Embattled Connecticut tanker owner Diamond S Shipping has lost its chief commercial officer after a year in which its operating performance in MR and suezmax tankers came under sharp criticism.
Michael Fogarty, senior vice president for commercial, parted ways with the New York-listed company in November, TradeWinds has learned.
Diamond management did not reply to a request for comment. Fogarty declined comment.
It has been a rough year for the Greenwich-based company, which is led by chief executive Craig H Stevenson Jr.
Fogarty is one of several veterans of the old OMI Corp recruited to Diamond by Stevenson, who had led OMI to one of shipping’s biggest success stories of the 2000s.
Stevenson and Robert Bugbee, now Scorpio Group president, had transformed OMI from a troubled penny stock to a mature tanker company that was sold to Teekay Corp and Torm for $2.2bn in 2007.
Fogarty was one of the key members of OMI’s well-respected chartering staff.
Stevenson essentially replicated the OMI model of suezmaxes with MRs in building the Diamond fleet.
Like most tanker companies, Diamond made big money in the year’s first half on an oil glut and floating storage, turning in a net profit of $90.7m.
However, in May, the owner was put in the tough position of explaining that its second-quarter bookings would miss some of the boom market because of “stranded voyages” in the crude fleet.
It was Fogarty’s task to explain the issue in August at the next quarterly earnings call.
He said six suezmaxes had been hung up on discharge delays and forced to accept demurrage rates that — while strong at about $40,000 per day — trailed the prevailing $100,000-per-day market.
“We missed earning those high-paying voyages because we were stuck on demurrage,” Fogarty said.
“And now that the market has completely turned, and we're at a much lower rate — $15,000 to $20,000 a day for suezmaxes — those voyages have finished, unfortunately. So we kind of got a double whammy with it.”
But the suezmax miss was far from the only issue.
In June, Diamond announced it was placing most of its product tanker fleet into Norden Shipping’s MR pool.
Analysts said Diamond was acknowledging its consistent underperformance of rates achieved by Norden and the broader market.
This was followed by reports of lay-offs in Diamond’s chartering staff, and by Greek shipowner Evangelos Marinakis pulling ships he had contributed to Diamond in a 2019 merger with his Capital Maritime back under his commercial control.
Then in November, Marinakis issued an unusual public condemnation of Diamond management and the owner’s operating performance.
The Capital founder said he regretted the merger, calling it one of his worst business decisions.
“They failed to take advantage of the good tanker markets to sell older assets and take time charter coverage, while the commercial performance and overall governance has been disappointing,” Marinakis said during a conference panel appearance.
Then during a third-quarter earnings call days later, Stevenson acknowledged that Diamond’s suezmax performance had been “substandard”, saying he would consider alternatives, including pool employment.
Fogarty did not participate in the 16 November call.
Two days later, a footnote to a US Securities and Exchange Commission (SEC) filing related to shareholding referred to Fogarty as “Former Senior VP — Commercial”.
On 27 November, Diamond said in a one-sentence SEC filing that a previously agreed sale of the MR tanker Atlantic Mirage (built 2009) had been cancelled “due to unexpected delays in the vessel’s itinerary”.
The prospective buyer was understood to be Ecuadorian oil company Flopec.
Diamond has not otherwise publicly disclosed Fogarty’s departure or said anything about a replacement.
Diamond operates 17 crude tankers, 16 of them suezmaxes. It also owns and operates 50 MR product tankers.
