Eurotunnel Reluctantly Sells Ferries to DFDS

By Reuters 2015-06-07 19:10:52

Eurotunnel, the operator of the undersea rail link between England and France, said on Sunday it reluctantly agreed to sell its Calais-to-Dover ferry business, MyFerryLink, to DFDS, a Danish competitor on the same sea route.

The company is a forced seller of the service because of antitrust action. It said it had wanted to sell the business to a workers’ cooperative, SCOP SeaFrance, rather than to DFDS.

The price was not disclosed.

Britain’s Competition and Markets Authority (CMA) has been examining Eurotunnel’s move into the ferry market since 2012 when the company bought the former SeaFrance ferries from French rail operator SNCF. A tribunal earlier this year ruled it should cease on the grounds it was too dominant in cross-channel traffic.

Eurotunnel announced the MyFerryLink exit plan on May 28, even though a British court in the meantime had contradicted the tribunal ruling and cleared the way for continued operation.

The company said it made the decision because it feared the CMA would continue its campaign despite the ruling.

DFDS shares reached a record last week after Eurotunnel’s decision to sell up. Analysts had said the exit was good news for DFDS, and predicted correctly that it might buy the ferries.

In its statement on Sunday, Eurotunnel said it “regrets that the SCOP SeaFrance has not had the support it needed to be able to present a takeover proposal.”

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Oceans: An Essential Global Resource

By MarEx 2015-06-07 19:01:41

June 8 is World Oceans Day, a day to celebrate our world’s shared ocean and our personal connection to the sea, as well as to raise awareness about the crucial role the ocean plays in our lives and the important ways people can help protect it.

The world’s oceans – their temperature, chemistry, currents and life – drive global systems that make the Earth habitable for humankind.

Our rainwater, drinking water, weather, climate, coastlines, much of our food, and even the oxygen in the air we breathe, are all ultimately provided and regulated by the sea. Throughout history, oceans and seas have been vital conduits for trade and transportation.

Careful management of this essential global resource is a key feature of a sustainable future. The challenge of caring for our oceans is being taken up by people around the world.

Facts and Figures

Oceans cover three quarters of the Earth’s surface, contain 97 percent of the Earth’s water, and represent 99 percent of the living space on the planet by volume.

Over three billion people depend on marine and coastal biodiversity for their livelihoods.

Globally, the market value of marine and coastal resources and industries is estimated at $3 trillion per year or about five percent of global GDP.

Oceans contain nearly 200,000 identified species, but actual numbers may lie in the millions.

Oceans absorb about 30 percent of carbon dioxide produced by humans, buffering the impacts of global warming.

Oceans serve as the world’s largest source of protein, with more than 2.6 billion people depending on the oceans as their primary source of protein.

Marine fisheries directly or indirectly employ over 200 million people.

Subsidies for fishing are contributing to the rapid depletion of many fish species and are preventing efforts to save and restore global fisheries and related jobs, causing ocean fisheries to generate $50 billion less per year than they could.

As much as 40 percent of the world oceans are heavily affected by human activities including pollution, depleted fisheries and loss of coastal habitats.

Case Study: U.S. Coast Guard Rescues Sea Turtles

Last week, a law enforcement team from the U.S. Coast Guard Cutter Stratton sped to the scene of a suspicious object floating in a known drug transit zone in the Eastern Pacific Ocean. When the crew arrived at the scene, they found two sea turtles entangled in fishing line and make shift buoys.

“There was no question what we had to do. And no one spoke a word. We immediately moved in to rescue mode,” said Petty Officer 2nd Class Hylan Rousseau. The Coast Guardsmen on board the vessel removed green fishing line. One of the turtles had line wrapped around its neck, which restricted its airway causing apparent respiratory distress.

“We cut the first turtle free without much incident. While we were freeing him, we could see the second, and much larger turtle, was quite literally choking to death,” said Chief Petty Officer Brian Milcetich, a member of the law enforcement team. “He had been trying so hard to free himself from the fishing line that he had cinched the line around his own neck.”

After lifting the approximately 70-pound turtle on board, the delicate process began. A specialized pair of sheers normally used by emergency medical technicians was used to sever the line. Following the rescue, the crew stowed their gear and continued patrolling the area.

Case Study: Australia’s Humpback Whales

On ScienceNetworkWK Michelle Wheeler reports that humpback whales are facing pressure from both reduced food availability because of climate change and from being disturbed by mining and boats as they make their annual migration along Western Australia’s (WA) coast.

The impacts have recently been documented in two studies. In the first study, researchers used historical whaling data from Albany, Carnarvon and Point Cloates to examine the body condition of humpback’s caught in WA waters from 1947-1963.

They used oil yields as a proxy for whale body condition and found the whale’s fat content, or energy reserves, was highest when there was a lot of krill available. This in turn was associated with high sea ice cover in Antarctica the previous winter.

Whale researcher Janelle Braithwaite says the research is important in trying to assess climate change impact in the Southern Ocean in the future. “If there’s less sea ice then there’s going to be less food for whales,” she says.

“If there’s less food for whales, then our results indicate that the whales aren’t going to be as fat, and this is going to cause problems when it comes to trying to complete migration on their limited energy reserves as well as also reproducing.”

A second study led by Braithwaite used theoretical models to determine the optimal speed whales would travel and the ideal amount of rest they would have if they wanted to conserve energy.

The results closely mirrored what happens naturally in the wild, suggesting whale migration has evolved to conserve energy on the long journey, Braithwaite says. She says mining off the coast and boats in places like Exmouth Gulf and Shark Bay can disrupt these natural migration patterns.

“Human activities do have the potential to disrupt this energy conservation by disturbing [the whales] when they’re resting so they can’t rest for long enough, making them swim faster so they’re using more energy,” Braithwaite says.

Braithwaite says the two papers show humpbacks are facing new challenges, just as their numbers have begun to recover from whaling. “If you have a low krill year…and then they’re migrating and they encounter a lot of human activity, mining off the coast, lots of boats…they’re vulnerable to being exhausted and not being able to complete their migration and successfully reproduce.”

Case Study: Nitrous Oxide

Nitrous oxide is a potent greenhouse gas that can contribute to climate change and damage the ozone layer, but its cycling in and out of ocean waters has remained poorly understood.

New research by MIT postdoc Andrew Babbin and three others has provided a way to quantify its ocean cycling. The findings, based on computer analysis and sampling of ocean waters from different depths, show that this source of atmospheric nitrous oxide has been drastically underestimated. There have been a lot of estimates on what the sources and sinks are, both on land and in the ocean, Babbin says. But the new measurements show that in parts of the ocean, those estimates were off by at least a factor of 10.

A particular zone of the ocean — a boundary between oxygen-rich surface waters and oxygen-free, or anoxic, deep waters — plays a key role in nitrogen cycling. This suboxic zone experiences an imbalance between bacterial processes that create nitrous oxide and those that break it down — and the excess of nitrous oxide created by this imbalance is given off to the atmosphere.

Ocean nitrification begins with nitrogen entering the sea as runoff from agricultural fertilizers and other sources. Marine microbes take in nitrogen compounds, such as ammonia, and chemically modify them, releasing nitrous oxide as a byproduct. Other bacteria carry out denitrification, a process that breaks down nitrogen compounds through steps that ultimately lead to nitrogen gas — but which can also release some nitrous oxide.

Most of the time these processes balance out. “The denitrifying bacteria that produce nitrous oxide also consume it, and it was thought that these two processes are pretty tightly coupled,” Babbin says. But that’s not the case in the suboxic layer, resulting in leftover nitrous oxide that leaks away to the surface.

The research involved taking water samples from various depths at three different locations in the eastern tropical North Pacific, and then measuring these samples in the lab to determine their denitrification rates. The sampling region is one of three known to have extensive suboxic zones, Babbin says, along with the eastern tropical South Pacific and the Arabian Sea.

Babbin’s measurements demonstrate that production of nitrous oxide in just these three small regions could equal the total worldwide marine production that had been estimated in climate models, including the most recent International Panel on Climate Change report: some four million metric tons of nitrous per year. While that amount is dwarfed by carbon dioxide production, nitrous oxide is 300 times more potent as a greenhouse gas.

Anoxic regions of the ocean are expected to increase significantly in size, thus also expanding suboxic zones and their nitrous oxide production — which could amplify climate change. “These findings are highly significant,” says James Galloway, a professor of environmental sciences at the University of Virginia who was not involved in this research, “as they indicate that now the oceans can be expected to increase their nitrous oxide emissions, just as continents are expected to, due to agriculture.”

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China Mourns Loss of Life at Jianli

By MarEx 2015-06-07 16:00:01

Chinese officials, rescuers and family members gathered in mourning on Sunday for those lost on a cruise ship which capsized during a storm in the Yangtze River, as the death toll from the disaster reached 431, with 11 still missing.

Only 14 survivors, one of them the captain, have been found after the ship carrying 456 overturned in a freak tornado on Monday night in Jianli in Hubei province. Most of the passengers were elderly tourists.

The Eastern Star was righted and raised on Friday, allowing rescuers onto to it to clear away debris, break down cabin doors and look for bodies. The river is being swept to as far away as Shanghai looking for the missing.

Government spokesman Hu Kaihong told reporters that DNA tests were being carried out to identify the bodies.

Sunday marks seven days since the Eastern Star went down, and according to Chinese tradition this a key date on which to mourn the dead.

State television showed rescue workers and government officials standing on a barge facing the battered boat, removing their hats and bowing their heads, as surrounding boats sounded their horns.

At separate locations along the river, emotional family members also got together to burn joss sticks and make offerings of food to the spirits of the deceased.

More than 1,400 relatives have come to Jianli, with many expressing frustration at the lack of information from the government. On Friday, one burst into a just-concluded news conference, publicly accusing the government of treating its people like enemies.

The government says that it is doing everything possible to help the relatives, including providing free accommodation and medical services, and Vice Premier Ma Kai has been dispatched to meet family members personally.

Some relatives, speaking to foreign reporters in the presence of officials, praised the government’s efforts.

“It made me feel incredibly warm. When he shook my hand and said a few words to me, told us to keep on going. I felt that he didn’t seem like a political leader at all. He was so genial. He was like my own father,” Wang Hua, 42, who lost both parents on the ship, told Reuters of her meeting with Ma.

Major state newspapers on Sunday carried the same lengthy story by the official Xinhua news agency on their front pages, headlined “Bearing great responsibility to the people” and detailing the government’s efforts.

“In the midst of disaster, we are all of one heart, the whole nation helping each other, staunchly moving forward,” it wrote.

The company which operated the ship has apologized for the disaster and said it would “fully” cooperate with the investigation. Beijing has pledged there would be “no cover-up”.

Police have detained the captain and chief engineer for questioning as part of the investigation. An initial probe found the ship was not overloaded and had enough life vests on board.

The captain Zhang Shunwen, and chief engineer Yang Zhongquan both report the vessel being caught in a freak storm, and BBC reports one passenger describing the ship as tilting at a “45-degree angle” before going down.

The suddenness of the storm might explain why the no emergency call was sent, and why there were so few survivors despite enough lifejackets being available for those on board.

Some have questioned why the vessel was sailing given that there were multiple weather warnings issued by regional authorities in Hubei and Jingzhou. At this stage, it is not clear if the captain received the warnings.

Zhang was quoted as saying by Xinhua that the ship overturned within one or two minutes.

He could be found culpable if he had abandoned the ship, said James Hu, professor at the Shanghai Maritime University and an expert in maritime law, although there is no evidence he did.

“China has one rule that it’s particularly strict on – the captain must be the last one to leave the ship,” Hu said. “If the leader of the ship is not the last to leave the ship, it is a jailable offence.”

The disaster has now caused a higher toll than the sinking of a ferry in South Korea in April 2014 that killed 304 people, most of them children on a school trip. It is China’s worst shipping catastrophe in seven decades.

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Over 2,000 Migrants Rescued in Med

This weekend the Migrant Offshore Aid Station was involved in the rescue of more than 2,000 people from five separate migrant boats with the assistance of navy vessels from Italy, Germany and Ireland. After spending some nine hours coordinating the rescue efforts, Phoenix is currently on its way to Sicily to disembark some 372 people including 184 men, 126 women and 62 minors, mostly from Eritrea.

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Ship Management: Some Things Never Change

By Wendy Laursen 2015-06-07 16:35:00

After 30 years of running one of the world’s leading ship management companies, Olav Eek Thorstensen has stepped down as CEO of Singapore-based Thome Group, leaving his successor, Olav Magnus Nortun, to take the helm. But with Olav Eek Thorstensen assuming the mantle of Thome Group Executive Chairman, there is plenty of experience and management brainpower available to help the group grow and strengthen in the years ahead.

MarEx spoke to Nortun to find out what is occupying his thoughts as he leads the company forward.

What challenges have been set for you at Thome?

The need for shipowners to cut costs is a never-ending theme of the market and with only 20 percent of owners using third party managers, there are plenty of opportunities to build on the scope of work and services we can offer our clients. In some cases, owners are earning freight revenues up to 20 percent below opex – a factor which creates its own efficiency issues for them. This is where a quality ship manager can help, not just through his larger purchasing and administrative power but also through implementation of tried and tested processes and procedures in key areas such as crewing – recruiting, training and retention – as well as all facets surrounding the technical management of the ship.

As a company, we are focusing on organic growth. We want to keep our position as the premier ship management company and make sure we continue to enjoy healthy, sustainable organic growth. Ship management is all about partnership with our owning principals, and it is important that the companies we work with share the same management ethos and the drive for quality that we as a group strive to deliver. As you well know, Thome is a major force in the management of today’s merchant ships, especially tankers, but we are also an established third party provider of offshore services, and we aim to be as much of a leader in the growing offshore sector as we are in our traditional vessel sectors.

Today’s low oil price is a blessing for fuel purchasing but a curse for the oil exploration and development industry. Offshore service vessel owners need to cut costs by between 20 and 30 percent, which opens up further opportunities for the outsourcing of technical services to third party ship management companies like us. So we see this ongoing situation as an opportunity.

The shipping industry has its work cut out pushing forward the boundaries of vessel operational efficiency – a challenge that Thome is already meeting and will continue to meet.

Where will you make changes?

Thome Ship Management offers full ship management services for vessels trading worldwide. We have a long history of successful management of all kinds of vessels particularly tankers, bulk carriers and container ships. The company was a pioneer in ship management and has a full suite of services it can offer its clients. It is a well-run organization.

So I am looking to see where we can leverage our strengths so we can further develop them. To be more efficient, we are looking at what we are going to outsource and how we are going to scale the organization moving forward.

We have a big presence in the Philippines, one we have had for a long time. We focus on crewing and purchasing there but may expand that further. Croatia is also a good source for officers, and we are looking at the feasibility of establishing a technical center there.

Additionally, LNG-fuelled vessel management is becoming more and more of a demand from our principals so we are planning to scale up that activity.

What experience do you bring to the job?

Prior to joining Thome, I worked with DNV GL in a variety of positions where I gained wide experience in the maritime industry, specifically strategic development and governance of production, knowledge management and systems related to ship classification.

I received a Master of Science in Naval Architecture from the Norwegian Institute of Technology with a postgraduate thesis in Management in a Technological Environment, and I have attended senior management courses at INSEAD, Fontainebleau and IMD in Lausanne.

That’s what your CV says. What about the real you?

Before I came to Thome, I was heavily involved in the integration of DNV and GL. I was also looking after vessels that traded globally from a technical point of view, factors I believe will add a strong perspective to the job I am doing here at Thome.

I now live in Singapore, which is the sixth country that I’ve had a work permit for. Here at Thome, we have different nationalities in our staff, our crew and our principals, and I believe I have a good understanding of what it takes to manage them effectively and productively.

How does Thome recruit its seafarers?

Launched in 2005 under Thome’s Human Element initiative, the Thome Global Cadet Program has already trained in excess of 1,350 cadets from at least 12 countries in Asia, Europe and the Far East. Currently there are 650 cadets at various stages of training on the program with another 250 plus due to join soon as deck, engine, and electrical and catering cadets in 2015. The success of this scheme has enabled Thome to fill all of its 2014 junior officer vacancies from within its own pool of trained seafarers.

As Thome Group continues with the controlled expansion of its fleet, the requirement for suitably trained officers to serve on board our tankers, bulkers, gas carriers and offshore vessels has increased exponentially. Our cadet program includes a robust selection process to ensure we recruit well-rounded individuals who benefit from our high quality coaching. Our cadets are a multi-national and multi-cultural group, fully representative of the diversity within Thome Group.

The cadet intake for 2015 is around 275 cadets globally with the Philippines remaining the core of the intake, but we continue to expand in Myanmar, Europe, India and China.

What are the technical challenges of the future?

Current and future legislation relating to emissions can be challenging for shipowners. Take the Ballast Water Management Convention, for example. Owners need to know what is the right product they need to invest in and when do they need to invest. They ask us: Is there a system that is actually complying with all the legislation? The convention has been around for about 10 years now, and we still haven’t got a firm implementation date. We still don’t have sufficient numbers of suppliers or equipment approved. What will happen? That is a real challenge for everyone.

Where is technology leading the industry?

Soon it will be possible for ships to stream video anywhere in the world. This will yield lots of possibilities for ship management companies including how to manage what is going on at sea, how to help the crew and how to can improve efficiencies by more enhanced online vessel-monitoring.

I see that this growing connectivity will help us guide and support them better – in ways we haven’t even imagined yet. It’s like when we got mobile phones, we didn’t really know what we would be able to do with them, and today they’re not really phones anymore – having a conversation is the least frequent job we use them for.

So connectivity will really shape the industry in the future, but how exactly? That’s still guess-work.

How do you view Thome operating in the future?

We will embrace technology sensibly, and we are heavily focused on how to harness Big Data to better serve our principals. We will give them the information they need, getting it directly from the source without too much filtering. With so many sensors on board it gives lots of new possibilities, and it will reshape the industry.

That said, technology is developing incredibly quickly, and that is a challenge. Is a new development something that is driven by need or by opportunity? We need to manage change so that it is driven by need, because there are a lot of things that you can do that don’t really give you benefit. It’s like young people and social media: Is it actual or is it virtual? How many friends do you really have?

While technology will change us, some things won’t change. Crewing is going to be just as important in the future as it is now. We will always need to know the level of competency we have on board, how the crew behave and how to develop the right safety culture that the crew can embrace.

Thome makes a point of ensuring that it is in control of the quality and numbers of new entrants it needs for the ships it manages. Being self-sufficient in this area is important. In ship management you have both the technical and the human element. You can’t have one without the other, and we are focusing on both going forward. – MarEx

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Iran in Russian Oil Barter

By Reuters 2015-06-07 16:22:42

Russia will begin importing Iranian oil under a long-heralded oil-for-goods barter arrangement in the coming week, Iran’s oil minister was quoted as saying, more than a year after negotiations began.

The Kremlin announced in April it had begun to implement the deal, in which Iran would export up to 500,000 barrels per day (bpd) of crude oil to Russia in exchange for goods of an equivalent value, but traders said they saw no signs of it.

“Russia will begin oil imports from Iran this week,” the semi-official Fars news agency quoted Bijan Zanganeh as saying on Saturday, citing a report by Bloomberg, as he returned to Tehran from an OPEC meeting in Vienna.

“We agreed with (Russian Energy Minister) Alexander Novak in Vienna that Russia will buy less than 500,000 bpd from Iran in exchange for cash, and Iran will use this cash to buy Russian goods such as steel, wheat and oil products from Russia.”

Iran’s oil exports have fallen by more than half to around 1.1 million bpd since 2012, when Western powers imposed sanctions aimed at curbing the Islamic Republic’s disputed nuclear programme.

Iran and six countries, including Russia, reached an interim agreement in early April and are working towards a final deal by the end of this month that could see sanctions lifted.

But the two sides still disagree on several issues, and Tehran has been working in parallel to develop what its leaders call a ‘resistance economy’ that can survive under sanctions.

Sources told Reuters more than a year ago that Iran was working on the barter deal with Russia, which they said could be worth up to $20 billion.

Russia also lifted a self-imposed ban on selling the advanced S-300 surface-to-air missile system to Iran shortly after the interim nuclear agreement, a move criticised by Western powers.

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