Kuwait Oil Tanker Co to buy 5 double hull products tankers

Sep 21, 1998 02:00 AM

State-owned Kuwait Oil Tanker Co, which is being considered for partial privatisation, said it plans a phased purchase of 5 new products carriers starting from 1999.
"We will use our own means to finance the new tankers like we self financed the 2 new vessels we received this year," KOTC chairman Abdullah al-Roumi said.
KOTC, whose fleet survived 2 devastating Gulf wars and a still unresolved $ 100 mm embezzlement scandal, plans to use some $ 210 mm deposited with banks to finance the purchase rather than further burdening an economy suffering of weak oil prices.
"Our plan is for the phased purchase of 5 double hull products tankers of 100,000 tonnes and less starting in 1999," Roumi added.
The company, the shipping arm of Kuwait Petroleum Corp (KPC), the world's seventh largest oil firm, took delivery earlier this year of the second of 2 double hull 309,000-tonne crude tankers ordered from South Korea's Hyundai Industries Co in a $ 160 mm deal.
KOTC, which carries some 20% of KPC's output, now has a fleet of 32 vessels of crude tankers and petroleum products and liquefied gas carriers.
The average age of the fleet is 11.65 years.
Roumi said KOTC made a record net profit in the 1997/98 (July-June) fiscal year of 24.1 mm dinars ($ 79.3 mm).
"This is the highest profit in our 41-year history," he said of the company which made a record net profit of 18.38 mm dinars the previous year.
Showing a profit and sound operations is vital for KOTC since it is under close scrutiny by members of parliament seeking legal action against a former oil minister and other officials for alleged corruption prior to and during Iraq's seven-month occupation of tiny Kuwait which ended in 1991.
Kuwait's Oil Minister Sheikh Saud Nasser al-Sabah, who also heads KPC said that KOTC is among 2 main KPC firms being considered for partial privatisation although the state would continue to hold a majority stake.
KOTC, which carried some 25 mm tonnes in 1997/98, a 2.4 mm-tonne rise overthe previous year, is guaranteed to receive KPC contracts at going market rates.
Operating profit rose by 9.8 mm dinars in the fiscal year which ended in June to 17.6 mm dinars.
Roumi attributed the sharp rise to a cut in costs, a drop in insurance rates for a now younger fleet, selling older vessels which showed a loss and chartering out to other oil exporters to keep the fleet operational around the year.
KOTC still has 3 90,000-tonne products tankers which carry the flag of the US and are operated by American crews which cost more to operate.
The US-flagged vessels showed a loss of almost 5 mm dinars a year in previous years, but a company report showed them breaking even in 1997/98.
During the 1980-88 Iran-Iraq war, KOTC was forced to register some of its tankers in the US to envoy naval protection to deter repeated attacks on its vessels by Iran in what was known as the "tanker war." Kuwait supported Baghdad in that war.
Roumi predicted a drop in shipping rates in the current fiscal year with a possible cut in world supplies to try and boost world oil prices at a time of weak demand and high stock levels by major consumers.

Source: not available
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