Spirit approaching Melbourne, Australia. of the 106,360-deadweight Fuji Spirit at the Tsuneishi yard, top left A photograph taken from Fuji Spirit off Whangarai, New Zealand. Captain Hans Schaefer Captain Hans Schaefer above A view from Fuji Spirit in the to cater for owners wishing to order larger a relatively short space of time, some Chinese Japan, in 2003. Captain Hans Schaefer top right Fuji Spirit discharging at the oil terminal in Brisbane, Australia. Captain Hans Schaefer Arabian Gulf. Captain Hans Schaefer ships to meet the surge in two-way trade. shipyards began a refitting process that would

128 Teekay: the first 40 years Chapter 4 • Boom Years 129 raise them to levels where they were compet- quickly established himself as a very strategic itive in terms of price, and in some cases the team member, negotiating complex deals on My journey with Teekay – cadet to chief engineer quality of their vessels was comparable to behalf of his new company. In cooperation those that were produced by shipyards in with David Glendinning – then senior vice- other countries. president of Marine Project Development ascinated with ships from an early In late 1999, I accepted the opportunity On the back of unprecedentedly high ship- – he was instrumental in commencing the age, Chief Engineer Surendra Sirodar to work at the Vancouver office as a Marine ping markets, this expansion of Chinese ship- pursuit of the next area in the energy sector F and Safety Coordinator. This role prepared traces his career, which took him to the building came at the right time since most that awaited Teekay’s entry. As major energy me to take on the Chief Engineer position rank of chief engineer: without hesitation. yards in other oriental countries were fully sources, coal and oil were coming under However, with an increase in rank committed for the foreseeable future, and increasing scrutiny because of the amount It was a childhood hobby to watch ships comes increased responsibility. On several European yards had priced themselves of carbon, sulphur and other impurities from my house that overlooked the port. joining the Sudong Spirit as Chief Engineer, out of the market. Shipowners thus came to given off during combustion, while nuclear My father worked on a ship and took me on I meticulously identified a serious board for the first time when I was six. I sat malfunction issue with the steering gear the upgraded Chinese yards in their droves. power generation was also the focus of atten- on my father’s shoulders and tightly held which, if undiscovered, might have caused The shipbuilding boom was another factor tion from environmentalists, many of whom his head while he climbed the pilot ladder. a major mishap. Thanks to the excellent that escalated the Chinese demand for steel argued against its widespread use. On the I was curious about the operations on board support from the staff on board and ashore, and I was fascinated to meet everyone. we have tackled and resolved many issues and the importation of a wide range of parts other hand, many viewed natural gas as a It was this exciting and memorable over the years. Sailing is my passion and equipment for the new vessels. cheaper and more eco-friendly energy source, experience that inspired me to choose a and taking challenges is my inclination. To support the phenomenal growth in particularly for domestic purposes, and the Each voyage has been different and career at sea. Chinese industry and the consequent vora- industry, aided by a significant green lobby, The journey started when Teekay every problem has been a new challenge. selected me as a cadet and I boarded the Resolving the task gives me immense cious appetite for goods, minerals and energy, was pushing for its more widespread use, Tasman Spirit in 1990. My first voyage was satisfaction and continues to keep me global demand for ships expanded, creating not only for domestic consumption but also thrilling and electrifying with rough motivated in my job. the largest market for shipping, even when for industrial use and, notably, for power weather across the Pacific. During my 20 years at sea, I have compared with the extraordinary levels of generation. During this voyage, I took part in a managed my time effectively. This Teekay-designed training program that included using my vacations and spare demand after the Second World War. Not surprisingly, during 2003 Teekay was the first of its kind. With instructor time on board to enhance my knowledge. With charter and freight rates soaring as a became interested in playing a role in the Chief Engineer Robert Lindsay, I completed I completed my MBA in 2007 and recently result of the massive global demand for crude growth of the shipment of liquefied natural nine months of onboard training. It was an underwent training for a private pilot’s excellent mix of theory and practical hands- license. oil, oil products and gas, tanker owners also gas (LNG), which was among the most cap- on experience. At the end, I was prepared to A sea career has been very rewarding benefited from this unprecedented surge in ital intensive areas of shipping. As this was take on challenges at sea with confidence. as I have had the opportunity to explore shipping markets. The widespread pollution a largely unknown sector for the company, the world, and understand the people and A treasured moment from this trip was following the sinking of the single-skinned it would need to embark on a steep learning shaking hands with Teekay’s owner, Mr their cultures. I have been privileged to Torben Karlshoej, on his visit to the ship at develop myself while supporting a good tankers Erika (1999) and Prestige (2001) off curve if its entry to the operation of LNG ships Long Beach. lifestyle. the French and Spanish coasts respectively was to be successful. Above all, its seafaring Soon after, in 1992, I was assigned To those starting a career at sea, I brought European restrictions on such vessels, staff – to comply with international require- the position of Third Engineer. By 1996, I suggest having short- and long-term goals a move that was followed by the International ments – would need to undergo considerable became First Engineer. From the beginning, since life at sea is full of opportunities if my goal, which I met, was to achieve you have a good plan. In addition, today’s Maritime Organisation’s decision to order the training in the specialised field of gas tanker competency with a minimum sailing technology provides us with the whole phasing out of single-skinned tankers by 2010, operation. Alternatively, Teekay could add the period and to pass my examination on world at our finger tips. One can take full immediately boosting the fortunes of double- necessary expertise through the acquisition first attempt. This is thanks to my serious advantage of the short contracts and use efforts, my family’s moral support and the the time effectively to achieve one’s goals skinned vessels (see page 107), including of an existing player. The company set out to grace of God. and celebrate our precious life. n the large double-hulled fleet owned and in- pursue both of these alternatives. chartered by Teekay. The lessons learnt from Evensen, who earlier in his career had the sinking of Erika and Prestige also height- enjoyed a good relationship with the privately ened oil companies’ flight to quality, making owned Spanish gas tanker company Naviera F. them very interested in chartering Teekay’s Tapias SA, initiated a series of negotiations that When Teekay took over the Spanish gas tanker company Naviera F. Tapias SA in 2004, it not only gained four gas carriers, vessels, often for lengthy periods. including the 135,423-cubic-metre gas carrier Madrid Spirit (ex-Ivan Tapias), but the deal also included nine Suezmax tankers, ultimately led to Teekay’s acquisition of that With his experience in banking and ship- an aspect of the transaction that proved profitable. Teekay Collection company in 2004. The owner of the company, ping finance (his bank had represented Statoil Fernando Tapias, was a colourful figure who before and during the negotiations that led was also a vice-chairman of the famous Real to Teekay’s purchase of Navion), Peter Even- Madrid football club. Early in the negotiating sen joined Teekay in 2003 to take over from process, while Teekay was courting Tapias to Peter Antturi as the chief financial officer. He sell his company to them rather than to one of

130 Teekay: the first 40 years Chapter 4 • Boom Years 131 A large-scale exploration programme in participation in this sector, and it was now Qatar had discovered extensive gas reserves ready to put this to the test. Captain David and, as gas had become an increasingly Glendinning contacted an acquaintance in favoured energy source, it was logical that ExxonMobil to ascertain the requirements the operation of LNG vessels would be an to allow Teekay to pre-qualify for a contract expanding sector for shipping. ExxonMobil, to move LNG from Qatar to various import as a partner in the Qatari development, ports. ExxonMobil forwarded a pack of docu- drew up specifications for a massive building ments for completion and shortly there- programme involving 70 LNG ships – worth after Glendinning was called to a meeting more than $15 billion – which they ordered in London, where he learnt that Teekay had from Korea, and then sought shipping com- pre-qualified and was invited to tender for panies to acquire these ships and charter that contract. After skilful negotiations over them to the Qatari joint venture under long- a number of months, he was delighted to term contract. As only a small number of gas secure contracts under which Teekay would ships existed prior to the huge newbuilding form a 70:30 joint venture with Qatar Gas programme, very few shipowners had been Transport for the construction, ownership regarded in the past as being ‘LNG compe- and operation of three LNG carriers under tent’ to operate these technically challenging 20-year contracts to Rasgas II. ‘Although we vessels. By acquiring Tapias and its gas carrier had limited exposure to LNG shipping, we operations, Teekay had gained valuable expe- got into this on the strength of our reputa- rience and, with the company’s high operat- tion in the wider oil sector,’ Glendinning ing standards in the tanker business, it felt it commented later when discussing this $600 Teekay’s first annual management conference was held at had established the necessary credentials for million investment. Whistler, British Columbia, in 2004. Teekay Collection

Another of the former Tapias LNG carriers, Galicia Sprit. the competitors who were also pursuing him, and saw them in that suite, they might con- Teekay Collection a team consisting of Evensen, Sean Day and clude Teekay was secretly negotiating a deal Bjorn Moller were scheduled to have dinner with Tapias. Thus, instead of concentrating with Tapias in Madrid, but he called to post- on the match, they spent the evening ducking pone the start time of the dinner because he and covering their faces each time they saw a had to host the Spanish king that evening at a television camera pointed in their direction! football match against Valencia. To make it up The subsequent successful acquisition to the visitors, Tapias offered them tickets to of Naviera Tapias for $1.3 billion provided the game, and they gladly accepted. After all, the Teekay fleet with an additional nine they dearly wanted to watch the match! When Suezmax tankers, but, more importantly for the three men arrived at the stadium they the company’s plans to participate fully in were ushered to the VIP suite where drinks the burgeoning LNG market, the acquisition were served to a crowd of attending celebri- included four gas carriers that were on long- ties before the game, and, to their horror, the term charter to Spanish companies. This Teekay people were surrounded by television brought Tapias’s seagoing and shore-based cameras. They realised that if any other ship- personnel with experience in the gas trade owners were watching the match, which was into the Teekay fold and formed the basis of being broadcast on television across the world, later developments in the gas sector.

132 Teekay: the first 40 years Chapter 4 • Boom Years 133 The Aframax tanker Esther Spirit (115,444 deadweight) for Teekay, building its position from initial FPSO, and, in the Norwegian company Petro- was completed at the Samsung yard in 2004. She was named after Torben and Axel’s stepmother, whose gracious entrant into the world’s second-largest inde- jarl, Teekay found a partner with whom they manner helped them to come to terms with the early pendent owner of LNG ships. felt comfortable and where common ethics death of their mother when they were still young boys. In terms of continuing its drive towards prevailed. Having had significant contact Teekay Collection the BHAG, in 2006 the Teekay leadership with them earlier in his career, Peter Even- team turned its attention to a growing sector sen knew the Petrojarl people well and con- of the offshore oil industry – the operation cluded the joint venture deal with them to of floating production, storage and offtake develop the FPSO business further. The new (FPSO) vessels. These complex structures, partners soon joined forces to convert a ves- which typically cost hundreds of millions sel in Poland to serve under a contract to of dollars, are permanently moored on an Petrobras of Brazil. offshore oilfield where they take the well- Within a few months an outsider, Prosafe, stream directly from beneath the seabed, unexpectedly acquired a 30 per cent stake in remove water, sludge and other impurities, Petrojarl, a public company with fragmented separate gas from the oil, compressing the ownership. Teekay had to decide quickly gas or releasing it in a controlled way, and whether they wished to try to prevent their then store the stabilised crude oil until it is new partner from falling into the hands of trans-shipped to a shuttle tanker or piped another company by securing Petrojarl for for delivery to a shoreside refinery. Having themselves. The Teekay board was convened already built a strong position in its cus- at short notice to consider the situation. To tomers’ offshore oil value chain through the board this seemed an agreeable prospect its fleet of shuttle tankers and floating stor- since the acquisition of full ownership of an age vessels, Teekay saw FPSOs as the natural FPSO company would be a good fit in their extension of its service offering. It would chain of operation. In addition, they noted require the company to scale a high barrier the significant growth potential for these ves- to entry and prove to customers it had the sels in the broader oil industry, which was capability of adding value in this highly seeking every opportunity to develop opera- engineering-focused business. tions away from the Middle East to areas such Teekay therefore sought a joint venture as the North Sea, Brazil, Australia and West with an established operator for its first Africa, where FPSO business was expanding.

Glendinning and Teekay’s marine opera- ships. BP offered them to Teekay, who read- above top Training in liferaft launching procedure aboard tions team, headed up by Graham Westgarth, ily bought the two gas carrier sister-ships – Torben Spirit. Chief Engineer Kanwar Deep Ghei above immediately began to plan the construction renamed Tangguh Hiri and Tangguh Sago – and, centre Rescue and other life-saving drills are carried and operation of the three 149,539-cubic- since each vessel came with existing 20-year out regularly. Here an ‘injured’ crewman is secured to a stretcher. Captain Hans Schaefer above Maintenance of metre LNG carriers to be built in the Daewoo charters, Teekay was assured of lengthy lifeboats. Captain Hans Schaefer left The Aframax tanker yard in Korea. On delivery in 2006–2007, the employment for their new acquisitions in Helga Spirit was built by Samsung in Korea in 2005, and bears the name of Axel and Torben Karlshoej’s mother. 288-metre, state-of-the-art ships were named the Tangguh Project. Teekay Collection. Al Marrouna, Al Areesh and Al Daayen. Driven Within a year, Teekay entered into a sec- by steam turbines whose boilers are fired ond, even larger joint venture in Qatar to by boil-off gas, these ships were designed to move gas across the globe, and this project reach a service speed of 20 knots. led to the construction of four 214,000-cubic- Teekay’s next venture into LNG ship- metre LNG ships (Al Huwaila, Al Kharsaah, Al ping happened almost by coincidence. A BP Shamal, and Al Khuwair). With lengths of 315 planned operation in Indonesia was being metres they were the largest of their kind at hampered because of a conflict of interest the time and totalled over $1 billion in value. perceived by the Indonesian government In a unique and memorable ceremony in due to BP’s dual role as operator of the gas February 2008 at the Samsung yard on Koje field and proposed owner of the LNG ships Island, South Korea, all four LNG ships were that would ship the product. The oil major, named at the same time, a world-first. who had already booked slots in a shipyard Between 2004 and 2012, LNG shipping to build the gas carriers, now had to sell the became a third area of market leadership

134 Teekay: the first 40 years Chapter 4 • Boom Years 135 World-class people – the key to the Teekay brand

orben Karlshoej’s dream of building the business units, which would focus on mar- Tworld’s biggest and best shipping com- keting the company’s key business segments, pany was rooted in his belief that it was pos- and four corporate units, which would sible to establish Teekay as a respected symbol provide a uniform corporate infrastructure of quality, recognised as a true, differentiated across all of the business segments (see brand in a largely commoditised industry. diagram page 138). Since Teekay’s inception, its people have Over time, Teekay’s home-grown talent been responsible for creating, sustaining and emerged to lead three of the four business enhancing this brand. The seed was sown units: Bruce Chan (tankers), David Glendin- when Teekay entered shipowning in 1986, ning (gas), and Kenneth Hvid (shuttle and Torben recognised the need to have the tankers). Peter Lytzen was hired to lead the right people to deliver consistent, safe, high- fourth unit, the FPSO business. Each of these quality customer service. He hand-picked executives was responsible for a business highly motivated crews and shore staff, that ranked among the world leaders in its inspiring them with his passion for ‘doing it segment, and collectively they had respons- right’. He successfully built the organisation ibility for more than $10 billion in assets. to manage the growth of the fleet to about 40 In charge of coping with the rapid growth owned tankers between 1986 and 1992. of the fleet was Captain Graham Westgarth, To fulfil the 1998 BHAG that called for president of Teekay Marine Services. He stand- a quadrupling of the fleet by 2010, Bjorn ardised the operational quality by creating Moller realised that the organisation first and implementing a number of innovative had to be made scalable. His first step was systems across the fleet and shore operation. A unique feature of Teekay is its virtually ‘stateless’ identity, because, despite its Danish roots and its Canadian head office, to ensure Teekay had the right senior lead- At its peak, Teekay Marine Services managed the company has no specific national affiliation. People from across the continents make up the board and management; ership team (SLT), who in turn could build a over 150 ships and was also responsible for Teekay employees – ashore and at sea – come from all corners of the globe; and the company operates in a number of talent base that could handle rapid growth the company’s newbuilding activities, build- regions. Few companies display a cosmopolitan nature to the same extent, a significant strength in Teekay’s operation and a characteristic that allows the company always to recruit the very best talent, regardless of nationality. No glass ceilings exist while preserving consistency of the brand. ing nearly 100 ships between 1986 and 2012. when promotions are considered, a factor that reflects the philosophy of Torben Karlshoej, who welcomed all to his company The company was reorganised around four At one stage, Teekay was simultaneously as long as they were fit for the job. Teekay Collection

136 Teekay: the first 40 years Chapter 4 • Boom Years 137 constructing ships at a number of shipyards and also seamlessly integrating into the fleet over 70 ships acquired through companies bought by Teekay. In the finance and accounting area an- other home-grown talent, Chief Financial Officer Vince Lok, oversaw the financial inte- gration of the company’s huge growth, lead- ing the elaborate accounting processes of four separate public companies, raising bil- lions of dollars in equity and debt financing during a time when Teekay’s balance sheet assets grew tenfold. The complex legal structuring, tax and insurance activities of a growing fleet and of many corporate acquisitions were led by General Counsel Arthur Bensler. Executive Vice-President Lois Nahirney provided global corporate services, includ- ing hiring and integrating shore staff and IT systems from acquisitions, thereby providing a platform from which Teekay could operate around the clock across its global network of offices on five continents. Chief Strategy Officer Peter Evensen, working closely with CEO Bjorn Moller, led the acquisitions of companies and the design of the corporate structure involving the par- 8000 40 ent company and three publicly listed com- Number of Employees (Shore and Sea) panies for LNG, offshore and conventional 7000 35 above The Teekay Senior Leadership Team in 2011. Left to right: Kenneth Hvid, Bruce Chan, Vince Lok, Peter Evensen, tankers. Number of Countries with Teekay Offices 6600 6300 6300 Peter Lytzen, Graham Westgarth, David Glendinning, Art Teekay There can be no question that the greatest 6000 6100 30 Bensler, Lois Nahirney and Bjorn Moller. Teekay Collection Corporation asset of Teekay is its world-class people. From 5600 right The leadership structure of Teekay in 2011. Bjorn Moller 5500 5500 President and CEO approximately 25 employees worldwide in 5000 5100 25 Teekay Teekay 1985, the Teekay organisation grew to more Corporation Corporation than 6,000 sea staff and 1,000 shore staff by 4200 20 Peter Evensen Art Bensler 4000 4100 4100 EVP and EVP and 2010. The successful integration of new col- Chief Strategy Officer General Counsel leagues, who joined through acquisitions 17 17 3000 3000 3000 16 16 16 16 15 and brought new ideas and perspectives, 14 14 with Teekay’s long-serving home-grown tal- 2000 12 12 12 12 12 Teekay Teekay 2000 10 Corporation Corporation ent who grew up immersed in the Teekay Vince Lok Lois Nahirney culture, allowed the company to use each of 8 EVP and EVP and Corporate 1000 5 Chief Financial Officer Resources its acquisitions as a foundation on which to build further growth. The focus on providing 0 0 flawless customer service, which has always 19991998 2000 2001 2002 2003 200620052004 2007 20092008 20112010 been a hallmark of Teekay, has continued to build Teekay’s reputation. This, coupled with Teekay Teekay Navion Teekay Teekay Teekay the virtually unlimited amount of talent, Tanker Services Shuttle Tankers Gas Services Marine Services Petrojarl The growth in the number of employees and the number of countries in which Teekay had offices are indications of the Bruce Chan and Offshore David Glendinning Graham Westgarth Peter Lytzen experience and capacity for work that has expansion of the company over the years. Teekay Collection President Kenneth Hvid President President President President been assembled in every part of the organisa- tion, has allowed Teekay to achieve its ambi- tious BHAG. n

138 Teekay: the first 40 years Chapter 4 • Boom Years 139 top Built in Korea, the 149,539-cubic-metre LNG ship Al Marrouna (shown here in Zeebrugge during her maiden voyage) was completed in 2006 as part of Teekay’s joint venture with Qatar Gas Transport. Her original schedule took her from Qatar to Zeebrugge, with some voyages from Qatar to Japan, or to Aliargo in Turkey. Her current destination with Qatari gas is usually a terminal south of Venice. To ramp up to full loading at 12,000 cubic metres per hour takes about an hour, and under two hours to ramp down. After clearing Ras Laffan, she arrives at Port Suez about six days later, transits the canal, and after a three-day passage she arrives at the Italian terminal where discharge takes about fourteen hours. Her route takes her through the pirate-infested waters off Somalia, and although her speed and high freeboard make her an unlikely target for a successful pirate boarding, their arsenal now includes rocket-propelled grenades that could be lethal if launched at one of these ships. Teekay Collection above A remarkable ceremony at the Samsung shipyard in Ulsan, Korea, in 2008 involved the simultaneous naming of four large LNG carriers, Al Huwaila, Al Kharsaah, Al Khuwair and Al Shamal. Teekay Collection Right Petrojarl 1 was taken over by Teekay in 2006 as part of the deal whereby the company bought out Petrojarl to enter the FPSO market. Teekay Collection

140 Teekay: the first 40 years Chapter 4 • Boom Years 141 A new FPSO: the Remontowa project

eekay’s first FPSO project involved a by the project, several other issues arose. arrival in Brazil a Niteroi-based shipyard Tjoint venture with Petrojarl for the con- For the first time teams from Norway, Brit- undertook several additional fitting-out version of a tanker to an FPSO for opera- ain and Poland worked together on a Tee- jobs. The FPSO has six cargo centre tanks tion on the Siri oilfield in Brazil’s Campos kay project. Although cultural difficulties with a capacity of 34,044 cubic metres Basin. Initial planning began in Trond- between the groups seemed insurmount- (214,103 barrels) of oil and equipped with heim, Norway, in 2007, and a shipyard in able at first, a few team-building exercises heating coils. Discharging the oil to shut- Gdansk, Poland, won the contract for the – not the least of which were fundraising tle tankers is done by two steam-turbine conversion project on which the engineer- efforts for a local orphanage – became the centrifugal pumps with a pumping capac- ing work began later that year. catalyst for blending the various nation- ity of 151,000 barrels a day, an electric Much cutting away of unnecessary alities involved in the project into a good centrifugal pump that can move 128,296 equipment and top hamper by acetylene operational unit. barrels a day, and a steam piston pump torches preceded two heavylift floating When the Polish shipyard completed with a capacity of 98,108 barrels a day. She cranes lowering a 600-ton processing mod- its part of the conversion shortly before has accommodation and facilities for sixty ule into position on the ship. New piping, Christmas in 2007, the vessel’s length had people, although her normal operational new electrical systems, including pumps, been extended to 197 metres – including crew strength is about forty-five. as well as extra accommodation, had to a helipad jutting over the stern – and she Renamed Petrojarl Cidade de Rio das Ostras, be installed in the operation, which lasted sailed under her own power to Rio de she began operating in April 2008. n nearly a year. Besides the engineering and Janeiro. During the voyage, teams contin- naval architectural challenges presented ued to work on the modification, and on

Teekay also recognised that, while most oil raid’, they secured 40 per cent of Petrojarl’s Petrojarl Foinaven operating in the North Sea. Teekay drilling had occurred in shallower waters shares. Teekay subsequently launched a Collection where it was easier to pipe oil ashore, drill- public bid for the remaining shares and, ing was moving into deeper water, generat- although Prosafe held out for a while, Teekay ing a burgeoning demand for FPSOs. It also eventually secured the full shareholding. in Brunei, he also had to plan a system to pipe seemed logical that an FPSO operation would Graham Westgarth was put in charge of gas sixty kilometres from the gasfield to the provide more stability to the company, com- the new company on a temporary basis until sultan’s palace to fuel a bank of generators pared to the conventional tanker markets. a permanent head could be appointed. To so that the sultan could play golf at night on The board therefore decided that Teekay operate the new company – known as Teekay his 18-hole course! Within a year, the system should pursue the blossoming FPSO sector Petrojarl and based in Trondheim, Norway – had been installed and, to celebrate this, the and authorised the acquisition of Petrojarl. Teekay needed a strong, experienced leader, sultan invited a number of special guests, Moller and Evensen were both in Scandi- which led Moller to approach Peter Lytzen, including several prominent players, for a navia on individual business trips when the a true oil and gas professional. His career round of golf. news of Prosafe’s raid on Petrojarl broke. included time with the A.P. Moller Group, When he returned to A.P. Moller, Lytzen Having been informed of the situation while where he gained experience as the project managed the engineering and construction attending a reception at which the king director for their North Sea operations, and side of the group’s FPSO business, where of Norway was the guest of honour, Moller time with Shell in Brunei. The latter appoint- he quickly learnt to combine his engineer- Formerly the 1981-built Aframax tanker Che Guevara, the FPSO Petrojarl Cidade de Rio das Ostras was rebuilt in stages by Norwegian, Polish and Brazilian shipyards for operation in the Siri oilfield off the Brazilian coast. Teekay Collection excused himself and called Evensen to dis- ment gave him experience in planning pro- ing experience with financial management. cuss the best way to proceed. They then went jects at a time when the oil price was around When he received Bjorn Moller’s telephone to work, and in a successful overnight ‘dawn $9 a barrel. Apart from industry-based work call, and during the subsequent meetings, he

142 Teekay: the first 40 years Chapter 4 • Boom Years 143 A 2006 photograph of wondered whether he should accept the offer venture with Teekay for a converted unit in strength. As a result, Petrojarl had enjoyed the Teekay Corporation board. Standing (left to to move to Teekay – he was, after all, enjoy- Brazil. Over the previous 20 years Petrojarl limited commercial flexibility, meaning that right): Tommy Hsu, Bjorn ing his job in the A.P. Moller Group. However, had created a valuable brand around its tech- several of its units were committed to relat- Moller, Tore Sandvold, excited by a new challenge, particularly to nical and operational strength, which had ively unattractive contracts. Under Teekay Ian Blackburne, Axel Karlshoej. Seated (left merge the FPSO expertise of Petrojarl with enabled it to build a leading position in the ownership, the first priority was to improve to right): Eileen Mercier, the financial strength and overall resources highly regulated North Sea sector. Indeed this the profitability of the existing units. Once Peter Janson, Rod Clark and Sean Day. Teekay of Teekay, he accepted the offer to join Teekay reputation was one of the key attributes that progress had been made on this front Teekay Collection Petrojarl as its president and chief executive. attracted Teekay to the company. However, Petrojarl was able to start focusing on expan- When Teekay took over, Petrojarl had four having been bounced around between several sion. The financial strength of the parent FPSO units operating in the North Sea, a part- different owners over the years, the company company, coupled with the acumen of the share in an FPSO off Tunisia, and the joint had never been allowed to build financial much-strengthened Petrojarl management team, enabled the company to embark on a successful growth path. Subsequently, two FPSOs were ordered, Project code names for corporate transactions one of which was a $400 million conversion project for Brazil in 2012, and the other a $1 billion newbuilding destined for the North n the world of mergers and acquisitions, projects are normally code-named to Sea in 2014. The wider future of FPSO opera- Iensure confidentiality. In particular, the world of shipping is small and has a very tion was extremely positive. active rumour mill. One of the more notorious places for information leaks to occur By 2007 the size of Teekay’s Aframax over the years has been on board flights between some of the world’s leading ship- fleet had declined somewhat from the sale ping centres – Oslo or Copenhagen to London – with bankers or shipping people of its remaining single-hull tankers. With discussing business with their colleagues a bit too loudly within earshot of a compet- the tanker market remaining very strong, itor. You never know who might be sitting next to you as you work on your laptop and asset values being high, Teekay chose computer on a flight, or who your cab driver in a foreign city might be related to. to replenish its Aframax fleet through in- Peter Evensen ringing the bell at the New York Stock Because companies may be involved in more than one project at a time it is practical chartering of third party tonnage from a relat- Exchange at the listing to use code names that help the team remember which company it involves, yet pro- ively fragmented market. It was also seeking of the first daughter vide no connection for the uninitiated. For this reason, code names are often quite to expand its tanker business with a move company, Teekay LNG Partners, on May 12, irreverent and humorous. Below is a list of some of the code names Teekay has used into the Suezmax market in response to new 2005. Teekay Collection over the years: emerging trade routes. With the more con- centrated ownership structure in the Suez- ◆◆ Project ‘Peninsula’ (Caltex Australia) during the initial phases of this max segment, and no attractive fleets being – decision to pursue project was project. available for sale, Teekay was pursuing this reached during a meeting at Penin- ◆◆ Project ‘Posh Spice’ (Naviera Tapias) segment through a newbuilding programme sula Hotel in New York. – the owner, Fernando Tapias, had of eight vessels, but remained on the lookout ◆◆ Project ‘North-West’ (Bona) – named an honorary role as vice-president for opportunities to consolidate the Suezmax for the combination of Bona Ship- of Real Madrid Football Club. At business through the acquisition of a first- ping, located in Norway (= ‘North’), the time, David Beckham played for class fleet of modern Suezmaxes to catapult and Teekay, located on the west RMFC and his wife, Victoria Beck- the company into a leading position. In a hot coast of Canada (= ‘West’). ham, was known as ‘Posh Spice’ in market, both client demand and investor ◆◆ Project ‘Discovery’ (UNS) – the pur- the famous girl band Spice Girls. interest were strong, making a meaningful suit of this shuttle tanker company ◆◆ Project ‘Viking’ (Petrojarl) – a nat- transaction more attractive than piecemeal was code-named after the U.S. space ural name, given the company’s expansion. As Sean Day put it later, ‘One of shuttle Discovery. location in the northern Norwegian the big challenges of growing so big is that ◆◆ Project ‘Hummer’ (Navion) – code- town of Trondheim. [we needed] to start buying ships “wholesale” named after the name of restaurant ◆◆ Project ‘Donut’ (Sevan) – named for rather than “retail”. We didn’t want to just Hummeren (Norwegian word for the doughnut-shape of the cylindri- buy a few ships and slowly enter the Suezmax ‘The Lobster’), where Bjorn Moller cal hulls of Sevan’s floating produc- market – we had reached a point where we had a key meeting with the chair- tion vessels. were looking to do it on a larger scale.’ man of Navion, Erling Overland, When OMI Corporation put itself up for sale in 2007 it presented Teekay with a rare opportunity to acquire a large bloc of modern

144 Teekay: the first 40 years Chapter 4 • Boom Years 145 Drama in the North Sea strengthens Statoil/Teekay relationship

he North Sea has a reputation for gales Tthat generate wild seas, especially in the region where swells sweep across the North Atlantic Ocean, uninhibited by land. In this region is the Statfjord oilfield, a vast oil- and gasfield about 200 kilometres west of Bergen in the Norwegian sector of the North Sea, and operated by the Norwegian state oil com- pany, Statoil. Weather and sea conditions at Statfjord A Platform on December 12, 2007 were bad as Teekay’s shuttle tanker Navion Britannia was connected to a loading buoy. A force ten south-westerly wind was blowing and a seven-metre swell was running when a surge of pressure in the loading hose ruptured it, causing about 3,700 tons of crude oil to spill into the sea, creating a slick that stretched for 23 square kilometres. Because the rup- ture occurred underwater, no one noticed that oil was escaping until the slick was spot- ted when daylight broke. The Teekay leadership team were in a meeting in Vancouver when news broke of the accident. On hearing of the disaster from an aide everyone was shocked, worry- The shuttle tanker Navion Britannia. Teekay Collection ing about the environmental impact as well The explanation is that this equipment the company complied with all the recom- as the excellent reputation of the company. [experienced] pressure loads which mendations made in that report. It was im- [exceeded] its design capacity. During A team of Teekay people was assembled portant for the Statoil-Teekay relationship terms of certain shuttle contracts whose loading, up to 2,000 litres of crude can immediately to assess first-hand the extent flow through a hose every second. Under and for their commitment to the Norwegian financial viability had been undermined and impact of the oil spill, and ascertain its such loads, a hose needs a shut-down people that they should allay fears of a recur- by unprecedented increases in operating cause. Fortunately the south-westerly wind time of 30 seconds. Because of procedural rence that could have a more devastating expenses in the North Sea. The rapport that errors and technical faults, the hoses continued to blow the slick towards the had been shut down in seconds – and impact on the marine environment. More had developed between Jacobsen and Moller, north-east, while the wild sea and strong they simply broke in two. That is what importantly, it was vital that the right meas- and indeed between members represent- wind caused it to disperse fairly quickly. happened on Statfjord. ures should be taken, simply because it was ing both organisations, while resolving the Nevertheless, for Teekay – a key service right to do so. exceptional challenges of the Statfjord inci- provider to the Norwegian oil industry and While it would have been easy to launch into The dedicated approach by the Teekay and dent proved very important. ‘The commercial entrusted with the vital movement of oil for a blame game, both Teekay and Statoil coop- Statoil teams was lauded both in Norway and negotiations were tough,’ recalls Jacobsen. the Norwegian nation – this was an acute erated openly, sharing information and sug- further afield. They worked closely together ‘We worked on it for a long time, but we embarrassment, especially as the subsequent gesting ways to prevent a recurrence of the on the rectification programme, which, inter developed mutual respect and had a desire investigation into the incident revealed that accident. A key meeting took place between a alia, brought more thorough training of to engage to find solutions. And we achieved there were mistakes made by both Statoil team from Statoil, led by Jon Arnt Jacobsen, crews on the tankers and the offshore instal- it … There was a common culture between top Matterhorn Spirit (114,834 deadweight) was completed at the Daewoo shipyard, Korea, in 2005. Teekay Collection and Teekay, with a number of breaches of the executive vice-president who had taken lations, upgraded equipment, and modified the two organisations … and a willingness to Above The vessel’s first passage through the Baltic Sea in winter. Chief Engineer Kanwar Deep Ghei barriers in the way the loading operation over the liaison with Teekay, and a delega- procedures to be adopted during the entire do the right thing. Teekay’s partnership and had been conducted. tion from Teekay, led by Bjorn Moller. A task loading operation. willingness to invest were crucial to moving In his book From Sea to Shore, John Ove force was established and began studying One year later Teekay approached Statoil forward.’ Lindoe writes: the investigator’s report and ensuring that to seek their agreement to restructure the

146 Teekay: the first 40 years Chapter 4 • Boom Years 147 Suezmax tankers. However, OMI’s fleet also reducing its import volumes of minerals and included a large number of smaller product other raw materials, including oil. tankers, which was not a strategic fit for Tee- Since the frenetic Chinese growth had kay. In addition, at $2.2 billion the cost of been the generator of the shipping boom the entire OMI fleet was very significant. The from 2001, its quieter production lines now company solved these issues by forming a signalled serious times ahead for shipping. partnership with the Danish products tanker Gone was the surging demand for all types specialist Torm to bid jointly for OMI. Their of ships that had conveyed raw materials to combined offer was accepted by OMI, and Chinese ports and had moved Chinese prod- Teekay added the Suezmaxes to its fleet and ucts to Europe and North America. Freight Torm took the product fleet. In one stroke, and charter rates, particularly for contain- Teekay had become the largest operator of erships and dry bulk ships, were slashed, Suezmax tankers. Although the tanker mar- forcing many owners to either scrap or lay ket downturn in the following years proved up their older, less economical ships. Few the cyclical timing to be less than ideal, the new orders were placed with shipyards – in deal still offered significant strategic benefits 2009 no containerships were ordered – while to Teekay. many owners who had already ordered new Midway through 2008, financial storm ships either requested later delivery of their clouds began to loom on the horizon. Con- new tonnage or cancelled their building pro- trary to sensible trading practices, many grammes, reneging on their contracts. This banks and other financial institutions had aggravated the decline in global steel produc- lent beyond the repayment capacity of many tion, especially in China and South Korea, of their debtors who, in increasing numbers, further reducing the demand for ships, with were reneging on their repayments, some all the negative side effects of that malaise. of which were relatively small amounts for The shipping markets continued at their home mortgages, while other payments low levels as the prices of new and second- involved huge amounts in the commercial hand tonnage dropped. Some struggling top In February 2008 a naming ceremony was held on and industrial sectors. The crisis deepened owners were keen to dispose of their fleets, board the FPSO Petrojarl Cidade de Rio das Ostras to as some of the largest American financial which often included relatively new ships, celebrate first-oil. Also known as the ‘Siri FPSO’, this was the first Petrojarl FPSO to go into production after Teekay’s houses collapsed, rendering tens of thou- making this period a good time for buyers. acquisition of Petrojarl. On the right in the photo is the sands of people unemployed, compounding Amidst the financial carnage of the vessel’s godmother, Ms Anelise Quintao Lara, manager of Reservoir Engineering, Petrobras, joined by Bjorn the problems relating to debt as the num- decline, tanker owners were pleasantly sur- Moller, Teekay CEO (centre) and Peter Lytzen, president ber of debtors increased, and reducing the prised that the market remained relatively contango. Traders could buy oil, fill a tanker, not experience such a downward spiral at The teams from Teekay and the Danish product tanker of Teekay Petrojarl. Teekay Collection above A four-year demand for consumer goods, motor vehicles, strong for several months, and, with the and sell it forward at a price that was suf- the time, the overall gloom in the financial specialist TORM at a commemoration of the 2007 joint apprenticeship at the Mazagon Dock Limited launched acquisition of OMI that led to Teekay acquiring OMI’s Kanwar Deep Ghei on a career as a marine engineer luxury items, and even fuel. demand for oil at the onset of the northern ficiently high to make a comfortable profit. and shipping markets still drove Teekay’s Suezmax fleet, and TORM taking OMI’s product tanker that has spanned more than three decades. His first ship The downward spiral then hit the manu- hemisphere’s winter, rates even improved. But this was to prove a short-lived respite share price down in line with the rest of the fleet. With that transaction, Teekay became the largest was the Scindia Steam Navigation Company’s freighter operator of Suezmax tankers. Teekay Collection Jalarashmi, a 6,714-kW power vessel that he joined as facturing sector as vehicle assembly plants However, they did not escape the decline for tanker owners: when the contango pric- industry. From a peak above $60 per share 5th engineer in April 1982. He moved through the ranks, and the electronics and clothing industries entirely. In mid-2008 the average spot charter ing disappeared, a large number of tankers in the spring of 2007, the shares reached a and soon after gaining his chief engineer’s certificate cut production, putting more people out of rate for Aframax tankers was at a near-record were released from storage and re-entered low of $11.50 in early 2009. Once the panic of competency, he joined Teekay in July 1994 as 1st assistant engineer in Mendana Spirit. Promotion to chief work and aggravating the credit crisis. Tour- high of $80,000 a day, a figure that within a the tanker market to compete with large of the financial market settled down a year engineer came with his appointment to Pacific Spirit in ism also suffered as fewer people were able to year dropped to $25,000 a day; and rates for volumes of tanker newbuildings pouring out later, Teekay’s shares staged a recovery April 1998. A special memory for this amiable man was being in the Daewoo shipyard in Korea during the last travel, creating further unemployment. other classes of tankers were reduced by at of the shipyards, ordered during the boom that better reflected the company’s unique few weeks of the construction of the ice-class Aframax The malaise spread to the UK and the rest least 60 per cent, the worst being the VLCC years earlier in the decade. Coupled with a business model. tanker Matterhorn Spirit, and being aboard for her delivery of Europe, and with the declining demand rates, which moved from well over $210,000 rare drop in tanker demand resulting from Throughout its pursuit of the BHAG, the voyage in 2005. Indeed, he continued to serve in the vessel as chief engineer for the first three years of her for vehicles, consumer goods and industrial a day to $80,000 a day a year later. the economic collapse, tanker rates entered Teekay team had been true to its promise of career. Kanwar Deep Ghei is one of those interesting equipment, oriental countries also began to These were still relatively attractive a prolonged slump to their lowest level in maintaining financial strength. Its diversi- seafarers who take their cameras to sea, and he has thus compiled an extensive photographic record of life aboard feel the pinch. China’s meteoric economic rates in historical terms, and unexpectedly more than a quarter of a century. fied business, with leading market positions the ships in which he has served. ‘Joining Teekay,’ he rise was now threatened by the slackening of in the first half of 2010 tanker rates staged Although many of Teekay’s vessels across in attractive growth niches, its strong cash wrote, ‘was the best thing to happen to me…’ The support demand for its wares, and it began to reduce another strong rally. The main reason was its various tonnage segments were on long- flow from solid fixed-rate contracts and its he has received from the company over the years and the pleasure of working with its personnel have been most its industrial production – notably steel – the widespread use of tankers for floating term, fixed-rate charters to oil majors or access to capital, were to prove extremely memorable. Teekay Collection and began laying off thousands of people and storage because the price of oil futures was in national oil companies, and therefore did valuable in the stormy seas that lay ahead. n

148 Teekay: the first 40 years Chapter 4 • Boom Years 149

Bjorn Moller

ne of the sharpest minds in shipping,’ become the vice-president of the chartering ‘O is how one colleague described the man department in Long Beach. He moved to the who led Teekay from 1998 until March 2011, United States in November 1987 and Rochelle and who is credited with taking it to new followed her beau! Exciting times lay ahead as heights with his goal-orientated leadership. Teekay expanded rapidly. In the course of his His introduction to the working world was negotiations with clients and ordering new delivering flowers when he was 12 years old, ships Torben travelled widely, telephoning but his career began in earnest in the wood Moller every day. He became well acquainted department of the Copenhagen-based East with Torben, learning his ways and absorb- Asiatic Company, at that time (1975) Europe’s ing his business philosophies, and Torben biggest trading house and Denmark’s largest regarded him as a close confidant, to the point company. He was involved with the shipment that he mentioned to several people that he of logs brought from the tropical forests to wanted Moller to succeed him. Europe, much of it carried by East Asiatic’s A formidable figure, Captain Jim Hood, own fleet of ships. Teekay’s president and Torben’s second-in- Nine months of military training in the command, had been of immense help to Danish air force interrupted his career, but Moller in Copenhagen and London, and con- when he returned he completed his introduc- tinued to encourage him during his time at tory programme at East Asiatic before being Long Beach. After Torben’s untimely death transferred to London to work in a timber in 1992, the two men worked closely with yard. This was followed by an 18-month tour the rest of the senior management group to of duty in Cameroon in West Africa as East Asi- ensure that the company’s growth continued atic’s export manager, controlling the ship- despite its desperate financial situation. ment of logs and sawn timber. At the age of 23 Moller moved to the position of chief oper- he was the ‘big boss’ of about 300 people, some ating officer on January 1, 1997 and eventu- of whom worked in the forest where the trees ally succeeded Jim Hood on April 1, 1998, were felled, some at sawmills, and others in top left Fishing in the streams and lakes of British Columbia or game fishing in the Caribbean Sea is one way a busy remaining as president and chief executive shipping executive like Bjorn Moller can find relaxation. Teekay Collection top right Like Torben Karlshoej, Moller enjoyed Douala, where ships were loaded with export meeting those at sea, particularly as the discussions helped him to understand the issues facing the seafarers. Teekay officer until his retirement on March 31, timber. Although the head office wanted him Collection above At Koje Island, South Korea in 2006, Bjorn Moller delivered an address at the double ship naming of the first 2011. Thereafter he continued his association to spend another 18 months in Cameroon, two liquefied natural gas (LNG) carriers ordered by Teekay, the Al Marrouna and Al Areesh. These ships serve under a 20-year with the company as a non-executive director Bjorn Moller, chief executive officer and president of Teekay from April 1, 1998 until his retirement on March 31, 2011. Teekay contract to RasGas II. Teekay Collection he returned to Copenhagen in 1981 to study Collection on Teekay’s board. economics part-time at Copenhagen Business The results of his highly acclaimed leader- School. At that time East Asiatic had a vacan- ship of the company are recorded elsewhere cy in its recently created five-vessel product office. By coincidence a tanker broker who was of East Asiatic,’ Moller thought, captivated about its owner, he was apprehensive about a surprised expression on his face Torben in this book, but worth noting here are the tanker department, and Moller was offered also going to attend invited Moller to join the by Torben’s approach as he shared his dream terminating a promising career in East Asiatic looked straight at him and responded quietly, comments of a senior figure at the time of and accepted this position. Here he learnt the dinner party. Though he did not know who that Teekay would become the world’s big- for an unknown company. ‘What if it doesn’t ‘There are none! We just work!’ It didn’t take Moller’s retirement: ‘Bjorn has a brilliant but fundamentals of tanker chartering and opera- Torben Karlshoej was, nor that Karlshoej was gest tanker company. Here was the principal work out?’ was his constant concern. How- long for Moller to realise that his new boss practical mind; he is loyal to people, humble tions, launching him into a new career path, looking for people to hire, Moller enjoyed the figure in a shipping company talking to an ever, he met Torben as agreed and, if the was an uncomplicated, action-orientated man and leads by example when it comes to hard the outcome of which he could probably not evening immensely, especially as he found unknown entity and becoming passionate subject arose, he had determined that he with high business principles. work.’ A more junior employee in Vancouver have foreseen even in his wildest imagination. the conversation around the dinner table about his plans for expansion. ‘It was excit- would ask for a salary that was 50 per cent When Torben wanted to transfer his summed it up in her way. ‘He even remem- By 1985 Teekay, located in Long Beach, Cali- stimulating and refreshing. He was stunned ing, even compelling listening to him,’ Moller more than he was earning at East Asiatic. European office to London, the hub of inter- bered our birthdays,’ she said, and, referring fornia, was expanding, and Torben Karlshoej when he received a telephone call the follow- reflected later. ‘Done deal!’ said Torben when they reached national shipping, Moller closed the small to a major project on which she had worked wanted to open an office to serve Europe, ing evening from the broker, who told him ‘Come and see me next Monday,’ Torben the salary issue during their discussion, and Copenhagen office on a Friday afternoon and in Poland, she added, ‘I was homesick, and, where some of the oil majors had their head to go to Torben’s hotel to discuss working told him as Moller left, ‘and tell me what it Moller was hired to work for Teekay as charter- opened the new office in London on the Mon- after he had talked with me during his visit offices. He extended a dinner invitation to the for the tanker owner. Torben welcomed him will take to persuade you to work for me.’ ing manager, starting May 1, 1985 in a shared day morning. More upheaval was to follow. to the shipyard, the president was concerned head of East Asiatic’s tanker department, Jan enthusiastically and described his own back- Moller’s mind was racing. As his friends office in Vedbaek, north of Copenhagen. Soon after he met his future wife, Rochelle, enough to send me a package from Vancou- Selsmark, to conduct an informal assessment ground and his vision for the fledgling com- in the tanker business had never heard of ‘What are the office hours?’ he asked Tor- in an Italian restaurant in London he received ver with all the familiar goodies from home. of him as a candidate to run the Copenhagen pany. ‘How different to the formal structure Teekay, nor did anyone know anything ben a few days before his starting date. With a telephone call from Torben inviting him to Now that meant a lot to me.’ n

150 Teekay: the first 40 years Chapter 4 • Boom Years 151 CHAPTER 5

Wider Horizons

lthough tanker rates, surprisingly, did estimates that 80mbbls of crude are being not only to survive this downturn, but not drop immediately in the first part stored in tankers, occupying 30–35 VLCCs ultimately to thrive by taking advantage A and [about] 10 Suezmaxes (Bloomberg). of opportunities in the future. of 2009 – largely owing to the speculative However, with westbound sailings demand for tankers to be used for float- continuing to fall, OPEC supply cuts [are] ing oil storage – most tanker owners found yet to hit the market and [with] the Brent In 2009 the United States stock market began operations increasingly difficult as the year contango flattening, storage demand to recover from the global financial melt- could soon start to wane, thereby putting wore on. Teekay, however, was cushioned for pressure on tanker rates. down that had started in 2008. Teekay’s three a while from the ravages of the global ship- publicly listed daughter companies – Teekay ping slump. In addition to securing long- It was becoming clear that Teekay would not LNG Partners, Teekay Offshore Partners, and term charters for a large percentage of its remain immune to the effects of the global Teekay Tankers, in which investors enjoyed ships, the stable income from its investment trends and, in response to growing concerns, attractive yields – recovered more quickly in gas, FPSOs and shuttle tankers confirmed the senior leadership team initiated deci- than most. Low interest rates made investors the wisdom of diversification into these sec- sive pre-emptive steps to steer the company ‘yield hungry’ and Teekay’s dividend-paying tors, where long-term fixed rates provided a through these difficult waters. It launched daughter companies with substantial long- measure of financial stability for the group. a three-year strategic plan in 2009 with the term charter coverage prospered. This al- In view of the decrease in the global slogan ‘Survive and Thrive’. The introductory lowed the company to continue raising large demand for crude oil, OPEC had cut produc- lines to a pamphlet issued by the executive amounts of capital in the daughter compa- tion and, although oil inventories in many stated the following: nies to pay for assets dropped down from countries had declined, predictions at the the parent company, Teekay Corporation, a start of 2009 did not provide much hope for Teekay has undergone tremendous change move that also allowed the parent company an imminent increase in tanker rates. New since the launch of the Teekay Vision to continue to de-leverage its balance sheet ships continued to be delivered into the mar- and the first Big Hairy Audacious Goal despite the poor shipping market. The bold (BHAG) in 1997. The Teekay Vision has ket at a rapid rate as a consequence of the been a guiding light for our initiatives and innovative daughter company strategy bloated orderbook, which had built up dur- and growth. Our investments in people, was proving its worth in troubled times, to ing the boom years, further exacerbating the systems, access to capital and processes the envy of most other shipping companies, have given us a reputation in the industry imbalance between supply of tanker capacity which had been shut out of the capital mar- as a quality operator. It has enabled us to and the demand to move oil. In January 2009 achieve ten-fold growth in assets in just kets. The de-leveraging of Teekay Corporation Morgan Stanley wrote: over ten years while expanding beyond oil and the dropdown of assets also accelerated tankers into gas and offshore. the recovery of Teekay stock, to the delight Today, after five exceptionally strong VLCC and Aframax rates firmed last week, years in shipping and offshore, we of investors. up to $76kpd and $31kpd, respectively, face an operating landscape filled with While the previous goals had been ori- while Suezmax rates softened somewhat uncertainty. Teekay took early action entated towards expansion – which Teekay to $43kpd. VLCC rates continue to defy in anticipation of a down cycle and is had undoubtedly achieved in a remarkable gravity, propped up by demand for storage continuing to take strong action. This resulting from the current steep crude oil three-year strategic plan outlines our plan fashion through the acquisition of several contango . . . [A leading tanker company] to ensure the company is positioned well-known companies and the building of

152 153 Besides the conventional tankers operating worldwide and experiencing some of the worst weather conditions possible during the course of their normal operational The TK Foundation voyages, Teekay operates FPSO and FSO vessels as well as shuttle tankers in the North Sea, one of the world’s most challenging weather environments for the offshore industry. The equipment is designed to withstand, and orben Karlshoej had a life-long passion operate in, very harsh weather, and it requires highly Tfor the sea and ships, and transformed trained crews to keep production running uninterrupted in all but the most extreme conditions. In December his early audacious goal to operate his own 2011, the Teekay FPSO Petrojarl Banff (seen here in shipping company into reality with the for- calm waters), operating in the British sector of the mation and remarkable development of his North Sea, experienced extreme weather conditions in excess of the 100-year storm. During a harrowing night, tanker operation. He had an especially high with waves exceeding 16.5 metres and wind speeds in regard for those who crewed his ships, for he excess of 160 kilometres per hour, five of the FPSO’s ten mooring lines broke, causing the unit to drift off its geo- recognised their sacrifice and efforts, always stationary position. (The actual wind speed is not known caring for their comfort and welfare. He as it exceeded the maximum read-out on measuring had great human compassion, and offered a equipment.) Despite Petrojarl Banff pitching 17 metres from trough to peak every 12 seconds, the offshore ready hand to assist seafarers with personal installation manager (OIM) managed to use the FPSO’s hardships. thrusters to hold it faced into the weather, helping the remaining five anchor lines to hold and allowing the vessel He would often give young people a chance to ride out the storm. The FPSO was subsequently taken to prove themselves, and would reward their off the field for repairs, and the unit is expected to be back good work. He was blind to issues of race and on the field in 2013. Teekay Collection ethnicity, hiring and promoting people from all backgrounds. Although he had no formal tertiary education, he understood the import- ance of education to uplift disadvantaged young people. new ships – the strategy now focused on main- by about 8 per cent, leading to the supply of In view of Torben’s ideals, the TK Founda- taining strong cash flow and driving greater vessels outstripping the demand and result- tion, established in 2002, seeks to further efficiency, enabling Teekay Corporation, the ing in continued pressure on charter and the causes about which Torben cared most, parent company, to become net debt-free by freight rates for much of the year. Even the and to continue the emphasis on the values 2011. The actions included restricting capital Deepwater Horizon accident in the U.S. Gulf in that were important to him: honesty, trust, projects, selling some vessels, and extending May 2010 and the resulting fear that other respect and perseverance. or refinancing bank facilities on loans. But the supply platforms in the U.S. Gulf would be The foundation’s focus centres on pro- new plan also reached into every office, every closed as a precautionary measure made grammes relating to the health, safety and desk, and even aboard every ship, calling on little impact on overall rates, though the welfare of seafarers, maritime education Teekay staff to work smarter and cut costs expected slight increases in demand for ves- and training, and to strengthening maritime wherever possible. Internal cost-cutting man- sels to cater for the northern hemisphere’s security. A special emphasis in many of the aged to trim 20 per cent off the company’s winter oil requirements continued to show projects is the improvement of the lives of overhead and operating expenses without negative trends. young people who have encountered phys- compromising safety aboard its ships. Glimmers of hope appeared for conven- ical, economic or academic barriers to their In response to these assertive steps, the tional tanker owners during the early part success. Torben was a great believer in giving Top In her role as programme officer at the TK Foundation, the amiable Susan Karlshoej, Torben Karlshoej’s second daughter, share price rebounded and, although the of 2011 when short-term rates spiked at the ‘a hand up’ (but not a ‘hand out’) to hard- works closely with non-profit applicants and successful grantees (mainly in North and South America and Africa) as well returns were not as good as they had been a onset of the Libyan civil war. As a result, it working and deserving young people. Since as with partners in operations, funding, and management. In wholehearted support of the TK Foundation’s hands-on year earlier, the company out-performed its was reported that Suezmax tankers had out- its inception, the foundation has awarded philosophy, she relishes the face-to-face discussions with grantees and grant applicants, as well as visits to the sites where the TK Foundation has made a difference in the lives of people. She is also a board member of the TK Trust Company Ltd, competitors. performed other tanker classes, with rates over $20 million in grants to assist special the trustee of the TK Foundation. She holds a bachelor’s degree in social ecology with an emphasis on criminology, law and The preparation by everyone at Teekay for ships trading from West Africa to the projects initiated by non-profit maritime- society from the University of California, Irvine, and is currently reading for her master of business administration degree. She is shown here with a senior student in the simulation bridge aboard the training ship Golden Bear at the California Maritime for a rough passage proved very timely, for U.S. Atlantic coast reaching above $18,000 related organisations, and it is expected to Academy. The TK Foundation supported phase two of the construction of the navigation laboratory that incorporates a although 2010 began on a surprisingly posi- a day. Although this represented a serious distribute a great deal more in the coming multi-function simulation bridge and an on-board classroom simulator, complete with 20 cadet workstations. The academy tive note as rates improved – with analysts downward trend from the levels prevailing years to deserving causes around the globe. n has the only training ship in the United States equipped with a state-of-the-art simulation facility, which complements the ship’s traditional operating bridge. Brian Ingpen above One of the flagship projects undertaken by the TK Foundation was predicting increased cargo volumes – there during the halcyon days back in 2008, the the funding of the construction of a specialised building to house the Lawhill Maritime Centre at Simon’s Town School, South was little net growth as the year passed, fact that earnings in excess of operating costs Africa. With its magnificent view across False Bay to the distant mountains, the fine building has accommodation for 54 students as well as supervisory staff. There are two custom-built classrooms for the teaching of maritime subjects to over when measured against the cargo levels of were possible was of some comfort to tanker 100 students aged 15 to 17 years. The Centre also has a maritime resource centre for students, a dining saloon (with fully 2008. Adding to the malaise was the fact owners. However, figures for other major equipped galley) and recreational rooms, making this a home-from-home for out-of-town students, most of whom come that the worldwide tanker fleet had grown trades showed rates easing and doused the from disadvantaged situations. Brian Ingpen

154 Teekay: the first 40 years Chapter 5 • Wider Horizons 155 flicker of hope of a revival, despite Asian Statoil, Norway’s leading oil and gas company and imports of crude oil growing at about 4 per refining body, needed to cent since the start of the year, and Chinese maintain production and imports increasing by 7 per cent. Apart export during unplanned export riser repairs at from a surplus of ships on the world trades, the Kristin field in the importers were sourcing crude oil from North Sea. Over two and a half months, the shuttle Asia and the Middle East, further reducing tankers Navion Britannia the demand for tankers on the longer haul and Navion Hispania from West African and Mediterranean ports. were fast-tracked through comprehensive Economists pointed to a 15 per cent decline modifications to meet in African crude oil exports to most Far East- all the specific and statutory requirements ern destinations, in favour of imports from for operation at the closer oilfields. This represented a decline in oilfield. Teekay developed voyage-time that translated into less demand field specific dynamic- positioning (DP) software, for tankers and resulted in flattened rates. installed a telemetry However, Teekay’s analysis and the ‘Sur- system, reprogrammed the communication vive and Thrive’ strategy had some positive systems and developed elements as it identified several patches specific training of sunlight on the otherwise gloomy sea of programmes, field operation manuals and despair that prevailed in the global shipping emergency procedures. industry from 2009. Three of the particularly This enabled the Teekay ships to deliver brighter patches stemmed from Teekay’s sig- continuous loading nificant involvement in the Norwegian oil operation on the dynamic industry, so carefully nurtured from the time positioning system through direct loading the company’s team signed for the takeover to the tankers until the of Bona Shipping, thereafter Ugland Nordic completion of the repairs. Teekay Collection Shipping, and, finally, the prized Navion Shipping. Through these acquisitions, Teekay had established itself as the leader in shuttle tanker operations, a sector that had grown beyond expectations as worldwide exploita- tion of deepwater oil reserves expanded sig- nificantly. Similarly, Teekay had also become an important player in the Norwegian FPSO business through its acquisition, in two stages, of Petrojarl. This had extended its operations to position an FPSO in Brazil- ian waters, where limited undersea piping to offshore fields had also provided Teekay with significant growth in the shuttle tanker business. With deepwater exploitation via conventional rigs and FPSOs, an increasing volume of oil had to be brought ashore by shuttle tanker, and Teekay had increased its stake in this burgeoning business. From the Samsung yard in Korea the company ordered four 106,000-deadweight shuttle tankers: Amundsen Spirit for delivery in 2010, and Peary Spirit, Nansen Spirit and Scott Spirit for delivery in 2011 for service mainly in the North Sea. With a length of 248.6 metres, these state-of-the-art vessels are

156 Teekay: the first 40 years Chapter 5 • Wider Horizons 157 Northern Pacific crossings

he sea has its moods: calm, quiet waters of 60 miles south of the Aleutian Islands – have for later discharge in Yosu (Korea) and temperatures dipping below zero at times, a tropical passage, or a wild, troubled, rag- experienced considerable discomfort. Singapore: accompanied by occasional snow … T As the ship left the calm waters of the San ing mass that can sow destruction on passing Chief Officer Harsh Yagnik relates an Francisco Bay, the thoughts and feeling were ships. Among the places where the sea can account of a winter crossing of the northern The Great Circle route from the Golden Gate [the] same among all onboard … here come show its worst is the northern Pacific Ocean, Pacific Ocean in December 2009 to January Bridge to Korea was going to take Torben Spirit the days of rock-n-roll! And rock-n-roll it was! close to, but south of the Aleutian Islands. and several Teekay ships – whether choosing 2010 when Torben Spirit was fixed to load Though not as notorious and unforgiving as Very cold weather was expected and hence the North Atlantic, the Pacific can give her to transit the Unimak Pass into the Bering carbon black feed stock in three United States precautions were put in place. The weather share of tough times. Sea, or on a Great Circle route to pass about ports (El Segundo, Benicia and Richmond), throughout the passage was indeed cold, with But Torben Spirit braved her way through the many low pressures that originated off the Asian coast, as if coming off some factory production line. Even weather routing was not too helpful, with lows spread all across the North Pacific. Basing our passage decision on the prognosis and synopsis of the weather facsimile, satellite weather bulletins and weather routing reports, the final courses changed from those planned. As she distanced herself from the US coast and started climbing up the latitudes, the temperatures started dipping. Very soon it was snowing, with a beautiful white blanket 140˚ 180˚ 140˚ 100˚ covering Torben Spirit. Since the cargo was

a n e L Arctic Circle t i M a kc e n ze i a r heated, the actual deck surface was relatively t Y u k o n S g n warm, and no snow or ice accumulated on ri Be deck which helped moving around topside. Anchorage No slips, trips or falls! The pipelines and other Magadan structures, including the lifeboats, were well BERING SEA Sea of Gulf of covered in ice though. The white of the snow Okhotsk d s Alaska a n on the pipelines and other structures, with s l Petropavlovsk n I the red of the deck as the backdrop gave a A l e u t i a Vancouver good, contrasting colour theme. Khabarovsk

Seattle M M Besides the weather, other operational i i s s s s Vladivostok o i challenges occurred throughout the voyage. u s r s Beijing Sea of i i p A cargo of low viscosity and a ‘negative’ API, Japan NOR TH p Seoul i San Francisco that needed heating to high temperatures, Tokyo PA CIFIC presented a challenge. To complicate matters, Yosu OCEAN Los Angeles Shanghai some heating coil manifolds developed leaks, East China leading to steam condensing and the water Sea Hong Kong Tropic of Cancer freezing! That started the difficult job of Philippine South Sea 0 1000 2000 3000 4000 Miles working in strong wind conditions in sub-zero China Sea temperatures, to remove and repair these Manila Marshall Is. 0 1000 2000 3000 4000 5000 6000 Kilometres steam manifolds.

Caroline Is. L Every time the waves broke on the ship i Albatross n e Plateau M E side and sent spray flying onto the deck, the L I Cocos Ridge opposite left Torben Spirit shortlyA N after being commissioned in 1994. Shes was withdrawn from service in 2012. Teekay E l S a crew at work would feel the chill up their Collection Top Ice on the foredeck of ITorben Spirit. Chief Officer Harsh Yagnikn Above The Great Circle course of Torben Spirit. A d s spines as the spray hit them. The wind chill Chief Officer Harsh Yagnik and freezing spray were a couple of tough factors to brave and work against, but work After over five days of dark and way to start the day. Discharge at the Korean the crew did! The tasks continued late into the overcast skies with cold winds and freezing port, however, was in itself a different story evening, and only when all defects had been temperatures, the nice bright sun for the last as we had to unload into seven barges while repaired did the crew rest for the night. This two days of the voyage was a big welcome. the vessel was anchored off the berth, before was unavoidable as the cargo had to be heated It was the dawn of a beautiful day and there going alongside to discharge for about seven the next day. As the days progressed and the were broad smiles across the faces of the hours and then we returned to anchor to ship moved into lower latitudes, the sub-zero crew who worked on deck, in spite of the discharge into the remaining barges. temperatures rose to zero and stayed around cold winds which still persisted. As the vessel From Korea, we headed to Singapore to zero to positive four degrees. There was no made her way through the approach channel discharge the rest of the cargo to two ships, more snow and the sun melted what little ice at Yosu early in the morning, the rising sun via ship-to-ship operation. and snow had collected over the earlier days. and the sweet smell of land made the perfect A successful voyage was completed. n

158 Teekay: the first 40 years Chapter 5 • Wider Horizons 159 highly automated, not only in terms of their company, in the process devising a succes- machinery, dynamic positioning systems, sion plan for Moller and also pinpointing the and navigation equipment, but also in the skills and attributes that would be needed by automated connection of their bow-loading its next leader. Among a range of other find- equipment to hoses from the loading plat- ings, Langton affirmed that Moller embodied forms. A Teekay public relations piece stated: the legacy of Torben Karlshoej and was an impressive chief executive who had become We are proud of our latest generation a highly respected, trusted figure among of shuttle tankers, the Explorer class – Teekay employees, clients and competitors the most sophisticated and eco-friendly shuttle tankers ever built. [The design alike. In addition, a powerful relationship of] these vessels received the Clean had developed between him, the chairman Shipping Award in recognition of Sean Day, and the company patriarch Axel outstanding efforts to reduce the emission of greenhouse gases at the 2009 NOR- Karlshoej. Because of the esteem demon- Shipping exhibition in Oslo. strated by company employees towards Moller and his remarkable track record – Teekay brought Amundsen Spirit to Stavanger especially his leadership during the global for her official naming ceremony. The ship uncertainties of 2009 and 2010 – his shoes dwarfed buildings in the immediate vicinity would be difficult to fill. of the berth, drew curious townsfolk to the Whether his successor should be an out- harbour, and reaffirmed Teekay’s commit- sider or should come from within the com- ment to Norway. The special arrangements pany was an important decision for the board, for the naming, and the photographs of who soon agreed on the latter because of Amundsen Spirit so dominant in the narrow the considerable talent available within the confines of that part of Stavanger harbour, senior leadership team. Langton had drawn also provided a fillip for staff morale, espe- attention to the fact that Teekay was able to cially in Norway. develop people because, while the company had strong leadership, individuals at many ◆ levels were involved in decision-making pro- cesses. The board therefore invited members ore uncertainty lay ahead for Teekay. of the senior leadership team to put their MIn Vancouver Bjorn Moller had decided names forward if they were interested in to retire, a step that signalled the closing of being considered to fill Moller’s position. Five a most successful chapter in the life of the out of nine members of the team decided to company. It was also unwelcome news for toss their hats into the ring, and in Septem- many Teekay employees and business part- ber 2010 they each made presentations to the ners as he had been the public face of the board during a meeting in Shanghai. Such company, and his care for the staff had been was the talent available that it proved to be impressive and encouraging, particularly an exceedingly difficult decision. The board during the sudden downturn in shipping. He believed that each of the five was qualified to was a trusted and highly respected figure in lead the company, which was a testament to the wider tanker world and would continue the depth of management talent within the to be involved with the Teekay Group by company. However, in the company’s chief remaining a member of the board. strategy officer, Peter Evensen, Teekay had A prominent business leadership con- a logical and extremely able successor who sultant, Steve Langton, was commissioned had wide experience in shipping finance and to undertake a wide-ranging survey of the who had made an outstanding contribution

Occidental Petroleum was seeking an FSO vessel for deployment on the Al Rayyan field off the coast of Qatar. Teekay was awarded the contract in April 2009 and delivered the modified Falcon Spirit (formerly the shuttle tanker Sarita) in December 2009 for operation at the offshore field. This fast-track project included the procurement of heavy equipment and the conversion of the tanker. The Al Rayyan field was developed by a production jack-up rig that uses the 124,472-deadweight Falcon Spirit for storage. The FSO is moored to a single buoy mooring using standard shuttle tanker bow loading equipment. Conventional tankers moor astern of Falcon Spirit for cargo transfer once every two months. Teekay Collection

160 Teekay: the first 40 years Chapter 5 • Wider Horizons 161 once he and the other investors had sold Sean Day, chairman Navios, he became the chairman of Teekay’s main board and also chairman of several of the board other boards within the group. With the astute Day as chairman and Bjorn Moller as the president combining to eekay’s chairman, South African-born form a formidable team, the company moved Tand educated Sean Day, has been a major from tanker ownership to its position as a player in the phenomenal success of the com- leader in several oil-related fields, including pany. World affairs and shipping have been its vital role in the Norwegian oil industry. his interests since his days in the boarding His style is that of a ‘hands-on’ chairman facility at the South African College School, and his time at sea allows him to understand the country’s oldest school, where, early each the intricacies of seafaring and some of the morning, while his schoolmates were still in conditions under which seafarers work. bed, he would hasten to the common room When he visited the shuttle tanker Nordic to read the daily shipping column in Cape Laurita that had been in the anchorage off Town’s daily, the Cape Times, and scan the rest Cape Town for several weeks waiting to load of the newspaper to keep himself abreast of her next consignment from the FPSO off the global and national events. South African coast, he learnt that the ship On completing his schooling he enrolled had not been alongside for a long time. He at the South African Merchant Navy Academy scribbled a note in the little book that he General Botha for pre-sea training, where he carries with him and the following day, at became senior cadet captain, and then joined his insistence, the tanker was alongside in Safmarine, at the time South Africa’s largest Cape Town to enable the crew to enjoy a run shipping line. Later he became an officer in ashore. ‘We must look after these people,’ he the South African Navy before studying first responded to a local journalist when asked at the University of Cape Town and then, about the ship’s sudden berthing in Cape after being awarded the prestigious Rhodes Town. Scholarship, proceeding to England to read Acclaimed for his contribution to ship- jurisprudence at Oxford University. ping over more than three decades, he was He then moved into the shoreside of ship- elected commodore of the Connecticut Mari- ping at Jardines, the famous Hong Kong ship- time Association in 2005. ping company. His three years in Asia were Sean Day does more than simply remem- followed by a spell with Fednav in Montreal, ber his South African roots. To enable the which he joined in the late 1970s. Marriage Teekay board members to understand the to Ginny brought him to New York in 1981, potential and complexities of his original where he undertook freelance work for banks homeland, he brought them to South Africa with distressed shipping portfolios. In 1982, in 2005, exposing them to experiences rang- Steeped in maritime matters from an early age, the chairman of the main Teekay board, Sean Day, enjoys time aboard his after Fednav had bought into Navios, a raw leisure boat, Spirit, along the waterways of the north-east coast of the United States. Sean Day ing from the sights and sounds of South Afri- material shipping arm of the United States can township life to those of the Bushveld, Steel Corporation, he was asked by Fednav’s that remarkable part of the country, rich Chairman, Ladi Pathy, to join a team of se- an investor and owner by virtue of the lever- came the response. ‘We don’t deal with in flora and fauna. Through his personal nior managers to rescue Navios from finan- aged buyout that he had arranged with the people like that,’ retorted Day, and the deal involvement – and that of his wife, Ginny, cial distress in the deep shipping slump of backing of Citibank and Fednav. At the helm went flat. Little did he realise that shortly and his four daughters – in various educa- the early 1980s. While handling the restruc- of the company for ten years, he transformed thereafter he would be directly involved in tional projects, he does much to encourage turing of numerous freight contracts, he had Navios into a profit-making, leading bulk the company established by the guy on his young South Africans to reach their full an increasing desire to ‘become an owner of shipping corporation. boat in the Bahamas and would find that he potential. Having accomplished so much top With his wife Ginny and two of his four daughters, Sean Day celebrates his election as commodore of the Connecticut a business, rather than just an employee of On one occasion, while at Navios, the shared so many of the principles for which himself, Sean Day is a role model for young Maritime Association. Sean Day ABOVE Sean Day in his reading nook at his home in Connecticut. Sean Day the company,’ as he puts it. prospect of doing business with Torben Torben Karlshoej stood. people – including those from his native A spell at Citibank gave him valuable ex- Karlshoej arose. ‘Who is he?’ Day asked an With all his talents, his sharp financial land – who are prepared to work hard and perience in the complexities of high finance, associate. ‘He’s a guy who runs a shipping acumen and his business achievements, Tee- adhere to uncompromisingly high personal after which he returned to Navios in 1989 as company from his boat in the Bahamas,’ kay invited Day to join its board. In 1999, standards. n

162 Teekay: the first 40 years Chapter 5 • Wider Horizons 163 Teekay’s office, Once the board had appointed Peter Evensen to succeed Vancouver. Teekay Bjorn Moller as chief executive officer and president of Collection Teekay, the two men visited each Teekay office for Moller to bid farewell to the staff, and to introduce Evensen. Among the centres visited was Sydney, Australia, where they went to the crest of Sydney Harbour Bridge. Teekay Collection

Teekay’s general leadership conference in 2011. Teekay Collection

Bjorn Moller taking leave to Teekay since he joined the group in 2003 of his amiable personal as chief financial officer, working inter alia assistant, Theresa Murray, in 2011. In 1993 on the Tapias and Petrojarl acquisitions and she responded to a overseeing the establishment and growth of newspaper advertisement for a human resources the daughter companies. As Moller had been position at Teekay unique, Evensen too would provide his own and was appointed. unique style of leadership. ‘He is an energis- Having substituted for Bjorn Moller’s personal ing, creative personality,’ commented a close assistant in 1996, she colleague, with whom there was widespread continued in that role during the rest of his concurrence among Teekay employees. tenure as chief executive The board appointed Evensen, and after a and president of Teekay, six-month handover period – during which and remains personal assistant to his successor, he and Bjorn Moller visited Teekay offices and Peter Evensen. Teekay customers around the world so that Moller Collection could bid farewell to the staff and introduce his successor to clients – Moller retired on March 31, 2011.

◆

164 Teekay: the first 40 years Chapter 5 • Wider Horizons 165 eekay had achieved its 2010 Big Hairy goal and more for a unified purpose – some- When the processing of the staff input had Safety and Sustainability, Passion, Innovation, new, long-term opportunity had arisen earl- his staff to evacuate. When they ran from the TAudacious Goal that, though altered once, thing to act as the guiding light for the future. been completed, one word kept appearing Reliability, Integrity and Teamwork. ier in the month amidst tragic circumstances. building large pieces of concrete were falling had essentially served as a fixed, high-level Workshops were held across all of Teekay’s across the various offices: ‘spirit’, a concept Today, Bringing Energy to the World with On Friday March 11, 2011 Japanese workers into the street, miraculously missing the and effective objective for twelve years. With operations to seek feedback and to give staff that Torben Karlshoej had embraced and Teekay Spirit lies at the heart of Teekay’s resumed duties after their lunch break until fleeing staff members. As television footage of that goal in the past and Teekay moving into the chance to contribute to the company’s embodied in the suffix of the names of growing and diversified business. With the shortly before 14:30, when the island chain the tsunami was relayed to the outside world, recovery from the economic recession of the future plan. Employees were asked a series of his tankers. Representing the professional vision – underpinned by the company’s core was hit by a severe earthquake, bringing a and as media representatives moved into the late 2000s, the senior leadership team real- questions to determine the themes and char- attitude, enthusiasm and commitment values – firmly in place, Teekay staff found subsequent tsunami that inundated vast areas worst-hit areas, the extent of the devastation ised that Teekay would need a new target acteristics that reflected their shared Teekay shared by Teekay’s seafarers and shore staff guiding principles around which they could of the Japanese archipelago. In his Tokyo office became apparent. Television viewers across around which all could rally as the company experience. The feedback, collected from 31 around the world, the word spirit – with all rally as they continued the task of returning Dai Matsui, Teekay’s director of chartering and the globe began to comprehend the sheer moved towards an exciting new chapter. sessions, across 17 offices and involving 500 its positive and exciting connotations – was the company to profitability. freight (Pacific), waited for the earthquake to horror of the disaster and share the tragedy Although there were uncertainties regarding employees, was turned into the first draft of chosen to anchor both Teekay’s new vision subside, as he had done on similar occasions with the Japanese nation. global economic trends, especially in the oil Teekay’s new vision. From there, 1,200 more statement and to reaffirm its core values. ◆ in the past. Although Japanese buildings The tsunami indirectly caused major dam- industry, there would also be new challenges employees were invited to give their input. In June 2011 Teekay officially launched its are designed to withstand earthquakes, age to the Fukushima Daiichi nuclear power and many new opportunities. It was time to Though it may seem like an inordinate new vision – Bringing Energy to the World with ith a new chief executive officer at which occur frequently in the geologically plant following explosions in three reactors establish a new approach. amount of focus testing, Teekay’s senior lead- Teekay Spirit. Alongside the new vision, the Wthe helm, and the new Teekay Vision unstable area, the phenomenal intensity of as hydrogen gas built up within their outer In late 2010 the leadership team had ership team was determined to craft a new core values as formulated by Torben were established, there was much to do. Although the earthquake on this occasion shook the containment buildings after cooling sys- decided to reach out across the company for message for the company that truly reson- affirmed, using SPIRIT as an acronym for the the tanker markets remained in the doldrums building far more terrifyingly than anything tems failed. The subsequent explosions were input, looking less for a concrete business ated with every Teekay employee. cultural touchpoints of Teekay’s operations: with little prospect of an improvement, a he had experienced before, and he ordered caught dramatically by television cameras,

far left Captain Steve Tucker aboard the gas Captain Steve Tucker carrier Al Marrouna. Captain Steve Tucker Left Cadet Revan Pristiwana plotting a resh from secondary school, Cadet Steve Engineer George Thompson, Tucker was position. He is from Jakarta, Indonesia. FTucker joined Trident Tankers’ Orissa in invited to a meeting with Torben in London Captain Steve Tucker 1965 to begin an illustrious seagoing career in January 1987. He recalls a cordial atmos- that has lasted more than forty-five years. phere as Torben shared his ideas on crewing Within ten years he had his master’s cer- and outlined expansion plans for the compa- tificate but when Trident’s parent company, ny. ‘We will need good officers,’ he told the P&O, announced a pay freeze, he looked three men, ‘and I will value your input regard- abroad for employment and joined the giant ing new recruits for senior ranks.’ That the Japanese bulk carrier and tanker operator owner had included these senior officers in Sanko, which was expanding. Initially he such discussions was a reflection of the way served as chief officer in Sanko’s Aframax he ran the company. tanker Manhattan Viscount and later in Neptune Subsequent officers’ conferences dem- Chief Cook Honorato Leo, before gaining command of Mint Prosperity, onstrated the same willingness on the part De La Cruz, and Second all of which were on charter to Teekay. of the company to share its plans and to Cook Jeorme Castillo In 1984 he gained his first command inSea gather input from those who venture to cooking doughnuts for the morning coffee break. Royal and two years later joined Teekay as mas- sea and whose opinions are always regarded Captain Steve Tucker ter of Sunrise, a vessel that Torben Karlshoej as important to the smooth operation of the had bought ‘as is, where lies’ because the fleet. price ($3.7 million) was so low for a vessel of After in-depth training in 2005, including that size. She was in a very dilapidated state time at sea in two of the former Tapias LNG but Torben ensured that before she began carriers, the affable Captain Tucker trans- trading to his account she was refitted. As ferred to the group’s LNG carrier fleet and cur- other problems were encountered they were rently commands Al Marrouna, the first of the fixed, so that within a yearSunrise was totally new LNG carriers, built by the Daewoo yard shipshape. in Korea in 2006 and 2007. (Also see the other With Captain Alan Hayes and Chief references to Captain Tucker’s experiences.) n

166 Teekay: the first 40 years Chapter 5 • Wider Horizons 167 as was the aftermath – parts of the power others went in search of family members capacity substantially, Japan had to import anti-nuclear organisations to make mileage plant lay twisted and broken, and comment- and the same applied to many of the staff large volumes of gas, mainly for domestic from those scenes, as well as from the fact ators agreed that a major result of the disas- of Teekay’s Japanese clients, port employees heating and lighting, to make up the short- that hundreds of thousands of people had ter would be felt in the contamination of the and those in ancillary services. Unusually for fall. A mini-boom in the gas carrier market been evacuated from the area where radia- area around the plant. Japan, delays at the ports were unavoidable followed and owners, including Teekay, tion may have caused harm. Sentiment in Some local Teekay operations were imme- for this was an occurrence of catastrophic scrambled for charters to move gas to Japan- Japan began to swing away from nuclear diately affected by the earthquake, the tsu- proportions. Some tankers approaching ese terminals. power to other forms of energy, notably to nami and the nuclear disaster. Employees Japan were ordered to slow down in case As the country began the huge recon- natural gas. The voices of anti-nuclear groups suffered from extreme stress in the hours and the terminals to which they were heading struction task and most of the ports returned also began to carry weight in other parts of days after the tragedy, especially those who would be unable to discharge their cargoes. to normal operations, issues relating to the the world where nuclear power plants were waited anxiously before they received news With the nuclear plant effectively destroyed, longer-term effects of the disaster came operating, were under construction, or were that all their relatives and friends were safe; reducing the country’s power generation under the spotlight. It did not take long for being planned. Clearly, the unfortunate Japanese experience had a large impact on the watching world, and the tanker industry of 1987 as the operations manager in the began to wonder whether the growing wave Captain David ship management division. of anti-nuclear sentiment would trigger a The next four years were probably swing towards more gas-fired power genera- Glendinning the most challenging but exciting part tion. As expected, in the wake of the Japan- of his career to date. Torben was rapidly ese disaster and as gas became increasingly expanding his fleet, which required his perceived to be a ‘cleaner’ fuel, that swing avid Glendinning walked up the gang- ship management division not only to happened, and gas became a favoured fuel to Dway of his first ship in 1970 when he keep the fleet running but also to ensure make up for the shut-down nuclear plants, at joined British Fame, a 16,000-deadweight that all additions were properly regis- least in the short term. fuel oil carrier owned by BP Tankers. He tered, insured and manned on delivery. Shortly before the onset of the Norwe- gained his second mate’s certificate while The move to Vancouver from Long Beach gian winter of 2011, Teekay announced a working for BP and remained employed at the end of 1991 resulted in promo- deal with Sevan Marine, a transaction that by them for seven years, attaining the tion for Glendinning to vice president of moved it further into the FPSO sector. Ten rank of second mate before moving on to commercial operations, a position that years earlier, Sevan Marine had developed a Captain David Glendinning Teekay Collection different challenges. saw him taking responsibility for cargo unique design of specialised technology for In contrast to the national oil com- planning, operations and logistics for the FPSOs. Unlike the conventional FPSOs, the panies of the United States and Europe, that Teekay was recruiting experienced entire fleet. He held this position until Sevan design involves a cylindrical unit that which were reducing the size of their tanker officers for shore positions he 1998, when commercial operations were is not subject to the usual ‘weather vaning’ shipping fleets, foreign flag operators made contact with Torben Karlshoej, absorbed into the new team structure. He characteristic of a conventional FPSO, thus were increasing their fleets, offering who invited him to London for a meeting. was then appointed as senior vice presi- obviating the need for a very expensive and interesting opportunities for their of- After a successful interview Glendinning dent of customer service and marine pro- complex turret structure. ficers. In 1977 Glendinning accepted an was offered and accepted a position in ject development, where he led a number In 2004 Sevan contracted with the Yan- appointment with Sanko Line, a Japanese- the Teekay London office working in the of FSO and other projects. tai Raffles shipyard in China to build their controlled and rapidly expanding tanker chartering department for Bjorn Moller, Once the company had decided to first cylindrical FPSO, Sevan Piranema. Within operator. Glendinning’s tenure with where he started in February 1987. That enter the LNG sector, a new assignment three years she was in production and Sevan Sanko Line lasted almost ten years as he position would only last for a few months awaited him when he was appointed had placed orders for another two, Sevan rose to the rank of chief officer. During as Torben insisted that if Glendinning president of Teekay Gas Services in 2003, Hummingbird and Sevan Voyageur. In terms of this time he first came across Teekay, was to be successful ashore he needed which involved supervising the expan- the agreement with Sevan, Teekay bought which regularly chartered Sanko tankers to sail as a master. He was subsequently sion of the company’s investment in a the three FPSOs with their respective con- under the Palm Shipping name. In 1986 given command of Golden Gate Sun, which fleet of LNG carriers and other -initia tracts, acquired a share in a recapitalised Sanko was facing financial problems and was trading out of the Arabian Gulf at the tives relating to the LNG business, a vast Sevan Marine, and financed the completion as part of its restructuring was reducing height of the Iran-Iraq war, during which and rapidly expanding portfolio. On his of the FPSO Sevan Voyageur (later renamed the number of ships it owned and was tankers were targeted by both sides to try watch, Teekay has become involved in the Voyageur Spirit). The company also agreed to top Galicia Spirit loading liquefied natural gas at Hammerfest, Norway. Teekay Collection above In May 2012 Teekay’s moving to a more cost-effective crewing to choke each other’s oil revenues. He and ownership of 27 gas carriers, through the Woodside Donaldson loaded the first export cargo from Western Australia’s newly opened Pluto LNG Terminal, a 4.3 million acquire future FPSO projects developed by model, which resulted in Glendinning his ship survived without incident and he acquisition of the owning companies or ton per annum LNG project owned by Woodside. The facility processes gas from the Pluto gasfield, located in the Carnarvon Sevan Marine. ‘Our investment reflects our seeking other opportunities. On hearing returned to shoreside employment, ini- ships and through the company’s partici- Basin about 190 kilometres north-west of Karratha. The initial phase of the project comprises an offshore platform in confidence in Sevan’s strong offshore pro- 85 metres of water, connected to five subsea wells on the field. Gas is piped through a 180 kilometre trunkline to the from his former Sanko Line colleagues tially at the Long Beach office at the end pation in joint ventures. n onshore facilities, which include an LNG-processing train. The 2009-built LNG carrier, one of six acquired from Maersk LNG in ject development expertise while providing 2011, is on a 15-year time charter to Woodside. Teekay Collection Teekay with an enhanced pipeline of future

168 Teekay: the first 40 years Chapter 5 • Wider Horizons 169 Angola

n 1955, 45 years after the Portuguese coloni- Ial government granted the first prospecting licence in Angola, oil was discovered in the onshore Kwanza Valley by Petrofina, which, with the colonial government, established the jointly owned company Fina Petroleos de Angola (Petrangol) and built a refinery in Luanda. Seven years later the Cabinda Gulf Oil Company undertook the first seismic survey of Cabinda’s offshore area, and in Sep- tember 1962 they made the first discovery of sub-sea oil. Although its oil prospecting and production was inhibited by the long fight for independence and the subsequent civil war, the country has forged ahead with extensive geological survey work, much of which has yielded positive results, so that Angola now has vast confirmed reserves of oil and gas, making it Africa’s second largest producer. With turbulence frequently threatening Arabian Gulf oil supplies, and as the Iran-Iraq war of the 1980s emphasised the vulnerabil- ity of oil supply routes through the Arabian Gulf, western oil interests have been widen- ing the scope of their quest for other, more reliable sources of oil and looked, inter alia, to West Africa for solutions. Closer to both Europe and North America than the Gulf, the rich oil- and gasfields of Angola, Nigeria and above LNG carrier Soyo. Teekay Collection right Cubal, the other countries in the region had received last of the quartet of LNG carriers completed in 2011 and considerable investment over the years. 2012. Teekay Collection With pressure mounting to find alternative sources – including the search for sub-sea oil at greater ocean depths – growth escalated at opportunities to follow its customers as they an unprecedented pace. become involved in what has become a sig- Also among those with a major interest nificant alternative source to the Arabian in the expanding West African oil industry Gulf. Among other investments, Teekay has top FPSO Piranema Spirit, the first cylindrical FPSO, is operating for Petrobras on the deepwater Piranema field off Brazil. was China, which, through various aid pro- a 32 per cent stake in four 160,400 cubic Installed to operate at a depth of 1,100-metres, she is currently interconnected to seven wells, some for extraction of oil and grammes and offers to rebuild infrastruc- metre LNG carriers (Soyo, Lobito, Malanje and some to re-inject water into the seabed. Teekay Collection above In August 2008 FPSO Hummingbird Spirit (then named ture damaged during the civil war, had Cubal) built by the Samsung yard in Korea. Sevan Hummingbird) became the first cylindrical FPSO to be installed in the North Sea. Her ability to receive helicopters even during severe winter storms and the fact that she experiences no processing restrictions in relation to weather conditions, established a major economic foothold in Soyo was delivered in May 2011 and the last have demonstrated the suitability of the Sevan design for operations in harsh environments. Teekay Collection Angola. This has led to large volumes of oil of the quartet, Cubal, entered service a year moving to China. Although Teekay was not later. These vessels are on long-term charters a major player in the West African oil trade, to a joint venture between Sonangol, Chev- the growing importance of the region in oil ron, Total and ENI, and they operate from the and gas production brought the company Angolan LNG terminals. n

170 Teekay: the first 40 years Chapter 5 • Wider Horizons 171 above Stavanger, Norway, on October 5, 2011 when the shuttle tankers Nansen Spirit, Peary Spirit and Scott Spirit were named in a dramatic joint ceremony. Brian Ingpen right This photograph indicates the careful pilotage that was necessary to fit the three 248-metre tankers, each with a beam of nearly 44 metres, into Strandkaien and Skagenkaien in Stavanger harbour. Teekay Collection

on-the-water FPSO growth opportunities,’ and queen, as a museum, and as a venue for commented Peter Evensen after the deal had special receptions hosted by the local gov- been signed. Teekay also agreed to modify ernment. Stavanger’s energetic mayor, Leif Sevan Marine’s capital structure. Sevland, representatives of the city, mem- In the meantime the other three shuttle bers of Teekay management, including the tankers of the Explorer class had been com- masters of the three ships, and other guests pleted in Korea but, although they had attended the evening function. Although the commenced operations, no formal naming Teekay visitors awoke the following morning ceremony had occurred for any of them. The to cloudy skies, a cold wind from the North success of the naming ceremony of the lead Sea and intermittent rain, nothing could vessel of the class, Amundsen Spirit, in Stavan- detract from the splendid naming ceremony, ger in 2010 – in terms of extensive media a spirited occasion enhanced by those in tra- coverage and the generation of goodwill in ditional Norwegian dress. Norway – prompted Teekay to plan an even An article in the Cape Times, a morning more ambitious event: the naming of all newspaper in Cape Town, South Africa, three sister ships on October 5, 2011 in that described the spectacular occasion: same small area of the harbour at the Strand- kaien and Skagenkaien. In the semi-darkness of the Norwegian Guests travelled from various parts of dawn – a long process in those high latitudes at this time of the year – I Norway and from further afield to attend the watched the Teekay shuttle tanker Scott event, which began on the evening before Spirit being nudged to her berth in the the ceremony with a dinner at the Royal narrow confines of Stavanger harbour, Manor Leedal, an elegant, carefully restored that important oil centre on Norway’s west coast. nineteenth-century building that serves as a When she and her two sister ships, summer residence for the Norwegian king Peary Spirit and Nansen Spirit, had been

172 Teekay: the first 40 years Chapter 5 • Wider Horizons 173 Peter Evensen

The LNG carriers Tangguh Sago and Tangguh Hiri (shown here in the Celebes Sea) form part of the BP Tangguh LNG project left Peter Evensen Teekay Collection above Peter Evensen greets Mr I.S. Roh of Samsung Heavy Industries, Korea, at the in Indonesia and carry LNG exports from the Tangguh LNG terminal on Papua Island, Indonesia, to South Korea and Mexico. naming ceremony of the LNG carrier Malanje. Teekay Collection They are the largest ships involved in this project, and when they were delivered from the Hyundai Heavy Industries yard in South Korea in 2008 they represented advanced technology in LNG transportation: the natural gas cargo boil-off is used as fuel in the four main diesel electric engines for the ship’s propulsion, thus making them environmentally friendly ships. left, top The son of a Russian teacher and a dentist, Oleg Dolzikov grew up in the small industrial city of Sterlitamak in the ever a crisis, merely an opportunity.’ name forward for consideration for appoint- new course for the company that saw major Russian Ural Mountains on the outskirts of Siberia, thousands of kilometres from the sea. Strangely, when he was 17, he left These words have become the mantra ment as the president and chief executive acquisitions of LNG and FPSO assets, as well his Russian home for the Ukrainian port of Odessa to fulfil his dream – to become a ship’s captain. After years at sea and with ‘N considerable command experience, he joined Teekay in 2002 to command Avalon Spirit, and this is probably the only time of Peter Evensen, Teekay’s fourth chief ex- officer of Teekay. After hearing presenta- as investment in key marine technology com- the company has employed a shipmaster directly from outside the company. Captain Dolzikov transferred to the company’s ecutive officer, who assumed control of the tions from all applicants for the position, the panies. ‘We figured out it wasn’t just a mat- LNG division and was appointed master of the first Teekay-built LNG tanker Al Marrouna. He subsequently took command company in April 2011. board appointed him to replace Moller from ter of using capital,’ he commented. ‘It was of Tangguh Hiri. Left, middle Some officers aboard Tangguh Hiri. Left to right: Third Engineer Abdul Rauf (without helmet), Second Officer Rahmat Subagio (centre), and Third Officer Ridwan Citra Gurmita. L eft, below Junior officers in the cargo During his distinguished career in April 1, 2011. about how we would enhance the asset. We control room in Tangguh Hiri. Left to right: Third Officer Ridwan Citra Gurmita, Second Officer Junianto Nugroho, and Second finance, he had contact with the Teekay lead- Evensen, who had previously also served would really spend time working on those of Officer Rahmat Subagio. All photographs: Captain Oleg Dolzikov ership group during a number of their acqui- as Teekay’s chief strategy officer, was faced our skill sets that are needed for a particu- sition negotiations, and, during a visit to with an unenviable task: to return a com- lar project. We look beyond the asset’s price Teekay’s office in Vancouver, he walked into pany that had lost hundreds of millions of tag. It’s how you add value to it that is very squeezed into the port, they completely the bow, the shuttle tankers will operate dominated the skyline, an impressive mainly between North Sea oil installations the office of Bjorn Moller who casually asked dollars in the recession back to profitability. important. We may look at a lot of opportu- sight that drew townsfolk galore to and European or British terminals. him whether he had ever thought of mov- Though the work ahead was daunting, nities, but we choose very few.’ see these 248-metre vessels. Although When the Vancouver-based Teekay ing to Teekay. Moller went on to outline the Evensen’s years of experience in banking, Resolving to not let Teekay repeat the Stavanger residents also turn out in Corporation bought several Norwegian numbers when cruiseliners call during companies, ranging from shuttle tanker company’s BHAG plan and its business philo- working for companies such as the European mistakes of other shipowners who failed to the summer, this was an exceptional owners and Aframax tanker operators to sophy. Based on what he had seen of Teekay’s Shipping Group and J.P. Morgan Securities prepare for a changing business landscape, event as the tankers were named in those with FPSO interests, locals feared operations and the interesting description of Inc., made him particularly well suited to the Evensen has proved himself a valuable stew- separate ceremonies within two hours. that the deals would be hit-and-run affairs, the company Moller had sketched for him, as task at hand. Able to look at Teekay’s position ard. With a number of projects set to start Local radio and television stations gave leaving a trail of job losses and perhaps the arrival and naming of the ships disinvestment. However, to the delight well as the quality of the Teekay team he had from an asset manager’s perspective instead generating increased revenue in 2013, he has excellent coverage. A fourth sister ship, of the locals, Teekay have honoured met, he agreed to join the company as the of from that of a shipowner, Evensen devised helped guide Teekay from a financial down- Amundsen Spirit, entered service last year commitments made at the time of each chief financial officer where, from May 2003, a new strategy for the company: ‘Buy assets turn to a truly promising future. after a naming ceremony in Stavanger. purchase to retain the Norwegian flavour his excellent work at raising good-priced and then grow the hell out of them,’ he once His vast experience in shipping finance, Worth about $130 million each, these of each company, and have expanded state-of-the-art 109,000-deadweight shuttle their investments in Norway. Most of the capital enabled Teekay to make several sub- said. his energetic approach to his work and his tankers ran the pirate gauntlet on their company’s large fleet of shuttle tankers sequent company acquisitions. Recognising that Teekay’s competitive gregarious, caring nature have endeared him delivery voyages from a Korean shipyard to are now operated from Stavanger, while When Bjorn Moller announced his retire- advantage would be in value-added services to the Teekay staff. As a junior staff member Norway. Loading crude oil from offshore their FPSO portfolio is administered from platforms via sophisticated equipment in Trondheim. ment in 2011, among the first people he told rather than bottom-line operations, Evensen commented, ‘He is never short of energy, was Peter Evensen, who decided to put his worked closely with Bjorn Moller to chart a which keeps us energised.’ n

174 Teekay: the first 40 years Chapter 5 • Wider Horizons 175 international shipping MLP. Bankers, lawyers a full-dividend payout vehicle that focused on contributes unrivalled knowledge of the North Daughter companies and accountants were hired to help steer Tee- conventional tanker shipping. American energy industry, having been CEO kay through this arduous process. Although The timing of this offer could not have been of TransCanada Pipelines for six years, and there were setbacks along the way, the team better as it was launched in December 2007, having subsequently run a number of other efore creating what has affectionately persevered and with a favourable equity mar- before the onset of the worst recession since companies in the energy industry. Bbecome known as Teekay’s ‘daughter com- ket backdrop, Teekay LNG Partners L.P. (TGP on the Great Depression. The subsequent financial The most recent addition to the board is pany’ structure, the company had two financial the New York Stock Exchange) was launched on collapse led to one of the worst spells in the Joseph McKechnie, a retired United States challenges – an inherent ‘conglomerate dis- May 4, 2005 at a price of $22.00 per unit. With tanker markets during the past 30 years. While Coast Guard officer who served for more than count’ in its stock price due to the presence of investors now able to focus on the stable cash the growth of this daughter company is not 23 years, many of which focused on marine three unique businesses each with its own cash flows generated by the LNG fleet, the valuation evident in its stock price, it was as successful safety and security with an emphasis on LNG. flow characteristics, and limited or no access to of TGP and of Teekay (as sponsor) increased, as TGP and TOO because it allowed Teekay to Since his retirement from the Coast Guard, he equity capital. While the original structure was enabling Teekay/TGP to be more competitive de-risk its financial position while maintaining has held multiple senior positions in the LNG perfect in the eyes of Teekay’s customers, these on subsequent LNG tenders. Armed with a functional ownership of the business that ini- industry. financial challenges needed to be resolved, oth- cheaper cost of capital than most of its compet- tially made it great. Since its inception TNK has erwise Teekay’s growth would be inhibited and itors, TGP achieved significant success in the also raised over $650 million of equity capital TK Offshore Partners US-based David Lemmon its stock price would be affected negatively. subsequent five years as it acquired interests in to fund its growth initiatives. has had an extensive 40 year career in the The board and management sought the best 17 LNG vessels that had long-term charters. To The formal structures of the three daughter energy industry, ultimately serving as CEO Teekay Chairman Sean Day ringing the closing bell at the New York Stock Exchange. Those attending the ceremony were (left solution to these challenges. help finance this growth, TGP has been able to companies was described as follows in public to right) Captain David Glendinning, Vince Lok, a stock exchange official, Sean Day, Bjorn Moller, Peter Antturi, Peter Evensen, of Colonial Pipeline Company, the largest To gain a premium valuation, investors’ access the American equity markets. Since its documents in 2012: Jon Christian Evensen, Paul Wogan and Captain Graham Westgarth. Teekay Collection pipeline company in the US. He also brings attention had to be focused away from the inception, TGP has raised over $1.2 billion of previous MLP board experience to the table. short-term conventional tanker business equity capital. Teekay Tankers Ltd (NYSE: TNK) Swedish Mikael von Mentzer has spent his towards the longer-term stable cash flows gen- Based largely on the success of Teekay Teekay Tankers Ltd was formed in December burgeoning operations in these sectors, Teekay success. With advanced technology and su- distinguished career in a number of sectors of erated by Teekay’s newer businesses. The best LNG, Teekay and its investors sought other 2007 by Teekay Corporation as part of its strat- LNG has continually grown since its incep- perior vessel designs, Teekay Offshore is a the shipping and offshore service industries, way of doing this, the board reasoned, was to businesses that had cash flows that would fit egy to expand its conventional oil tanker busi- tion, with major deals such as the acquisi- leading operator in harsh and ultra-harsh including shipbuilding, and brings extensive create ‘pure-play’ equity vehicles to allow inves- nicely inside the MLP structure. Built through ness. With a balanced chartering strategy and tion of six A.P. Moller-Maersk LNG carriers weather environments. knowledge of the North Sea oil industry to bear tors to place appropriate value on the discrete the acquisitions of Navion and Ugland Nordic, conservative balance sheet, Teekay Tankers in 2011, creating a truly robust fleet. With in board deliberations. cash flows, thereby enabling future success Teekay’s shuttle tanker franchise would be manages the volatile tanker markets by buy- analysts seeing markets in 2013 and beyond Directors of daughter companies Canadian John Peacock was president of owing to a lower cost of capital. Unfortunately perfect for the new structure. With a higher oil ing and selling vessels, fixing out charters and as the ‘golden age of gas’, Teekay LNG Part- Given the success of the earlier global search Fednav International Ltd, the largest Canadian this success would be limited without access to price that generated an increase in exploration creating economies of scale with versatile pool ners is positioned to take advantage of the to find the ideal mix of skills and experience to shipping group, and also has over 40 years of a new source of equity capital. and production activity, the offshore shipping, partnerships. Teekay Tankers has grown into increasingly profitable global gas market. serve on the Teekay Corporation board, it was accounting experience, thus contributing a In the past Teekay had relied on bank and production and storage segments were poised one of the world’s largest midsized conven- decided to do the same when TK LNG Partners great combination of shipping and accounting public bond debt and had retained earnings for strong growth. Late in 2005 Teekay hired tional tanker fleets and owns approximately Teekay Offshore Partners L.P. (NYSE: TOO) was launched in 2005, followed by TK Offshore knowledge. to finance growth. Thankfully, owing to the the same team of investment bankers, law- 30 vessels, including Aframax tankers, Suez- Teekay Offshore Partners L.P. is Teekay’s off- Partners and Teekay Tankers. Each of these strong tanker market, Teekay had an abun- yers and accountants for the launch of Teekay max tankers, product tankers and one VLCC shore segment subsidiary, operating as an inter- companies was established with a balance of Teekay Tankers UK-based Dick Bronks retired dance of each capital source at that time. Offshore Partners in December 2006. Success newbuilding, owned through a 50 per cent national provider of marine transportation, oil outside independent directors and Teekay ‘in- from Goldman Sachs, where he held a number However, to achieve its desired growth plans, came quickly to Teekay Offshore Partners L.P. joint venture that was scheduled for delivery production and storage services. The majority siders’, and each of these boards has contrib- of positions in the trading of commodities Teekay required an alternative source of equity (TOO) as its unit price, which began at $21.00 in April 2013. of Teekay Offshore’s fleet trades on long-term, uted much to the subsequent success of these and derivatives, as well as equity and bond capital that was not dependent on the fluc- on December 14, 2006, reached approximately stable contracts that focus on the fast-growing, companies. The current directors of these com- financing. He was previously with BP Oil tuating tanker market. In consultation with $37.50 within months. Since its inception, TOO Teekay LNG Partners L.P. (NYSE: TGP) deepwater oil regions of the North Sea and Bra- panies are: International, so brings a valuable combination Teekay’s investment banks, the master limited has also raised over $1.2 billion of equity cap- Teekay LNG Partners L.P. is Teekay’s gas business zil. Established in 2006, Teekay Offshore owns of energy and financial markets experience. partnership, or MLP structure, was analysed ital to fund its growth initiatives. entity, operating a number of liquefied natural interests in 39 shuttle tankers (including four TK LNG Partners London-based Jane Hinkley Also UK based, Bill Lawes served as a manag- in detail. Ultimately this structure was chosen Lastly, Teekay saw an opportunity to gain a gas (LNG) and liquefied petroleum gas carriers chartered-in vessels and four committed new- has had a distinguished career in the shipping ing director of JPMorgan Chase; before that he because, historically, MLPs had enjoyed consist- valuation advantage if its conventional tankers across the globe. Teekay LNG is the third-largest buildings), three floating production, storage industry, having previously been managing was Global Head of Shipping Finance at Grind- ent access to a considerable pool of equity cap- were also placed in a publicly listed ‘daugh- independent owner of LNG carriers, and has and offtake (FPSO) units, five floating storage director of two major shipping companies lays Bank, thus bringing both shipping and ital and because of the general partner, or GP, ter company’. While not an MLP owing to built its successful business through long-term, and offtake (FSO) units, and nine conventional active in oil and gas transport – Gotaas-Larsen broad financial experience to the board table. Teekay could earn outsized profits if it grew the the short-term cash flow, Teekay could reach fixed-rate contracts ranging from 10 to 25 years oil tankers. It is structured as a publicly traded and Navion Shipping (before its acquisition Richard du Moulin is president of Intrepid underlying partnership. similar yield-focused investors through a high- with high-quality customers. These contracts, master limited partnership. by Teekay). Canadian Bob Boyd has held Shipping LLC, a US-based tanker and bulk ship Late in 2004 Teekay embarked on a six- dividend payout structure. This would have coupled with the growing world demand for Now that offshore oil represents approx- senior financial positions with several major owning company that he founded 11 years ago. month process of launching its first publicly the added benefit of carving-out this volatile liquefied natural gas as an abundant, cleaner imately 3 per cent of total world production companies, including Gulf Oil Corporation, and He has had a distinguished career in the ship- traded subsidiary, Teekay LNG Partners. Focus- business from Teekay’s growing base of fixed- burning fuel, position Teekay LNG as a force for and a record number of new offshore discov- has brought very strong skills and experience ping industry, including a term as chairman of ing on LNG shipping and on contracts ranging rate cash flows. The team of advisers was hired years to come in the marine energy market. eries and projects in recent years, Teekay Off- to his leadership of the Audit Committee. Intertanko, the leading trade organisation for from 10 to 25 years in length, this was the first once again to launch Teekay Tankers Ltd (TNK), Formed in 2005 to expand Teekay’s shore Partners is positioned for significant Another Canadian, George Watson, the tanker industry. n

176 Teekay: the first 40 years Chapter 5 • Wider Horizons 177 Teekay spent much money bringing including the potential of expanding the Norwegians’ refreshing approach should those tankers to Stavanger, affirming mutually beneficial links between port be embraced in South African port cities. their commitment to their Norwegian and city. Stavanger’s charismatic mayor, So much more benefit can be derived if operations, a gesture to which the who is also chairman of the board of the harbours, municipalities and the local local business community responded port, enthused about the role of shipping business sector co-operate fully regarding warmly. in the life of the town that has enjoyed each other’s developmental plans and Last week, Teekay announced the significant spin-off from the thriving other aspects of mutual interest. acquisition of another Norwegian North Sea oil sector. More benefits will company, Sevan Marine, [which] from its accrue from large newly-discovered oil The ceremony over, the ships began to leave. headquarters in Arendal, developed and reserves off the coast, especially as western In deteriorating weather and with night fall- operates cylindrical floating production countries are sourcing more oil outside ing, Nansen Spirit sailed first, followed byPeary and drilling units. the troubled Middle East. My brief venture into Nordic lands left Since harbours and their adjacent Spirit, and finally, Scott Spirit was eased from me with several indelible impressions, cities are inextricably linked, the her berth by two tugs and, like the others,

Providing tailored customer service

eekay’s varied activities in Australia are Ta prime example of the company utilis- ing its marine experience to deliver a tail- ored service to meet individual customer needs. This has allowed Teekay to establish a position as Australia’s leading marine company. Team Australis operates four product tankers, one shuttle tanker, and four floating storage vessels, two of which are operated on behalf of Shell Australia. above Teekay’s proud record as the largest operator of The team also operates the agency services FPSO vessels in the North Sea and the fourth largest in Australasia. Various vessels, including leased FPSO operator globally has been enhanced by four Capesize bulk carriers, are managed conversion projects involving existing tankers and by newbuilding projects. The company’s FPSO vessels under for third parties by Team Gemini, which long-term contract include two on the Norwegian shelf, is also involved in crewing projects, while three on the British continental shelf, and two off the coast of Brazil. One of Teekay’s attainable goals is to be Team Taurus operates 12 harbour tugs the leader in FPSO operations in harsh and ultra-harsh at the iron ore port of Port Hedland, a Broadsound, one of a fleet of tugs operated by Teekay in Australian bulk ports. Teekay Collection environments – such as the conditions found in the North number that is expected to increase signi- Sea and Arctic areas – and to be a significant player in emerging offshore markets. A major project involved the ficantly by 2015. The fourth team provides conversion of the Aframax tanker Archon (built in 1985 as marine services as well as other services for sophisticated scientific blue-water research venture as Australian production in iron the Shell tanker Spectrum) to the FPSO Cidade de Itajai (above) at the Jurong shipyard in Singapore. The joint- the Australian Defence Force, the govern- vessels. Based in Hobart, Tasmania, she will ore, coal and gas increased, as did the size venture project, involving Teekay Petrojarl and its partner ment and various research bodies. operate from the tropical northern coasts of ships calling, requiring more tugs at Odebrecht Oil and Gas (OOG), began with the signing of In 2011 Teekay Australia won the ten- of Australia to the Antarctic ice-edge and some ports. At the announcement of the a contract in October 2010, and she sailed for Brazil in November 2012, becoming Teekay’s third FPSO off the der for the design and construction of a across the Indian, Southern and Pacific joint venture, David Parmeter, managing Brazilian coast. She is operating on a fixed-rate contract to research vessel for the Commonwealth Oceans. director of Teekay Shipping Australia, com- Petrobras to service the Bauna and Piracaba accumulations in the Santos Basin, corresponding to the areas of Tiro and Scientific and Industrial Research Organ- In 2012 Teekay Shipping Australia and mented: ‘Since 2002, Teekay has operated Sidon, respectively. Aad Norland Left Costing more than isation (CSIRO), Australia’s national sci- the Dutch company KOTUG International in the Australian towage market at both $1 billion, Teekay’s largest project is the construction of ence agency. Teekay signed a contract for announced the formation of a new joint Hay Point and Port Hedland where we cur- Petrojarl Knarr FPSO, which will have a design production capacity of 63,000 barrels a day and 70 million mscf a the work with Sembawang Shipyard, Sin- venture company, KT Maritime Services rently manage 12 tugs and have experience day of gas export via pipeline. The vessel has been under gapore, for the engineering, construction Australia Pty Ltd, to pursue new business with several KOTUG RotorTug vessels. With construction since November 2011 at the Samsung Heavy Industries yard in South Korea, and upon delivery in 2014 and delivery of the vessel, to be named opportunities in the Australian towage our new JV company, we are formalising a she will be employed under contract on the Knarr oil- and Investigator on her completion midway market. The two companies foresaw con- partnership that will deliver top-tier tow- gasfield in the North Sea. Teekay Collection through 2013. She will be one of the most siderable opportunities for their new joint age services for the Australian market.’ n

178 Teekay: the first 40 years Chapter 5 • Wider Horizons 179 moved stern-first down the narrow harbour company during the tough economic times Teekay had bought a fleet of LNG carriers area before turning to head for the North Sea that the shipping world has experienced from the Danish shipping group A.P. Moller- to continue loading cargoes of crude oil from over the last few years. Maersk for an aggregate purchase price of offshore installations. Guests had hardly arrived back home approximately $1.4 billion. In addition to The far-sighted ordering of these four from that inspiring event in Stavanger when the total ownership of six LNG carriers, the ultramodern shuttle tankers was indeed news broke of another positive step for Tee- deal included a 26 per cent ownership in a blessing to Teekay as growth in that sec- kay. Via its LNG daughter company, and in two additional LNG vessels. Five of the eight tor provided a measure of stability to the a joint venture with Marubeni Corporation, ships had been fixed on long-term, fixed-rate

Full house – Teekay’s investor meeting

he Teekay story is clearly attractive view it as the corporate circle of life. Tee- Moreover, its strong balance sheet and Tto investors as evidenced by the filled kay parent invests in new projects, drops liquidity ensure survival and ability to to capacity room at the Waldorf As- down existing assets currently in inven- grow without raising equity. toria where the 2012 Teekay Investor tory, commercialises and monetises new The other two children are far more Day took place on Monday to start off the businesses and acquires third party assets. privileged and live and work in nicer Marine Money Week festivities. And, we In exchange, it receives sale proceeds and neighbourhoods. With easy to find oil can assure you, it wasn’t the free lunch GP and LP distributions. The lifeblood of getting depleted, the search has moved (180 served) that filled the room. For us, this process is the company’s financial offshore, particularly in ultra-deepwater. the substance was in the broad strategic strength and access to capital, both from This trend suits market leader Teekay Off- focus rather than in the details. Investors the banks and the capital markets. Per- shore’s FPSO and shuttle solutions. Teekay now understand the corporate structure haps just as important as a competitive LNG Partners participates in the ‘Golden which has gone beyond what was viewed advantage is its operational excellence, Age of Gas’ as demand growth is driven as ‘simple’ financial engineering at the which has evolved over the years, largely by the power generation sector with gas time-charter contracts, with an average commence operations under ten-year time Teekay has designed the next generation of tankers: outset to an enabler of value creation. through acquisitions. Teekay’s custom- displacing coal. The resulting worldwide remaining firm contract period duration charters for BG in Brazil. The addition of the One Spirit, a vessel whose revolutionary design has the potential to change the future of shipping. The Similarly, Teekay is no longer simply the ers encourage growth so that their other build-out of a global LNG market requires of approximately 17 years, plus extension four vessels will increase the size of Teekay’s eco-design reduces fuel consumption by 30 per cent, ‘world’s leading midstream marine ser- businesses can benefit from its expertise. significant investment in infrastructure options, while the other three vessels had Brazil-based shuttle tanker fleet by approx- dramatically reducing voyage costs and providing a more environmentally efficient solution to transportation. vices company’ but ‘a play on the build- As they suggested they were the only and the logistics chain. Is there any ques- shorter-term, fixed-rate time charters. Such a imately 30 per cent. The One Spirit design has three key innovations: an out of global energy infrastructure.’ As ones who could do the Sevan transaction, tion who operators will call? Operating purchase was more than a boost for the com- While the conventional tanker markets aerodynamic hull (a saving of 17 per cent with wave the importance of LNG and deepwater which required both expertise and cap- expertise and strong financial position pany’s LNG operations at a time when the remain weak, Teekay teams have been pre- impacts); a ‘G’ type engine de-rated (saving of 6 per cent); and a slower propeller, 20 per cent larger in diameter. The offshore oil increases, it is clear that Tee- ital. ‘Who ya gonna call? Ghostbusters or and access to equity capital make Teekay gas trade was booming – it also had a most paring other new ventures, away from the vessel’s design is so efficient that it is already compliant kay is uniquely positioned to seize the Teekay.’ LNG a clear choice in this big dollar busi- salutary effect on company morale, which carriage of crude oil. Anyone flying over with the requirements of the so-called 2025 Energy Efficiency Design Index. Teekay Collection opportunities that arise. And what proud parent doesn’t like to ness. Financially, the company has $440 had taken a knock during a period when so the North Sea towards the Dutch or Belgian With the recent dropdown of the bulk talk about their children. They’re all fine, million of liquidity, no material debt bal- much gloom prevailed in shipping. Here was coasts or over the Thames estuary for the first of the conventional tanker fleet, Teekay thank you very much. Teekay Tankers loon payments until 2018, no covenant something new, something positive, a likely time will have noted with amazement the parent has become what was envisioned has taken on the mantle of the original concerns or unfunded capex. All of this earner of good revenue, and a challenge to extent of the wind farms in the area, part of – a project manager with the overall goal Teekay’s conventional tanker franchise made possible by the MLP structure and those involved to merge the new ships into the response to the ongoing pressure for gov- to grow Teekay’s net asset value per share. with the recent dropdown of thirteen a strong supportive parent. Certainly, Teekay’s ship management system. ernments to increase the amount of wind- To accomplish this, the company will be vessels and has capacity for further we have not done justice to the excellent Involvement in the shuttle tanker sec- generated electricity. Similar wind farms are an asset manager, focused on increasing organic growth as four Suezmaxes are presentations in this short article and can tor remains a successful venture for Teekay, located off many coasts in a growing number the value of the daughters and the two GP still inventoried at Teekay. Perhaps the only encourage you to take a look at the who, mindful of the progressive movement of countries, but some wind farms stretch interests, a project developer and an oper- more deprived child, Teekay Tankers, as webcast and the detailed presentation of of oil production towards deeper water, has further from the coast into deeper water ational leader. The company includes a a consequence of a portfolio of fixed rate just one big happy family. ordered four new Suezmax ships from Sam- where conditions can become very rough. As crucial slide which shows how the corpor- contracts, can continue to pay dividends (An extract from Marine Money, June sung Heavy Industries in Korea. Known as the technology of wind power has developed, ate structure enables value creation; we during this weak current tanker market. 21, 2012) n the Samba class, the quartet of dynamic- the turbines and the columns on which they positioning shuttle tankers are scheduled stand have become larger and more robust – for delivery in mid- to late 2013, and will and therefore heavier – to withstand storm

180 Teekay: the first 40 years Chapter 5 • Wider Horizons 181 Board of directors: Teekay Corporation

Some members of the board of directors of Teekay Corporation. From left to right: Ian Blackburne; Eileen Mercier; Tore Sandvold; Peter Janson; and Bill Berry.

eekay Corporation draws its board mem- Ian Blackburne and Eileen Mercier were of the widely admired Ontario Teachers’ energy companies, and on the Energy Policy continues to have extensive ties in that coun- Tbers from around the globe, and board invited to join the board in 2000. Dr Black- Pension Plan, the largest pension plan in Foundation of Norway. try. He rose to oversee exploration and pro- meetings are held quarterly in locations burne, a former managing director and chief Canada, among other activities. As Teekay moved into the offshore shuttle duction worldwide for ConocoPhilips, giving where Teekay has operations. ‘Our current executive officer of Caltex Australia, brought Leif Hoegh, a highly regarded Norwegian and storage sectors, and then acquired Petro- him unrivalled knowledge and a perspective board members originally hail from Den- valuable experience in petroleum refining shipowner, joined the board after Teekay jarl, it became clear that engineering and pro- that is relevant to so much of Teekay’s varied mark, Norway, Sweden, China, Australia, and marketing in Australasia and Asia as acquired Bona Shipping (controlled by the ject management knowledge was required at activities, and making him an excellent addi- Canada, the United States and South Africa,’ well as strong academic credentials to the Hoegh family). Regrettably, Teekay’s entry the board table. And so Teekay was fortunate tion to the board. says board chairman, Sean Day. ‘I believe table. Given Teekay’s focus on the Pacific into the LNG business a few years later in to attract Peter Janson to the board in 2005. A The Teekay Corporation model has been that we gain a competitive advantage by Basin at the time that he joined, and its sub- competition with Hoegh, among others, led dual Canadian-Swedish citizen and a former followed in the development of the daughter recruiting the best talent wherever we find it, sequent expansion in Australia, Blackburne to Leif having to step down from the Teekay chief executive officer of both the Canadian companies’ boards and each of those compa- with each board member bringing a unique has been a great contributor over the years. board. With Teekay’s entry into the Norwe- and United States operations of Asea Brown nies now has similarly talented and accom- perspective and experience from his or her Widely respected in the Australian business gian offshore sector, there was a need for Boveri, the large multi-national Swedish plished directors, drawn from around the background. Travelling together to meet cus- community, he is a former chairman of the a replacement who would bring extensive Engineering and Construction company, he world, bringing relevant but complementary tomers and to view our operations around Australian Nuclear Science and Technology knowledge of the Norwegian energy policy brought the skill set that was needed. With skills to each company. Sean Day observes: the world, has allowed our board to develop Organisation, among other distinctions. as well as oil and gas production. Teekay was diligence and humour, he has contributed ‘Once or twice a year we have a joint meeting unusual closeness, which contributes to its Eileen Mercier is widely acknowledged as extremely fortunate to find Tore Sandvold, much to discussions over the years as the of the boards of all four of the Teekay group effectiveness.’ one of the most experienced and respected who has served on the board since 2003. He company has moved into ever larger and public companies. I am always very proud to Today there are ten directors serving on corporate directors in Canada, where she had previously risen to serve as the director more complex offshore projects. He remains look around the room at the extraordinary the Teekay Corporation board. Axel Karlshoej has been honoured numerous times for her general of the Norwegian Ministry of Oil active on many North American boards, array of talent and sheer horsepower gath- (see page 96) and Tommy Hsu (see page 78) many contributions to corporate governance and Energy, capping a distinguished 30-year including the National Advisory Board on ered together for the benefit of our group. joined the board before the company went over the years. Her prior experience in the career in the Norwegian government. Very Sciences and Technology in Canada. We are indeed fortunate to have attracted public. With the changes in leadership of the oil and gas industry, as well as other cyclical few individuals can match the depth and Bill Berry is Teekay’s newest board mem- so many talented and focused directors over board and company in 1998, Bjorn Moller industries, her astute insights on strategy and breadth of his knowledge of the Norwegian ber, having joined in 2011. He enjoyed a dis- the years, and this has served us well in good (see page 150) and Sean Day (see page 162) balance sheet matters, and her leadership of oil industry and his contributions to board tinguished 30-year career with ConocoPhilips markets and bad.’ n followed, and Peter Evensen (see page 175) the audit committee, make hers a respected deliberations have been invaluable, given and its predecessors, and lived and worked became a member of the board when he voice at the board table. She continues to Teekay’s extensive activities on the Norwe- in many parts of the world during his tenure assumed his current role as chief executive be a sought-after director for Canadian com- gian continental shelf. He continues to serve there, including spells in Norway and China. officer in 2011. panies, and currently serves as chairman on the boards of a number of multi-national He has taken a great interest in China, and

182 Teekay: the first 40 years Chapter 5 • Wider Horizons 183 conditions. This necessitates complex instal- transactions, Teekay was awarded Marine rom Teekay’s early days, first in New York lation processes – including the building of Money’s ‘2011 Dealmaker of the Year’ award. Fand then in Long Beach, to its vibrant large concrete foundations and columns for With the demand for gas and ammonia activities forty years later, talented and ded- the turbines – and maintenance programmes increasing, Teekay LNG Partners L.P. and the icated people have been the key to its success. that require the use of specialised ships with Belgium-based EXMAR NV announced an Torben Karlshoej’s relentless and bold pur- stowage space for the pillars and blades of the agreement in principle in December 2012 to suit of a dream to operate the largest fleet of wind turbines as well as heavylift equipment create a 50:50 joint venture to operate in the tankers was honed, modified and expanded to install them and conduct in situ refits. LPG carrier market and to focus on midsize by others so that his goal has been achieved, Teekay signed an agreement with the gas carriers. and an extensive, diversified international Danish company A2Sea to design a vessel Following shortly after this announce- operation is now in place. to install offshore wind turbines. Teekay’s ment came another that Teekay LNG had con- Wise, long-term responses to the remark- experience in operating shuttle tankers with tracted with the Daewoo shipyard of South able financial returns during the halcyon dynamic positioning systems stands it in Korea to build two 173,400 cubic metre LNG days of soaring rates enabled the company to good stead to develop and operate a suitable carriers, with options to order up to three hunker down for the more testing times of the vessel, and it can identify ships from its own additional vessels. Before their delivery in global economic slump in recent years. Buoyed fleet that would be suitable for conversion to 2016, Teekay will secure long-term charters through those difficult days by an experienced installer vessels. for the vessels that will be constructed with board of directors, by a tireless and efficient A glance at the wall in an office in -Tee M-type, electronically controlled gas injec- executive team, and by thousands of dedic- kay’s building in Stavanger shows the result tion twin engines, which are significantly ated, industrious employees at sea and ashore, of research into the design of such vessels. more fuel-efficient and have lower emission Teekay has survived and thrived, inter alia by Apart from being suitable for the installa- levels than other engines currently being making strategic investments away from the tion and maintenance of wind turbines, they utilised in LNG shipping. ‘The delivery of fluctuating conventional tanker sector. The will provide lifting or emergency evacuation these vessels,’ said Peter Evensen, Teekay’s company remains a world leader in several of or routine crew-change services for oil rigs chief executive officer, ‘is timed to coincide its fields of operation. and other offshore platforms. As activities with the next wave of increased demand for Yet, while transforming into a multi- in the North Sea expand, particularly in the LNG carriers, which is expected when a large faceted public company of international Norwegian sector, and as the Brazilian off- number of new LNG export projects come stature, and while setting benchmarks for shore oil and gas industry becomes a major on stream from late-2015. These ships will quality, customer care and professionalism, growth point, such versatile vessels are likely be among the largest LNG carriers that will Teekay in its latter years has retained much to be in demand. In acquiring these diverse be able to transit the Panama Canal after its of the entrepreneurial flair, the family FPSO, LNG and offshore projects, Teekay expansion project has been completed, mak- atmosphere and the attention to detail found profitable additions to their existing ing them ideal to move LNG exports from the that characterised its early years under its business model, as well as forward-looking United States…’ remarkable founder, Torben Karlshoej, and investment opportunities. For their success- since his death, under the equally remarkable ful completion of the Sevan and Maersk LNG ◆ guidance of his brother, Axel Karlshoej n

184 Teekay: the first 40 years Afterword

rom its beginnings as Torben Karlshoej’s Fsmall chartering operation in 1973, Teekay has grown into a truly worldwide industry leader. Evolving beyond its initial conventional tanker business, Teekay Cor- poration today stands as a diversified marine energy business, owning and operating ves- sels ranging from gas carriers and offshore shuttle tankers, to FSOs and billion-dollar- FPSOs. Since weathering financial and eco- nomic hardships in the early 1990s, Teekay has grown ten-fold in assets, created four publicly traded companies and established numerous joint ventures – all while holding true to Torben’s high standards of opera- tional excellence. Though the future of the shipping and marine energy industries remains uncertain, Teekay is ready to move forward. Having survived the recent global recession, Teekay Corporation has emerged stronger than ever. With a varied portfolio of assets, dynamic leadership and experienced staff, the com- pany is prepared to succeed in the short-term and adeptly meet the challenges ahead.

Peter Evensen President and chief executive officer

Teekay: the first 40 years 185 Appendix 1

Teekay’s Departmental Structure

Legal and Tax Department ing. Teekay’s business development teams In 2012 the innovation team went public Floating production, storage and offtake work hard to find new business opportun- for the first time, announcing the One Spirit, projects are complex, multi-jurisdictional, ities and overcome barriers to entry into new a revolutionary vessel with the potential multi-million dollar efforts. Fortunately, Tee- and emerging markets, but Teekay first has to change the future of shipping. With an kay’s experienced legal, tax and insurance to find these opportunities. eco-design that reduces fuel consumption team had the necessary acumen to success- Led by Kenneth Hvid, as its executive by 30 per cent, One Spirit would have a dra- fully negotiate and integrate these business vice-president and chief strategy officer, Tee- matic effect on voyage costs and provide a ventures. Led by Arthur Bensler, executive kay’s Strategy Innovation Projects Depart- more environmentally efficient solution to vice-president and general counsel, Teekay’s ment does just that. By analysing market transportation. team of experts successfully managed the trends, keeping abreast of industry news With the continued expansion of the complex international regulations and sig- and exploring potential revenue streams, world’s energy infrastructure, as well as nificant legal risks of these transactions. this department ensures that Teekay is pre- investments in marine technology compa- In addition, the legal team worked to pared to respond to emerging challenges nies like Sevan Marine ASA and Remora AS, supply Teekay with the means to acquire and prospects in the marine energy sector. the innovation team is situated to continue these large assets by financing and re-financ- Currently, Teekay is pursuing new business developing value-added projects that will ing existing assets and conducting a steady development opportunities in China, India keep Teekay’s competitive advantage strong stream of public offerings. These offerings and Brazil – emerging markets ready to fur- into the future. funded ‘drop-downs’ of Teekay Corporation ther commercialise their individual energy assets to Teekay’s daughter companies, sub- industries. Newbuilding Projects: Building a stantially growing the portfolio of each sub- World Class Asset Base sidiary. Teekay employs a unique financial Innovation However, in order to be a truly Teekay’s newbuilding projects team is re- structure, with a parent company (Teekay successful project developer, Teekay must sponsible for delivering new vessels from Corporation) acting as a portfolio manager also deliver innovative technological and concept to execution, liaises with shipyards, that allocates capital to three daughters: commercial solutions for its customers, and manages construction costs to ensure Teekay Tankers Ltd, Teekay LNG Partners avoiding the ‘commodity trap’ where differ- the hardware is delivered on time and on L.P., and Teekay Offshore Partners L.P. In entiation is solely price driven. With this end budget. this structure, each company is set up and in mind, Teekay created its innovation team Led by Derek Walford, vice-president, New empowered to act as a project developer in in 2011. Build and Technology, the team has success- its respective business segment. Through its innovation team, Teekay fully delivered 94 newbuildings into the Tee- develops new solutions that deliver signi- kay fleet since 1988, with more than half of Strategy Innovation Projects ficantly higher value than existing techno- those vessels coming online after 2004. Strategic Development Growth opportun- logies, thus generating a real competitive Dedicated to achieving excellence ities around the world are constantly chang- advantage in customer relationships. without harm to people, property or the

186 Teekay: the first 40 years Teekay: the first 40 years 187 environment, the newbuilding projects team transport LNG, liquefied petroleum gas (LPG) ate in the extreme weather conditions found of successful operations, most important- receive and process the oil, gas and water needed to handle the weight of the VSAT provides Teekay and its customers with the and compressed natural gas (CNG) around in locations like the North Sea. ly health, safety, the environment and obtained directly from the well. FPSOs antenna. Dry dock occurs once every five new vessels needed to succeed in the world the globe. In 2011 Teekay LNG Partners (in TSO also manages Teekay’s fleet of float- quality (HSEQ). From 1973 to the present day, can vary enormously depending on the years per vessel, leading to an average of ten energy shipping market. With the co-ordinat- a joint venture with Marubeni) acquired ing storage and offtake (FSO) units, used to customers have recognised the company’s complexity of the oil field, the oil, gas and vessel installations a year. Thankfully in 2011 ed efforts of the Strategy Innovation Projects six vessels from the A.P. Moller-Maersk LNG take oil or gas from a nearby platform and commitment to safety as a key characteristic water composition of the reservoir itself, and a vendor was able to provide an in-service team driving the company forward into excit- fleet, further establishing Teekay as a market store it until it can be offloaded onto wait- of Teekay’s worldwide business. production rates. solution. This enabled the installation of ing new areas, Teekay is set up to expand its leader in gas services. ing tankers. In 2012 TSO initiated a business VSAT on the majority of the fleet without competitive position in the industry. review that led to the department becoming Teekay Petrojarl Corporate Resources interrupting regular business. Today a total Teekay Shuttle and Offshore Services more cost effective, setting Teekay Shuttle A leader in floating production, storage Human Resources Teekay’s strength lies in of 97 vessels (about two-thirds of the fleet) Teekay Tanker Services Teekay is the world’s largest owner and oper- and Offshore Services up for future success as and offtake (FPSO) operations in harsh and the more than 6,000 dedicated employees feature VSAT internet. Since 1973 Teekay has proudly operated in ator of shuttle tankers, with over 50 per cent managers of their reliable ‘floating pipeline’. ultra-harsh environments, Teekay Petrojarl who showcase the company’s core SPIRIT Jennifer Zaluski, the manager of IT Vessel the conventional tanker market. Although of the worldwide fleet under Teekay manage- (TKP) handles Teekay’s capital-intensive FPSO values – safety and sustainability, passion, Support, commented on the positive impact it has expanded into other areas, its conven- ment. Teekay Shuttle and Offshore Services Fleet Operations projects. The largest operator of FPSO vessels innovation, reliability, integrity, and team- of VSAT: ‘I often get comments from the sea- tional tanker business remains at the heart (TSO), based in Norway, manages this shuttle Teekay’s Fleet Operations team is respons- in the North Sea, Petrojarl successfully work. Establishing the clear Teekay vision farers about how positive this change has of Teekay’s worldwide success. tanker fleet, providing offshore oil loading ible for the ongoing cost efficiency and prof- develops profitable offshore opportunities, and values across a worldwide staff is made been for their life at sea, [and] some are even Headed by President Bruce Chan, Teekay and transport solutions. Led by Ingvild Sae- itability of vessel operations. Operating on including two on the Norwegian shelf, three possible by Teekay’s Human Resources extending their contracts because they can Tanker Services is an integral part of Tee- ther, president, Teekay Shuttle and Offshore the basis of innovative practices and systems on the UK continental shelf, and two off the Department, led by Lois Nahirney, executive so easily communicate with their families.’ kay’s marine midstream services, primarily Services, the team is highly respected for its – many of which were developed under Cap- coast of Brazil. Led by Peter Lytzen, president vice-president of Corporate Resources, which It’s no exaggeration to say that VSAT managing the global transportation of crude operation of the technologically complex tain Graham Westgarth during his tenure and CEO of Teekay Petrojarl, TKP is also the also includes Information Technology. revolutionised IT support for the vessels. IT oil. Able to offer customers solutions ranging vessels, with each utilising a specialised load- with Teekay from 1999 to 2012 – the Fleet latest addition to the Teekay family. FPSO Responsible for the recruitment, develop- today still provides a degree of remote vessel from spot market voyages to fixed and vari- ing and dynamic positioning system to oper- Operations Department manages a number units have production systems on the deck to ment and leadership training given to staff, support; however, VSAT has created a mostly able rate contracts, Teekay Tanker Services Teekay’s HR team provides the organisation hands-off solution for the captain and crew, uses one of the world’s largest conventional with the talent it needs to operate as a world leaving them free to focus on their primary tanker fleets to meet customer needs around leader in the marine shipping industry. shipboard responsibilities. the globe. With global chartering teams located in Information Technology Teekay’s diverse Finance and Accounting Teekay’s Finance London, Singapore, Houston, Tokyo, Vancou- marine energy business is supported by an and Accounting Departments, led by Vince ver, Connecticut and Stavanger, the Teekay equally diverse corporate resources team, Lok, executive vice-president and chief Tanker Services team works around the clock consisting of information technology, corpo- financial officer, have long been an integ- to optimise Teekay’s fleet, control costs and rate communications, office services and hu- ral part of the company’s success. Through connect customers with the right ships at man resources staff. their dedicated efforts, the two teams ensure the right time and place. Teekay’s IT Department provides the Teekay has the capital needed to compete in varied business segments with access to the complex international shipping market. Teekay Gas Services the software and programmes needed to The resourceful Finance Department has In 2004 Teekay entered the developing lique- effectively manage the ‘round the world, proved to be a true competitive advantage fied natural gas (LNG) shipping market and round the clock’ operations at the heart in recent years, demonstrating the ability to established the Teekay Gas Services Depart- of Teekay’s business. However, IT support raise capital in difficult, recession-affected ment. Within eight years Teekay would be- at Teekay extends past their shore staff, markets. When many investors and banks come the third-largest independent owner reaching seafarers as well. With a global became unwilling to lend, Teekay’s finance and operator of LNG vessels in the world. community of over 5,000 working on Teekay team maintained their ability to raise With operations managed by David Glendin- vessels, often away from families and friends capital, including more than $2.4 billion in ning, president, Teekay Gas Services, TGS for months at a time, there’s nothing more 2011. provides LNG transportation services under valuable than the ability to stay in touch. The finance and accounting teams also long-term, fixed-rate contracts to major en- In the latter half of the 2000s, a technology support the transactions necessary to make ergy and utility companies worldwide. called VSAT became available – a broadband Teekay’s daughter company structure a true While natural gas is an energy source internet solution available to vessels. Eager success. During 2010 alone, the hard work of in abundant supply, many of the world’s to provide greater quality of life to seafarers, Teekay’s financial minds allowed the Teekay reserves are located far from major con- Teekay IT began the hard work of getting Corporation to sell over $900 million of fixed sumer markets. Drawing on expertise their vessels a permanent online connection. assets to its daughter companies, which in acquired during decades of handling the Beginning in 2008 the project was slow, since turn enabled the daughters to raise $680 mil- industry’s most challenging shipping vessels had to be in drydock to complete lion of new, lower-cost equity through seven assignments, Teekay Gas Services is able to the installation, and an on-shore crane was public offerings. n

188 Teekay: the first 40 years Teekay: the first 40 years 189 Appendix 2

Recent Changes to Teekay’s Structures and Procedures

Conventional Profitability Review problems. To address the profitability of Tee- examination of Teekay’s shuttle tanker op- With social media having effected a Though Peter Evensen’s strategy of focusing kay’s conventional fleet operations, a joint erations was concurrently underway. Led by cultural change in the way businesses on Teekay as an asset manager and project venture was created with the Hong Kong- Ingvild Saether, president, Teekay Shuttle and individuals communicate, Jonathan developer considerably brightened the com- based Anglo-Eastern Ship Management. Under and Offshore Services, the so-called ‘STEAM’ Anthony’s team introduced Yammer – an pany’s future amidst continuing global eco- the newly formed company, Teekay Marine project was created to ascertain which altera- enterprise social networking tool – into the nomic gloom, these adjustments alone were Limited, all of Teekay’s existing seafarers re- tions would be necessary to transform Tee- organisation. Functioning like ‘Facebook not enough to return the company to profit- main on Teekay contracts and serve in Teekay- kay’s shuttle operations into a more viable, for business’, Yammer instantly changed ability. Teekay had built a reputation of qual- owned vessels, but with operational manage- cost effective business. the way that Teekay’s worldwide network of ity and excellence that unfortunately carried ment conducted by Anglo-Eastern staff. The STEAM project review was completed employees interacted. Rather than a static with it a number of high overheads that After hard work from Teekay staff around in the late summer of 2012, and brought site of controlled information, Yammer were inhibiting the company’s ability to suc- the world to prepare for the transition, Tee- with it more impending changes for Teekay. provides each employee with an individual ceed. ‘The business fundamentals demand kay Marine Ltd officially began business on The shuttle and offshore service team would profile, allowing him to customise his- Tee change,’ Evensen told Teekay employees. September 1, 2012. The creation of Teekay be flattened into a structure that allowed for kay experience around subjects such as gas ‘Driving operational efficiencies is critical to Marine was an inspired solution, enabling flexible project work, allowing the organisa- or human resources. More importantly, Yam- get us back to profitability.’ Evensen synthes- the company to make a drastic and necessary tion to run more efficiently while also giving mer also enabled each employee to ask ques- ised this need for change into an acronym change without losing its identity as a world- all employees the chance to bring their indi- tions, share ideas and contribute to business – SAFE – that decribed the kind of business leading tanker operator. vidual talents to bear on high-value projects. discussions online in his own voice. Teekay Teekay needed to become: Simple, Aligned, Also announced was a major internal ‘I am convinced,’ reported Saether, ‘that staff members were free to start a conversa- Flexible, Efficient. re-alignment, which replaced the older, this is what we have to do to become more tion around any piece of news, start open With this in mind, Teekay began a period counter-intuitive corporate structure with a cost efficient and sustainable; to be here in discussions and even offer public congratula- of critical self-examination early in 2012. clear line of sight from each fleet operations the long run.’ tions for a job well done. Where once there This initial review of existing tanker opera- team (asset operator) through its business Sadly, both CPR and STEAM resulted in a was corporate control, Yammer offered real tions, referred to as the conventional profit- unit (asset manager) to the publicly listed number of lay-offs, which Teekay’s leadership empowerment to employees. ability review (CPR), unearthed two critical daughter company (asset owner). This realign- team did not take lightly. ‘While it is sad to ‘The network was already there,’ com- business issues. Firstly, it was no longer cost- ment served not only to increase accountabil- see good colleagues go,’ Saether commented Yammer strictly top-down, controlled manner. While mented Jonathan Anthony. ‘Yammer is just effective for Teekay’s existing conventional ity across Teekay’s business unit operations, while reflecting candidly on the realities of While focusing on profitability and cost this traditional corporate procedure had a tool to allow this network to flourish.’ This fleet operations to be managed by internal but also to make each business far nimbler, business, ‘it is important to remember that efficiency had become a top priority for the served their needs in the past, Teekay re- new, social media-based approach to internal operations alone; and secondly, the manage- empowering both leaders and staff members we need to make these changes to make our company, Teekay’s leaders affirmed an impor- cognised that, facing a global recession and news and conversations showcases how Peter ment structure of each of Teekay’s business to drive success and profitability. business sustainable. We are in the process tant aspect that Torben had recognised years declining profits, the need to improve Evensen’s modern Teekay would not only be units was inefficiently aligned. of creating an agile, efficient, and effective earlier: Teekay’s real power lies not in its ves- company communication, collaboration and satisfied to turn a critical eye to its opera- On May 14, 2012 Teekay made a major The ‘Steam’ Project project organisation that will enable us to sels and its contracts, but in its people. Since innovation would require a revision of tions with customers, but also to recognise internal announcement, informing staff of While changes stemming from the CPR be- win new business and be successful in the the company’s inception, Teekay employees procedures if the company was to move the need to look inward and constantly strive the steps that would be taken to correct these gan to be felt across the company, a similar long run.’ had received news and announcements in a forward. for internal improvement. n

190 Teekay: the first 40 years 191 Joined Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks Appendix 3 fleet Bastogne Lancashire; Berge Hugin; BW LPG carrier Hyundai 35,229 2002 2013 Hugin Bayani Spirit Arcadia Spirit; Nachi Maru Aframax tanker Namua Imari 81,657 1980 1989 2000 Renamed Mendana Spirit in 1990 Bermuda Spirit Suezmax tanker Hyundai Samho 159,000 2009 2009 Brilliancy Aframax tanker Kasado 90,986 1976 1985 1995 Sold to Danica; renamed Brilliant Sea; subsequent names Fleet List Brilliant Sea II; Vena; Prudent

Broadwater Australia Star Aframax tanker Samsung 94,560 1986 1997 2005 Sold to Westmont Maritime A.S.; renamed Trust Friendship Compiled in April 2013 Brugge Venture LPG carrier MHI Nagasaki 35,418 1997 2013 Brussels Oxfordshire LPG carrier MHI Nagasaki 35,454 1997 2013 Catalunya Spirit Inigo Tapias LNG carrier Izar 135,423* 2003 2004 Cathay Spirit White Gardenia Aframax tanker Hayashikane 85,453 1976 1987 1995 Sold to Dorothea Shipping; renamed Captain Mitsos l Chiba Spirit Sea Silkload Aframax tanker Mitsui Chiba 60,835 1980 1991 1998 Sold to Roseanne Enterprises, Liberia; renamed Ladon China Express Container Zongha 8,727 1985 1985 1987 Sold to Dongnama Shipping; renamed Singapore Glory ship (480 teu) Chios Spirit Aframax tanker Hyundai Samho 112,668 2002 2002 2006 Managed by Teekay for Greek owners; sold to Flower Shipping, Panama; renamed Kyriakos Clare Spirit Launched as Colorado; Beryl; Shuttle tanker Stocznia Im 99,259 1986 1999 2003 Sold to V Ships, Norway; renamed Hawaiian Leader Feliz; Venliza; Bona Ranger Komuny Paryskiej Cloudesdale Manhattan Baron Aframax tanker Sanoysu 87,076 1975 1986 1995 Sold; renamed Darius; subsequent names Atlantas; Tefton Joined Clyde Spirit Golden Fleece; Pretty Lady; Aframax tanker Hyundai 94,706 1985 1999 2003 Sold to Mercator Lines, India; renamed Devsi Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks fleet Bona Sparrow Aegean Spirit Aframax tanker Hyundai Samho 112,668 2002 2002 2006 Managed by Teekay for Greek owners; sold to General Columbia Spirit Ocean Express; Bona Skipper Aframax tanker Mitsubishi 81,274 1988 1999 2005 Sold to Tanker Pacific; renamedYellow Sea International Maritime Transport, Libya; renamed Intisar Constitution Spirit Constitution Aframax tanker Samsung 104,622 1999 2008 African Spirit Suezmax tanker Hyundai 151,736 2003 2003 Cook Spirit Blue Sky River Aframax tanker Hashihama 91,538 1987 1996 2003 Sold to Cetrofin; renamedMerbabu ; since converted to semi- Al Areesh LNG carrier Daewoo 148,786* 2007 2007 submersible heavylift vessel Zhen Hua 29 Al Daayen LNG carrier Daewoo 148,853* 2007 2007 Courcheville Nyhall LPG carrier Boelwerf 28,006 1989 2013 Al Huwaila LNG carrier Samsung 214,176* 2008 2008 Vlaanderen Emse Al Kharsaah LNG carrier Samsung 214,198* 2008 2008 Cubal LNG carrier Samsung 160,400* 2012 2012 Al Khuwair LNG carrier Samsung 213,101* 2008 2008 Dampier Spirit Frontier Spirit FSO Hyundai 106,668 1988 1998 Converted to FSO 1998 Al Marrouna LNG carrier Daewoo 149,539* 2006 2006 Dania Spirit Navion Dania LPG carrier Hyundai 8,669 2000 2004 2010 Sold to Veder Chartering, Rotterdam; renamed Coral Parensis Al Shamal LNG carrier Samsung 213,536* 2008 2009 Dilong Spirit Suezmax tanker Bohai 159,000 2009 2009 Albahaa B Libra; Kiku Maru; Eastern VLCC Howaldtswerke 239,410 1971 1979 Lost in Indian Ocean in 1980 Donau Gaz Nordsee LPG carrier Mayer Neptun 30,207 1985 2013 2013 Eagle; Cordoba; Balder King; Kiel Papenburg Gull Donegal Spirit Product tanker Hyundai 105,200 2006 2006 Alexander Spirit Miss Marina Product tanker SLS 40,083 2007 2009 Eeklo LPG carrier Kawasaki Sakaida 37,450 1995 2013 Algeciras Spirit Nuria Tapias Suezmax tanker Daewoo 149,999 2000 2004 Erik Spirit Aframax tanker Samsung 115,526 2005 2005 Alliance Spirit Aframax tanker Koyo 97,087 1989 1989 Wrecked in severe storm at Skikda, Algeria, in 2003; total Esther Spirit Aframax tanker Samsung 115,444 2004 2004 loss Eupen LPG carrier MHI Nagasaki 38,961 1999 2013 Americas Spirit Aframax tanker Hyundai 111,920 2003 2003 European Spirit Suezmax tanker Hyundai 151,849 2003 2003 Amundsen Spirit Shuttle tanker Samsung 106,000 2010 2010 Everest Spirit Aframax tanker Daewoo 115,048 2004 2004 Apache Spirit Aframax tanker 3-MAJ 106,684 1991 1991 1994 Sold to Metrofin; renamedGammatank ; subsequent name Excalibur LNG carrier Daewoo 138,000* 2002 2010 Promise Excelsior LNG carrier Daewoo 138,087* 2005 2010 Apollo Spirit El Paso Cove Point; Jade FSO Avondale 129,019 1978 1991 Phoenix; Nordic Apollo; Jade Falcon Spirit Sarita; Nordic Sarita; Rita FSO Daewoo 124,472 1986 2009 Phoenix; Coast Jade; Coastal Knutsen; Rita Jade Falster Spirit Vendonna; Bona Rover Aframax tanker Hyundai Heavy 95,400 1995 1999 2010 Sold to Egyptian interests; renamed Sharifa 4 Arcadia Spirit Nachi Maru Aframax tanker Namura 81,634 1980 1987 2000 Renamed Bayani Spirit in 1989 Industries, Ulsan Arctic Spirit Arctic Sun LNG carrier Ihi 87,305* 1993 2007 Favour Spirit Hoegh Favour; Bona Favour; OBO Howaldtswerke 82,462 1981 1999 2003 Sold to Norbulk, Liberia; renamed Swift Favour; scrapped Teekay Favour Kiel 2008 Arwa Spirit Maersk Arwa LNG carrier Samsung 165,500* 2008 2012 Flanders Harmony LPG carrier Boelwerf 85,826 1993 2013 Ashkini Spirit Aegean Lady; Ingeborg Suezmax tanker Hyundai Samho 165,209 2003 2007 Vlaanderen Emse Asian Spirit Suezmax tanker Hyundai 151,693 2004 2004 Flanders Tenacity LPG carrier Kawasaki Sakaida 84,270 1996 2013 Asiatic Spirit Geiko Maru; Sanko Hope Aframax tanker Onomichi 87,607 1977 1987 1995 Sold to Galaxy Maritime Enterprises, Cyprus; renamed Flying Clipper CYS Dignity; Atlantic Dignity Aframax tanker Tsuneishi 89,939 1975 1988 1993 Sold to Petrostar, Saudi Arabia; renamed Nejmat el Petrol Abdoun Discovery XXIV Atlantic Spirit CYS Olympia; Atlantic Peace Aframax tanker Stocznia Im 84,631 1983 1988 1990 Sold; subsequent names Kosmos Spirit; Skaudrott; Skaubay; Flying Cloud Anita Monti VLCC Fincantieri 228,541 1970 1979 1980 Sold Komuny Paryskiej Arianne Laura; Kalymnos Flying Cloud CYS Excellence Aframax tanker Isuneishi 89,947 1975 1988 1996 Sold to Shield Shipping; renamed Cloud Australian Spirit Aframax tanker Hyundai 111,905 2004 2004 Foam Spirit Hoegh Foam; Bona Foam; OBO Hyundai 78,532 1981 1999 2004 Sold to Norbulk, Liberia; renamed Nobel Foam; later names Avalon Spirit Nassau Spirit Aframax tanker Imabari 107,181 1998 2002 2013 Reverted to Nassau Spirit in 2005 after Canadian charter Teekay Foam Britanny Mae; H.A. Sklerar completed Fortuna Spirit Hoegh Fortuna; Ambia OBO Hyundai 78,532 1982 1999 2004 Sold to Norwegian interests; renamed Nobel Fortuna; Axel Spirit Aframax tanker Samsung 115,392 2004 2004 Fortuna; Hoegh Fortuna; Bona subsequent names August Oldendorff; Augusta Bahamas Spirit Sanko Trader Aframax tanker Koyo 107,261 1998 2001 Fortuna; Teekay Fortuna Barrington Australia Sky Product tanker Samsung 33,239 1989 1996 2009 Sold; renamed Galaxy Forum Spirit Hoegh Forum; Bona Forum; OBO Hyundai 78,395 1983 1999 2004 Sold to Norwegian interests; renamed Nobel Forum; later Basker Spirit Wilomi Yukon; Wilma Yukon; Shuttle tanker Dalian 97,068 1992 2005 2013 Sold Teekay Forum Antoine D; scrapped Nordic Yukon; Navion Basker

192 Teekay: the first 40 years Teekay: the first 40 years 193 Joined Joined Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks fleet fleet Fountain Spirit Hoegh Fountain; Bona OBO Hyundai 78,532 1982 1999 2004 Sold to Norwegian interests; renamed Nobel Fountain; later Madrid Spirit Ivan Tapias LNG carrier Izar 135,423* 2004 2004 Fountain; Teekay Fountain named E. Oldendorff Magellan Spirit Niko Maru Aframax tanker Hitachi 95,007 1985 1995 2003 Sold to Great Eastern Shipping, India; renamed Jag Leena Freighter Spirit Siboseven; Hoegh Freighter; OBO Bremer Vulkan 75,395 1982 1999 2004 Sold to V Ships, Norway; renamed Seahawk Freighter; later Magellan Spirit Maersk Magellan LNG carrier Samsung 165,500* 2009 2012 Bona Freighter; Teekay renamed Hong Harvest Freighter Mahanadi Spirit Alam Bakti; Guadalupe Product tanker Onomichi 47,037 2000 2007 Frontier Spirit Aframax tanker Hyundai 106,668 1988 1988 Converted to FSO; renamed Dampier Spirit in 1998 Malanje LNG carrier Samsung 160,400* 2011 2011 Fuji Spirit Aframax tanker Tsuneishi 106,360 2003 2003 Marib Spirit Maersk Marib LNG carrier Samsung 165,500* 2008 2012 Galicia Spirit LNG carrier Daewoo 137,814* 2004 2004 Matterhorn Spirit Aframax tanker Daewoo 114,834 2005 2005 Galway Spirit Product tanker Hyundai 105,200 2007 2007 Mayon Spirit Aframax tanker Onomichi 98,507 1992 1992 2011 Ganges Spirit Delaware Suezmax tanker Hyundai 159,453 2002 2007 Mendana Spirit Bayani Spirit; Arcadia Spirit; Aframax tanker Namua Imari 81,657 1980 1990 2000 Sold to Polembros; renamed Everton Nachi Maru.B133 Godavari Spirit Athenian Glory; Angelica Suezmax tanker Hyundai 159,106 2004 2007 Meridian Spirit Maersk Meridian LNG carrier Samsung 165,500* 2010 2012 Golden Gate Sun Aframax tanker Onomichi 82,543 1975 1985 1995 Sold to Polembros; renamed Golden Gate Mersey Spirit Fortune; Bona Spring Aframax tanker Hyundai 94,752 1986 1999 2003 Sold to Mercator; renamed Sadanand; scrapped 2009 Golden Sunray Aframax tanker Sumitomo 89,665 1976 1987 1992 Sold to Ocean Peace Shipping, Malta; renamed Prime Unity Methane Spirit Maersk Methane LNG carrier Samsung 165,500* 2008 2012 Gotland Spirit Venessa; Bona Rider Aframax tanker Hyundai 95,371 1995 1999 Mihara Spirit Grand Wisdom Aframax tanker Koyo 103,584 1976 1988 1995 Sold to Care Shipping, Malta; renamed Spirit Granada Spirit Aquitaine; Tito Tapias Suezmax tanker Astileros 140,000 1990 2004 2005 Sold to Trand E & Transport; renamed Hebei Genius Musashi Spirit Licorne Atlantique OBO Mitsubishi 262,411 1973 1987 1988 Sold to Arne Naess; renamed Mountain Spirit Grand Wisdom Aframax tanker Koyo 103,584 1976 1985 1995 Renamed Mihara Spirit in 1988 Musashi Spirit VLCC Sasebo 280,654 1993 1993 2004 Sold to Mercator Line, Singapore; renamed Sri Prem Putli; Hamane Spirit Aframax tanker Onomichi 105,203 1997 1997 2012 Sold to Sierra Leonian interests; renamed Hamane Spiri, and subsequent name Prem Putli then Lion Spirit Nagasaki Spirit Aframax tanker Mitsubishi 95,997 1989 1989 Collision, caught fire; constructive total loss in 1992; hulk Hamilton Spirit Suezmax tanker Hyundai Samho 159,000 2009 2009 Nagasaki sold to NOL; renamed Neptune Leo; scrapped as Ross Sea Helga Spirit Aframax tanker Samsung 115,515 2005 2005 Nakata Spirit Product tanker Onomichi 39,557 1988 1988 1988 Chartered to BP; renamed BP Architect; sold to OSG; Hispania Spirit Fernando Tapias LNG carrier Daewoo 137,814* 2002 2004 renamed Overseas Primar Honshu Spirit Tango Maru Aframax tanker Tsuneishi 81,281 1979 1989 1998 Sold to Nassau Shipping, Bahamas; renamed Naga Namsan Spirit Aframax tanker Hyundai 106,671 1988 1988 Converted to FSO; renamed Pattani Spirit in 2004 Hudson Spirit Bona Spinner Aframax tanker Mitsubishi 84,841 1988 1999 2005 Sold to Tanker Pacific Nansen Spirit Shuttle tanker Samsung 106,000 2011 2011 Huelva Spirit Huelva Tapias Suezmax tanker Daewoo 149,999 2001 2004 Narmada Spirit Athenian Victory; Adair Suezmax tanker Hyundai 159,199 2003 2007 Hugli Spirit Athenian Splendour; Brazos Product tanker Hyundai 46,889 2005 2007 Nassau Spirit Aframax tanker Imabari 107,181 1998 1998 2013 Renamed Avalon Spirit 2002; reverted to Nassau Spirit 2005; Hummingbird Hummingbird FPSO Yantai Raffles 30,000 2007 2011 First circular FPSO to operate in the sold Spirit North Sea Navajo Spirit Aframax tanker 3-MAJ 106,684 1991 1991 1992 Sold to Eparka Shipping, Liberia; renamed Alphatank; Ida Helene Ardmore Product tanker As Horten 31,600 1975 1987 1988 Sold; renamed Livingstone; subsequent names Livi; Asean subsequent name Promise Promoter Navion Akarita Akarita; Stena Akarita; Nordic Shuttle tanker Tsuneishi 107,223 1991 2002 2012 Ionian Spirit Aframax tanker Hyundai Samho 112,664 2002 2002 2006 Managed by Teekay for Greek owners; sold to General Akarita National Maritime Transport, Libya; renamed El Gurdabia Navion Anglia Shuttle tanker a.e.s.a. 126,360 1999 2002 Iskmati Spirit Arlene; Aegean Eagle Suezmax tanker Hyundai Samho 165,209 2003 2007 Navion Bergen Shuttle tanker Sumitomo H.I. 105,641 2000 2002 Jiaolong Spirit Suezmax tanker Bohai 159,000 2009 2009 Navion Britannia Shuttle tanker a.e.s.a. 124,238 1998 2002 Kanata Spirit Aframax tanker Samsung 113,022 1999 1999 Navion Clipper Polyclipper Shuttle tanker Mitsui S.B. 78,228 1993 2002 Laid up 2013 for possible conversion to FSO Kareela Spirit Aframax tanker Samsung 113,144 1999 1999 Navion Europa Jorunn Knutsen Shuttle tanker A.E.S.A. 130,319 1995 2002 Karratha Spirit Pioneer Spirit FSO Hyundai 106,672 1988 2002 2011 Sold to Sarost, Tunisa; renamed Thapsus Navion Fennia Future Shuttle tanker Kvaerner Masa 95,195 1992 2003 2012 Sold; renamed Avion Kaveri Spirit Athenian Olympic; Janet Suezmax tanker Hyundai 149,985 2004 2007 Navion Roviken Shuttle tanker Samsung 152,244 2006 2007 Kemira Gas LPG carrier Boelwerf 12,030 1995 2013 Gothenburg Vlaanderen Emse Navion Hispania Shuttle tanker A.E.S.A. 126,183 1999 2002 Kilimanjaro Spirit Aframax tanker Daewoo 115,048 2004 2004 Navion Marita Nordic Marita; Navion Shuttle tanker Samsung 103,895 1999 2001 Kimberly Texaco North America; VLCC Howaldtswerke 209,407 1969 1979 1982 Navion Norvegia Hanne Knutsen Shuttle tanker A.E.S.A. 130,596 1995 2002 Olympic Sky Kiel Navion Oceania Shuttle tanker A.E.S.A. 126,355 1999 2002 Kiowa Spirit Bona Valiant Aframax tanker Samsung 113,395 1999 1999 Navion Oslo Bertora Shuttle tanker Samsung 100,257 2001 2007 Kisuca (2) Albacore Motor yacht Cantieri, Venice 1004 grt 1966 1984 1992 Sold to Italian buyer; renamed Amazon Express Navion Saga Polysaga FSO Mitsui S.B. 149,000 1991 2002 Converted to FSO Crustamar Amazon Express Navion Savonita Savonita; Stena Savonita; Shuttle tanker Tsuneishi 108,153 1992 2001 2012 Nordic Savonita Koa Spirit Bona Verity Aframax tanker Samsung 113,333 1999 1999 Navion Scandia Shuttle tanker A.E.S.A. 126,749 1998 2002 Kobe Spirit Product tanker Onomichi 39,520 1989 1989 1993 Sold to Aerial Shipping, Cyprus; renamed Fulmar Navion Scotia Vinga Aframax tanker Sanoyas Hishino 95,029 1993 2002 2011 Renamed Scotia Spirit in 2006 Koyagi Spirit Aframax tanker Mitsubishi 95,987 1989 1989 2005 Sold to Centrofin; renamedCerigo ; subsequently converted to semi-submersible heavylift vessel Zhen Hua 15 Navion Stavanger Nordic Stavanger Shuttle tanker Samsung 148,729 2003 2003 Koyo Spirit All Star; Panstar 1 Aframax tanker Koyo 102,855 1976 1988 1995 Sold to Giant Shipping, Malta; renamed Posidon Navion Svenita Svenner; Nordic Svenita Shuttle tanker Koyo Dockyard 106,506 1997 2001 2006 Kyeema Spirit Bona Vigour Aframax tanker Samsung 113,357 1999 1999 Navion Torinita Torinit; Nordic Torinita Shuttle tanker Tsuneishi 106,852 1992 2001 2012 Kyushu Spirit Aframax tanker Mitsubishi 95,562 1991 1991 2004 Sold to Fairdeal Group; renamed Fair Spirit Nordic Akarita Akarita; Stena Akarita Shuttle tanker Tsuneishi 107,223 1991 2001 2012 Renamed Navion Akarita in 2005 Nagasaki Nordic Apollo Euro Spirit; Glyfada Spirit Suezmax tanker Samsung 159,988 2003 2006 Renamed Apollo Spirit Leon Spirit Jahre Trader; Borja Tapias Aframax tanker Split 142,031 1989 2004 2004 Sold; renamed Ancora; subsequent names Songa Ancora; Nordic Brasilia Roviken Shuttle tanker Samsung 151,294 2004 2004 Ancora; Osprey. Now heavylift vessel Nordic Laurita Houston Accord; Nordic Shuttle tanker Tsuneishi 68,139 1981 2001 2006 Sold to FPSOcean; renamed Laurita; converted to FPSO; Leyte Spirit Aframax tanker Onomichi 98,744 1992 1992 2013 Sold Challenger renamed Deep Producer 1 Libramont LPG carrier Daewoo 38,455 2006 2013 Nordic Marita Shuttle tanker Samsung 103,894 1999 2001 Renamed Navion Marita in 2007 Limerick Spirit Large product Hyundai 105,200 2007 2007 Nordic Rio Shuttle tanker Samsung 151,294 2004 2004 tanker Nordic Sarita Sarita Shuttle tanker Daewoo 124,472 1986 2001 Renamed Rita Knutsen in 2005; later Rita; converted to Lobito LNG carrier Samsung 160,400* 2011 2011 FPSO; renamed Falcon Spirit Luzon Spirit Aframax tanker Onomichi 98,629 1992 1992 2012 Sold Nordic Savonita Savonita; Stena Savonita Shuttle tanker Tsuneishi 108,153 1992 2001 Renamed Navion Savonita in 2007 Nordic Spirit Storviken Shuttle tanker Samsung 151,294 2001 2002

194 Teekay: the first 40 years Teekay: the first 40 years 195 Joined Joined Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks fleet fleet Nordic Svenita Svenner Shuttle tanker Koyo 106,506 1997 2001 2006 Renamed Navion Svenita Sabine Spirit Ocean Leader; Bona Shimmer Shuttle tanker Mitsubishi 84,841 1989 1999 2005 Sold to Tanker Pacific, Singapore; renamedRed Sea Nordic Torinita Torinita Shuttle tanker Tsuneishi 106,597 1992 2001 Renamed Navion Torinita in 2005 Samar Spirit Aframax tanker Onomichi 98,640 1992 1992 2011 Nordic Troll Jaguar; Skaustream; Petrotroll Shuttle tanker Tsuneishi 67,436 1987 2001 2005 Sold to Rubicon Offshore International, Singapore; renamed Samba Spirit Suezmax shuttle Samsung 154,000 2013 2013 Rubicon Intrepid tanker Nordic Trym Osco Beduin; Primo; Petrotrym Shuttle tanker Dalian 80,745 1987 2001 2007 Sold to Rubicon Offshore International, Singapore; renamed Santiago Spirit Suezmax tanker Daewoo 159,500 2005 2005 2005 Sold to Nordic American before delivery to Teekay; renamed Rubicon Vantage Nordic Freedom Nordic Yukon Wilomi Yukon; Wilma Yukon Shuttle tanker Dalian 98,001 1992 2001 Renamed Basker Spirit in 2005 Scotia Spirit Vinga; Navion Scotia Aframax tanker Sanoyas Hishino 95,029 1993 2006 2011 Norgas Camilla LPG carrier Taizhou Wuzhou 10,000* 2011 2011 Scotland Vewassa; Philmac Venturer Product tanker MHI nagasaki 40,794 1982 1990 2000 Sold to Dry Tank/Cardiff Marine; renamed Conquistador Norgas Cathinka LPG carrier Taizhou Wuzhou 10,000* 2009 2009 Scott Spirit Shuttle tanker Samsung 106,000 2011 2011 Norgas Pan LPG carrier Taizhou Wuzhou 10,000* 2009 2009 Sebarok Spirit Aframax tanker Imabari 95,649 1993 1993 2011 Norgas Unikum LPG carrier Dingheng Jiangsu 12,000* 2011 2011 Seletar Spirit Pacific Mercury Aframax tanker Koyo 94,998 1988 1998 2004 Sold to Phoenix Energy Navigation; renamed Aonoble; Norgas Vision LPG carrier Dingheng Jiangsu 12,000* 2011 2011 2011 scrapped 2011 in India Oinouissan Spirit Golden Sea Aframax tanker Samho 112,661 2002 2002 2006 Managed by Teekay Greek owners; sold to Libyan owners; Semakau Spirit Seto Breeze; Nssos Amorgos Aframax tanker Koyo 98,731 1988 1998 2007 Sold to FPSOcean; converted to FPSO; renamed Deep renamed Dubai Legend; later Seafalcon Producer 2 Onomichi Spirit Product tanker Onomichi 39,538 1988 1988 1989 Chartered to BP; renamed BP Advocate; subsequent name Senang Spirit Aframax tanker Imabari 95,649 1994 1994 2012 Primar Sentinel Spirit Sentinel Aframax tanker Samsung 104,623 1999 2008 Onozo Spirit Aframax tanker Onomichi 100,020 1990 1990 2005 Sold to Dynacom; renamed Onozo Sentosa Spirit Aframax tanker Imabari 97,163 1989 1989 2004 Sold to Phoenix Energy Navigation; renamed Welsky; Oppama Spirit Atlantic Maru Aframax tanker Sumitomo 90,313 1980 1989 1997 Sold to Lancaster Shipping, Greece; renamed Legaspi subsequent names Pacific Bangoa; PB Phoenix; Erisos; converted to bulk carrier Orkney Spirit Bona Spirit Aframax tanker Mitsui 106,266 1993 1999 2013 Seraya Spirit Aframax tanker Imabari 97,119 1992 1992 2004 Sold to Phoenix Energy Navigation; renamed PB Eagle; Oshima Spirit Diana Prosperity Aframax tanker Oshima 89,735 1976 1987 1995 Sold to Cypriot buyers; renamed Erissos; later Erissos XL, and converted to bulk carrier Skamneli Sevilla Spirit Front Melody; Sandra Tapias Suezmax tanker Astilleros Espana 147,253 1991 2004 2004 Sold to Trijata Maritime, Singapore; renamed Trijata Pacific Spirit Aframax tanker Hyundai 100,020 1988 1988 2004 Sold to Mariene Trust, Liberia; renamed Ce-Pacific Shannon Spirit Eliana; Antares; Ventares; Aframax tanker Stocznia Im 99,335 1987 1999 2003 Sold to V Ships, Norway; renamed Hawaiian Star Palm Monarch Universal Monarch Aframax tanker Mitshui Chiba 89,922 1981 1989 1998 Sold to Stingray Enterprises, Greece; renamed Missouri Bona Ray Komuny Paryskiej Palmerston Ampol Tva Product tanker Inchon 37,700 1990 1997 2010 Sold to Bahraini interests; renamed Bramco 1 Shenlong Spirit Suezmax tanker Bohai 159,000 2009 2009 Palmstar Cherry Aframax tanker Onomichi 100,024 1990 1990 2005 Sold to Dynacom; renamed Star Cherry; later names Cherry; Shetland Spirit Bona Sailor Aframax tanker Mitsui 106,263 1994 1999 2008 Sold to Elmira Tankers, Greece; renamed Ocean Elegance Arrow Shilla Spirit Aframax tanker Hyundai 106,677 1990 1990 2004 Sold to Centrafin, Liberia; renamedCe-Shilla Palmstar Lotus Aframax tanker Onomichi 100,314 1991 1991 2005 Sold to Dynacom; renamed Lotus; later sold and converted to bulk carrier; renamed Tien Sheng 7; then Tien Sheng 17 Shoshone Spirit Aframax tanker 3-MAJ 106,684 1989 1989 1992 Sold to Metrofin; renamedBetatank Palmstar Orchid Aframax tanker Onomichi 100,047 1989 1989 2005 Sold to Dynacom; renamed Star Orchid; later name Orchid Singapore Spirit Galaxy River Aframax tanker Imabari 97,300 1987 1996 2003 Sold to Great Eastern Shipping, India; renamed Jag Laila Palmstar Poppy Aframax tanker Onomichi 100,031 1990 1990 2005 Sold to Dynacom; renamed Poppy; later sold and converted Sombeke BW Sombeke LPG carrier Daewoo 38,447 2006 2013 to ore carrier; renamed Iron Monger 3 Sotra Spirit Ventina; Bona Robin Aframax tanker Hyundai 95,371 1995 1999 2010 Sold to E.N.E. Kassos I; renamed Kassos Palmstar Rose Aframax tanker Onomichi 100,202 1990 1990 2005 Sold to Dynacom; renamed Rose; later Soyo LNG carrier Samsung 160,400 2011 2011 sold and converted to ore carrier; renamed Iron Monger 6 SPT Explorer Aframax tanker Tsuneishi 106,000 2008 2008 Palmstar Thistle Aframax tanker Onomichi 100,289 1991 1991 2005 Sold to Dynacom; renamed Thistle; later sold and converted SPT Navigator Aframax tanker Tsuneishi 106,000 2008 2008 to ore carrier; renamed Iron Monger 5 Stena Alexita Shuttle tanker Tsuneishi 126,955 1998 2001 Pattani Spirit Namsan Spirit FSO Hyundai 113,805 1988 2004 Converted to FSO 2004 Stena Natalita Shuttle tanker Tsuneishi 108,073 2001 2001 Peary Spirit Shuttle tanker Samsung 106,000 2011 2011 Stena Sirita Shuttle tanker Hashihama 126,873 1999 2001 Petroatlantic Shuttle tanker Samsung 92,968 2003 2003 Stena Spirit Shuttle tanker Samsung 151,293 2001 2001 Petrojarl Banff FPSO Hyundai 95,000 1998 2007 Sudong Spirit Full Moon River Aframax tanker Koyo 98,214 1987 1997 2003 Sold to Great Eastern Shipping; renamed Jag Lamha Petrojarl Cidade Archon FPSO Jurong 80,000 1985 2010 Began operating 2013 de Itajai Summit Spirit Suezmax tanker Samsung 160,451 2008 2008 Petrojarl Cidade St Michaelis; Che Guevara FPSO Remontowa 25,000 1981 2007 Began operating 2008 Sun Aronia Penelope of York Aframax tanker Kanasashi 87,801 1976 1989 1995 Sold; renamed Victoria l; later renamed Victo; scrapped de Rio das Ostras Sunrise Sunrise; Sunrise Trader Aframax tanker Koyo 110,488 1975 1986 1994 Sold to Tsakos Shipping, Cyprus; renamed Cerro Petrojarl Foinaven Anadyr FPSO Turku 140,000 1998 2006 Tandara Spirit Helcion Product tanker SPP 50,760 2008 2011 Petrojarl 1 FPSO Nippon Kokan 46,000 1986 2006 Tangguh Hiri LNG carrier Hyundai 151,885* 2008 2008 Petrojarl Varg Varg; 15/12B Varg FPSO Fels 57,000 1998 2006 Tangguh Sago LNG carrier Hyundai Samho 155,000* 2009 2009 Petronordic Shuttle tanker Samsung 92,995 2002 2002 Tasman Spirit Mabini; Kenko Maru+B227 Aframax tanker Onomichi 87,588 1979 1990 2002 Sold to Polembros; wrecked at Karachi under new owners, Petroskald Oktella Shuttle tanker Uddevallava 39,750 1982 2001 2004 Sold to Dukkar Engineering, Russia; renamed Severomorsk; July 27, 2003 Rvet scrapped later Teekay Arawak Petro Bordeaux Water barge Cant. Naviera 5,012 1971 1982 1987 Sold to Unitrans, Paraguay; renamed Yelena Pinewell Spirit Methoni; Merida Aframax tanker Oshima 63,797 1981 1989 1993 Sold to Meandros Shipping, Cyprus; renamed Vergina; Teekay Fair August Thyssen; El Lobo; OBO Bremer Vulkan 75,000 1981 1999 2003 Sold to Norbulk, Liberia; renamed Swift Fair subsequent name San Sebastian Ballenita; Bona Fair Pinnacle Spirit Suezmax tanker Samsung 160,389 2008 2008 Teekay Favour Hoegh Favour; Bona Favour OBO Howaldtswerke 82,462 1981 1999 Renamed Favour Spirit in 2003 Pioneer Spirit (1) Panamax bulker Koyo 61,931 1981 1981 1982 Sold; subequent names Nichigo Maru; Esperanza Marina; Kiel Kimisis; Evangelistra; Electra; Panamax Otter Teekay Foam Hoegh Foam; Bona Foam OBO Hyundai 78,532 1981 1999 Renamed Foam Spirit in 2003 Pioneer Spirit (2) Aframax tanker Hyundai 115,351 1988 1988 Converted to FSO; renamed Karratha Spirit in 2002 Teekay Fortuna Hoegh Fortuna; Ambia OBO Hyundai 78,532 1982 1999 Renamed Fortuna Spirit in 2003 Piranema Spirit Sevan Piranema FPSO Yantai Raffles 30,000 2007 2011 Fortuna; Hoegh Fortuna Polar Spirit Polar Eagle LNG carrier Ihi 87,305* 1993 2007 Teekay Forum Hoegh Forum; Bona Forum OBO Hyundai 78,395 1983 1999 Renamed Forum Spirit in 2003 Poul Spirit Aframax tanker Onomichi 105,351 1995 1995 2013 Teekay Fountain Hoegh Fountain; Bona OBO Hyundai 78,532 1982 1999 Renamed Fountain Spirit in 2003 Fountain Rainier Spirit Product tanker Daewoo 114,880 2005 2005 2009 Sold to Almi Tankers, Greece; renamed Almi Star Teekay Freighter Siboseven; Hoegh Freighter; OBO Bremer Vulkan 75,395 1982 1999 Renamed Freighter Spirit in 2003 Randgrid Heidrun Shuttle tanker Samsung 124,502 1995 2010 Co-owned vessel that became part of a three-ship joint Bona Freighter venture with Teekay. Teekay Fulmar Hoegh Fulmar; Bona Fulmar OBO Hyundai 75,395 1983 1999 2003 Sold to TMT Company, Panama; renamed Mommy Duckling Rita Sarita; Nordic Sarita; Rita Shuttle tanker Daewoo 124,472 1986 2010 Converted to FSO; renamed Falcon Spirit in 2009 Knutsen Teekay Hunter Containership (480 Zongha 8,727 1986 1986 1987 Sold to Dongnama Shipping; renamed Busan Glory teu)

196 Teekay: the first 40 years Teekay: the first 40 years 197 Joined Ship’s name Former name/s Type of ship Yard Dwt/*m3 Built Sold Remarks fleet Appendix 4 Teekay Spirit Aframax tanker Onomichi 100,336 1991 1991 2005 Sold to Dynacom, Liberia; renamed Spirit II Teekay Vigour Prosperity Queen; BP Vigour Aframax tanker Koyo 87,275 1975 1988 1996 Sold to Glasgow Shipping, Malta; renamed Vigour Teekay Vision Hellespont Glory; BP Vision Aframax tanker Oshima 89,735 1975 1988 1998 Sold to Maritime Wanderer, Cyprus; renamed Arab Wanderer Teesta Spirit Athenian Harmony; Janette Product tanker Hyundai 46,921 2004 2007 Teide Spirit Suezmax tanker Daewoo 149,999 2004 2004 Chronology Temse Helga; BW Helga LPG carrier Kawasaki Sakaida 35,058 1994 2013 Tenerife Spirit Bosco Tapias Suezmax tanker Daewoo 149,999 2000 2004 Tianlong Spirit Suezmax tanker Bohai 159,000 2009 2009 Tokyo Spirit Product tanker Onomichi 39,545 1989 1989 1991 Sold to Leacroft Shipping, Gibraltar; renamed Capetan Costis; sold to Tomasos Brothers; renamed Capitan Costis Toledo Spirit Suezmax tanker Daewoo 159,342 2005 2005 Torben Spirit Aframax tanker Onomichi 98,622 1994 1994 2012 Sold; renamed Piri Torres Spirit Sanko Pioneer Aframax tanker Namura 96,144 1990 1997 2005 Sold to Zhen Hua 15 Shipping, St Vincent; convereted to semi-submersible heavylift ship; renamed Zhen Hua 15; sold; renamed Lan Jing Touraine Antwerpen Venture LPG carrier Nagasaki Hitachi, 39,270 1996 2013 Shubishi Ulsan Spirit Aframax tanker Hyundai 106,679 1990 1990 2004 Sold to Centrafin; renamedCe-Ulsan Vancouver Spirit OBO Hyundai 102,100 1992 1992 2004 Sold to Barclay Shipping; renamed Allegro II; sold and renamed Bic Clare; scrapped in India 2012 1911 January 6: Helga Hansen is born. 1965 July 12: Kimberly is born to Torben 1976 January: Torben charters White Peony, Victoria Spirit OBO Hyundai 103,200 1993 1993 2004 Sold to Barclay Shipping; renamed Amore Moi; sold and renamed Bic Irini; scrapped in India 2012 1913 August 20: Poul Gunnar Karlshøj is and Gail Karlshoej. the first tanker on charter for his Voyageur Spirit Sevan Voyageur FPSO Yangtau Raffels 30,000 2007 2011 Began operating 2012 born. 1967 June 6: Six-Day War between Israel company. Keppel Verolme 1938 October 30: Poul Karlshøj marries and Arab states begins, closing the 1977 August 1: Jim Hood joins Teekay Woodside LNG carrier Samsung 165,500* 2010 2012 Donaldson Helga Hansen. Suez Canal, a factor that led to as operations manager in the Long Yamato Spirit Sanko Prestige Aframax tanker Kanasashi 86,969 1976 1985 1994 Sold to Faith Maritime, Malta; renamed Daphne l 1939 September 3: Second World War radical changes in tanker design Beach office. Yamuna Spirit Dakota Suezmax tanker Hyundai 159,435 2002 2007 begins. and operations. 1977 Torben marries Cathy Stuck. Zenith Spirit Suezmax tanker Samsung 160,510 2009 2009 1940 April 9: German forces invade Den- 1968 Daniel Ludwig’s Universe Kuwait 1978 Torben and Cathy are divorced. Sources: www.shipspotting.com / www.fleetmon.com / www.marinetraffic.com / Lloyd’s Register / www.teekay.com / unpublished Teekay documents. mark. (332,092 deadweight) is the first 1979 The 564,763-deadweight, 460-metre 1940 July 12: Axel Mogens is born to Poul tanker with a cargo capacity of over tanker Seawise Giant (later Jahre Viking), and Helga Karlshøj. 300,000 tons. enters service to become the largest 1941 November 23: Jens Torben is born to 1968 May 11: Susan is born to Torben and moving object ever built. Newbuildings Poul and Helga Karlshøj. Gail Karlshoej. 1979 Torben takes delivery of his first VLCC, 1944 July 8: Helga Karlshøj, wife of Poul 1970 Torben and Gail are divorced. Kimberly (ex-Olympic Sky) in a short- and mother of Axel and Torben, dies. The first Norwegian North Sea oilfield, lived venture into the VLCC market. Ship’s Name Type Of Ship Yard Dwt/*M3 Built 1971 1945 May 4: German forces occupying Ekofisk, begins production. 1979 Torben forms Viking Star Shipping H1250 – VLCC VLCC Waigaoqiao 319,000 2013 Denmark surrender. 1972 Torben resigns from Stolt-Nielsen. Inc. as a shipowning company. HHIC Hull P0100 LPG carrier Hyundai 38,000 2015 1947 August 6: Poul marries Esther Larsen; 1973 May: Torben begins his shipping 1979 Captain James (Jim) Hood joins Teekay HHIC Hull P0101 LPG carrier Hyundai 38,000 2015 from this marriage, six children are operation in New York by founding as the head of operations as the char- HHIC Hull P0102 LPG carrier Hyundai 38,000 2016 born: Lis Johanne, Tom Rasmus, Ruth the Teekay Shipping Group, incor- tered fleet expands to 18 tankers. HHIC Hull P0103 LPG carrier Hyundai 38,000 2016 Asta, Knud Age, Inger Margarethe, porated in Liberia. 1979 Torben moves his office to the HMD Hull 8121 LPG carrier Hyundai 38,000 2014 and Laila. 1973 October 6: The Yom Kippur War Bahamas. HMD Hull 8122 LPG carrier Hyundai 38,000 2014 1962 Torben leaves Denmark to begin a breaks out between Israel and the 1984 Torben buys Amazon Express, and sends HMD Hull 8123 LPG carrier Hyundai 38,000 2014 new life in the United States; the Arab states, raising tanker rates and her to Norway to be refitted as his HMD Hull 8124 LPG carrier Hyundai 38,000 2015 spelling of his surname changes to delaying the reopening of the Suez private yacht, Kisuca (2). Hull 2038 Suezmax shuttle tanker Samsung 154,000 2013 Karlshoej. Canal. 1985 Torben buys Golden Gate Sun and Hull 2039 Suezmax shuttle tanker Samsung 154,000 2013 1963 Torben begins work at Sun Coast 1975 Torben establishes Palm Shipping Inc. retains her name. She is the first ship Hull 2040 Suezmax shuttle tanker Samsung 154,000 2013 Petroleum Company, under Gerry to charter tankers for the trans-Pacific to be owned and managed by Teekay Knarr Spirit FPSO Samsung 63,000 2014 Plato. movement of crude oil parcels. with her crew recruited and employed LNG carrier LNG carrier Daewoo 173,400* 2016 1963 August: Torben meets Shigeru Matsui 1975 The Suez Canal reopens to traffic; as directly by Teekay. LNG carrier LNG carrier Daewoo 173,400 2016 and forms a lasting friendship that it has been deepened and widened, 1985 May 1: Bjorn Moller is employed by S-1672 LR2 STX 113,000 2015 will assist Torben when he starts his larger tankers are able to transit the Teekay as chartering manager, and S-1673 LR2 STX 113,000 2015 own shipping company. canal, influencing tanker design and begins work in a shared office in S-1674 LR2 STX 113,000 2016 1964 July 10: Torben marries Gail Downing. changing global tanker trade routes. Vedbaek, north of Copenhagen. S-1675 LR2 STX 113,000 2016

198 Teekay: the first 40 years Teekay: the first 40 years 199 1986 February: Torben’s good friend Arne 1992 September 19: Nagasaki Spirit collides 1999 October: Teekay takes over Bona 2008 The so-called credit crunch causes the Naess introduces him to Den norske with the containership Ocean Blessing in Shipping, Norway, and in the process collapse of several major banks and Bank, which would later finance many the Straits of Malacca. Both ships catch adds ten Panamax OBO ships and 15 depresses the shipping markets. of Teekay’s ships. fire and 22 Teekay crew members, relatively modern Aframax tankers to 2009 To counteract the effects of the 1988 Frontier Spirit, Teekay’s first newbuild- including the master, are lost. its fleet. collapse of the shipping markets, Tee- ing, is completed. 1992 October 3: Torben dies unexpectedly at 1999 December 12: The tanker Erika belong- kay launches a three-year strategic plan 1989 March 24: The VLCC Exxon Valdez his house in Palm Springs, California. ing to an Italian owner breaks in half with the slogan ‘Survive and Thrive’. grounds in Prince William Sound, 1992 Axel Karlshoej takes over the company and sinks off the French coast. The sub- 2011 March 11: An earthquake and an Alaska, resulting in a major oil spill as chairman of the board that Torben sequent oil pollution along the coast unprecedented tsunami hit Japan, caus- that has very serious implications for had formed to assist him prior to his – and the accident involving the tanker ing extensive flooding, and indir-ectly the United States tanker sector, lead- death. Prestige in November 2001 – brings into causing a nuclear power plant disaster. ing Torben to reduce his company’s 1992 Captain Jim Hood becomes chief execu- force measures to phase out all single- 2011 March 31: Bjorn Moller retires as presi- involvement in the United States oil tive officer of Teekay. hull tankers. dent and CEO of Teekay. trade. 1994 Teekay withdraws its first attempt to 2001 September 11: Hijacked aircraft crash 2011 April 1: Peter Evensen becomes presi- 1989 The Aframax tanker Palmstar Orchid is offer shares after the New York Stock into the World Trade Centre in New dent and CEO of Teekay. the first of 30 vessels to be delivered Exchange experiences a slump. York, the Pentagon in Washington, 2011 May: Soyo, the first of four large LNG over the following six years. The 1995 July 19: Teekay Shipping Corporation and a field in Pennsylvania, sparking carriers, is commissioned in a joint group’s revenues total $200 million. is admitted to the New York Stock uncertainty and leading to the UN-led venture operation for the Angolan gas 1990 June: Oshima Spirit collides with Exchange, an event that raises much- invasion of Afghanistan, the US-led export market. another ship off Sri Lanka. needed capital (about $139 million) to invasion of Iraq, and also the introduc- 2011 The Libyan civil war causes a short- 1990 August 2: Iraq invades Kuwait, sparking expand at a time when tanker markets tion of the International Ship and Port term spike in tanker rates. a surge in tanker rates, and ultimately are strengthening. Security Code in 2004. 2011 October: Teekay buys three FPSOs with leading to the UN-led invasion of Iraq 1997 The onset of the Asian economic crisis 2001 Teekay celebrates a decade in Van- their respective contracts from Sevan in 1991. cripples the growth of several of the couver by sponsoring the J. Torben Marine, Norway; Teekay also acquires 1990 The draconian Oil Pollution Act, Asian ‘Tiger’ economies, inhibiting Karlshoej Gallery in the local Maritime a share in the recapitalised company, African Spirit and Australian Spirit trans-shipping cargo. Teekay Collection which stemmed from the Exxon Valdez growth in global shipping, including Museum. and finances the completion of one of accident, is introduced by the United the tanker markets. 2002 Teekay takes over Ugland Nordic Ship- the FPSOs. States. It is the extension of existing 1998 March 31: Captain Jim Hood retires ping, Norway, adding to its fleet the carriers for BHP Australia, increasing carriers, Tangguh Hiri and Tangguh Sago, 2011 October 5: Simultaneous naming strict US liability laws pertaining to oil as president and chief executive of Ugland Shuttle as well as conventional Teekay’s Australian profile. As part of to transport Indonesian gas. ceremonies of three shuttle tankers in pollution incidents, and allows for the Teekay. tankers. the deal, Teekay begins to operate 2007 Teekay enters into a second joint ven- Stavanger, Norway, draw international criminalisation of seafarers or others 1998 April 1: Bjorn Moller becomes president 2002 Teekay takes over Navion Shipping, the tugs at Hay Point and Port Hedland, ture involving the shipment of Qatari attention. responsible for pollution, even in the and chief executive officer of Teekay. shipping arm of the Norwegian state- Australia. gas, leading to the construction of four 2011 November: Teekay’s largest single pro- case of a genuine accident. This causes 1998 Sean Day joins the Teekay board. owned oil logistics organisation, and 2004 Teekay acquires the Spanish gas tanker 214,000-cubic-metre, 315-metre LNG ject, the construction of the FPSO Knarr, Torben Karlshoej to decide that his 1998 Bjorn Moller unveils his BHAG, which thereby acquires a fleet of tankers and company Naviera F. Tapias SA, provid- ships, Al Huwaila, Al Kharsaah, Al Shamal, commences. tankers would not trade to the United sets out goals for the company to meet. significant long-term contracts for the ing the Teekay fleet with an additional and Al Khuwair. The ships total over $1 2011 Teekay acquires six LNG carriers from States. He later rescinds that decision. 1999 Teekay buys Caltex’s four-ship product movement of much of Norway’s crude nine Suezmax tankers and four gas billion in value when delivered in 2008. the A.P. Moller Group. 1991 January: First Gulf War begins. tanker fleet, operating in Australia, and oil and oil products. carriers, a move giving Teekay a firm 2007 Teekay and the Danish product tanker 2012 May: Teekay’s Woodside Donaldson loads 1991 February 10: Mendana Spirit collides charters the ships back on long-term 2002 The TK Foundation is established foothold in the LNG carrier market. operator Torm make a combined offer the first export cargo from Western with the Turkish ore carrier C. Eregli off contract to Caltex. to assist deserving maritime-related 2005 First daughter company, Teekay LNG for the OMI fleet. OMI accepts the offer, Australia’s newly opened Pluto LNG Yemen, and the ore carrier sinks. 1999 Teekay bids successfully for the opera- projects. Partners L.P., is established and listed and Teekay adds the OMI Suezmax Terminal. 1991 November 15: Torben moves the tion of an FSO vessel for Apache Energy 2003 February 1: Alliance Spirit is blown on the New York Stock Exchange. tankers to its fleet and Torm takes the 2012 Teekay and Hong Kong’s Anglo-Eastern company’s head office to Vancouver, on the Stag oilfield off Australia’s ashore during a gale-force wind at 2005 Sean Day elected as commodore of the product fleet. In one stroke, Teekay Ship Management form a strategic Canada. north-western coast. As part of this Skikda, Algeria, and becomes a con- Connecticut Maritime Association. becomes the largest operator of Suez- partnership to create a joint ship man- 1991 December: Torben enlists the help of project, Frontier Spirit is converted to structive total loss. 2006 Teekay takes over Petrojarl to enter the max tankers. agement company. Art Coady to structure his finances into become Teekay’s first FPSO, and is 2003 March: The United States-led invasion FPSO sector. 2007 Daughter companies Teekay Tankers 2012 Teekay Shipping Australia Pty Ltd trusts. renamed Dampier Spirit. of Iraq begins. 2006 Al Marrouna, the first of three and Teekay Offshore are established and the Dutch company KOTUG 1992 April 11: Torben marries Jung-ja ‘Aiko’ 1999 Faced with surplus oil on the global 2003 May 1: Peter Evensen joins Teekay; 149,539-cubic-metre LNG carriers, is and listed on the New York Stock International announce the formation Ko in Vancouver. markets, OPEC reduces production and he later becomes president and chief commissioned in a joint venture with Exchange. of a new joint venture company, KT 1992 July: Teekay’s financial crisis deepens the tanker market falls sharply. executive officer of the company. Qatar Gas. 2008 April: Teekay’s first FPSO, Cidade de Maritime Services Australia Pty Ltd, to as instalments become due on twelve 1999 Axel Karlshoej retires as chairman of 2003 Teekay tenders for and wins the 2007 Teekay takes up an offer to purchase Rio das Ostras, begins operating off the pursue new business opportunities in tankers ordered from shipyards. Teekay and is replaced by Sean Day. contract to manage and crew four LNG a 70 per cent share in two large LNG Brazilian coast. the Australian towage market. n

200 Teekay: the first 40 years Teekay: the first 40 years 201 3 Appendix 5 Vessel Type Description Dwt/*M Length Beam Draught Profile LNG CARRIER A vessel that is designed to carry liquefied 214,198m3 315m 50m 12m natural gas at a temperature of about –163 degrees Celsius. Ship Types and Glossary

LPG CARRIER A vessel that is designed to carry liquefied 10,000 m3 110m 21m 8m petroleum gas at a temperature of about The notes and profiles below are representative of types of ships in the Teekay fleet. –55 degrees Celsius. Each profile is simplified and may not necessarily resemble a vessel of the particular type in the Teekay fleet. Figures showing the approximate dimensions have been rounded off. Some vessels of the type may have larger or smaller dimensions. OBO* Oil/Bulk Ore Carrier. A vessel designed to 103,203 244m 42m 15m carry crude oil or iron ore.

Vessel Type Description Dwt/*M3 Length Beam Draught Profile PRODUCT TANKER A tanker designed to carry refined oil 105,200 243m 42m 9m AFRAMAX TANKER A tanker that is usually used on shorter 98,622 245m 41m 14m products such as gasoline, kerosene, trades to move crude oil. Even when fully diesel, and liquid chemicals. laden, these tankers can pass through the Panama and Suez Canals. A typical Aframax tanker carries about 700,000 barrels of oil.

SHUTTLE TANKER A tanker that loads crude oil from an 106,000 249m 44m 14m offshore storage facility (via specialised equipment on the fo’c’sle) and carries the oil to an oil terminal ashore for refining. FPSO (conventional) Floating, Production, Storage and Offtake 80,000 225m 32m 14m Because of the areas in which many of vessel. A vessel that is directly connected these vessels operate, they are specially (via a coupling in the bow) to a vertical designed for harsh weather operations. pipe through which crude oil is drawn from below the seabed. Mud, water and some other impurities are removed from the oil, which is then trans-shipped to a SUEZMAX TANKER A crude oil tanker that can pass through 159,000 274m 48m 14m shuttle tanker for shipment to a shoreside the Suez Canal fully laden, but not oil terminal for refining, The vessel ‘vanes’ through the original locks in the Panama around the bow connection according to Canal. A typical Suezmax tanker carries changes in the weather and/or current. about 1,000,000 barrels of oil or more, depending on the actual size of the ship. FPSO (cylindrical) A cylindrical vessel that is directly 55,000t 66m 60m >18m connected to a vertical pipe through displacement diameter which crude oil is drawn from below at the seabed. Mud, water and some other 18m draught impurities are removed from the oil, VLCC Very Large Crude Carrier. A crude oil 319,000 300m 55m 20m which is then trans-shipped to a shuttle tanker that is too large to pass through approx. approx. approx. approx. tanker for shipment to a shoreside oil either the Panama or Suez Canals terminal for refining, The cylindrical when fully laden. A typical VLCC carries design nullifies the ‘vaning effect’ that about 2,000,000 barrels of oil or more, occurs in conventional FPSOs according to depending on the actual size of the ship. changes in weather and/or current.

FSO Floating, Storage and Offtake vessel. A 106,668 245m 43m 15m vessel (usually a converted tanker) that is used as a floating storage facility for crude ULCC* Ultra Large Crude Carrier. A large crude oil >320,000 >320m 60m >20m oil. The Teekay FSOs are based at various tanker that is too large to pass through offshore oilfields, and store the oil until it the Panama or Suez Canals fully laden, is trans-shipped to a tanker that will take and is larger than a VLCC. A typical ULCC it to an oil refinery ashore for refining. carries more than 3,000,000 barrels of oil.

*No vessel of this class in the current Teekay fleet. The OBO design is now obsolete.

202 Teekay: the first 40 years Teekay: the first 40 years 203 120˚ 80˚ 40˚ 0˚ 40˚ 80˚ 120˚ 160˚

Appendix 6 Laptev Sea Beaufor t East Sea Baffin Bay Kara Sea Siberian Barents Sea Sea

it D a tr a S Typical Areas v rk i a Arctic Circle s m S n t e r D Norwegian Sea a it of Operation See inset map Hudson Bay

a Nor th e Gulf of S ic Sea of Sea lt Alaska B a Okhotsk The map and its inserts show the position of each Teekay-operated vessel on one day. In some cases, there may be a time lapse between the position shown and the ship’s actual position. C a Aral Therefore, although the ships’ positions are s Sea p Black Sea i based on those shown on the Fleet at Work a n

map on www.teekay.com and, for ships not Sea of S 40˚ e Japan shown on that map, on the positions given in a NOR TH www.marinetraffic.com, all positions should be regarded as approximate. ATLANTIC Yellow N O R W E G I A N Sea S E A OCEAN

8° 0° 8° East China 0 500 Miles Gulf of Sea 0 500 Kilometres SWEDEN Tropic of Cancer Mexico

6 NORWAY 58° SHETLAND IS. P h i l HEBRIDES C South i a p ORKNEY IS. ri bb Bay of China p 5 ea i n S n ea e Stavanger Bengal Sea

4 S Vänern e SCOTLAND Aberdeen 3 a k 2 rra ge Ska NORTHERN 1 IRELAND C P I E NORTH Öland

N T Isle of N L

IRELAND Man I SEA A

N DENMARK

B E S Gulf of 0˚ UNITEDSevern KINGDOM Guinea

WALES ENGLAND E l b e 50° Thames NETHERLANDS INDIAN Meuse BELGIUM ENGLISH CHANNEL Rhine l O d r a PA CIFIC e OCEAN SOUTH n GERMANY See inset map n Seine a LUXEMBOURG OCEAN h ATLANTIC C Coral Sea CZECH e REPUBLIC u q OCEAN i b 0 1000 2000 Miles m a Sierra Leone z Basin o 0˚ 0 1000 2000 Kilometres Tropic of Capricorn M

A m a z o n

BRAZIL Shuttle Tanker Aframax Tanker Product Tanker P e Aracuja r u 7 LNG Tanker Suezmax Tanker LPG Tanker -

C

h i

c FSO Tasman l 20˚ e

40i ˚ Sea

T

t r 1 FPSO Petrojarl Banff 6 FPSO Petrojarl Foinaven

e Rio de n n Janeiro

c 2 FPSO Hummingbird Spirit 7 FPSO Piranema Spirit

8 a h

l 0 1000 2000 3000 4000 Miles 3 FPSO Voyageur Spirit 8 t FPSO Petrojarl Cidade P a r a n á 9 A 4 FPSO Petrojarl Varg de Rio das Ostras SOUTH - 0 1000 2000 3000 4000 5000 6000 Kilometres A TLANTIC 9 FPSO Cidade de Itajai d 5 FPSO Petrojarl 1 OCEAN i 40˚ M

Argentine Basin 204 Teekay: the first 40 years Teekay: the first 40 years 205 C. Eregli (Turkish ore carrier) 52 Deepwater Horizon 154 Filipino fishermen rescued 98, 99 Chan, Bruce 136, 138, 188 De La Cruz, Chief Cook Honorato 167 Filipino seafarers 87, 108–109 chartering business 32–34, 36, 60, 120–121, 150 Delhovedgaard xv, 17, 20, 22, 25 Finance and Accounting Department 189 charter rates 30, 32–34, 36–37, 43–45, 59, 66, Denmark map showing farms 25 financial crisis 65, 66–69, 70, 71–73, 85, 88. see 107, 112, 130, 148, 153–154, 188 Den norske Bank (DnB) 69, 71, 72, 119 also economic crises long-term fixed rate 89, 103, 149, 153, 176, Diana Prosperity. see Oshima Spirit Fjell, Olav 117 Index 179, 180, 182 Dingman, Michael 89, 91 fleet list 192–198

charters long-term 170, 181, 184 Dolzikov, Capt. Oleg xv, 100, 174 Fleet Operations Department 188–189 Chevron 170 Dortyol Pipeline 59 fleet size 85, 88, 89, 93–94, 136, 139, 145 Teekay ships mentioned in the text are included in the index. For a complete Fleet List see pages 192–198. China Express 44, 193 double-hulled vessels 40, 53, 61, 78, 99, 122, 130 floating production, storage and offtake vessels. Page numbers in italics indicate illustrations. Chinese industrialisation 125, 129–130, 148 double-skinned vessels 107, 130 see FPSO vessels Chinese shipbuilding 71, 129–130, 148 Downing, Gail. see Karlshoej, Gail floating storage vessels 135, 149 chronology of the company 199–201 drug and alcohol testing 53 Flores, Harry 75 church near Mariehøj 19 dry bulk markets 129 Flying Clipper 50, 60, 193 churchyard at Rohlte 26 Du Moulin, Richard 177 Flying Cloud 50, 193 Clark, Rod 144 dynamic positioning shuttle tankers 181 FPSO Cidade de Itajai 179 Clean Shipping Award 161 dynamic positioning systems 117, 157, 184 FPSO sector 169 Coady, Art xi, xiii, 60, 68, 71, 84, 85, 89, 91 FPSO vessels (conventional) 135, 136, 142–143, A Asea Brown Boveri 183 Blackburne, Ian 144, 182 code names 145 E 145, 154, 156, 179, 180, 202 A2Sea 184 Ash, Judy 101 Blue Funnel Line 35 commodity trap 113 earthquake in Japan (2011) 167, 168 FPSO vessels (cylindrical) 169, 171, 202 Aas, Hans-Petter 119 Asian oil markets 34, 156 Bluewater (company) 102 communication within TK 190 East Asiatic Company 150 Franovic, Chief Engineer Sveto 46 Adams, John 110 Asian Spirit (Suezmax tanker) 114, 192 Bona Shipping 105, 107, 114, 145, 156, 182 competence management system 111 eco-design tankers 181 freight rates 33, 66, 130, 148, 154 affreightment 89, 117 Asiatic Spirit (Aframax tanker) 44, 110, 192 Boyd, Bob 177 Connecticut Maritime Association 163 economic crises 103, 148–149, 153 From Sea to Shore (Lindoe) 146 Aframax tankers 31, 37, 40, 41, 48, 49, 50, 52, 61, Australian Defence Force 178 BP Advocate 196 ConocoPhilips 183 education and training. see training seafarers Frontier Spirit 42, 47, 102, 193 63, 66, 69, 71, 93, 105, 124, 127, 134, 135, 142, Australian Spirit 127, 192, 201 BP Architect 50 containerships 44, 129, 148 efficiency 154, 188, 190, 191 FSO vessels 102, 103, 154, 161, 202 145, 202 Avalon Spirit (ex-Nassau Spirit) 100, 174, 192 BP operating in Indonesia 134 contango pricing 149 Ekofisk oil field 31 Fugelsoe, near Havndal 22, 25, 27 Al Areesh 111, 134, 151, 192 Axel Spirit 118 BP Shipping 82 contracts employees 136–139, 161, 164, 166, 168, 184, 189, Fuji Spirit 128–129, 193 Alaskan oilfields 31–32 Azalea Manning Agency 108 BP ships 50 fixed-rate 179, 180, 188 190, 191 Fukushima Daiichi nuclear power plant 167 Alcoa, Port Elizabeth 65 BP Tangguh 174 long-term 179 Energy Efficiency Design Index 181 alcohol and drug testing 53 B BP Tankers 168 Conventional Profitability Review (CPR) 190 ENI 170 G Al Daayen 134, 192 Bacalando, Chief Engineer 125 Brazilian oilfields 156, 179, 181 Corak, First Engineer Milan 46 Erika (tanker) disaster 107, 130 Galicia Spirit 111, 132, 169, 194 Aleutian Islands 158 Bahaman seafaring and training 35 Brilliancy 41, 87, 192 core purpose statement 99, 103 Erik Spirit 97, 193 Garrett, Phil 53 Al Huwaila 134, 140, 192 BAHR (law firm) 105 Bringing Energy to the World with Teekay Corporate Resources 189 Esso Bremen 46 gasfields 133, 143, 146, 169, 170, 179 Al Kharsaah 134, 140, 192 Balasbas, Maximo 75 Spirit 166 cost-cutting 154 Esther Spirit 134, 193 gas tankers. see LNG carriers Al Khuwair 134, 140, 192 Baltimar Overseas Shipping 70, 71 British Fame 168 countries with TK offices 139 European Shipping Group 175 gas to Japan after tsunami 168 Alliance Spirit 121–122, 192 bamboo raft found 98, 99 Broadsound 178 CPR (Conventional Profitability Review) 190 European Spirit 126–127, 193 gas trade 176–177, 181 Al Marrouna 111, 134, 140, 151, 166, 174, 192 Banic, Capt. Boris xv, 61, 108, 122–123 Bronks, Dick 177 crewing 108–111, 166, 168 Evensen, Peter viii, ix, xii, 130–131, 132, 135, Geiko Maru. see Asiatic Spirit Al Rayyan oilfield 161 Barbara Brask (tanker) 46 Built to Last: Successful Habits of Visionary Companies Croatian shipyards 62 138, 161, 164–165, 175, 182 General Botha 162 Al Shamal 134, 140, 192 Barber, Capt. Roger 52 (Porras & Collins) 99 crude oil spill 146–147 Eversby, Anne 97 general leadership conference (2011) 165 Amazon Express (later Kisuca 2) 56 Bauna accumulations 179 Burton, Chief Officer John 46 Cubal (LNG carrier) 170–171 Eversby, Flemming 97 Ghei, Kanwar Deep 148 Americas Spirit 127, 192, 201 Bayani Spirit 52, 192 customer service 35, 94, 136, 139, 168, 178 exchange rates 66 Gladwin, Chief Engineer Richard 47 ammonia 184 Behn, Eric 113 C cylindrical FPSO vessels 145, 169, 171, 202 EXMAR NV 184 Glendinning, Capt. David 41, 72, 79, 84, 86, Amundsen Spirit xiv, 156, 161, 172, 174, 192 Bellerophon 35 Cabinda Gulf Oil Company 170 Expedo Shipping Corporation 78 102, 122, 131, 133, 136, 138, 168, 188 Anglo-Eastern Ship Management 190 Bensler, Art 138, 139, 187 cadet training 44, 110, 155 D Explorer class shuttle tankers 161, 172 global recession 185 Angolan oil- and gasfields 43, 170 Bergina (ex-Jarena) 117 California Maritime Academy 155 Daewoo shipyard 111, 134, 147, 151, 166–167, ExxonMobil 133 goal-oriented leadership 99, 102, 103, 113, Anthony, Jonathan 190 Bergshav 117 CALM buoy (catenary anchor-leg mooring) 102 184 Exxon Valdez 50, 52, 53, 60, 107 124–125, 150, 153, 166 Antturi, Peter 105, 117, 118, 124, 130 Bernd Leonhardt 46 Caltex Australia 102, 103, 145, 182 Dampier Spirit 102–103, 193 ‘Golden Age of Gas’ 180 Apache Energy 102, 103 Berry, Bill 183 Canaport (St John, New Brunswick) 100 Danish resistance movement 20–21, 23 F Golden Bear 155 Apache Spirit 62, 87, 192 BHAG (Big Hairy Audacious Goal) viii, 99, 102, Cape Horn and the Alliance Spirit 122–123 Dansk-Fransk Shipping Company 27 Falcon Spirit 160–161, 193 Golden Gate Sun (later Golden Gate) 37–38, 40, 41, A.P. Moller Group 143 103, 113, 124–125, 135, 136, 139, 150, 166, carbon black feedstock 65, 158 daughter companies viii, 144, 153, 164, farms 25 52, 168, 194 Arabian Gulf 31, 43, 170 175 Carlisle, Capt. Harry xv, 43, 46, 62, 67, 122 176–177, 183, 187, 189, 190 Faxe-Ladeplads xv, 23, 25 Gospic, Chief Engineer Tomislav 111 Arcadia Spirit 52, 192 BHP Australia 102 Castillo, Second Cook Jeorme 167 Day, Ginny 162, 163 Feder, Morris 88–89, 91 GPS on Teekay vessels 57 Archon (ex-Spectrum) 179 Big Hairy Audacious Goal (BHAG). see BHAG Catalunya Spirit 111, 193 Day, Sean viii, xii, xiii, 90, 93, 94, 113, 117, 118, Fedgaarden 20, 22, 25 Grand Wisdom (later Mihara Spirit) 38–39, 41–42, Arco (Texas City) 65 Bistrup, Palle 36 catenary anchor-leg mooring (CALM) 102 125, 132, 144, 161, 182 Fednav 162 108, 122, 194 areas of operation 93–94, 204–205 Bjohurn 25 Cathay Spirit (ex-White Gardenia) 50–51, 193 Dealmaker of the Year (2011) 184 Filipino cadets 44 graves of Poul and Helga 25, 26

206 Teekay: the first 40 years Teekay: the first 40 years 207 Gray, Chief Engineer Bill 43 International Ship Management Code 65 Karlshoej, Kimberly (Kim) 29, 30, 31, 38, 54, 55, KOTUG International 178 Mariehøj 17, 18, 19 Navios Corporation 90–91, 93, 162 Great Circle route 158 Investigator (research vessel) 178 56, 72–73, 87 KOTUG RotorTug vessels 178 marine energy business 185 Neptune Leo (formerly Nagasaki Spirit) 76, 166 grounding of vessels 33, 52, 60, 69, 107, investing in Teekay 105, 125, 149, 180 Karlshoej, Poul (Axel’s son) 96, 97, 124 Koyagi Spirit 76, 194 Marine Project Development 131 newbuilding projects 187–188 121–123 IOPP (International Oil Pollution Prevention) 53 Karlshoej, Stacey 97, 124 Koyo Dock, Japan 65 market position of Teekay 93, 103, 124, 149 newbuildings 38, 40, 45, 47, 61, 62, 66, 70, 72, Gulf War 62, 65 Iranian events influence oil prices 34 Karlshoej, Susan 29, 31, 54, 79, 87, 155 Koyo Spirit 44–45, 194 MARPOL (International Convention for the 78, 102, 113 Gulley, Sven 113 Iran-Iraq War 40–43, 170 Karlshoej, Torben 21, 24, 30, 31, 32, 55, 56, 74 Kristin field 157 Prevention of Pollution from Ships) 53 New York Stock Exchange listings 88, 89, 90, Gurmita, Third Officer Ridwan Citra 174 Iraqi invasion of Kuwait 52, 54, 59 biography 86, 87 KT Maritime Services Australia 178 Marubeni Corporation 180 176, 177 Gurnee, Anthony (Tony) xv, 63, 65, 66, 84, 89, 91 ISPS (International Ship and Port Security character 26–27, 83 Kwanza Valley 170 Matsui & Company 36 Nielsen, Johanne. see Karlshøj, Johanne (grand- Code) 87, 112 death 73, 77–83 Matsui, Dai 167 mother of Axel & Torben) H early life 16–27, 57 L Matsui, Shigeru xii, xiii, 29, 31, 32, 33–34, 36, Nielsen-Karlshøj, Ane (great grandmother of Axel Hallman, Eric 51, 62, 81 J effect of mother’s death 20, 24–25 Labella, Tony 72 37, 45, 57, 66, 71, 80, 84 & Torben) 17 Hamane Spirit 40, 99, 194 Jack in the Box (sport-fishing boat) 56, 57 funeral and grave 79, 80, 81 Laine, Chief Mate Kari 42 Matterhorn Spirit 147, 148, 195 Nielsen-Karlshøj changed to Karlshøj 17 Hansen, Helga. see Karlshøj, Helga jack-up rig 161 health 68, 72, 79, 84 Lake Maracaibo 65 Mayon Marine Management Inc. 108–109 Nielsen-Karlshøj, Johanne. see Karlshøj, Johanne Hansson, Herborn 115 Jacobsen, Jon Arnt xv, 146, 147 his passion and philosophy xi–xii Langton, Steve 161 Mayon Spirit 46, 61, 122, 195 (grandmother of Axel & Torben) Hapag-Lloyd 75 Jalarashmi 148 job-seeking in America 29–31 Lara, Anelise Quintao 148 McDonald, Donald 44 Nielsen-Karlshøj, Poul (great grandfather of Axel harbour tugs 178 Janson, Peter 144, 183 legacy of leadership vii Larsen, Esther. see Karlshøj, Esther McKechnie, Joseph 177 & Torben) 17 Hatteras sport-fishing boat 56, 57 Japanese Shipbrokers’ Association 36 love of golf 73, 86 Lawes, Bill 177 Meldgaard, Mads xiii, 44, 49, 79 Nielsen-Karlshøj, Poul Gunnar. see Karlshøj, Poul Hawaiian Express 75 Japanese Shipping Exchange 36 love of ships and the sea 23, 25–27, 86, 95 Lawhill Maritime Centre, Simon’s Town 155 Mendana Spirit 52, 148, 195 (father of Axel & Torben) Hayes, Capt. Alan 38–40, 41, 79, 81, 84, 99, 166 Japanese shipping market 33–34, 66 management style xii, 83 Legal and Tax Department 187 Mentzer, Mikael von 177 Nielsen-Karlshøj, Rasmus. see Karlshøj, Rasmus Helga Spirit 135 Japanese shipyards 32, 37, 48, 49, 50, 65, 66, 72 marries Aiko 63 Lemmon, David 177 Mercier, Eileen 128, 144, 182 (formerly Nielsen-Karlshøj) Herras, Carlo 75 Japan Peony. see White Peony moves to America 27 Leroy, A.B. 101 Middle Eastern oil markets 156 Nigerian oilfields 43, 170 Hinkley, Jan 177 Jardines shipping company 162 obituaries 77, 79, 80–83 Leyte Spirit 65, 67, 194 Mihara Spirit (ex Grand Wisdom) 42, 76, 195 Niteroi-based shipyard 142 Hoegh, Leif 105, 113, 125, 182 Jeb Mai Shipping 35 relationship with brothers 25, 96 Libyan War 154 Mint Prosperity 166 non-profit maritime-related organisations 155 Hong Kong’s prosperity 125, 129 Jensen, Stig 70 relationship with Esther 24–25 lifeboat drill 100 Mitsubishi shipyard 48, 74, 75 Norbulk Shipping 50 Hood, Capt. Jim xi, xiii, 34, 35, 36, 46, 49, 53, 67, jet fuel 62 relationship with father 27, 57, 96 Lindoe, John Ove 146 Moller, Bjorn vi, xiii, 44, 49, 53, 55, 60, 63, 79, Nordic Laurita 116, 163, 195 72, 77, 79, 81, 85, 88, 89, 90, 91, 93 Jones Act 60 Karlshoej, Yumi 124 Lindsay, Chief Engineer Robert 130 81, 84, 86, 87, 150–151, 182 Nordic Spirit name change 49 Hood, Karen 74 J.P. Morgan Securities 175 Karlshøj changed to Karlshoej 17 liquefied natural gas. see LNG carriers as CEO viii, ix, xii, 91, 93, 94, 102, 105, 113, Northern Victory 34 Horsfield, First Engineer Nigel 47 JTK. see Karlshoej, Torben Karlshøj, Esther (née Larsen) 24, 57, 81, 134 liquefied petroleum gas (LPG) 188, 203 115, 118, 119, 124, 128, 132, 138, 144, 146, north Pacific crossings 158–159 hose ruptures 146–147 J. Torben Karlshoej Gallery 124 Karlshøj, Helga (née Hansen) 16, 17, 18, 20, 21, LNG carriers 102, 111, 131, 132, 132, 133, 134, 147, 148 North Sea oil and gas xv, 31–32, 107, 113–121, Houston Ship Canal 65 Jurong shipyard 179 135 140, 167, 168, 170–171, 174, 180–181, 203 retirement 161, 164–165 124, 143–146, 154, 156, 157, 163, 171, 174, Hsu, Steve 90–91 Karlshøj, Inger (Axel & Torben’s stepsister) 24, Lobito (LNG carrier) 170, 194 Moller, Rochelle 151 177–179 Hsu, Thomas (Tommy) xi–xii, 44, 45, 60, 71, 73, K 57 logo (TK) 39, 40, 43 Mulrenan, Jim 82 Norwegian Ministry of Oil and Energy 182 78, 79, 83, 85, 90, 91, 93, 144, 182 Kagachi, Mr & Mrs 74 Karlshøj, Johanne (grandmother of Axel & Lok, Vince 138, 139, 189 Murphy, Allan xv, 77, 123 Nowell, Chief Engineer Steve 100 Hummingbird Spirit 171, 194 Kaiser Group of California 35 Torben) 17, 18 LPG carriers 203 Musashi Spirit (1), OBO 46, 47, 195 nuclear disaster (Japan) 167–168 Hvid, Kenneth 136, 138, 187 Kalbygard 25, 25 Karlshøj, Johanne (sister of Axel & Torben). see Luff, W. 82 Musashi Spirit (2) 85, 88, 195 Nugroho, Second Officer Junianto 174 Hwang, Sung Hyuk 49, 77, 80 Kanarek, Chief Engineer Roman 100, 101 Madsen, Johanne (Soester) – née Karlshøj Lunde, Marit xv Hyundai shipyard 47, 48, 49, 71, 72, 102, 174 Kanata Spirit 103, 104, 194 Karlshøj, Knud 24 Luzon Spirit 32, 65, 194 N O Kareela Spirit 103, 104, 194 Karlshøj, Laila 24, 57 Lyondell-Citgo 65 Nachi Maru. see Mendana Spirit OBO vessels 33, 46, 47, 105, 195, 203 I Karlshoej, Aiko xiii, 55, 63, 66, 73, 74, 79, 81, 95, Karlshøj, Lis 24, 57 Lytzen, Peter xv, 136, 138, 143, 145, 148, 189 Naess, Arne 54, 57, 69 Occidental Petroleum 164 ice on deck 100, 159 124 Karlshøj, Poul (father of Axel & Torben) 16, 17, Nagasaki Spirit 63, 67, 72, 73, 74, 75–77, 82, 195 Ocean Bank & Trust Company 68 54, 56, 81 Imabari shipyard 65, 101 Karlshoej, Axel viii, xii, xiii, 18, 24, 36, 56, 57, M Nahirney, Lois 138, 139, 189 Ocean Blessing 75, 76 relationship with father 25 IMO. see International Maritime Organisation 63, 71, 73, 79, 81, 84, 89, 91, 93, 113, 124, 144, Machida, Michihiro 66, 73 Nakata Spirit (later BP Architect) 50, 195 Odebrecht Oil and Gas (OOG) 179 relationship with sons 20–21, 23, 24, 27, 57 Impetuous 36, 54 161, 182 Mackereth, Capt. Alan 75, 76, 77 Namsan Mountain 48–49 offshore installation manager (OIM) 154 Karlshøj, Poul Gunnar. see Karlshøj, Poul (father Indian seafarers 109–110 biography 96–97 Madsen, Johanne (Soester) – née Karlshøj xii, xv, Namsan Spirit 47, 49, 102, 195 offshore oil 180 of Axel & Torben) industrial production declines 148 character 25 18, 23, 24 Nansen Spirit 156, 172–174, 178, 195 offshore oil value chain 135 Karlshøj, Rasmus (formerly Nielsen-Karlshøj) 17, information technology 189 early life 16, 21, 27 Maersk LNG 169, 184 Nassau Spirit 90, 100, 101, 195 offshore projects 184 18, 20 insurance payout for Nagasaki Spirit 77 relationship with Torben 25, 96 maintenance of ships 71, 86, 108, 111 natural gas xii, 131, 151, 169, 174, 176, 188 offshore wind turbines 184 Karlshøj, Ruth 24, 57 International Convention for the Prevention of Karlshoej, Caroline 34, 54, 81, 87 Malanje (LNG carrier) 170, 194 Navajo Spirit 87, 195 Oian, Anne xv, 69, 71, 72 Karlshøj, Tom 23, 24, 25, 57, 81 Pollution from Ships (MARPOL) 53 Karlshoej, Cathy (formerly Stuck) 34 management changes 93–94, 187–189, 190–191 Naviera F. Tapias SA 131 oil market affected by ‘Sept. 11’ 112 Karratha Spirit 102–103, 194 International Convention of Salvage 76–77 Karlshoej, Erik 96, 97 management, sound 118 Naviera Tapias 132, 145 oil pollution 53, 60, 107, 130 Kimberly (VLCC) 38, 194 International Maritime Organisation (IMO) 53, Karlshoej, Gail (née Downing) 29–30, 31 management style (Porras & Collins) 99, 103 Navion Anglia 121, 195 Oil Pollution Act (1990) 52 Kiowa Spirit 65, 194 107, 130 Karlshoej, Inge (Axel’s wife) 25, 57, 63, 96, 97, Manhattan Viscount 166 Navion Britannia 146–147, 157, 195 oil spills 50, 52, 53, 107, 130, 146–147 Kisuca (1) 54, 56 International Oil Pollution Prevention (IOPP) 53 124 Manila, Phillippines 62 Navion Hispania 156–157, 195 oil transport from Newfoundland 100 Kisuca (2) 24, 36, 42, 45, 49, 55, 56–57, 86, 86, 194 International Ship and Port Security (ISPS) Karlshoej, Jens (Axel’s son) 96, 97, 124 manufacturing sector declines 148–149 Navion Shipping 114–121, 145, 156 OIM (offshore installation manager) 154 Knarr oil- and gasfields 179 Code 87, 112 Karlshoej, Jens Torben. see Karlshoej, Torben map of Denmark showing farms 25 Navion Stavanger 120–121, 195 Olympic Games benefits China 129 Kosmos Group 117

208 Teekay: the first 40 years Teekay: the first 40 years 209 OMI Corporation 145, 148, 149 piracy 47, 140 salaries 46, 47, 108, 111 Siri oilfield 142 T Teekay Offshore Partners (TOO) 153, 176, 177, One Spirit 181, 187 Piranema oilfield 171 salvage award challenged 76–77 Sirodar, Chief Engineer Surendra 130 Tabucan, A 75 180 Onomax class of tankers 49–50 Piranema Spirit 171, 196 Samar Spirit 110, 196 Six-Day War 30–31 Takebayashi, Risuke 33 Teekay Petrojarl (TKP) xv, 143, 145, 179, 189 Onomichi shipyard 32, 37, 48, 49, 50, 61, 62, 65, Plato, Gerald (Gerry) 29, 30, 32, 33, 85 Samba class shuttle tankers 181 Skikda, Algeria 122–123 Tangguh Hiri 134, 174, 197 Teekay Phillipines 109 67, 85, 95 Pluto gasfield 169 Samsung shipyard 97, 103, 104, 156, 179, 181 SLT. see senior leadership team Tangguh Project 134 Teekay Shipping Australia 178 Onomichi Spirit (later BP Advocate) 50, 196 Pluto LNG Terminal 169 4 ships named together 134, 140 Smedvig Tankships 105 Tangguh Sago 134, 174, 197 Teekay Shuttle and Offshore Services (TSO) 188 Onozo-class product tankers 50, 62, 99 Polish shipyards 142 Sandvold, Tore 144, 182 Smit International salvage team 123 tanker market depressed 33, 34, 36, 43–44, 66, Teekay Spirit 50, 197 Onozo Spirit 50, 62, 196 pollution. see oil pollution Sanko company 37, 40, 66, 108, 166, 168 social networking tools 190 70, 148–149, 176 Teekay tanker services 188 OOG (Odebrecht Oil and Gas) 179 Port Elizabeth 65 Sanko Hope. see Asiatic Spirit Soester. see Madsen, Johanne (Soester) tanker market expands 31, 112, 129 Teekay Tankers (TNK) 153, 176, 177, 180 OPEC oil production 103, 153 Portland Pipeline Terminal 100 Sanko Prestige 45 – née Karlshøj tanker services 188 Teekay Vigour (ex-BP Vigour) 50, 197 Orient Overseas Container Line 75 port security 112 Sanko Stresa 122 Sonangol 170 tankers for floating storage 149 Teekay Vision (ex-BP Vision) 198 Orissa 166 Poul Spirit 40, 96, 196 San, Nagao 65 South African Merchant Navy Academy 162 tanker war 41–43 Teekay Vision (ex-BP Vision) 50 Oshima Clipper 60 Prestige (Aframax tanker) disaster 107 San Sinina II 35, 38 South African Navy 162 Tapias 111, 164 Tesoro (U.S. refiner) 53 Oshima Spirit (ex-Diana Prosperity) 69, 196 Pristiwana, Revan 167 Sarita. see Falcon Spirit South Korean shipbuilding 34, 40, 66, 133. see Tapias, Fernando 131–132 Tespoer, Boni 44 Oslo Stock Exchange 105, 115 production jack-up rig 161 Schaefer, Capt. Hans xv, 46, 109 also Daewoo shipyard; Hyundai shipyard; Tasman Spirit 110, 197 Texado 35 Overland, Erling xv, 116, 119 product tankers 148, 150, 203 Scheie, Trond xv, 69, 71, 72 Samsung shipyard Team Australis 178 Texas-chicken manoeuvre 65 Overseas Shipholding Group 89 profitability review 190 Schiefelbein, Capt. Hans 34, 46, 56, 57 Soyo (LNG carrier) 170–171, 197 Team Gemini 178 TGP. see Teekay LNG Partners (TGP) oversupply of tonnage 66, 154, 156 project code names 145 SCOPE programme 111 Spectrum 179 Team Taurus 178 Thompson, Chief Engineer George 166 Prosafe 135, 143 Scotland (product tanker) 50, 197 Spirit as a suffix for TK ships 45 teapot refineries 33 Tiber Energy 68 P Scott Spirit 156, 172–174, 178, 197 SPIRIT (Safety and Sustainability, Passion, Teekay time charters 89 Pacific Spirit 47, 71, 148, 196 Q Sea Amber 35 Innovation, Reliability, Integrity and Team- after Torben’s death 84–85, 88–91 TK Foundation 155 Palm Shipping 32, 33, 34, 37, 60, 72, 168 Qatar Gas Transport 133, 140 seafarer’s training 35 work) 166–167 annual management conference (1st) 133 TK logo 39, 40, 43 Palm Springs house (Rancho Mirage) 73, 79 seafaring 106. see also crewing; training seafar- spot market viii, 32, 89, 112, 148, 188 Bahamas office 34, 35, 36, 53 TKP. see Teekay Petrojarl Palmstar Cherry 49, 50, 196 R ers Stag oilfield, Australia 102, 103 boom years 91, 93 TK Trust Company Ltd 155 Palmstar Lotus 50, 196 Rancho Mirage (Palm Springs house) 73, 79 ‘seaman’s book’ 112 Statoil xv, 113, 119, 146–147, 157 business units 136, 138 TNK. see Teekay Tankers (TNK) Palmstar Orchid 50, 196 RasGas II 133, 151 Sea Royal 166 Stavanger harbour corporate units 136, 138 TNST (Teekay-Navion Shuttle Tankers) 121, 124 Palmstar Poppy 50, 61, 122, 196 Rasmussen Group 115, 116 Seawise Giant (later Jahre Viking) 30 Amundsen Spirit naming ceremony xiv, xv, derivation of name 31 Tokyo Maritime Arbitration Commission 36 Palmstar Rose 48, 50, 196 Rauf, Third Engineer Abdul 174 security for ships and ports 112, 113, 155, 177 161, 172, 174 expansion plans 50–51, 103, 105, 107 Tokyo Spirit 62, 198 Palmstar Thistle 50, 196 Reachi, Victor 44, 45 Seletar Spirit (ex-Pacific Mercury) 40, 105, 197 triple naming ceremony 172–174, 178 financial affairs 65, 66–69, 70, 71–73, 79 Tomson, George 82 Panamax ships 35, 105 recession 185 Selsmark, Jan 150 Stavanger, TK operating headquarters 117 founded 31 tonnage oversupply 66, 154, 156 Panayotides, Villy 113 recruiting staff 51, 108, 110 Sembawang shipyard 178 ‘Steam Project’ 190 head office Vancouver 35, 60, 63, 66, 164 TOO. see Teekay Offshore Partners (TOO) Panfilco Agency 87 Remontowa project 142 Semco (tug operator) 76 steel production 129, 130, 148 high standards 60, 136 Torben Spirit 95, 98–99, 110, 158–159, 198 Panfil crewing agency 108–109 Remora AS 187 Senang Spirit 65, 197 Stevens, Allen (Al) 57, 70 London office 45, 49 Torm (shipping company) 107, 113, 148, 149 Parameter, David 178 research for CSIRO 178 senior leadership team (SLT) 136, 138, 161, 166 Stevenson, Matt 97 Long Beach office 70, 71 Total 170 Pathy, Ladi 162 Reservoir Engineering, Petrobras 148 Sentosa Spirit 65, 197 stimulating progress 99 market leaders 93, 124, 134, 148, 180 towage market 178 Pattani Spirit 102–103, 196 rice aid cargoes 36 September 11 (2001) 112 Stina Mari (replica) 124 operations 1996 89 trade with U.S. halted 52, 53 Paturzo, Raffaele 123 Rijeka shipyard 62 Seraya Spirit 64–65, 197 Stolt-Nielsen (company) 29–30, 31 from private to public company 90 training seafarers 35, 44, 46, 94, 99, 109, 110, Patwardhan, Vinay 36, 38, 47, 72, 84 Rogers, Capt. J.W. 76 Sevan 145, 184 Stolt-Nielsen, Jacob 31 rules and regulations 53, 69 111, 130, 146 Peacock, John 177 Roh, I.S. 175 Sevan Hummingbird 169, 171 strategy innovation projects 187 Stavanger office 117, 118, 119, 124, 184 trans-Pacific tanker business 34, 38 Peary Spirit 156, 172–174, 178, 196 Roholte 25, 26 Sevan Marine 169, 171, 172, 178, 187 Stratfjord oilfield 146–147 Tokyo office 66 transport boom in China 129 Petersen, Dr 20, 21 Ross, Diana 54, 57 Sevan Piranema 169 Stuck, Cathy. see Karlshoej, Cathy Vision viii, 91, 94, 103, 153, 166–167 Trident Tankers 166 Petrangol (Petroleos de Angola) 170 Ross Sea (formerly Nagasaki Spirit) 76 Sevan Voyageur (later Voyageur Spirit) 169 Subagio, Second Officer Rahmat 174 Teekay Australia 178 trusts associated with Teekay 68, 71, 84–85, 93, Petrobras 135, 171, 179 Rumania 47 Sevland, Leif 178 sub-scale tanker business 103 Teekay Bahamas 68 118, 155 Petro-Canada 100 shares (Teekay) 105, 125, 149, 180 sub-sea oil 170 Teekay Corporation 63, 144, 153, 154, 176, 177, TSO (Teekay Shuttle and Offshore Services) 188 Shilla Spirit 46, 47, 49, 197 Sudong Spirit 130, 197 tsunami (Japan) 167–169 Petrofina 170 S 182–183 ship names in the TK fleet 45 Suez Canal 30, 32, 34, 36 Tsuneishi shipyard 128 Petrojarl 135, 142, 143, 145, 156, 164 Sable oilfield 116 departmental structures 187–189 ship security 112 Suezmax tankers 114, 126–127, 131, 132, 145, Tsutsumi, Mr 108 Petrojarl 1 140–141, 196 Saether, Ingvild xv, 188, 190 Teekay Gas Services 168, 188 ship types and glossary 202–203 148, 149, 154, 180, 181, 203 Tucker, Capt. Stephen (Steve) xv, 43, 46, 50–51, Petrojarl Banff 154, 196 SAFE (Simple, Aligned, Flexible, Efficient Teekay Hunter 44 Shoshone Spirit 87, 91, 197 Sumitomo Corporation 66, 72 57, 79, 81, 82, 110, 111, 166–167 Petrojarl Cidade de Rio das Ostras 142, 148, 196 [business]) 190 Teekay Investor Day (2012) 180 shuttle tanker business 113–117 Sun Coast Petroleum Company 29 tugs 178 Petrojarl Foinaven 143, 196 Safety & Environmental Protection (SEP) 65 Teekay LNG Partners (TGP) 144, 153, 176–177, shuttle tankers 117, 124, 135, 154, 156, 161, Sunny Corporation 33 Petrojarl Knarr FPSO 179 Safety and Sustainability, Passion, Innovation, 180, 184 180, 181, 203 Sunrise (ex-Sunrise Trader) 42–43, 46, 108, 122, Petroleos de Angola (Petrangol) 170 Reliability, Integrity and Teamwork Teekay Marine Services 136 U simulation bridge 155 166, 197 Phillips, Capt. Andy 110 (SPIRIT) 166–167 Teekay-Navion Shuttle Tankers (TNST) 121, 124 Ugland, Andreas Ove 114–116 single-hull tankers 107, 145 ‘Survive and Thrive’ (TK slogan) 153, 156 Pioneer Spirit 47, 62, 102, 196 safety at sea 65, 69, 70, 84 Teekay Norbulk (Glasgow) 50, 108 Ugland, Johan Benad 115 single-skinned tankers 107, 130 Piracaba accumulations 179 Safmarine 162 Siri FPSO 148

210 Teekay: the first 40 years Teekay: the first 40 years 211 Ugland Nordic Shipping (UNS) 114, 121, 145, Victoria Spirit 72, 198 Wielingen (Dutch frigate) 52 156 Viking Star Shipping 37, 59–60, 61, 63, 70 wind-generated electricity 181, 184 ULCC tankers 203 Villavicencio, Capt. Benhur 86 Woodside Donaldson 169, 198 Uljanik yard, Yugoslavia 45 visa regulations for crew 112 Woodside Petroleum 102 Ulltveit-Moe, Jens 82 vision for the company viii, 91, 94, 103, 153, World Horizon 44 Ulsan Spirit 47, 49, 198 166–167 World War I & II, effects on Karlshøj family 17, unified purpose 166 Vlasimsky, Capt. Andrej 106 20–21, 23–24 Unimak Passage 43, 158 VLCC vessels 38, 148, 153, 203 Wright, Nick 49 United States Coast Guard 54, 56 Voyageur Spirit (ex-Sevan Voyageur) 169, 198 United States Steel Corporation 162 VSAT 189 Y Universal Mariner 35 yachts 54–57 UNS (Ugland Nordic Shipping) 114–116, 121, W Yagnik, Chief Officer Harsh 158 145, 156 wage scales 46, 47, 108, 111 Yamato Spirit 41, 45, 198 Upper Lakes Shipping 118 Walford, Derek 187 Yammer 190 USS Niagara Falls 76 Watson, George 177 Yantai Raffles shipyard 169 USS Stark 41 Westgarth, Capt. Graham 123, 134, 136, 138, Yom Kippur War 32 143, 188 Yugoslavian shipyards 45, 49 V West Navion 115 Vancouver Maritime Museum 124 whiteboard financial rescue plan 68–69 Z Vancouver Spirit 72, 198 White Gardenia. see Cathay Spirit Zaluski, Jennifer 189 Vancouver Sun – Torben obituary 82 White Peony (formerly Japan Peony) 33, 34 vehicle manufacturing industry in China 129 Whittington, Capt. Peter xv, 54, 56

212 Teekay: the first 40 years