OPEC’s decision to maintain its production target also contributed to the protracted slump in low crude oil prices. The low prices, along with surplus production of oil led to the continued build-up of onshore storage and boosted demand for tankers. With the number of crude tanker deliveries during the year remaining relatively low, this led to a tighter supply of tonnage and improvement in earnings for the petroleum shipping industry. Amidst an improved tanker rate environment, AET, our petroleum shipping arm, seized the opportunity to capitalise on higher spot charter rates and renewed contracts which were expiring at higher time-charter rates. Key developments AET continued to make steady progress in enhancing the competitiveness of its fleet, with the mission to deliver optimum solutions to its customers. In 2015, AET embarked on a fleet renewal programme for its crude tanker fleet and ordered four 113,000 dwt Aframax vessels and two 158,000 dwt Suezmax vessels, to be delivered by Samsung Heavy Industries Co. Ltd. (SHI) in 2018 and Hyundai Heavy Industries (HHI) in 2017 respectively. These newbuilds, upon delivery, will replace older tonnage in the AET fleet and re-balance the fleet profile. In addition, AET placed orders for two long-range (LR) product tankers of 114,000 dwt as a testament to its commitment to expand its business in the Clean Products sector. The vessels, upon delivery from HHI in 2017, will mark AET’s maiden venture into the ownership of LR2 vessels. The year also saw AET expanding into the North Sea shuttle tanker market, after taking delivery of two state-of-theart Dynamic Positioning (DP) shuttle tankers to service long-term contracts with Norwegian energy company, Statoil. Both vessels, Eagle Barents and Eagle Bergen, are equipped with DP technology to enhance their ability to stay in position, especially crucial when operating in harsh water conditions in the North Sea oil fields. The vessels are also fitted with a range of ecoinnovations to reduce their impact on the natural environment including a fully fitted ballast water treatment system, SOx scrubber. In 2015, 59 AET vessels were bestowed the prestigious 2015 Environmental Achievement Award by the Chamber of Shipping America testifying to their conscientious observance of the highest Health, Safety, Security and Environment (HSSE) standards. AET Shipmanagement attained ISO 50001:2011 Energy Management certification which features complex monitoring and measurement pa r ame t e r s r e l a t i ng t o e n e rg y management systems. In Singapore, AET became the second company to achieve this certification in partnership with ABS. Moving forward For the immediate term, the tanker market is projected to be favourable, as crude oil market is expected to remain oversupplied. AET will remain vigilant on the market developments, and continue to employ an optimum spot term strategy for its fleet. Today, AET’s fleet operates globally which gives it additional flexibility in positioning its vessels. AET will continue to maintain its Aframax fleet presence in both the Atlantic and Pacific regions and will supplement the fleet with in-charters as and when needed to take advantage of market conditions. In the lightering trade, AET will continue to provide its specialised services in the niche US Gulf (USG) lightering market through active customer and fleet management. In the clean tanker space, AET will focus on building a sustainable yet flexible fleet (including a portfolio of short and long-term chartered-in vessels) to meet the growing needs of its customers. For 2016 and beyond, AET will also be focusing on building a revenue stream of secured income on the back of longterm contracts. This includes looking for opportunities to expand AET’s shuttle t a n k e r bu s i n e s s a nd s t r a t e g i c partnerships with its customers on the conventional tanker front. MISC BERHAD Annual Report 2015 59
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