Abu Dhabi’s rapidly expanding Al Seer Marine has outlined plans to boost its fleet after confirming a swoop for two Sovcomflot VLCCs.
It said in a stock exchange filing that it had spent AED 404m ($110m) on the 321,000-dwt SCF Shanghai (built 2014) and Svet (built 2013), renamed Twin Pollux and Twin Castor.
Brokers have also reported the owner as acquiring two Sovcomflot LPG carriers, the 20,550-cbm Sibur Voronezh and 20,311-cbm Sibur Tobol (both built 2013).
Al Seer did not name the vessels, but said it had acquired two LPG vessels for AED 246m.
The Russian company had to sell vessels financed by European banks because of European Union sanctions.
Al Seer said the VLCC deals fit its strategic expansion plans to become a global player.
The company wants to acquire between 10 and 15 ships this year.
“Under current market conditions, these newly acquired tankers are expected to provide estimated returns of more than 20%,” it said.
“This is largely due to a forecasted global increase in tonne-mile demand fuelled by an uptick of crude oil production by 4% in 2022, and the declining global VLCC orderbook, which is down to 5.8% of the global fleet of 440m dwt of crude oil tankers.”
Timing is right
Al Seer now controls nine vessels, including bulkers, valued at $175m. It is analysing expansion initiatives in crude and product tankers, gas carriers and dry bulk.
Chief executive Guy Neivens said: “This acquisition of two new crude oil tankers is strategically driven, given the current market conditions, and we expect to see strong returns as oil demand recovers and ship recycling returns to normal levels.”
He believes increased scrapping will cause a reduction in the global tanker fleet, “presenting an opportune time for Al Seer Marine to expand and continue our trajectory in becoming one of the largest commercial shipping fleets in the Middle East and Asia regions”.
Al Seer is a subsidiary of Abu Dhabi industrial conglomerate International Holding Co.
The company said in April that it had completed a AED 495m financing transaction to build two VLGCs ordered by ABGC DMCC, its $170m joint venture with energy trader BGN International.
Abu Dhabi Islamic Bank is funding the duo being built by Hyundai Heavy Industries in South Korea.
The 86,000-cbm ships, costing $81m each, are due in 2023.
In March, Al Seer missed out in a bidding battle to buy two MR tankers under construction at South Korea’s K Shipbuilding, formerly STX Offshore & Shipbuilding.
The ships, sold for a total of $77m to Pacific Carriers, were originally ordered by South Korea’s Dong-A Tanker.