A Federal Court of Australia judge has ordered that a Singapore-controlled tanker linked to Oaktree Capital Management, and an Australian oil fuel supplier, appoint a mediator to help settle an ongoing dispute over a contaminated cargo of diesel fuel.
The mediator’s task will be to determine the amount of security required to secure the release of the 105,000-dwt LR2-type product tanker AG Neptune (built 2013), which has been languishing under arrest in Australia since 3 May.
The tanker had arrived off the port of Newcastle with 62,000 metric tonnes of diesel fuel that had been procured in Taiwan by Viva Energy Australia, a company that claims on its website to supply “a quarter of the fuel that Australians need to reach their destination”.
Court documents list AG Neptune Ltd, the vessel’s bareboat charter, together with its registered owner is OCM Capital Flyer, as the entities that appeared in the court on behalf of the ship.
Shipping databases link the AG Neptune to Singapore-registered AG Shipping and Energy, a company that TradeWinds was unable to reach by phone and that has an address shared with a corporate services company.
Market sources said that Oaktree financed AG Shipping’s acquisition of the tanker by AG Shipping in 2018. Both IHS Markit and VesselsValue list the Oaktree as the beneficial owner of the ship.
Viva Energy alleges that the diesel fuel was within specification when it was loaded onto the AG Neptune in Kaohsiung in March, but upon arrival at Newcastle on or about 10 April, the cargo in all tanks was found to be contaminated which has caused it losses and damages in the sum of approximately $41m.
Why the AG Neptune’s bareboat charterers and their insurers and/or P&I club West of England have been unable or unwilling to put up the security demanded by Viva Energy is unclear.
Market sources following the case believe that they deem the security amount to be excessive.
The AG Neptune is currently anchored off the port of Gladstone, where it was moved at shortly after its arrest at the request of OCM Capital Flyer to facilitate bunkering with very low sulphur fuel oil, which was running low.
The move to Gladstone was also made for safety reasons, as the port’s sheltered anchorage was deemed a more appropriate location for keeping ship than the exposed waters off Newcastle, where the ship had been required to drift 12 nautical miles off the coast.