COURSE SUMMARY

Making sound business decisions concerning tanker ownership, chartering, operations and coverage strategies demands a good understanding of key issues and their potential impact. This basic course covers the crude oil, petroleum products, chemicals and gas transportation sectors. This course also examines the important economic, financial, contractual, environmental and legislative issues when evaluating contract options, chartering and investment strategies, logistics and operating tactics. The emphasis of the course is on sound commercial practice, drawing on the working knowledge and experience of the various industry speakers. Case studies and practical sessions provide delegates with hands-on experience of decision making in this area. There are no pre-requisites for this course, nor is any advance preparation required.

What you will learn

• To understand key issues facing players in today’s energy shipping markets
• To use worldscale, calculate freight costs, undertake voyage estimate, and time charter conversions
• To understand the dynamics of the tanker chartering, sale and purchase markets, how to analyze the trends and assess investment risk, as well as how tankers are financed
• The characteristics and driving forces that determine developments in the specialist gas and chemicals carrier markets
• Factors determining oil company transportation coverage strategies and tanker owners’ chartering policies
• To appreciate the important insights into how technical factors and the increasingly stringent rules governing vessel operations, safety and pollution prevention impact commercial decisions
• The essential elements of a voyage charter party and the differences in owners’ and charters’ obligations under different forms of charter
• The process of tanker chartering and the role of the broker
• How the bunker fuel markets work and how bunkering strategies can be developed
• To identify important insights in the commercial and technical management of a tanker fleet
• The experience of working with a group of energy and shipping industry executives, having a range of experiences, from a variety of organizations around the world

WHO SHOULD ATTEND?

The supply, trading and risk management departments in oil, gas and petrochemical companies, the commercial and operations departments in the shipping affiliates or divisions of oil companies, the commercial and operations departments of ship owning companies, the planning and financial departments of shipping companies and oil company transportation divisions, banks and financial institutions involved in oil tanker, gas and chemical carrier finance, accountants and legal firms dealing with energy transportation issues, oil trading and distribution companies and management new to the transportation sector.

COURSE CONTENTS

The Structure of the (Crude Oil) Tanker, Petroleum Products, Chemical and Gas Carrier Markets

• How the markets operate
• Trends in ownership and chartering
• The role of the different types of companies, including shipbrokers
• Ship types and their physical characteristics

Charter Evaluation

• Different types of chartering arrangement
• Use and understanding of the Worldscale system, AFRA
• Voyage estimating and calculation of time charter equivalents
• Time charter evaluations and comparisons with the spot markets

Logistics and Operating Strategies

• Transportation economics and evaluation of logistics options
• Trans-shipment, lightering and the use of tankers as floating storage

Tanker Market Fundamentals and Market Influences

• Tanker demand and supply
• Trends in owner operating costs and charter revenue
• Rate formation
• The dynamics of short, medium and long
• term charter rates
• Assessing the impact of external market factors

Investment in Tankers

• New construction, second
• hand and scrap prices and their relationship with the charter markets
• The impact of environmental and safety legislation on tanker construction

Commercial and Legal Aspects of Charter Parties

• Demurrage, laytime, and other key clauses in spot charter parties
• Key aspects of time charter parties
• Contracts of affreightment – special considerations and negotiations, including key clauses relating to nomination procedures and bunker price changes
• Relative merits of different types of charter party
• Requirements of charterers
• Commercial, legal and other considerations, including arbitration
• Documentation

Tanker Coverage Strategy/Contract Portfolios

• Oil company and ship owner perspectives
• Calculation of oil company tonnage requirements and the development of a 'coverage strategy'
• Commercial, contractual, legislative, environmental and qualitative issues associated with controlling transportation
• Project implementation

Syndicate Work

• Participants will undertake exercises covering transportation economics, time charter evaluations and voyage estimating, demurrage, laytime and arbitration. The work is then used in case studies in which syndicates compete to develop optimum strategies for tanker coverage and contract portfolios

FACULTY

Mr Charles Lawrie