Commercial Mariner

OFFSHORE ACCOUNTS: "'All of you will die; but know one thing: Mother Russia will never forget us.' "So begins the (apparently) motivational speech given by a Russian commander to his troops near the front in Ukraine, shared widely on social media. "And it is not just the half a million soldiers killed or wounded in action that Russia has lost from its war in Ukraine. Now state gas monopoly Gazprom has reported a loss of RUB629 billion (US$6.9 billion) for full year 2023 as sanctions and the destruction of the Nordstream pipelines have led to a collapse in sales to Europe, which was previously its main profit source. Quick, find me the world’s smallest violin! "Gazprom’s gas sales dropped by half, from RUB8.4 trillion in 2022 to just RUB4.1 trillion last year, and the company’s international sales fell by close to 60 per cent. Russia’s share of Europe’s gas imports dropped from 40 per cent in 2021, the last full year before the invasion, to 14 per cent in 2023, according to EU data. Russian pipeline exports accounted for 8.7 per cent of EU supply and Russian liquefied natural gas (LNG) another 6.1 per cent. "The Financial Times reported that despite the efforts of the Kremlin to talk up Chinese purchases of Russian gas as a substitute for the lost European sales, those exports to China in 2023 were less than 10 per cent of the average of 230 billion cubic metres a year of gas that Russia exported to the EU in the decade before the Ukraine invasion. "The slump in international sales threatens to push Gazprom to the brink of insolvency as President Putin has continued to artificially suppress the domestic gas prices in Russia to prevent public dissent. This has forced Gazprom to borrow to cover its mounting losses. "Like Russian soldiers, foreign investors in Russian state enterprises should never forget to carry sunflower seeds in their pockets." Full article link in comments.

Who’s Who: Maritime Movements for March/April 2024 Full article link in comments.

TUG TIMES: "Several observers have pointed out that if escort tugs had been available, the accident could probably have been avoided. This should be good news for American tug operators, but I was surprised to see that Jennifer Carpenter, President and CEO of the American Waterways Operators, appeared to be only lukewarm to the idea. "'We know tugs are tiny and mighty and can do a lot of things…but at the same time it’s important to avoid speculating on how this could have happened,' said Carpenter. "She said the message from her industry is that 'tugboats [sic] can do a lot of good, but we should avoid a rush to judgement that tugboat escorts are the answer everywhere'. She went on to say that there are other factors to consider and it is appropriate that escort requirements should be specific to the needs of a particular port. "'There are many questions that have to be answered before jumping on escort tugs as a solution. We must ask what do we want the tugs to do, what is the added margin of safety that they will provide? What size and capacity should they be? Tug escort is a complicated manoeuvre. Where will the crews be trained?' "Really, Ms Carpenter, if you do not know the answers to those questions, perhaps you are in the wrong job. Would it have been beyond your capabilities to suggest that escort tugs could have slowed or stopped or steered the ship so that damage to the bridge might have been significantly less, or that the incident might even have been avoided altogether? And since you referred to escort tugs for tankers, did it not cross your mind that perhaps in America, which practically invented escort towing, there might be training available? I wish I knew." Full article link in comments.

REMINISCENCES: "The United Fishing Agency is one of the best things that has ever happened to Hawaii’s seafood industry. It is also one of the best things that ever happened to me. "Without doubt it completed my education in ichthyology and marine biology. Not only that, it was indirectly responsible insert for me being posted to the US Embassy in Tokyo as Regional Fisheries Attaché. "Going to the agency’s fresh fish auction for me was like going to a graduate seminar in marine biology and fisheries. The auction floor of the agency was my final Professor of Fisheries and Marine Biology. As a result, I have a very warm feeling in my heart for the United Fishing Agency. "The agency not only revolutionised and changed for the better the way Hawaii’s seafood is marketed, but it resulted in a 'fishing village' of related businesses being created in the area of Piers 36 and 38. This included dock space for the dozens of Hawaii-based longliners fishing for tuna, marlin, and other pelagic species, Pacific Ocean Producers, a huge marine and fisheries hardware store established in 1983 by Sean Martin, owner of the longliner 'Finback', and ex-akule aerial spotter Jim Cook, owner of the longliner 'Kaimi'. It houses a mammoth ice maker that serves fishing vessels as well as other customers island wide, several restaurants, and even a government office (NOAA Fisheries)." Full article link in comments.

OPINION: "The Freedom of Navigation Operations (FONOPs) program run by the US Department of Defense has become a symbol of China-US naval competition and of the West’s advocacy for a rules-based order. Operational assertions are thrust into the limelight whenever China responds to one. And barely any US statement goes by without reference to freedom of navigation and global norms. "That’s a problem. FONOPs were only ever meant to uphold narrow principles with select audiences in mind. Those principles uphold the right of all navies to operate in the world’s waters unimpeded. "A core audience since the program was established in 1979 has been foreign governments that may dispute the US stance on those rights but at least had context for the debate. To them, FONOPs are often an irritation, not a serious problem. "But that audience has expanded. Commentators, journalists, and officials have more reason to monitor maritime developments because they’re so central to Indo?Pacific security. They might not have expertise in arcane aspects of international law, but their voices matter deeply in shaping their country’s attitude to the United States – especially in democracies. "Some of them will view FONOPs through an intuitive rather than legal lens. Warships can be imposing. Sailing close by uninvited can appear like attempted intimidation – especially if histories of colonialism and gunboat diplomacy are at play. "FONOPs are easily perceived as the antithesis of the rules-based order that America seeks to uphold, muddying the distinction between its behaviour and China’s." Full article link in comments.

OFFSHORE ACCOUNTS: "Finally, a judge in the UK has confirmed what we had long suspected – that offshore contracting giant McDermott was on the edge of bankruptcy when it was forced to give a 20 per cent shareholding to the Colombian state oil company Ecopetrol to settle an arbitration award relating to a botched refinery project in February. "The financial insolvency press in the UK gave a great deal of coverage to the McDermott restructuring case, because of the precedents the case set for other re-organisations. However, the details largely slipped past the energy and shipping journalists until last week, when Iain Esau drew attention to some of the key elements in Upstream. "The most important revelation was that Ecopetrol’s Refincar subsidiary had been arguing for the liquidation of McDermott and the sale of its different divisions in an orderly manner to settle the US$1.3 billion arbitration claim that Refincar had won in 2023. Refincar only accepted the 20 per cent stake in McDermott because the English judge compelled it to. McDermott had attempted to restructure its debts in order to pay Ecopetrol fractions of cents on the dollar as an unsecured creditor, which the Colombians steadfastly resisted. "The case also revealed that McDermott had been hit by a hitherto undisclosed cyber attack in April 2023, disabling many of the company’s key systems for several weeks. McDermott thus joins Bourbon, Maersk, and Swire Pacific Offshore as shipping and offshore companies hit by hackers. "Most private companies keep such attacks secret, so we must assume that they are more common than thought and that maritime organisations need to remain vigilant on cyber security risks." Full article link in comments.

LETTERS: "Interestingly, according to a 2018 report from the World Association for Waterborne Transport Infrastructure, between 1960 and 2015, there have been 35 major bridge collapses worldwide due to ship or barge collision, with a total of 342 people killed. Eighteen of those collapses happened in the United States! "In the aftermath of this recent incident, there is currently much being written about bridges and bridge supports. Let’s face it: the ship collided with the bridge at one end of it and yet the rest of the 1.6-mile structure fell like dominoes. That shouldn’t happen. "However, on reading the media reports since the Baltimore bridge accident, there is not one mention of using tugs to solve the problem short and long term. Yet employing tugs to act as fail safe units during ships’ navigation of rivers world-wide is a quick fix and would not cost the earth." Full article link in comments.

OFFSHORE ACCOUNTS: "McDermott International, the 'troubled' offshore construction company, put out an innocuous looking press release a week ago. "Entitled 'McDermott announces completion of Transaction Support Agreement and amendment and extension of credit facilities,' it looked to be the driest and most boring document possible. There were no numbers mentioned in the document – just a few bland quotes from the CEO about rolling over McDermott’s letter of credit and term loan facilities successfully, and a pat on the back for the company’s lawyers and advisers. What a snooze. "The press release was largely overshadowed by an announcement on the same day that McDermott had won a contract from Thailand’s PTTEP for the change out of a flexible gas lift riser line at the Kikeh Field floating production storage and offloading vessel (FPSO) off Malaysia. This was valued at 'up to US$50 million' and seemed a lot meatier than the blah blah blah about the ill-defined restructuring. "But McDermott is like an illusionist, and we should not be looking at what they want us to focus on. Indeed, the magician’s rabbit was being smuggled into the top hat before our very eyes. Attention needed to be directed at a parallel press release from Colombia’s state oil company, Ecopetrol, issued on the same day. No, not the eye-catching report that the Colombian government will shortly begin a subsea excavation of the sunken Spanish galleon 'San Jose', which was sunk in a sea battle with the Royal Navy in 1708 not far from Cartagena with, apparently, tons and tons of gold coins and treasure aboard. "Instead, Ecopetrol’s announcement featured tangible riches for the company in the here and now. It announced that it was receiving 19.9 per cent of the share capital of McDermott International, in preferred shares, as a settlement for the disastrous delays to the refinery project in Cartagena that has plagued McDermott since 2019. "It was then that we first reported on the billion-dollar litigation hanging over the company, which its management initially poo-ed poo-ed as unlikely to succeed, and the allegations that its predecessor company Chicago Bridge and Iron Company had bribed Ecopetrol refining officials with the services of sex workers worth millions of dollars. "In August last year, the results of the arbitration were announced: a comprehensive defeat for McDermott and a one billion dollar award to Ecopetrol." Full article link in comments.

OFFSHORE ACCOUNTS: "Noble’s fixture and the huge discoveries by Galp and ExxonMobil reinforce the optimism that underpins the offshore industry. Cyan stands to benefit from MMA as a platform both to exploit the rising oil and gas market and to play the fast-growing Asian and Australian offshore renewables sector. "Like Rem’s newbuilding order, Cyan’s purchase shows how owners can combine flexibility in orders to work on both fossil fuel and wind projects. "Few are better at spotting big cycle shipping trends than John Fredriksen. He has just made the largest subsea vessel order in a decade; you’d be a fool to bet against him now. Cyan’s acquisition only reinforces the sense of optimism about subsea." Full article link in comments.

NAVAL GAZING: "US Army vessels are now taking a lead role in bringing relief to Gaza, which has suffered catastrophic damage and mass casualties during the course of the Israel-Hamas conflict. "In early March 2024, a flotilla of five US Army vessels set out from their base in Virginia on a mercy mission to Gaza. The ships involved are the landing ship vehicles (LSVs) 'SP4 James A. Lioux' and 'General Frank S. Besson' and the landing craft utility vessels (LCUs) 'Wilson Wharf', 'Monterrey', and 'Matamoros'. Also on passage to Gaza is the civilian-manned military support ship ex-USNS 'Roy P. Benavidez'. "The relief flotilla will be carrying equipment needed to set up a temporary pier, which is vital for the relief effort as Gaza has no port. This equipment includes components to set up the type of landing pier typically used for military operations, while Embarked US Army will carry out the necessary work. "The engineers will be joined by a 1,000-strong team of US Navy beach landing support specialists. "The plan is to set up a receiving facility capable of handling stores required to provide two million meals per day by early May." Full article link in comments.