Wednesday, March 9, 2011

National Shipping of Saudi Arabia May Expand Large-Tanker Fleet

By Maher Chmaytelli and Robert Tuttle

National Shipping Co. of Saudi Arabia, an operator of crude and chemical tankers, may expand its tanker fleet by purchasing so-called very large crude carriers, a company official said.

“Our strategy is to grow,” Saleh Al-Shamekh, president of oil and gas, said in an interview at the Marine Money conference in Dubai. “We will buy if the prices decline further,” he said, declining to be more specific.

New VLCCs cost about $100 million, down from $160 million in 2008, Per Wistoft, chief executive officer at Gulf Navigation Holding (GULFNAV) PJSC, said in an interview at the conference. Some 156 new VLCCs are needed to meet rising global oil demand, he said.

“VLCCs are not becoming cheaper,” Wistoft said.

The International Energy Agency raised its 2011 forecast for worldwide oil demand for a fifth month in February, citing increased consumption in Asia and signs of recovery in North America. Daily oil consumption will increase by 1.5 million barrels this year to 89.3 million, the IEA said. A worldwide total of 599 VLCC tankers are in operation, and about one-third were built in the past five years, according to data compiled by Bloomberg.

Oil prices, up 15 percent this year, fell 0.1 percent to $104.94 a barrel on the New York Mercantile Exchange at 10:30 a.m. London time.

To contact the reporters on this story: Maher Chmaytelli in Dubai at; Robert Tuttle in Doha at

To contact the editor responsible for this story: Stephen Voss on

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