Snap-back Accident Causes Serious Injury

By MarEx 2015-07-09 12:28:01

The UK’s Marine Accident Investigation Branch (MAIB) issued a safety bulletin following a mooring line failure on the LNG carrier Zarga, which injured a deck officer.

In early March 2015, a deck officer onboard the Zarga was struck in the head by a mooring line that parted during a docking at the South Hook LNG terminal, Milford Haven. He had to be airlifted to a hospital for emergency surgery.

Snapback danger was identified in the ships risk assessments procedures, but critical zones were not been marked on the tanker’s deck. The MAIB did a series of tests and trails to measure elongation and snapback characteristics:

• When connecting synthetic tails to UHMPE, HMPE and wire mooring lines, the energy introduced due to the elasticity of the tails can significantly increase the snap-back hazard.

• Elongation is proportional to the length of tail. Increasing the length of the tail will increase the amount of elongation and hence the amount of energy that can be stored in the line when under load.

• Ship owners/operators should ensure that the type of lines and tails used for mooring lines are suitable for the task and that the dangers of snap-back are fully considered.

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Former Chief Mate Jailed for Oil Dumping

By MarEx 2015-07-09 11:46:29

The former chief mate of the ocean cargo vessel M/V Murcia Carrier was sentenced on Wednesday to three months in prison for environmental crimes.

On April 27, 2014 Russian citizen Valerii Georgiev ordered crew members on board the M/V Murcia Carrier to dump several barrels containing hydraulic oil overboard. While Georgiev disputes the quantity of oil dumped into the sea, the government believes that approximately 20 barrels were dumped overboard.

The dumping occurred in international waters off the coast of Florida while the vessel was in transit from Costa Rica to New Jersey. It was not recorded in the ship’s oil record book in violation of the Act to Prevent Pollution from Ships (APPS).

During the course of the Coast Guard boarding, Georgiev denied that dumping occurred and instructed crew members on board the vessel maintain the same story. However, on June 15 of this year Georgiev admitted wrongdoing by pleading guilty to the environmental violations.

Also in June, the operator of the M/V Murcia Carrier, Glasgow-based Norbulk Shipping UK Ltd, pleaded guilty to failing to maintain an accurate oil record logbook and providing false statements with respect to the vessel’s garbage record book. The company was ordered to pay a fine of $750,000 and placed on probation for three years.

The case was investigated by U.S. Coast Guard Sector Delaware Bay and the U.S. Coast Guard Investigative Service. Captain Benjamin Cooper, the Sector Commander for the USCG Delaware Bay said, “the Coast Guard takes marine pollution seriously and works cohesively with our partner agencies to hold those who violate international law accountable for their actions. We anticipate the results of this case will deter future brazen illegal oil discharges into the sea.”

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MSC Diverts Ships from Tunisia

By MarEx 2015-07-09 11:01:14

MSC Cruises said it will drop port calls to Tunisia after the country imposed a state of emergency due to terrorism fears.

MSC will suspend Tunisia from its port rotation during 2015-2016 winter season. The popular destination, La Goulette, will be changed to Valletta, Malta.

The MSC Magnifica and MSC Poesia were scheduled for Tunisia in November and December. Tunisia’s president, Beji Caid Essebsi, declared the state of Emergency on July 3rd following the June 26 attacks on the Port El Kantaoui resort. Thirty-eight tourists were shot by a single Tunisian gunman in what is considered the worst attack in that country in more than a decade.

The attack was carried out by a student who had trained with terrorists that were involved in a March massacre at the national museum in Tunis. In the earlier incident, 12 passengers from the MSC Splendida were also killed along with 12 others museum visitors.

The terrorists attacks are apparently aimed to destroy Tunisia’s economy of which tourism is about seven percent of the GDP.

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BP Seized Settlement Chance Amid Dwindling Options

By Reuters 2015-07-09 09:16:28

In early May, with its legal options dwindling and investors impatient, BP Plc saw a chance to negotiate what became a $18.7 billion settlement that ended five years of litigation over the worst offshore oil spill in U.S. history.

An unexpected opportunity to secure a global deal that would wipe the slate clean of hundreds of claims and untold billions of dollar in penalties opened up when Chief Executive Bob Dudley met with Patrick Juneau, the lifelong Louisiana litigator who BP had panned for handing out “absurd” sums of money as part of a class settlement in 2012.

The British giant was ready to bury the hatchet after years of acrimony over payouts, which had ballooned to more than $10 billion. It had bigger problems: unresolved claims by the federal government, five Gulf of Mexico states and hundreds of local municipalities stemming from Macondo well blowout.

Toward the end of an over hour-long conversation about the claims, Juneau, a mediator by trade, steered it toward the bigger cases BP still faced from the 2010 disaster that killed 11 men and gushed oil into the Gulf of Mexico for 87 days.

“I suggested to Mr. Dudley that it seemed to me that I, along with Judge Shushan and Louie Freeh, thought that those matters can be and should be addressed,” he told Reuters.

Sally Shushan, the eastern Louisiana district court magistrate, and former Federal Bureau of Investigation director Freeh, who had been enlisted to investigate Juneau’s oil spill claims program, were already deeply steeped in the issue.

Within weeks, District Court Judge Carl Barbier, who had overseen years of acrimonious lawsuits, had designated this trio to shepherd the sides to what would be the largest corporate settlement in U.S. history, according to people involved.

Within a day, BP signaled its interest in further talks, Juneau said. Its executive board put chief financial officer Brian Gilvary, a mathematics PhD and career BP man, in charge of the effort, hoping it would turn out better than in 2012, when an initial round of settlement talks collapsed.

Dudley returned to meet Juneau, Shushan and Freeh in New Orleans later in May, bringing the credibility of an American who grew up just a two hour drive away in Hattiesburg, Mississippi.

“That’s how you settle: you get the CEO to walk into the room,” said Jim Hood, the attorney general of Mississippi, one of the five states involved in the settlement.

It took BP nearly two months of 10-hour sessions, often through the weekend, to reach the provisional agreement signed a week ago, finally putting a price tag on the spill’s civil damages. The deal swelled BP’s total bill for Macondo to $53.8 billion, yet provided a sense of closure for investors and boosted the share price of the company valued around $120 billion by as much as 5 percent.

With a federal confidentiality order still in effect and a final agreement yet to be signed, much is still unknown about the secret negotiations that headed off what could have been another decade of litigation.

But conversations with half a dozen people directly involved or briefed on the matter show how a series of legal decisions and deft maneuvering by a trio of insiders paved the way.

“They were losing at every count,” said New Orleans attorney Walter Leger Jr., who represented several local parishes and municipalities in the litigation against BP. “I think they finally realized that all the forces of the universe suggested they’d better talk.”

ROAD TO A DEAL

The road toward a settlement was laid by a series of rulings by Barbier, New Orleans-based Eastern Louisiana District federal court judge who has been involved in Macondo-related cases since a few months after the accident.

In September 2014, he ruled BP was “grossly negligent” in the disaster and last January set the size of the spill at 3.19 million barrels. Taken together, the rulings meant the BP was on the hook for a fine of up to $13.7 billion under the Clean Water Act alone. Billions more could be levied from a federal Natural Resource Damage Assessment.

Then, in March, BP took a pivotal step and withdrew a bid to remove Juneau as the administrator overseeing the payouts of individual and business damage claims from the uncapped 2012 class-action settlement.

Juneau said he med Dudley shortly thereafter to “reset the button.”

Freeh had set up the meeting. By early May, Barbier had named the “panel of neutrals” to guide the process.

TIME TO MOVE

BP was also under mounting internal pressure to free itself from a financial albatross that stymied planning.

Executives feared an unexpectedly large penalty could force a new round of asset sales, undercutting growth. The company also hoped state attorneys would be more flexible on a payout after an oil market crash that had halved prices since mid-2014, sliced BP’s earnings and threatened jobs in oil states such as Texas and Louisiana.

A BP spokesman in Houston declined to comment.

Weeks of meetings and hundreds of phone calls, with anywhere from 5 to 50 people at a time, followed. The trio mostly used conference rooms at two New Orleans hotels, but also Freeh’s office in Washington, D.C., to hold meetings with everyone from federal lawyers to community representatives, Juneau said.

Shushan, a former commercial litigator who has served as U.S. magistrate judge since 1999 and often negotiated settlements in complex cases, proved particularly pivotal as she was seen taking a firm hand when necessary.

“The magistrate started pulling the bull by the horns,” said Hood. “That lady worked hours and hours and hours, and if anybody deserves the credit in this thing, it’s Judge Sally Shushan.”

MILESTONES

While the talks continued under wraps, a series of milestones related to Macondo passed by, eliminating some of the uncertainty stemming from the disaster. Barbier held off making a final ruling on the Clean Water Act penalty, as widely expected, while the talks continued in private.

On May 20, BP resolved a chunk of messy litigation by settling all cross-claims from the spill with well services company Halliburton Co and driller Transocean Ltd .

Then, the deadline for submitting business or individual claims from the accident closed on June 8.

Finally, just three days before the settlement was announced, the Supreme Court dealt BP another blow, dismissing the company’s appeal of Barbier’s ruling that the company was liable under the Clean Water Act. At this point, Barbier could formally penalize the company at any moment.

On the morning of July 2 BP signed the deal: $5.5 billion for Clean Water Act violations, less than the maximum; $8.1 billion for natural resources damages; $4.9 billion to settle economic claims from the Gulf of Mexico states; and up to $1 billion reserved for local government claims.

It is not quite over. Local entities, including the La Fourche Parish Veterans district in Louisiana, must still approve the agreement by July 15, and it may take months to complete the legal paperwork for the federal agreement and get a binding deal approved by the court.

The hard work, however, appears finished. With the ink not yet dry on the deal last week, CFO Gilvary was already heading back to London to begin a holiday.

“It was quite an exhausting marathon,” one person said.

By Jessica Resnick-Ault, Dmitry Zhdannikov and Terry Wade

The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.

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Senator Urges Japan to Use Australian Components in Subs

By Reuters 2015-07-09 08:54:59

An influential Australian senator has asked Japan to buy components for its Soryu submarines from Australian companies to boost its chances of winning a major contract to supply Canberra with a fleet of submarines.

Independent South Australian Senator Nick Xenophon made the request to submarine builders Kawasaki Heavy Industries Ltd and Mitsubishi Heavy Industries Ltd as well as government officials in a series of meetings in Japan this week.

“What could be a game changer in their bid and in the relationship between the two countries in terms of defense cooperation is for components to be built in Australia,” Xenophon said during an interview in Tokyo on Thursday.

Adding foreign companies into the supply chain for a purely domestic defense project, particularly one as secretive as a submarine, would be an unprecedented move for Japan and one that would be politically sensitive too because it would mean having to take work away from Japanese firms.

By choosing a variant of Japan’s 4,000 ton Soryu submarine, Australia would give Japan its first major overseas deals after Prime Minister Shinzo Abe lifted a ban on arms exports last year.

The Australian government is weighing the Japanese bid against competing proposals from ThyssenKrupp Marine Systems, a subsidiary of Germany’s ThyssenKrupp AG, and France’s state-controlled naval contractor DCNS Group.

Without an attractive industrial package, that includes offering to build at least 70 percent of Australia’s submarines in South Australia, Xenophon said Japanese companies and officials risked becoming embroiled in a political backlash that would threaten Prime Minister Tony Abbott’s government.

“If the Australian government makes a decision to build the submarine overseas the winning country will find itself in the middle of a huge political brawl in Australia,” Xenophon said.

The South Australian senator said he planned to put the submarine project front and center in a campaign to win seats from Abbott’s ruling conservative Liberal Party in the next election for the 150-seat lower house, which must be held by January 2017.

Xenophon said he would field candidates to run against ruling party lawmakers and aimed to take at least four of the six Liberal Party seats in his state.

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MSC Cruises drops calls at Tunisia

MSC Cruises has dropped calls at Tunisia from its 2015/16 winter programme, linking its decision to last week’s declaration of a state of emergency in the north African country.
The company told IHS Maritime that a total of 24 cruises would be affected and that its decision was irrevocable. “The
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COSCO reports June dip in shipping volume

Shanghai-listed COSCO Shipping’s June shipping volume has fallen from a year ago, although total volumes for the year to June were still up.
June saw 1.2 million tonnes shipped, a drop of 8.7% (0.11 million tonnes) on a year ago. The six-month comparison shows 8.1 million tonnes shipped this year,
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US retailers raise box forecast

Demand for container imports during this year’s back-to-school and holiday shipping seasons will get a boost from higher-than-expected consumer spending, a major US box importer group predicts.
The National Retail Federation (NRF) raised monthly year on year growth estimates for the summer and fall
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GLDD nets BP spill contract

NASDAQ-listed Great Lakes Dredge & Dock (GLDD) was awarded a USD76 million dredging contract to restore a Louisiana coastal area damaged by the BP oil spill in 2010.
The Oak Brook, Illinois dredging contractor announced on 7 July that the contract calls for creating 4.5 km of beach and dune
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