INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRY www.bunkerspot.com Volume 7 Number 1 February / March 2010 Inside: • Mergers and Acquisitions • Spotting Opportunities CHANGING TACK: • Bunker Books The race to • Pricing Strategies • People and Places zero emissions • News and Events Contents NEWS Bunker Overview 4 Europe 8 Head Office: Asia Pacific 14 Petrospot Limited Americas 18 Petrospot House Somerville Court Africa and Mideast 22 Trinity Way Adderbury Oxfordshire OX17 3SN COMMERCIAL ISSUES England Tel: +44 1295 81 44 55 Lesley Bankes-Hughes looks at recent deals in the bunker sector – and asks what is Fax: +44 1295 81 44 66 driving M&A activity in these straitened times 24 Email: [email protected] Website: www.cargosecurityinternational.com For the international bunker market, writes Adrian Tolson of Chemoil, 2010 means Director - Publishing / Editor fewer contracted and more spot transactions, reduced credit lines, more insurance and Ian Taylor an increasingly fragmented customer base. Welcome to the new world order 28 Tel: +44 1295 81 44 55 Mob: +44 7876 70 45 41 Email: [email protected] BUNKERSPOT WORLD MAP Managing Director / Publisher Global prices and news at a glance 30 Llewellyn Bankes-Hughes Tel: +44 1295 81 44 55 Mob: +44 7768 57 44 30 RISK MANAGEMENT Email: [email protected] Henrik Zederkof of Dan-Bunkering expects to see a growing interest in bunker risk Associate Editor management 32 Lesley Bankes-Hughes Tel: +44 1295 81 44 55 Chris Thorpe of HCEnergy gives an update on price protection strategies 34 Mob: +44 7815 57 86 43 Email: [email protected] ENVIRONMENTAL ISSUES Advertising Sales Executive Steve Simpson Bill Hemmings of T&E considers how the recent Copenhagen Climate Conference Tel: +44 1295 81 44 55 will affect the bunker industry 36 Mob: +44 7800 75 52 78 Email: [email protected] Susann Dutt, Environmental Controller at the Port of Gothenburg, reveals the results Director - Events of a survey on the adoption of cold ironing undertaken as part of the World Ports Luci Llewellyn-Jones Climate Initiative 40 Tel: +44 1295 81 44 55 Mobile: +44 7775 92 42 24 Diane Gilpin of B9 Shipping outlines the company’s plans to develop a cargo vessel Email: [email protected] which uses carbon-neutral propulsion technologies 42 Events Executive Why is the shipping industry hanging on the outcome of COP15 and developments Sinead Harvey Tel: +44 1295 81 44 55 at the IMO when it already knows what it can do to address climate change, asks Email: [email protected] environmental charity Greenwave 44 Design & Marketing Manager Alison Jane Cutler TECHNICAL ISSUES Tel: +44 1295 81 44 55 Email: [email protected] Jon Watson of Razaghi Meyer International argues that bunker suppliers should look Design & Marketing Executive at the benefits of inline sensors 48 Simon Demaine Andrew McEwen of Guardian Marine Testing comments on the continuing debate Tel: +44 1295 81 44 55 Email: [email protected] about the proposed changes to ISO 8217 50 Sales Manager Luke Hallam Evans SPOTLIGHT ON HAITI RELIEF EFFORT Tel: +44 1295 81 44 55 Mob: +44 7815 86 73 52 Multi Service reports on the work going on behind the scenes to fuel the ships Email: [email protected] bringing aid to Haiti 52 Events Sales Executive Osei Mitchell EDUCATION AND TRAINING Tel: +44 1295 81 44 55 Mob: +44 7789 20 20 10 Llewellyn Bankes-Hughes looks at some of the books now available to newcomers to Email: [email protected] the bunker industry 54 Events & Subscriptions Sales Executive Elena Melis EVENTS Tel: +44 1295 81 44 55 Mob: +44 7975 89 52 03 Events and training course diary 56 Email: [email protected] Asia Representative NETWORKING Sarah Morris Tel: +65 8168 6976 Bunker people on the move 58 Email: [email protected] Accounts Bunkerspot is an integrated news and intelligence service for the international bunker industry. The bi-monthly magazine and 24/7 electronic news Helen Wilkins service, www.bunkerspot.com, both provide highly-specific information on all aspects of the marine fuels industry. Bunkerspot Magazine (published Tel: +44 1295 81 44 55 in February, April, June, August, October and December) annual subscription rate, including unlimited access to the website www.bunkerspot.com, is Email: [email protected] UK£250/€280/US$400. ISSN 1741-6981. Copyright Petrospot Limited © 2010. All rights reserved. Published by Petrospot Limited, a dynamic independent publishing, training and events organisation, focused on providing information resources for the transportation, energy and maritime industries. Cover Photo: Courtesy of B9 Shipping Disclaimer: Bunkerspot is an editorially independent magazine and electronic news information service. The information contained in the magazine and website is presented in good faith. Opinions expressed are not necessarily those of Petrospot Limited, which does not guarantee the accuracy of the information contained in Bunkerspot. Nor does Petrospot accept responsibility for errors or omissions or their consequences. No part of Bunkerspot may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photographic, recorded or otherwise, without the prior written permission of the publisher. Visit www.petrospot.com bunkerspot February / March 2010 www.bunkerspot.com 3 Bunker Overview 12 month rolling price charts 380 CST Fuel Oil 600 Houston 380 Singapore 380 500 Fujairah 380 400 Rotterdam 380 PRICE $/tonne 300 200 FMAMJJASONDJ Marine Diesel Oil 800 Houston MDO 700 Singapore MDO Fujairah MDO 600 Rotterdam MDO 500 PRICE $/tonne 400 300 FMAMJJASONDJ A time for grand alliances and new beginnings? Crude oil prices mounted a modest rally as global demand for crude oil fell by 1.4 million another four years before there will be a need this issue of Bunkerspot went to press, with barrels a day (b/d) in 2009 – but it has forecast to revise this policy. The timing could prove Brent futures trading at around $73 a barrel. that demand will rise again during 2010 by crucial. The Royal Bank of Scotland has Bunker prices were looking relatively firm, with about 800,000 b/d. As has been the case for speculated that a revival in Iraq’s production the delivered 380 centistoke (cst) fuel oil in some years now, the continuing expansion of capability could upset the balance of global Rotterdam pegged at around $435 a tonne. the Chinese economy will be a key factor. supply and drive Brent crude oil prices down to In the immediate term, market observers The International Energy Agency (IEA) below $60 a barrel. However, it will be several commented, prices were likely to be relatively has also been predicting an upswing, but with years before Iraqi output ramps up significantly stable. But there was no clear consensus on caveats: ‘There is a possibility that demand for – and if Iraq is back in the OPEC quota system the outlook for the rest of 2010 and beyond. oil will rise by about 1.4 million b/d in 2010, by then, its impact on global supply will be Participating at a London conference at if the recovery of the global economic growth more contained. the start of February, Abdalla Salem El-Badri, continues. Non-OPEC output may be able to So much for future speculation. For the Secretary General of the Organization of the cover this increase in demand, which means moment, the oil sector is looking relatively Petroleum Exporting Countries (OPEC), that OPEC’s production rate will be the crucial stable and there is a fair amount of market spoke with guarded optimism of a ‘demand factor in achieving balance in the markets.’ confidence. Business consultants Ernst & recovery’, while warning that there were still a ‘Non-OPEC output’ currently includes Young believe that this translates into a high number of ‘uncertainties’. Iraqi exports. Even though Iraq was one ‘positive outlook’ for mergers and acquisitions In its official outlook report, OPEC of the organisation’s founder members, its (M&A) and initial public offerings (IPOs) in the estimated that the world economy will grow by production has been excluded from OPEC oil and gas sector. According to Ernst & Young, 1.3% in 2010 and it anticipated that this could quota agreements since 1998 and the M&A activity in the oil and gas sector was help the oil industry. According to OPEC, Secretary General has said it will be at least much stronger in the second half of 2009 than 4 www.bunkerspot.com February / March 2010 bunkerspot Bunker Overview it was in the first six months, with 485 deals Nov/Dec-09 Jan-10 concluded compared to 352, and it expected 380 IFO 30-04 07-11 14-18 21-25 28-01 04-08 11-15 18-22 25-29 the upward trend to continue in 2010. Rotterdam d 455 441 426 432 441 470 472 445 435 On page 24, Lesley Bankes-Hughes looks Gibraltar d 472 469 462 465 469 499 501 474 457 at the recent merger and acquisition activity Piraeus d 473 466 450 451 458 494 495 474 458 in the bunker industry and finds that, when all the gloss of ‘synergies’ and ‘global reach’ are Suez d 497 503 501 500 493 499 512 513 503 stripped away, the main driver for many deals Fujairah d 473 463 453 461 474 497 494 474 457 Durban w n/a n/a n/a n/a n/a n/a n/a n/a n/a in the marine fuels sector is a simple matter of ‘survival’. Tokyo d 513 503 492 501 519 540 534 513 512 When faced with uncertainty, businesses Busan d 488 497 496 506 521 539 520 493 473 generally find that there is ‘safety in numbers’.