Icahn candidate Samuel Merksamer was voted onto the board of the world’s largest offshore oil rig contractor and shareholders removed Chairman Michael Talbert, Secretary Philippe Huber said at the Vernier, Switzerland-based company’s annual meeting today. Shareholders approved the company’s proposed $2.24-a-share dividend.

The company’s payment “represents one of the highest implied payout ratios and dividend yields in the industry,” Chief Executive Officer Steve Newman said on a May 9 earnings conference call. “We believe Mr. Icahn’s proposal is shortsighted, irresponsible and ignores the uncertainties the company currently faces.”

Icahn, the largest shareholder in Transocean with a 5.6 percent stake, began pushing for the dividend and potential board changes in January. In March, after Transocean proposed reinstating the dividend at $2.24 a share, Icahn announced his three board nominees for the company he said “has conducted ill-advised mergers, employed unsuccessful development strategies and squandered the substantial cash flow.”

Icahn’s interest in Transocean follows his takeover last year of oil refiner CVR Energy Inc., which announced a $5.50 special dividend in January. Icahn also pressured Chesapeake Energy Corp. for board changes and the natural gas producer replaced its chief executive officer last month.

Changing Boards

Icahn is one of several activist investors who have forced changes at energy companies in the past year. The Transocean vote comes one day after Hess Corp. reached a deal with Elliott Management Corp., agreeing to add three of the activist shareholder’s board nominees.

Occidental Petroleum Corp. Chairman Ray Irani, an executive at the oil company for almost three decades, was forced to step down this month after investors voted against him. SandRidge Energy Inc. agreed in March to make changes to its board after criticism from shareholder TPG-Axon Capital Management LP.

Transocean’s CEO will remain on the board along with fellow company-based nominees Robert Sprague, Frederico Curado and Thomas Cason.

Prior to the vote, Transocean said that Talbert would step down as chairman by a November board meeting. The former CEO pledged on May 13 to leave the board by the next annual shareholder gathering in 2014 after 19 years as a director.

‘Bear Responsibility’

“We believe that Michael Talbert, a long time incumbent, should bear responsibility for the long-term performance and outcome of strategic choices the company has made,” Institutional Shareholder Services said in an April 25 report.

The company said there weren’t enough shareholders present today to vote on an Icahn proposal to elect all board members every year, so the item was rejected.

Transocean halted dividend payments last year after its Deepwater Horizon exploded in the U.S. Gulf of Mexico. The company employed nine of the 11 workers who died in the April 2010 disaster that resulted in the biggest offshore oil spill in U.S. history. Transocean agreed to pay $1.4 billion to settle claims from the incident.

The company, which has 26 buy, 16 hold and two sell ratings from analysts, fell 0.6 percent to $54.40 at 12:32 p.m. in New York. The shares have gained 22 percent this year.

- David Wethe and Patrick Winters, Copyright 2013 Bloomberg.

Image (c) Jinga/Shutterstock

By Ship & Bunker, Contributing Author

Four people have been arrested in Singapore after authorities acted on information pertaining to illegal bunkering activities in the country earlier this year, the Maritime and Port Authority of Singapore (MPA) have said.

The Corrupt Practices Investigation Bureau (CPIB) and the MPA found that the vessel MT Ivory deliberately delivered a shortfall of fuel to the MT Front Splendor, which documentation indicated should have received bunkers totalling 2,662.389 metric tonnes (mt).

The authorities said Jason Choo Soo Beng, cargo officer with Sea Hub Energy Pte Ltd, paid MT Front Splendour chief engineer Antonov Sergey $8,400 to accept the short delivery of marine fuel, and both Sergey and Choo paid Victor Loh Tuck Seng, an independent surveyor for M/s Saybolt Sinagpore Pte Ltd, a total of $5,900 to provide false verification.

Finally, according to the investigation, Choo paid $200 to Lam Tat Fei, a boatman who delivered $18,000 to pay for the extra fuel resulting from the shortfall.

The suspects, who were scheduled to be charged Wednesday, will face various charges involving giving and accepting bribes, falsifying information and using false documents, and engaging in conspiracy.

The Singapore authorities said they take corruption in the industry seriously and will not hesitate to take action against the parties being charged.

About the Author:

Ship & Bunker provides daily news, bunker price indications, and market intelligence for the marine fuels industry. This article is re-published here with permission.

Freeport LNG terminal on Quintana Island, about 70 miles south of Houston, Texas. Photo: Freeport LNG

As Congressman Lankford seemed to hint this week, good news was on its way…

The U.S. Energy Department has just announced today that it has conditionally authorized Freeport LNG to export up to 1.4 billion cubic feet per day (Bcd/d) of domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States from their terminal on Quintana Island, Texas.

This is the first such license granted to an LNG export facility in the United States since approval was granted to Sabine Pass LNG in May 2011 for exports at a rate of up to 2.2 Bcf/d.

In an emailed statement this afternoon, Ohio Congressman Bill Johnson, a member of the Congressional LNG Export Working Group commented:

“Our group commends this progress, and encourages the President and the DOE to continue to expeditiously process the requests, evaluating each in a timely order to bring certainty to  the LNG export market. CF International recently released a study that disclosed LNG exports could lead to more than 200,000 American jobs; thus, this is an industry we cannot afford to ignore.”

The Energy Information Administration forecasting a record production rate of 69.3 Bcf/d in 2013.

Within their approval document, the Energy Department’s Policy Guidelines note that:

The market, not government, should determine the price and other contract terms of imported [or exported] natural gas. The federal government’s primary responsibility in authorizing imports [or exports] will be to evaluate the need for the gas and whether the import [or export] arrangement will provide the gas on a
competitively priced basis forthe duration of the contract while minimizing regulatory impediments to a freely operating market

The Department of Energy notes that federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

The full authorization can be read here: http://energy.gov/sites/prod/files/2013/05/f0/ord3282.pdf

Freeport LNG is a 50/50 joint venture between ConocoPhillips and Michael Smith, founder, Chairman and CEO of Basin Exploration Company.

In July 2012, Freeport LNG executed a Liquefaction Tolling Agreement (LTA)with Japan’s Osaka Gas Co., Ltd. and Chubu Electric Power Co. for a total of 4.4 million tons per annum (mtpa).   In February 2013, a 20-year LTA was signed between Freeport LNG and BP for another 4.4 mtpa over a 20-year period.  This added production coincides with the construction of a second LNG train.

A message from gCaptain sponsor, Castrol Marine

Port availability of premium 80 BN cylinder oil from Castrol Marine is widened to account for growing demand.

”We have responded to increasing demand from our customers for wider availability of our Cyltech 80 AW cylinder oil by expanding the supply network from five to 35 ports in key regions,” says David Goosey, Castrol Marine’s Chief Executive and Sales Director. “The popularity of our premium 80 BN product has grown since being made available last year via our main regional distribution hubs.”

Ports where customers will be able to book supplies will now take in major trading centres, including Antwerp, Rotterdam, Le Havre, Marseille, Hamburg, Bremen, Kiel, Singapore, Port Klang, Busan, Ulsan, Los Angeles, San Diego, San Francisco, Fujairah, Dubai, Jebel Ali and Khor Fakkan.

Castrol’s recommendation that owners adopt Cyltech 80 AW was initially prompted to address the implementation of slow steaming practices by operators of large containerships fitted with large bore 2-stroke crosshead main engines. However, wider availability reflects a direct response to increasing demand for other mainstream vessel types, including bulk carriers, for an OEM-approved product proven in diverse service.

Cyltech 80 AW is formulated for lubricating the cylinders of all types of crosshead engines operating on high sulphur residual fuel, typically above 2.5%. It is also especially recommended for ships operating under slow and super slow steaming conditions when main engines operate at reduced power, often below 60% of their full load capability.

Under such conditions cylinder liner temperatures are reduced and oil residence time is substantially increased. Both factors intensify demands on the cylinder lubricant to neutralise the acids formed as a result of combustion.

Another concern when slow steaming is that considerably less lubricant is fed into the engine and, under severe conditions, the prevailing lubrication regime moves from hydrodynamic to more boundary conditions; this may result in oil film breakdown and risk of mechanical wear.

Cyltech 80 AW can prevent reduced periods between unit overhauls that can occur with lower BN products by offering:

• Enhanced protection of liners against corrosive wear and scuffing, especially under slow steaming conditions and with optimised cylinder oil feed rates
• Excellent detergency properties, resulting in cleaner piston and liner conditions than lower BN products
• High levels of thermal and oxidative stability.

Low oil feed rates can be maintained even when slow steaming, helping to control annual lubrication costs.

“We know from field experience that Cyltech 80 AW provides improved neutralisation capacity and hence better corrosion protection across the fuel sulphur range while slow steaming than a mid-BN lubricant,” says Paul Harrold, Castrol’s Marine and Energy Technology Manager.

“By selecting the right cylinder oil for the right operating conditions, customers reducing their fuel bill by slow steaming, can be confident in the knowledge they are not risking damage to their engine; and that is why we recommend Cyltech 80 AW for many customers.”

For more information relating to Castrol Marine’s products and services, visit www.castrol.com/marine

(Press Release) Marine electronics specialist MARIS AS has completed an ECDIS (electronic chart data information systems) technical training programme to enhance support services covering North America and the Caribbean. The initiative is part of its commitment to the Global Distribution & Service Agreement with IMTECH MARINE.

Engineers in IMTECH MARINE’s service network covering US and Caribbean ports have been trained and certified by MARIS to install, commission and support the MARIS ECDIS900-series. IMTECH MARINE centres in New York, Jacksonville, Miami, Houston, Long Beach, Seattle, Point Lisas (Trinidad & Tobago) and Curacao now offer enhanced expertise in MARIS ECDIS to customers calling at US East Coast, Gulf Coast, West Coast and Caribbean regional ports.

The programme, undertaken at IMTECH MARINE’s Houston facilities, certifies support staff to service all vessels operating in US and Caribbean waters. Current MARIS clients making regular regional calls include tanker majors Torm and Stolt Tankers.

“Demand for the MARIS ECDIS900 continues to surpass expectations, and today 20% of the vessels in service worldwide that are fitted with ECDIS have MARIS technology installed,” says Willy Hansen, MARIS Director Special Projects. “The enhanced set up in North America and the Caribbean brings critical technical support for long-established customers, and ensures that the growing number of new customers can call on the same call-out response excellence.

“As mandatory ECDIS is phased in, completing this training initiative is a regional milestone in our global agreement with IMTECH MARINE. Comparable ECDIS training support has been delivered in Europe via IMTECH MARINE’s facilities in Rotterdam, while MARIS Singapore office trained IMTECH MARINE engineers centred in Singapore, Hong Kong and Shanghai.”

IMTECH MARINE recently bought MARIS spares and back-up equipment to enhance availability throughout its US and Caribbean network. Through the global agreement, IMTECH MARINE recognises MARIS as a ‘preferred supplier’ and co-ordinates spares support through sea, air and truck freight.

The MARIS support service training initiative has been spearheaded by Mr Hansen, who took on the role as part of his new brief as MARIS Director Special Projects last year, having formerly acted as MARIS Sales Director. [ENDS]

Image (c) IMO

The International Maritime Organization (IMO) has taken the controversial decision to consider delaying the implementation of tighter limits for nitrogen oxide (NOx) emissions from ships operating in emission control areas (ECA).

The 65th meeting of the Marine Environment Protection Committee (MEPC) this week was told by a correspondence group whether there was a need to delay the 2016 implementation date of the Tier III NOx standards contained in regulation 13 of MARPOL Annex VI.

According to the correspondence group, there is no need to delay as it considered the technologies needed to meet Tier III NOx standards are available.

In particular, the correspondence group stated that selective catalytic reduction (SCR) – which is to NOx emissions what scrubbers are to SOx emissions – is a sufficiently advanced market to be able to support the change.

Russia, however, submitted a paper to MEPC 65 disputing the correspondence group’s conclusion, and argued that SCR technology still had some shortcomings, and that the cost of the technology was significant.

The MEPC Chairman noted in his summary that the majority had agreed that Russia’s concerns were valid.

At the next session of the MEPC, the appropriate text that amends MARPOL Annex VI to reflect the delay in introducing the Tier III NOx standard in ECAs from 2016 to 2021 will be written up.

Environmental lobbyists have condemned the move, and Antoine Kedzierski, clean shipping officer at environmental NGO Transport and Environment, labelled the decision as “nothing less than a disaster.”

“Two years before the entry into force of the next emissions limit, the IMO punishes those who have chosen to invest in clean innovation in order to comply and rewards those who have cynically waited and lobbied for postponement,” he said.

“The call was led by Russia, but the lack of a common EU position is also to blame with Poland, Greece, Cyprus, Malta, Latvia and Estonia all toeing the Russian line. This decision will not only kill high-value jobs in the clean-tech industry, but will also increase emissions that have serious impacts on the environment and human health.”

The issue is likely to be inflamed further due to a new study from researchers of the University of Gothenburg, Chalmers University of Technology, the University of Delaware and the Institute for Advanced Sustainability Studies.

Carbon dioxide and other gases, such as the sulphur and nitrogen emitted by the shipping industry,   cause acidification by dissolving into the ocean and creating weak carbonic acid, sulphuric acid or nitric acid respectively.

Over time this can have a devastating impact on ecosystems. The study shows that acidification from shipping can during the summer equals that from carbon dioxide.

“Global shipping has emitted acidifying compounds for decades without emissions controls,” added James J. Corbett, professor of marine policy in the University of Delaware’s College of Earth, Ocean, and Environment. “Only recently have regulatory standards set limits on ship emissions.”

A 2009 EPA study revealed that annual total sulphur deposition due to international shipping ranges from 10 percent to more than 25 percent of total sulphur deposition along the entire Atlantic, Gulf of Mexico and Pacific coastal areas.

The IMO decision to delay regulation needs to be adopted by vote in the next Marine Environment Protection Committee, expected to be held in March 2014.

A ship berths near the Nigeria Liquified Natural Gas company (NLNG) near Finima village, during an aerial tour by the Royal Dutch Shell company, in Bonny March 22, 2013. Image (c) REUTERS/Akintunde Akinleye

ABUJA, May 17 (Reuters) – Nigeria LNG has declared force majeure on liquefied natural gas exports from its 22 million tonnes-a-year terminal after a leak at a Royal Dutch Shell facility, the Nigerian company said on Friday.

Shell declared force majeure on gas supplies to the export terminal on Wednesday, blaming a leak along the Eastern Gas Gathering System near Awoba in Rivers State. Around 1.5 billion standard cubic feet of gas per day is impacted, it said.

The move comes barely a month after force majeure on supplies to the plant was lifted on April 18, and at a time when Shell is reporting rising cases of sabotage and oil theft.

(c) 2013 Thomson Reuters, Click For Restrictions

Image: AP Moller-Maersk

By Mette Fraende

COPENHAGEN, May 17 (Reuters) – A.P. Moller-Maersk , owner of the world’s biggest container shipping company, is “100 percent certain” it can more than double freight rates in July despite market weakness that has seen prices fall by a third since March.

Shipping has taken a hammering in the past five years, hit both by the broad weakness of the global economy and a boom in orders for huge new freighters put in by major players just as the 2008 financial crisis hit.

The Danish group, whose Maersk Line vessels make up around 15 percent of world container shipping capacity, however, said its container shipping unit swung back to a $204 million profit in the quarter from a $599 million loss a year earlier, beating forecasts.

While those results benefitted from briefly improved prices, Maersk and other major players are now desperate to raise the industry’s traditionally volatile rates, after a fall in the past two months that left most trading at a loss.

Chief Executive Nils Smedegaard Andersen said he had “no doubt” Maersk Line would be successful in its plans to hike rates to $1481 per twenty foot container from July 1 from $731 currently.

Those spot rates, however, are traditionally only a basis for negotiation with clients and he also admitted that the outlook for the industry was bleak. The company cut its forecast for a rise in demand in 2013 to 2-4 percent from 4-5 percent earlier.

“To be honest, we just have to get used to the fact that these are harder times, and that there will be harder times ahead,” Andersen said at a teleconference.

Market capacity is also expected to increase significantly later this year, not least when the first of Maersk’s 20 new mega vessels is delivered by Korea’s Daewoo Shipbuilding & Marine Engineering.

The slump of around 400 dollars in spot rates – a 36 percent fall – since March had fuelled speculation that Maersk, which traditionally offers a conservative financial outlook, could be cutting 2013 expectations.

“The fact that they keep their outlook unchanged at a time when Asia to Europe freight rates are at an absolute low, is an important signal (for the full year results),” said Sydbank analyst Jacob Pedersen.

WEAK OIL

The group’s first quarter net profit fell to $790 million, down about 30 percent from the same period a year earlier which included $899 million in settlement for an Algerian tax dispute.

The result was above an average forecast of $726 million in a Reuters poll of analysts.

The company reiterated its overall group outlook for the this year’s net profit to be below last year’s $4.0 billion, and the result for its container shipping unit, Maersk Line, to exceed last year’s $461 million.

The improvement at Maersk Line countered a 73 percent drop in net profit at Maersk Oil to $346 million, hit by a falling oil price and lower production but ahead of forecasts.

The group’s shares rose 0.7 percent on Friday versus a 0.4 percent fall in the Copenhagen stock exchange. (Additional reporting by Shida Chayesteh, Stine Jacobsen and Ole Mikkelsen; Editing by Patrick Graham)

(c) 2013 Thomson Reuters, Click For Restrictions

VLGC Aintree, image (c) Petredec

(Bloomberg) — The cost of shipping liquefied petroleum gas headed for the biggest weekly gain on record as surging U.S. exports of the cooking fuel and chemicals feedstock sap vessel supply.

Rates for very large gas carriers already jumped 24 percent to $68 a metric ton since May 10, according to the Baltic Exchange, a London-based publisher of shipping prices on more than 50 maritime routes. That would mark the largest weekly rally in data going back to 2005 if costs stay the same today or rise, according to the bourse.

The U.S. is shipping more LPG than ever as a byproduct of record natural gas output, Energy Department data show. Trading is expanding because the fuel is cheaper in the U.S. than Europe, according to Diego de Potter, deputy chartering director at Exmar NV, the Antwerp, Belgium-based operator of two VLGCs. Port expansions and rising voyages to Asia adding cargoes and employing carriers for longer, said John Lording, who specializes LPG at Clarkson Plc, the world’s largest shipbroker.

“The VLGC market is quite finely balanced, so you only need to have an extra handful of cargoes and the market reacts very positively,” Lording said by phone today. “Owners are very happy.”

Enterprise Products Partners LP more than expanded monthly capacity at its Houston export facility by 3.5 million barreles to 7.5 million barrels in March. The U.S. produced a record 29.8 trillion cubic feet of natural gas last year and exported an unprecedented 71.9 million barrels of LPG, according to Energy Department data. The country’s exports rose 15 percent to 5.9 million barrels in the year to February, the most-recent data show.

Nippon Yusen

The publicly traded ship owner with the biggest fleet of the largest LPG carriers is Nippon Yusen K.K., based in Tokyo, according to data from Clarkson’s research unit. Shares of the company, which also operates vessels including oil tankers, coal and iron-ore transporters, and car carriers, will rise 8.3 percent to 287.08 yen ($2.81) in a year, according to the average of 12 analyst forecasts compiled by Bloomberg.

One gallon of propane costs 94.25 cents in Houston, compared with $2.07 in northwest Europe and $2.95 in Japan, according to data compiled by Bloomberg.

- Isaac Arnsdorf, Copyright 2013 Bloomberg.

“This is the largest active heave-compensated MacGregor offshore crane that has been ordered,” says Frode Grøvan, Director, Sales and Marketing for Advanced Load Handling. “At a time when subsea modules are getting larger and heavier and operations are being conducted at ever greater depths, a sophisticated crane on this scale equips the new vessel to meet the ever increasing demands of the offshore construction market.”

Sealion Shipping, a UK-based offshore support company that manages and operates offshore support vessels for Toisa, describes the MOCV as a customised version of an Ulstein Deepwater Enabler design. It says: “The DP 3 vessel is designed and equipped for worldwide operations in the oil and gas sector, ultra deepwater installation and construction, flexible lay, pipe lay, cable lay and topside construction support, and will be built to the highest standards and with maximum flexibility and capability prioritised”.

The crane delivery is planned for the beginning of 2015, with the vessel delivery following shortly afterwards in July.