John Fredriksen is working on an acquisition which if successful would clinch further expansion of Frontline's crude tanker fleet.
The Norwegian billionaire told TradeWinds that he and his team are in a dialogue to take over a rival fleet, though he declined to reveal any details.
“The process is ongoing and a transaction may take place within the next few months,” said Frontline’s chairman and largest shareholder
Frontline last week announced a deal to acquire 10 suezmaxes with four options from trading house Trafigura in a $675m cash and share transaction.
Yesterday, the Oslo and New York-listed company posted a return to profit year-on-year in the second quarter and signalled growing confidence in the crude tanker market outlook.
"We believe this is an inflection point in the tanker market and have positioned Frontline to be in the pole-position of this development,” said chief executive officer, Robert Hvide Macleod.
Tanker demand is being lifted by the return of refining capacity after maintenance closures, supply is being crimped by the impact of new IMO 2020 emissions rules, while rising US exports are extending the length of voyages.
Hvide Macleod said he did not want to comment on any further possible transaction.
“We have a very good fleet, no-one else have something similar and with such a low average age,” Fredriksen said.
“But we should really have had some more VLCCs. This is what we are looking at. We are still looking for consolidation.”
If Frontline exercises the Trafigura options it will lift its crude tanker fleet to 79 vessels.
Fredriksen ruled out further newbuilding orders, but did hint that the takeover of newbuilding contracts was a possibility.
Earlier this summer, Frontline was linked to a possible deal to acquire the VLCC newbuildings of Arne Fredly’s Hunter Group.
Fellow Oslo newcomer Okeanis Eco Tankers which has a series of eight VLCC newbuildings under construction at Hyundai Heavy Industries may be another possible target.
In July it emerged that Fredriksen had walked away from potential orders for up to eight VLCCs with two Chinese shipyards amid intense market talk that the group is homing in on 10 dual-fuel VLCC newbuildings in South Korea.
Fredriksen interests penned letters of intent with both Dalian Shipbuilding Industry Corp and Shanghai Waigaoqiao Shipbuilding, both for two firm vessels with two optional slots. But the LOIs were later dropped at both yards.
