Former BP veterans make the most of “a one-off opportunity” – Tradewinds
April 7, 2011
Former BP veterans make the most of ‘a one-off opportunity’
Layup has become a lucrative business for shipmanagers and will continue to be so for several years to come. It is what prompted three former BP shipping veterans to buy the oil major’s layup facility in Malaysia’s Brunei Bay toward the end of last year.
“I had worked with BP since graduating as an engineer 20 years before. I enjoyed working for BP but I always wanted to do something for myself. This came up as a one-off opportunity and I grabbed it,” explained Gavin Kramer, who was BP’s regional director for shipping in Asia before taking the plunge.
Kramer and two partners bought out BP Shipcare, a subsidiary that was set up to look after the large number of BP tankers laid up during the shipping crisis of the 1970s.
Brunei Bay, situated near the East Malaysian port of Labuan, is considered an ideal place to lay up ships. The vast bay can accommodate hundreds of ships. Its benign weather and shallow, sandy bottom make it an extremely safe anchorage and it is also considered very secure due to a strong Malaysian naval presence nearby.
Kramer and his partners have rebranded the BP entity as International Shipcare. The company maintains a small head office in Singapore and an operations base in Labuan, which has a team of 150 engineers and workers.
Kramer claims Shipcare International can place a vessel in cold layup within two to three weeks. It is a complicated process but ensures that the ships do not deteriorate while in storage.
The volume of vessels in layup fluctuates according to the state of the shipping markets but Kramer says there is always business to be had.
“In poor markets we get many ships but even when markets are good we are well patronised by the offshore industry who are looking to store VLCC and VLGC [very large gas carrier] tonnage they are keeping in stock for future FPSO [floating production, storage and offloading unit] and FSRU [floating storage and regasification unit] conversions,” he explained.
Kramer also notes that the offshore market is one that Shipcare International is keen to target as it has more off-hire cycles. There are an increasing number of offshore and LNG operators who are opting to put their vessels and rigs in cold layup for shorter periods of between two and six months.
“These ships often have to wait several months between contracts and it makes more economic sense to lay up the ship than leave it off some port awaiting orders,” he said.
Kramer adds that the average cost of layup is around $1,500 per day, as against current operating costs that can exceed $12,000 per day on some of the larger, more expensive vessels.
Kramer is now keen to develop further value-added services and promote the facility not just for layup but also for floating maintenance services, vessel inspections and the drawing up of “green passports”.
“Offering a wider spectrum of non-layup-related marine services will create a much more sustainable income stream. Labuan is a growth market in the offshore sector with many oil majors moving in who need good-quality marine services. Our location is also situated on a major international trade route so we want to market our services to any ships passing through the South China Sea,” he said.
By Jonathan Boonzaier Singapore
Published: 22:01 GMT, 07 Apr 11 | updated: 20:57 GMT, 06 Apr 11