Oil companies and tanker shipping companies have one nightmare in common – that they are suddenly involved in an oil disaster resulting in an oil spill, which first and foremost has a negative impact on the environment but also on their reputation and business. Such a situation can be a threat to a company’s existence – and at worst close it down.
On the other hand – safe vessels and safe transports enable both oil companies and NORDEN to not only acquire new business but also optimise earnings.
That is the reason why NORDEN’s fleet of product tankers is constantly put to the test. One inspection is followed by the next, and, as a matter of precaution, oil companies conduct their own inspections in addition to the inspections conducted by authorities and classification societies, announced as well as unannounced.
All to avoid a repeat...
(Pictured) The Exxon Valdez spilled over 35,000 tonnes of crude oil back in 1989
The Torrey Canyon disaster took place in 1967 and resulted in an oil spill of 120,000 tonnes of crude oil off the coast of South West England. In 1989, Exxon Valdez ran aground near Alaska and spilled 35,000 tonnes of crude oil, in 1991 Haven spilled 35,000 tonnes of crude oil following an explosion off the coast of Genoa in Italy, and in 1999 Erika spilled 20,000 tonnes of heavy fuel oil in the Bay of Biscay, etc.
Following these disasters, oil companies and shipping companies have cooperated intensely to increase the level of safety within the industry.
Although the disasters are few, although the last disaster took place many years ago, although clean-up after most of the disasters is completed and the million-dollar invoices have been paid, the disasters have left an inerasable impression in the memories of the oil industry and shipping companies. Consequently, they have a common mantra – never again an oil spill at sea. Or an oil spill altogether.
You cannot have degrees of safety
“You cannot compromise on safety, have degrees of safety or downgrade safety. Safety must have first priority at all times. Safety is an absolute value for our seafarers, for our employees on shore, for the environment, for our customers, for our shareholders and our stakeholders in general. If we are unable to deliver the standard which our customers demand, we cannot do business with them. It is a definite either/or situation – there is no compromise. And we have to remember that safety is not something that others deliver to us. Safety is something we have to deliver ourselves,” says Executive Vice President Lars Bagge Christensen, who is responsible for NORDEN’s fleet of product tankers.
Following the two latest deliveries – NORD Geranium and NORD Gardenia – NORDEN’s fleet of owned vessels includes 13 handysize vessels operated by NORDEN’s own Technical Department, whereas four Handysize vessels are in external technical management, which task it is to also take care of the four vessels’ safety condition.
Sailing with customers’ image
“Safety has first priority. This is due to a holistic approach to the world, but also to a more commercial point of view. When we transport a cargo for one of the oil majors, we de facto also have their image on board. If we – contrary to expectations and all preventive measures – should become involved in a disaster, it is our customers’ assessment that they, to a much larger extent than NORDEN, will be exposed in the media and thus the public and that their valuable image will come under pressure from various sides. Consequently, customers want their own inspections and assessments of the vessels which they are interested in employing for their transports,” says Executive Vice President Lars Bagge Christensen.
NORDEN’s fleet of product tankers – this is also the case for eight MR vessels which are chartered with purchase option – constitutes along with the Cypriote shipping company Interorient Navigation Company’s fleet of owned and chartered product tankers Norient Product Pool, which handles the commercial and operational management of the vessels. At the end of June, the pool consisted of 84 vessels, and the pool transported a total of 25.1 million tonnes of refined oil products in 2013. Fuel oil was the largest cargo category in 2013 and accounted for 28% of all cargo. The customer base includes the leading oil companies in the world.
Wish to make own vessel inspections
“Our customers are so focused on safety that they no longer blindly trust the private/state-authorised and governmental authorities and institutions, which have in fact been established to monitor vessel safety – classification societies and Port State Controls, which operate directly under the wings of the UN’s shipping organisation IMO,” says Lars Bagge Christensen.
The classification societies have strong competences in vessel and safety equipment and especially in the structural integrity of the vessels (the strength of the hull), whereas the port state controls – which are conducted unannounced and as random compliance checks – comprise physical inspection of the vessels’ condition and operation when the vessels call at a port.
In addition, oil companies have been interested in conducting their own inspection to assess not only the vessels safety equipment but also whether the vessel is operated safely and securely by the crew. This is the so-called SIRE inspection – SIRE is an abbreviation for Ship Inspection Report Programme. This recurring inspection must be conducted at least every six months, but for practical reasons it is conducted every four to five months. Oil companies’ inspectors board the vessel to get proof that the crew competently operates and maintains the vessel, operates the equipment correctly and is capable of cooperating correctly.
NORDEN’s target is to be in the top 25%, when oil companies compare and evaluate all the vessels they vet.
The Head of Tankers is convinced that the oil companies’ own inspections – SIRE – have led to a significant improvement in safety in the global tanker fleet.
“During some very challenging years in the 1980’s, tanker ship owners were unfortunately not capable of raising the bar on vessel safety themselves. Therefore, the oil companies were wise to set up their own inspection system through their organisation, Oil Companies International Marine Forum (OCIMF) in 1993 as this has resulted in a significant improvement in safety and strengthened competences in tanker operations. It is now important that oil companies and ship owners jointly – as we have shared interests – become even better at concentrating on safety and nothing else. Neither of us can let our attention become distracted by details on board which are without importance to safety as this will interfere with the crews’ focus on safety and consequently risk reducing safety levels,” says Lars Bagge Christensen.
A request for the oil companies
The underlying idea of the SIRE system is to make the best possible use of respective oil companies’ resources by letting them share observations from their respective tanker inspections through the OCIMF SIRE database, so that the oil companies do not have to always carry out their own inspections but can make use of the results from their peers.
“The reality is different, however. As the different oil companies prioritise the areas on board the vessels differently during their inspections, they often wish to inspect a vessel themselves instead of making use of the reports saved in the SIRE system by other oil companies,” says Lars Bagge Christensen, who encourages oil companies to further develop their cooperation through OCIMF’s SIRE database, so that the number of SIRE inspections can be reduced to the oil companies’ own stated target which is one inspection every six months.
“By doing so, we ensure that the crew is not worn down by the inspections, but instead keep their focus on the day-to-day safety, which is of vital importance and the very point,” says Lars Bagge Christensen.
The crew makes the difference
In principle, all ship owners can buy the same vessels – the steel is identical. It is the crew on board the vessels and the support they get from the on-shore offices that make the difference. It is NORDEN’s crew who in the day-to-day operation and at inspections have to show and prove that they make a difference, that they maintain the vessel optimally, that they plan navigation and loading operations in an optimal way. It is the conduct of the crew on board the vessels which distinguishes a safe vessel from an unsafe one.
”NORDEN wants vessels that meet the demands of our customers. This implies that we wish to have skillful and competent crew members who are conscious of this responsibility and can live up to it,“ says Christensen.
This is why NORDEN continuously works to ensure that vessel crew – not only on tanker vessels, but also on dry cargo vessels – possess the necessary competences and that they are familiar with NORDEN’s standards. This applies especially to the officers. In addition to this, NORDEN policy comprises recurring seminars for officers and a standard procedure for reporting so-called near-miss situations – that is situations where things nearly went wrong.
This reporting procedure is an important source for experience exchange and improvement.
“As a first-class shipping company, NORDEN wishes to work with the best customers in the industry, and that is why we must be able to meet their safety requirements. In return, we are in a position to transport cargo for the entire oil industry and in all geographical markets. This, at the same time, gives our charterers and operators maximum flexibility to find the best cargoes for the vessels and optimise vessels’ route planning with a view to obtaining the best financial result.
"This also allows us to work with the customers, who meet our own requirements for reliability and punctual freight payment. In other words – we can manage our fleet in the most optimal way because we meet our customers’ demands and expectations also on the safety front”, says Christensen.