Saudi Arabia to create biggest tanker fleet
RIYADH - Saudi Arabia will soon create the largest fleet of oil tankers in the world as part of its strategy to boost its crude oil exports, officials said.
The venture by the Arab Petroleum Investments Corporation (APICORP) and the National Shipping Company of Saudi Arabia (Bahri) will involve $1.5 billion being allocated over three phases to buy 15 very large crude carriers (VLCCs).
According to a statement, APICORP, with an 85% stake, will be the main investor and fund manager and Bahri will be the exclusive commercial and technical manager as well as being responsible for the remaining 15% investment.
Saudi Energy Minister Khalid al-Falih said: “The additional 15 VLCCs will be on top of the current and future fleet of Bahri that is more than 45 ships. This will make Bahri the world’s largest oil shipping company.”
The venture is set to benefit state-owned Saudi Aramco. According to Falih, Aramco ships about 20% of its oil cargoes by sea and needs additional tankers to meet rising demand.
“Timing is essential,” Falih said. “Many countries are cautious in investments amid the current recession. Thus, when Saudi Arabia announces such a huge investment this sends a clear message that the kingdom is moving forward in building its private sector companies and infrastructure.”
Pointing to the significance of the deal to Saudi Arabia’s economic reform drive, Bahri Chairman Abdulrahman al-Mofadhi said: “This fund will not only reduce Saudi Arabia’s dependence on external crude carriers but also its earnings will be reinvested in the local economy.
“As with any other initiative, our growth strategy for this investment firmly falls in line with Saudi Arabia’s plans for future development as laid out in the kingdom’s Vision 2030.”
Saudi Arabia is the biggest oil exporter in the world, producing more than 10 million barrels a day for the past several months. According to the Organisation of the Petroleum Exporting Countries (OPEC), the price of crude oil has rebounded more than 70% from a 12-year low earlier this year.
APICORP, which is based in the Saudi Eastern province, is owned by OPEC, with Saudi Arabia, Kuwait and the United Arab Emirates each having a 17% stake.
The firm announced last November its intention of issuing $1 billion in Islamic bonds in 2016, with the aim of financing energy projects in the Middle East and North Africa. APICORP, known mostly for its petrochemical investment, hopes to diversify by including more projects related to renewable energy.