(Bloomberg) — Tankers International LLC, operator of the largest pool of the biggest oil carriers, wants to shift hiring of its vessels back to single-voyage charters from longer-duration accords to increase returns.
The company decided it is carrying too little crude in the spot market, as single voyages are known in the industry, non- executive Chairman Morten Arntzen said yesterday on a conference call. He was speaking in his role as chief executive officer of Overseas Shipholding Group Inc., one of the owners contributing vessels to the pool.
“That was negatively impacting our trading flexibility and results,” Arntzen said. “So we are determined to shift that. We intend to continue to function as a key provider for our Chinese clients, but we also have a greater spot focus.”
Tankers International is the joint marketer and operator for 42 very large crude carriers from eight companies including New York-based OSG and Euronav NV, located in Antwerp, Belgium, its website shows. The fleet includes at least nine VLCCs from OSG, the biggest U.S. tanker owner, according to the site.
“We think we should have been doing better,” Arntzen said of returns from OSG’s vessels in the pool. A return to greater emphasis on the spot market will result in a “relatively better performance” he said.
The company is discussing extending or changing a contract with China International United Petroleum & Chemical Corp. that’s scheduled to expire in April, Arntzen said. Unipec, as the company is known, is the trading division of China Petroleum & Chemical Corp., the country’s largest oil refiner.
Arntzen spoke after OSG released second-quarter results. The company’s net loss widened to $55.3 million, or $1.83 a share, from $37.3 million, or $1.24 a share, a year earlier. OSG generated 24 percent of shipping revenue from participating in pools in the second quarter, a statement showed.
The company’s shares fell 73 percent in the past year to $5.75 in New York, giving it a market value of $177.4 million.
VLCCs aged under 15 years returned $27,451 a day, against $20,400 a year earlier, the company said. The global VLCC fleet consists of 600 vessels, according to Clarkson Plc, the world’s biggest shipbroker. Each of the tankers can hold 2 million barrels of crude.