NAFS NOVEMBER 2011

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Nafs issue November 2011

Transcript of NAFS NOVEMBER 2011

  • 83scanjet Group

    A vision that came true

    &

    AON First Piracy

    update

    TED PETROPOULOSFinancial focus

    Shipping todayand tomorrow

    ERMA FIRST 1 allast Water Treatment

    2011

    www.nafsgreen.grthe Greek Shipping portal for the Shipping Professional

  • When ballast water treatment regulations take effect,

    youll want a mature technology to meet them.

    PureBallast 2.0 is the second generation of Alfa Lavals

    market-leading ballast water treatment system, which

    means its even better adapted to your vessels real-life

    needs.

    Reduced power consumption, more responsive control

    and a PureBallast 2.0 EX version for explosive onboard

    environments are just a few of the new advantages.

    By choosing PureBallast 2.0, you choose the worlds

    most experienced supplier in ballast water treatment.

    Behind the updated system are thousands of hours of

    experience, logged both with shipyards and out at

    sea.

    In addition, you select a global working partner. With a

    far-reaching organization and a worldwide network of

    harbour support, Alfa Laval can provide the parts,

    service and true peace of mind you need.

    PureBallast 2.0 gives you more

    Always chemical-free. 40% less power consumption from now on.

    www.alfalaval.com/pureballast

    Alfa Laval AEBE, 20th km Lavrion Avenue, Thesis Karella, 194 00 Koropi-AtticaTel. 210-6683500, Fax 210-6643960, e-mail [email protected]

    Pure_ballast_NAFS Magazine.indd 1 20/05/11 12:23

  • 06 30

    08

    12

    16

    42

    46

    48

    5418

    Mirror200,000 / NAFSGREEN

    AONFirst piracy update confirms regional shift in piracy activity

    ...

    Ted Petropoulos MD, Petrofin S.AChinese Ship Finance for Greek owners - reality and promise

    Kaminco - AutronicaProtecting life, environment & property conference

    ERMA FIRST 1

    ANDREAS TSAVLIRISElected president of the Internationalsalvage union

    -

    Shipping today and tomorrow 2

    COVER STORYSCANJET GROUP: A vision that came true

    SHIPPING NEWS

    ... ;

    www.nafsgreen.gr

    22 58

    67

    , & , 2011, , 83 12, , 17343, : 2104286606, fax: 2104286610, e-mail: [email protected], www.nafsgreen.gr

    : , - : . , : . 50 . USD 70. NAFS, SSN 1107-3179.

    , , , , , , - . .

    22 18

    30 5442

  • APRIL-2010.indd 5 4/15/10 5:45 PM

  • Mirror

    .

    200,000 / NAFSGREEN

    18 .

    NAFSGREEN . ,

    media .

    2012

    .

    GOOGLE ANALYTICS www.nafsgreen.gr/magazine

    .

    55,000 . 250,000 ,

    13% 2,5 . 14 /.

    3% . 97%

    , .

    .

  • People Expertise Resources Technology Its the new range of water and waste water treatment systems on board.

    oil waterseparator

    sewagetreatment

    plant

    sewagetreatment

    plant

    fresh waterproduction

    unit

    Environmental Protection Engineering S.A.24, Dervenakion str., 185 45 Piraeus-GreeceT: +30 210 4060000 F: +30 210 4617423

    www.epe.gr [email protected]

  • nafs mag. issue 8308

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    29knowledge&innovation

    the current energy consumption. Of course, the data alone doesnt really tell us anything, says Hppner. We need to follow up with a comparison, wherever possible with one or several sister ships, or at least with the data from a similar ship type. This quickly tells us whether there are any statistical outliers with regard to energy consumption. The best possible scenario for Hppner has been an analysis project involving an entire fleet of ships identical by design and operating in very similar environments. Com-parison was straight forward and the outlier was quickly identified on the summary diagram: its En-ergy Efficiency Operational Indicator (EEOI), which ECO-Patterns is based on, was ten per cent lower than the average of the other ships. Among the rest of the fleet, the CO2 emissions and, consequently, the fuel consumption values were very similar the expected result for identical ships operating under nearly identical conditions.

    Drawing on the Skippers ExpertiseSo what is next after the ECO-Patterns analysis? Future-Ship can then offer a root-cause analysis, says Hppner. Our next step is what we call ECO-Practices. This is essentially a Failure Mode and Ef-fects Analysis (FMEA) whereby each energy-relevant system undergoes an error and risk assessment. To

    give an example, Hppner explains, a situation we encounter frequently, the cooling water system often wastes a lot of energy. So we take a close look at its operation and try to come up with the best way to improve efficiency. Another area to scrutinize is the on-board power-generating equipment. Working closely together with the ships officers is essential for Hppner. He draws on their insight into the subtle ways the ships systems interact. The amazing thing is knowledge how to achieve efficient ship opera-tion does exist on board. But in many cases nobody ever asks. We try to bring it out into the open.

    Accurate Directions FutureShip with its varied portfolio of consultancy services can assist in many different ways. The final results of the analysis can be applied on several intervention levels: the lowest or operational level addresses the way the ship is run. The second level involves minor retrofitting measures, and the third level includes major technical modifications. The customer decides how far he wants to go. In the case of the fleet of identical ships described above, the statistical outlier provided some valuable insights: the ECO-Patterns analysis quickly demonstrated that it was worth searching for hidden potential for optimizing operations. The question what to do in a

    given case whether to give new directions to the skipper and his officers or to invest in some technical modifications, such as a better cooling water pump can be answered by running an ECO-Practices analysis. More information on all above GL Group products can be requested by Mr. Konstantinos Vasileiadis, Business Development Manager, GL Piraeus.

    EEOI

    The Energy Efficiency Operational Indi-

    cator (EEOI) was developed by the IMO

    as a means to measure and optimize

    ship efficiency. The indicator is com-

    puted from a CO2 factor specific to the

    fuel used, the amount of fuel consumed,

    the distance travelled and the volume of

    goods transported. The industry is still

    debating whether or not the use of the

    EEOI should become a binding require-

    ment. But it is safe to

    assume that it will be introduced on a

    voluntary basis before long.

    www.internaftiki.gr, [email protected], Tel: +302104126997, Fax: +3021041275666 Alipedou str. GR 18531, Piraeus - Greece

    :

  • 09

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    29knowledge&innovation

    the current energy consumption. Of course, the data alone doesnt really tell us anything, says Hppner. We need to follow up with a comparison, wherever possible with one or several sister ships, or at least with the data from a similar ship type. This quickly tells us whether there are any statistical outliers with regard to energy consumption. The best possible scenario for Hppner has been an analysis project involving an entire fleet of ships identical by design and operating in very similar environments. Com-parison was straight forward and the outlier was quickly identified on the summary diagram: its En-ergy Efficiency Operational Indicator (EEOI), which ECO-Patterns is based on, was ten per cent lower than the average of the other ships. Among the rest of the fleet, the CO2 emissions and, consequently, the fuel consumption values were very similar the expected result for identical ships operating under nearly identical conditions.

    Drawing on the Skippers ExpertiseSo what is next after the ECO-Patterns analysis? Future-Ship can then offer a root-cause analysis, says Hppner. Our next step is what we call ECO-Practices. This is essentially a Failure Mode and Ef-fects Analysis (FMEA) whereby each energy-relevant system undergoes an error and risk assessment. To

    give an example, Hppner explains, a situation we encounter frequently, the cooling water system often wastes a lot of energy. So we take a close look at its operation and try to come up with the best way to improve efficiency. Another area to scrutinize is the on-board power-generating equipment. Working closely together with the ships officers is essential for Hppner. He draws on their insight into the subtle ways the ships systems interact. The amazing thing is knowledge how to achieve efficient ship opera-tion does exist on board. But in many cases nobody ever asks. We try to bring it out into the open.

    Accurate Directions FutureShip with its varied portfolio of consultancy services can assist in many different ways. The final results of the analysis can be applied on several intervention levels: the lowest or operational level addresses the way the ship is run. The second level involves minor retrofitting measures, and the third level includes major technical modifications. The customer decides how far he wants to go. In the case of the fleet of identical ships described above, the statistical outlier provided some valuable insights: the ECO-Patterns analysis quickly demonstrated that it was worth searching for hidden potential for optimizing operations. The question what to do in a

    given case whether to give new directions to the skipper and his officers or to invest in some technical modifications, such as a better cooling water pump can be answered by running an ECO-Practices analysis. More information on all above GL Group products can be requested by Mr. Konstantinos Vasileiadis, Business Development Manager, GL Piraeus.

    EEOI

    The Energy Efficiency Operational Indi-

    cator (EEOI) was developed by the IMO

    as a means to measure and optimize

    ship efficiency. The indicator is com-

    puted from a CO2 factor specific to the

    fuel used, the amount of fuel consumed,

    the distance travelled and the volume of

    goods transported. The industry is still

    debating whether or not the use of the

    EEOI should become a binding require-

    ment. But it is safe to

    assume that it will be introduced on a

    voluntary basis before long.

    www.internaftiki.gr, [email protected], Tel: +302104126997, Fax: +3021041275666 Alipedou str. GR 18531, Piraeus - Greece

  • By Ted Petropoulos Head, Petrofin Research

    Chinese Ship Finance for Greek owners reality and promise

    It is three years ago that the US subprime crisis

    triggered the 2008 international banking crisis, and

    witnessed the collapse of Lehman Brothers and the

    financial bailout of top US banks (i.e. Citibank and

    Bank of America, etc.) and financial groups (e.g. AIG)

    by the Fed. The crisis spread like wildfire throughout

    the worlds banks. Massive bank exposures to toxic

    products was discovered, e.g. RBS, which led to an

    acute loss of confidence both by depositors, as well

    as between the banks themselves. The above loss of

    confidence manifested itself in the collapse of the in-

    ter-bank market, the, until then, corner stone of bank

    funding. Thus began a bank de-leveraging process,

    which still continues, as banks sought to downsize

    their balance sheets due to lack of funding.

    Bank regulators reacted by scrutinizing bank capi-

    tal adequacy and ensuring financial transparency of

    banks exposures as well as adequate loan provi-

    sions.

    The above series of events hit western banks and

    left Far Eastern banks largely unaffected. The latter

    were operating in fast growing economies offering

    good loan opportunities and had better loans to de-

    posits ratios. Moreover, Far Eastern banks had less

    reliance on and a reduced exposure to toxic products.

    The re-trenching of western banks gave Far Eastern-

    ers a great opportunity to assert their strengths and

    encroach into sectors of the international lending mar-

    ket in which, until then, they had been largely absent.

    A key example of such a market is ship finance. Both

    global ship finance, as well as Greek ship finance,

    came to an abrupt halt and reversal in 2009/2010.

    In accordance with Petrofin Bank Research Greek

    ship finance, which had risen by an average annual

    23.7% between 2001 and 2008 to $73.23bn, fell in

    2009 to $67.02bn and in 2010 to $66.23bn. It should

    be noted that in accordance with the end 2010 ship

    finance bank exposures, Chinese banks had a total

    of $650m in Greek ship finance or approximately only

    1% of the Greek ship finance totals.

    Increasingly, in 2009 and 2010, western bank fresh

    ship finance ground to a halt. Far eastern banks in

    general and Chinese banks in particular, were seen

    as rays of hope. To a capital hungry and starved

    shipping industry, over-committed with newbuilding

    orders, the prospects of obtaining inexpensive fi-

    nance from the Far East was most alluring.

    The development of sovereign risk exposures, af-

    fecting European bank capital adequacy, in 2011,

    the increasing problem of the EU banks in relation to

    Greece and other EU countries, e.g. Ireland, Portu-

    gal, Spain, Italy, etc. and the need to increase capital

    adequacy to 9% as of 2012 in accordance with Basle

    III, have all led to the further retrenchment of Euro-

    pean banks in the second half of 2011. According to

    Petrofin Bank Research , about to be published this

    month, approximately 90% of all western ship finance

    banks, are currently reducing their ship finance expo-

    sures. Consequently, the past 3 years, have repre-

    sented an enormous opportunity for Chinese banks

    in particular to build up their Greek ship finance pres-

    ence, based on previous and new shipbuilding orders

    at Chinese shipyards.

    The first question to pose is what has been the

    progress made in 2009-2011 by Chinese banks in

    Greek ship finance?

    The short answer to this is that such progress has

    been painfully slow.

    According to mid-2011 XRTC information, the total

    new Chinese Greek shipping loans were approxi-

    mately $825m. These consisted of a solitary $74m

    Credit Development Bank (CDB) loan to Cardiff and

    6 China Exim (CEXIM) bank loans to Diana, Ange-

    likoussis, Costamare, Danaos, Toisa and Laskaridis

    of which 4 were syndicated with DNB and two with

    Citibank.

    Although there were many other loans being men-

    tioned in the pipeline to Prokopiou, Veniamis and oth-

    ers, in relation to the size of the Chinese order-book

    by Greek owners and the size of Greek ship finance

    lending, the above new loans are below expectations,

    as currently the above Greek orderbook in China

    stands at over 273 vessels, or 43% of the total Greek

    orderbook, out of which 199, or 73%, are bulkers.

    (DATA from CLARKSON FLEET REGISTER as of

    31st October 2011)

    Readers may recall the October 2010 announcement

    by Chinese Premier, Wen Jiabao, of a $5bn loan

    pledge to Greek shipping to finance Chinese ship-

    buildings. Indeed, there were reports in March 2011

    that the above figure had doubled to $10bn. Moreo-

    ver, in June 2011, AB Bank reported a co-operation

    agreement with CDB, which, however, has since

    bogged down and has produced no tangible results,

    thus far.

    Lastly, we have been informed by Bank of Cyprus,

    that a memorandum of Agreement has been signed

    with CDB for shipping loans to Cypriot owners and

    that the first Cypriot joint deal is approximately $65m

    and expected to be concluded within this year.

    Thus far it has been the policy banks of China, i.e.

    CDB, CEXIM, China Everbright Bank, that have

    shown the most interest in Greek ship finance, whilst

    Bank of China has not lent to Greek owners yet.

    We now come to our second question, namely, what

    have been the reasons for the slow start in Chinese

    ship finance of Greek owners?

    The slow start has not been due to unavailability of

    finacial focus nafs mag. issue 8312

  • risk appetite or bank related problems of any kind.

    Instead, the reasons can be summarized as follows:

    - Chinese banks investments have been linked to

    new shipbuilding orders placed by Greek owners and

    not to existing orders or second-hand purchases of

    Chinese vessels.

    - New Greek orders in Chinese shipyards slowed

    down in 2011 as the emphasis by Greeks shifted to-

    wards container and tankers placed primarily in Ko-

    rea.

    - The fall in the dry bulk market in 2011 has lead to

    a reduced interest in new orders for drybulk vessels

    in China which is the leading drybulk builder in the

    world.

    - Chinese yards, having a relatively full 2011/2012

    order book, have not felt the need to price levels to

    sufficiently interesting levels to Greek owners for

    2013/2014 deliveries.

    - Although interested, Chinese banks found them-

    selves unfamiliar in dealing directly with Greek own-

    ers. They lacked the know-how and expertise to re-

    spond swiftly and effectively to new enquiries.

    - Being largely unfamiliar with Greek owners credit

    risk profiles, Chinese banks concentrated on only

    the biggest private or publicly quoted Greek owners,

    thereby excluding numerous middle-size potential

    owners, who had an even greater need for such fi-

    nance.

    - Reportedly, the Chinese banks \due diligence re-

    quired was so demanding and intrusive into Greek

    owners businesses that many enquiries ground to a

    halt.

    - The distance and linguistic barriers have been dis-

    tinct hindrances in the development of more Chinese-

    Greek business in 2011.

    - Increasingly in 2011, Chinese banks requirement of

    credit insurance (Sinosure) in support of local finance

    has been unduly expensive. This amounted to ap-

    proximately 2% of the newbuilding price.

    - As the Renimbi (RMB) is an appreciating currency

    whereas the US dollar is a depreciating currency over

    time, Chinese bank lending in US dollars had to face

    this foreign exchange devaluation cost effect, as they

    had an insufficient US dollar deposit base and need-

    ed to fund new loans via RMB/US dollar swaps

    - As a matter of policy, Chinese banks appeared to fol-

    low central directives and considered shipping loans

    in support of orders placed with state and not private

    Chinese yards.

    - Some Greek owners have remained skeptical as to

    Chinese banks long term commitment to international

    shipping, as well as how they might react to a crisis

    or a difficulty by an owner to meet loan obligations in

    the future.

    - Chinese owners have increased their Chinese own-

    er loans, thereby absorbing a greater share of Chi-

    nese ship finance capacity towards the local market.

    - Greek owners have been reluctant to accept loans

    in RMB and not US dollars, as such RMB financing

    requires PRC flag and PRC ship mortgage, which

    exposes owners to greater delays, costs and risks.

    As the reader can see, the obstacles to Chinese ship

    finance for Greek owners have been higher than

    originally anticipated and may explain the slow build

    up in done deals. As reported to Petrofin Research

    by S&P brokers and lawyers, there have been a very

    high number of initial discussions between owners

    and Chinese banks, the vast majority of which, how-

    ever, have been abandoned at an early stage. Better

    progress has been achieved, where the discussions

    were held via a western bank, e.g. DNB, Citibank, as

    such banks do overcome a number of the barriers re-

    ported above.

    The third question to be answered is what if anything

    is being done by Chinese banks to overcome those

    factors restricting Chinese-Greek shipping co-opera-

    tion is ship finance?

    Chinese banks have not been idle or unaware of the

    need to adapt and become more competitive.

    In terms of organization, Chinese banks have ac-

    quired and are developing shipping specialists with a

    very good knowledge of English, as well as how west-

    ern clients differ from Chinese or Far Eastern clients.

    Indeed, CEXIM has opened an office in Paris for their

    European business and CDB has concentrated its

    non-Chinese ship finance out of its Nangxia branch.

    Moreover, there are reports that CDB will develop a

    standalone dedicated export ship finance division

    that would have the marketing, credit and approval

    ability to process business swiftly and competitively.

    Chinese commercial banks have increasingly

    stopped requiring costly credit insurance guarantees,

    although the US dollar funding issue still represents

    an issue.

    As securing fresh Chinese orders shall be required

    in 2012, Chinese banks are expected (together with

    Chinese shipyards) to become more competitive.

    Lastly, other Chinese state banks, such as Industrial

    and Commercial Bank (ICBC), Construction Bank of

    China (CBC), Bank of China and Agricultural Bank

    of China, are expected to commence offering ship fi-

    nance to secure a Chinese policy shift towards assist-

    ing export industries, such as shipbuilding, at a time

    of a global slowdown.

    What of the future?

    Greek or German owners have until now been in the

    focus of Chinese bank interest. This is expected to

    remain as both countries owners are facing a prob-

    lem in securing ship finance. The collapse of the Ger-

    man KG model and the withdrawal of Greek banks

    from ship finance, have exacerbated the problems.

    Consequently, the demand for Chinese ship finance

    is increasing.

    Chinese bankers have come to realize that they need

    to become more client-aware and flexible in their

    dealings with Greek owners. As know-how improves,

    it is anticipated that the heavy bureaucratic approval

    process often lasting for six months or more, shall be-

    come more competitive.

    As a consequence, the learning curve by Chinese

    banks shall expand and more potential loans shall

    reach successful drawdown. Once banks develop

    a Greek loan portfolio, repeat business based on

    satisfactory experience shall lead to a substantially

    higher loan exposure. In addition, bilateral deals are

    expected to commence which shall be a sign of a ma-

    turing industry.

    The above evolutionary process from infancy to ma-

    turity, is expected to take at least 5 years. However,

    the process has already begun and we expect that

    it will accelerate over 2012/2013 on account of the

    financing gap for Greek shipping anticipated over

    the period. In consequence, although, the progress

    in Chinese bank financing for Greek owners has been

    slower than anticipated over the last couple of years,

    it is expected to pick up substantially and this render

    Chinese banks the main beneficiaries of the western

    bank crisis. Chinese banks have not been slow in

    recognizing the enormous potential benefits of a sym-

    biosis between Greek owners Chinese shipbuilders

    and Chinese banks.

    13

  • Internaftiki acquires official representation of Anqing Daihatsu Engines in the shipbuilding sector

    TEN announces time charter employment

    Internaftiki acquires official representation of Anqing

    Daihatsu Engines in the shipbuilding sector

    After several years of continual presence in the Marine

    Market, Internaftiki SA expands its activities further

    within the rapidly growing shipbuilding business in the

    Chinese territory. It is a fact that Chinese Shipbuilding is

    increasing and many Greek Ship owners are ordering a

    considerable number of new ships to be built in Chinese

    yards. Internaftiki aims to offer its clients a high level of

    support in the new building industry and has established

    a trustful and evident relationship with the majority of

    Greek owners. Thus through its vast experience of 37

    years in the Marine market and as a distributor of ma-

    jor international manufacturers, the company is able to

    Mr. Cummis Zhu (Senda) and Mr. Nikos Skarpidis

    (Internaftiki S.A)

    evaluate the future of the business. This is a major step

    ahead in establishing its position as a leading Sales and

    Service representative.

    A direct result of this growth and development is the new

    representation agreement between Internaftiki SA and

    Senda Shipping Engineering & service Ltd, a member of

    CSSC Group, in the promotion of the Anqing Daihatsu

    CSSC Diesel Engine within the new building market.

    This project involves the DK series of medium size die-

    sel marine main and auxiliary engines for all future ves-

    sels built in Chinese shipyards for the Greek market. In-

    ternaftikis new building department will be responsible

    for the promotion and support of these engines directly

    to our Greek customers. The particular types of engines

    are already selected by several Greek ship owners hav-

    ing a very good feedback.

    Furthermore, this agreement also includes the after

    sale service and the supply of genuine Anqing Daihatsu

    spare parts by Internaftiki for the particular type of en-

    gines.

    Some prominent characteristics of type DK-20, DK-26,

    DK-28, DK-36 are the following:

    Low NOX emission

    Compact size

    High output

    Long stroke

    Reliable and long interval overhauling

    Anging Daihatsu Marine Engines meet the demands

    and requirements of ISO90001 Quality Assurance Sys-

    tems in every aspect of design, development, produc-

    tion and after-sales; satisfying the rules of classification

    societies CCS, LR, GL, ABS, NK, BV, RS, DNV, KR.

    Internaftiki SA was inaugurated in 1975 near the Port of

    Piraeus. The company specialises in the field of marine

    and industrial products, offering an entire range of serv-

    ice activities on ships and yacht machinery. All services

    are executed on a worldwide basis by highly qualified

    personnel who hold exceptional knowledge in this field.

    For more information, contact Mr. Spyros Drosopou-

    los on +30 210 4126997 or email [email protected]

    Tsakos Energy Navigation Limited (TEN or the Com-

    pany) (NYSE:TNP) announced time charters of four of

    its Suezmaxes, three of its Panamaxes and one of its

    Aframaxes to first class international end users. Four

    of the vessels have been fixed on a minimum with

    profit-sharing arrangements, while the other four have

    been chartered on fixed rates. These charters range in

    duration between one and threeand-a-half years and

    are expected to contribute minimum revenues of $140

    million. When combined with the recently announced

    fixtures of the two newbuilding Suezmaxes for 11 and

    12 years, the DP2 Shuttle tankers, still under construc-

    tion, for 15 years, the Companys LNG carrier for four

    years and one Handymax MR2 for a year, the sum of

    all chartering activity of late is expected to generate

    approximately $1 billion in total gross revenues to the

    Company.

    Inclusive of the above, as of today, 73% of remaining

    available days for this year have been fixed with mini-

    mum expected revenues of $104 million and 56% for

    2012 with minimum revenues at $175 million.

    These charters are a testament to the quality of our

    fleet and the relations our Company has developed with

    first class clients over the years. This follows the Com-

    panys consistent policy of securing downside protec-

    tion and upside potential to protect it from the turbulent

    freight cycles. The willingness of charterers to employ

    our vessels long term on profit sharing arrangements is

    a positive sign. Such fixtures reinforce TENs ability to

    take advantage of accretive growth opportunities that

    surface in weak markets and maintain its dividend. Our

    policy to further strengthen TENs balance sheet and

    to bridge the gap between our share price and the real

    value of our Company remains, Mr. Tsakos concluded.

    shipping news nafs mag. issue 8314

  • DESMI Pumps & Systems

    integrate

    knowledge & technology

    www.desmi.com

    DESMI Supplying the World with Pumps and Systems

    DESMI develops, manufactures and supplies pumps and pump systems for marine and offshore re-lated sectors.

    Centrifugal pumps

    Electric deep-well cargo pumps for LPG/C LEG/C, molten sulphur carriers and product/chemical carriers

    DESMI ROTAN internal gear pumps for high-viscous liquids

    Hear more about our below concepts:

    OptiSaveTM Save up to 80% of the pump energy consumption and get your pumps for free!

    DESMI 48 - Fast Track Pumps up to 1000 m3/h delivered within 5 days!

    www.desmi.com

    Greece representative:Intra Mare Hellas 4, Skouze Str., 185 36 PiraeusPhone: +30 210 429 3843 Fax: +30 210 429 3845E-mail: [email protected]

  • Kaminco-Autronica: Protecting Life, Environment & Property Conference

    Kaminco successfully held the first Conference titled

    Protecting Life, Environment & Property on September

    29th, 2011. The conference took place at the Metropoli-

    tan Hotel in Athens and was honoured by the presence

    of representatives from the most prominent shipping

    companies in Greece and Cyprus.

    Mr. Sotirios Kaminis, President and CEO of Kaminco,

    presented an opening speech, stating that for 50 years

    now one of Kamincos main targets is bringing new tech-

    nologies to the Greek & Cypriot Shipping Companies.

    Kamincos legacy goes back to the 60s with a wide

    range of innovative products intended to reduce the cost

    of Ships while giving the Ship-Owners state of the art

    technology. Mr. Kaminis stressed that Kaminco is a fam-

    ily business, as with most Greek Shipping businesses,

    not aiming to become the biggest company, but the best

    in what they do. He also shared some exciting upcom-

    ing news regarding an agreement with a giant Chinese

    Organization that will soon be announced.

    Following Mr. Kaminis welcoming speech, Mrs. Georgia

    Anifantis, Senior member of the Marine Management

    Team, presented Kamincos full profile and history as

    well as the 3 generations of Kaminco, and highlighted the

    companys worldwide network. With offices in Greece,

    Cyprus, & USA, Kaminco serves the marine and land

    based industries while providing 24/7, 365 days a year

    after sales support. She also described the 20 years

    cooperation with Omicron and announced that from the

    beginning of 2011, after the acquisition of Omicron by

    Autronica, Kaminco became the exclusive partner of

    Autronica for Greek and Cypriot Ship Owners handling

    both, sales and after sales.

    Mr. Geir Arne Hauan, Regional Sales Manager, of Au-

    tronicas Maritime Division, followed, presenting ex-Om-

    icron company details and the story of the acquisition

    by Autronica. He also stated that Kaminco offers TURN

    KEY solutions for Autronica which include pre-engineer-

    ing procurement, installation and commissioning of all

    Autronicas products. Finally, he presented Omicron

    products: Level Alarm, Gas Detection, Vapor Alarms etc.

    Mr. Bernt-Ivar Grannes, Regional Sales Manager South-

    Europe/South-America, Division Maritime of Autronica,

    took over and introduced Autronica and Fire Detection &

    Suppression Systems.

    Both speakers pointed out that the entire portfolio of

    products meets the latest IMO/Solas standards.

    A lunch buffet was offered to all guests and they all en-

    joyed the opportunity to mingle. The conference ended

    with a live demonstration of an Autroprime Fire Detection

    system and a Gas Detection and Alarm System.

    shipping news nafs mag. issue 8316

  • Shipping Today and Tomorrow 2

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    Nerys Jones.

  • scanjetGroup

    A vision that came true

    Scanjet Macron co Ltd

    Production unit of electropneumatic level gauging system, high-level alarms, vapour emission control systems. Sales & Service of Scanjet Korea

    Location; Korea

    Scanjet Marine AB

    Production unitSales of marine tank cleaning machines.

    Location; Sweden

    Scanjet Systems AB

    Sales of industrial tank cleaning machines

    Location; Sweden

    Scanjet Macron International OY

    Worldwide Sale Scanjet Macron products ex KoreaOffshore Sales and Development

    Location; Finland

    MaasMarine

    Sales & Service for Scanjet in Holland. Marine agencies

    Location; Netherlands

    Scanjet Engineering AB

    Engineering consulting

    Location; Sweden

    Scanjet Holding ABPresident Magnus WallinVice President Thomas JinbckVice President Claes Jinbck

    Scanjet Production S.p.z.oo

    Production unit

    Location; Poland

    Scanjet Asia Pacific Pte Ltd

    Sales and coordination all products in Singapore

    Location; Singapore

    cover story nafs mag. issue 8322

  • The Scanjet Group was founded 1961 and the company cel-

    ebrated its 50-years anniversary June 2011. The Scanjet Group is

    built around the concept Direct from producer to the end-user.

    Scanjet is an innovative company with in house design and R

    & D departments ensuring clients the best possible design and

    production technology.

    Producer to end user - Scanjet produces all machines and equip-

    ment in our own factories situated in Sweden and Korea. We pro-

    vide top class equipment secured by our rigorous quality control

    and ISO 9001 system.

    Since Scanjet entered into the market with our own brands we

    have gained considerable market share and are now in 2011 the

    undisputed world leading manufacturer of tank cleaning machines

    to the marine market.

    Following our success on being world leader in tank cleaning machines, the group has now advanced into marine

    electronics. The group consists today of 9 own, or partner companies as well as a worldwide network and sales

    and service representatives in all major ports.

    The SCANJET Group

    Scanjet Macron co Ltd

    Production unit of electropneumatic level gauging system, high-level alarms, vapour emission control systems. Sales & Service of Scanjet Korea

    Location; Korea

    Scanjet Marine AB

    Production unitSales of marine tank cleaning machines.

    Location; Sweden

    Scanjet Systems AB

    Sales of industrial tank cleaning machines

    Location; Sweden

    Scanjet Macron International OY

    Worldwide Sale Scanjet Macron products ex KoreaOffshore Sales and Development

    Location; Finland

    MaasMarine

    Sales & Service for Scanjet in Holland. Marine agencies

    Location; Netherlands

    Scanjet Engineering AB

    Engineering consulting

    Location; Sweden

    Scanjet Holding ABPresident Magnus WallinVice President Thomas JinbckVice President Claes Jinbck

    Scanjet Production S.p.z.oo

    Production unit

    Location; Poland

    Scanjet Asia Pacific Pte Ltd

    Sales and coordination all products in Singapore

    Location; Singapore

    23

  • It is not a secret that the shipping industry today is facing one of its most dangerous chal-

    lenges ever. Modern piracy primarily in the Middle East is spreading all over the world.

    Scanjets contribution towards the protection of vessels has been a great success.

    270 vessels are now equipped with SC 360 APR machines. By using Scanjets patented con-

    verted tank cleaning machines, the machines in theory are washing away the pirates and are

    giving a very clear signal to the attackers that a vessel with Scanjet Anti-pirate Machines is

    protected.

    As the system is non-lethal and passively protects the vessel it has become a preferred

    standard for several major oil carriers. Today more than 1600 machines from Scanjet are pro-

    tecting the world fleet from piracy attacks.

    Antipiracy MPS 360 APR Machines

    cover story nafs mag. issue 8324

  • SCANJET The leading product range for marine and offshore applications

    SC 30TP SC 75ASC 30T

    SC 285SC 100

    SC 40RT SC 45TW/SC 15TWSC 90T2

    As the world leader in tank cleaning, it

    comes naturally that Scanjet has the most

    versatile product range on the market.

    Scanjet has produced the most successful

    tank cleaning machines. The SC 50 was re-

    leased in the early nineties and followed by

    its successor the SC 30T. Scanjet has sold

    more than 70000 units since its introduc-

    tion in 1998, and is still going strong.

    What makes Scanjet equipment unique is

    the revolutionary Magnetic Transmission

    with its leakage free design. This comes

    as standard on the machines mentioned in

    this article excluding portable machines.

    Scanjet has a full set of portable tank

    cleaning machines, with all the accessories

    the clients can need.

    Product Range, Tank Cleaning Machines Oil Tankers25

  • Product range, Hold Cleaning Machines to Bulk Carriers

    Bulk carriers have a high demand for the

    rapid cleaning of their holds, for those

    vessels we deliver our hold cleaning ma-

    chines, both as fixed and portable units,

    our latest success is the swing type

    Model SC 90 RTS.

    Product range, Off Shore SegmentScanjet also has a stronghold in the off shore market supplying crude oil washing

    machines to FPSO;s FSU;s, supply vessels and oil platforms. Scanjet machines are

    perfect for the cleaning of the drilling mud tanks, brine tanks and various service

    tanks on board.

    cover story nafs mag. issue 8326

  • SCANJET Macron Product lineScanjet Macron is the latest

    addition to the family. Scanjet

    Macron design and produce

    Ballast Level Gauging Systems,

    High-High Alarms, Vapour

    Emissions Controls System and

    various instrumentation, and

    provide engineering to LNG &

    LPG carriers.

    Our combined Electro pneumatic

    Ballast Level Gauging System

    and Water Ingress Control Sys-

    tem has been a major success,

    and is preferred by Passenger

    Cruise Vessel as well as Heavy

    Lift Vessels and other advanced

    vessel constructions.

    27

  • SCANJET Systems The industrial market requires

    very advanced tank cleaning

    machines. The sanitary mar-

    kets require tank cleaning ma-

    chines that can not only clean

    the tank but also themselves.

    Scanjets team of innovative

    engineers has created the

    market leading Bio range, see

    Bio 25.

    The SCANJET GROUP is

    today ready for any new

    challenges and is prepared

    to serve the market from

    anywhere in the world, just

    call and we are there to assist

    you!!!

    cover story nafs mag. issue 8328

  • Key Features Anti-Pirate water cannon

    Marine Protection System - MPS

    Phone:+46313387530E-mail:[email protected]: www.scanjet.se

    Protects your crew and ship

    Visable, non provocative, non lethal anti-piracy jet

    Proven system to more than 80 vessels

    No need for manual operation

    Easy mounting without hot work

    Individually adjusted machine length and horizontal position

    Easy removable after use

    Adjustable rotating speed

    180o optimised downward operation

    Can be combined with barbed wire

    Ideal for sunken deck protection

    Class approval services

    VRC (remote control valves) system can be quoted as option

  • Aons first Piracy Update confirms regional shift in piracy activity

    Attempted attacks on the rise; West Africa activity analysis

    Aon Risk Solutions, the risk management

    business of Aon Corporation today announced

    its first in-depth piracy report for ship owners

    worldwide. Collated by Aons specialist Kidnap

    and Ransom Practice, Aons Piracy Update

    uses piracy data from 2009 to 2011 to clarify

    the changing trends in regional and seasonal

    Somali piracy activity to allow ship owners to

    better manage their exposure to piracy. The re-

    port also looks at the emerging threat of piracy

    off the west coast of Africa.

    Nearing the end of the monsoon season, a time

    when an increase of seasonal piracy activity is

    often seen, the update gives both commercial

    and private ship owners comprehensive insight

    into piracy risk and insurance and, in addition

    to a review of emerging piracy threats on the

    west coast, it also provides an analysis of piracy

    activity in four key risk zones off the east coast

    of Africa.

    Aons analysis confirms an increase in overall

    piracy activity while it reveals a general decline

    in successful attacks on vessels over the last

    year. The update explains a shift in regional ac-

    tivity, which has been attributed to an increase

    in anti-piracy measures. The most notable shift

    has been seen in the Gulf of Aden, historically

    a piracy hotspot, to the Arabian Sea, which has

    experienced a 267 percent increase of attacks

    year on year.

    This report has been produced to support ship

    owners in understanding the risks of piracy and

    how they can best mitigate and transfer those

    risks. Our team has many years of experience

    dealing with kidnap and ransom risks and, more

    recently, experience with the risks of piracy.

    While there has been no shortage of anecdotal

    accounts in recent years, access to fact-based

    data removes the speculation and supposition

    associated with activity in high-risk areas. Our

    clients benefit from the use of this data as we

    give credence to insurers requests to verify

    their statistical analysis. The report is also de-

    signed to clarify key elements of cover and key

    issues in Marine K&R policies.

    This report, collated by Aons specialist Kidnap and Ransom Practice, uses piracy data from 2009 to 2011

    to clarify the changing trends in regional and seasonal Somali piracy activity to allow ship owners to better

    manage their exposure to piracy. The report also looks at the emerging threat of piracy off the west coast of

    Africa.

    The findings of this analysis show that for the east coast of Africa:

    Pirate activity is seasonal

    There is an increased determination on the part of the pirates, shown both by the number of attacks and

    the far reaching distance from Somalia where attacks frequently occur

    The number of attacks are increasing

    Significant periods of time are taken to free vessels

    The number of successful hijacks is decreasing

    Anti piracy measures, be they active (eg armed guards and use of Naval resources) or passive (eg compli-

    ance with BMP4 or use of citadels), have been successful in protecting vessels. This is reflected in the

    declining number of successful attacks over the past year.

    West Africa has seen an increase in crime, including the seizure of vessels, boarding of vessels, kidnap of

    crew as well as general attacks and continued robbery. This issue may have been inspired by activity on the

    east coast. However, the political situation and relative stability in countries on the west coast makes it dif-

    ficult for pirates to find safe anchorages from which ransom demands and negotiations can be conducted.

    The emergence of kidnap and ransom policies to assist with the costs of an incident has been significant.

    They have helped to provide assistance and indemnification for losses not covered by traditional marine

    insurance policies.

    We have deliberately not analysed ransom demands or payments since this information is not, and should

    not be, in the public domain.

    Summary of the Somali piracy situation Attacks on vessels transiting the Arabian Sea, Indian Ocean and Gulf of Aden are well documented. There

    isnt a newspaper, magazine or internet site that hasnt covered the rise in frequency and severity of attacks

    on both commercial shipping and other vessels (eg yachts).

    The insurance markets have reacted to the situation by defining high risk areas, as most recently covered

    by the JWLA/018 dated 1 August 2011 (attached as appendix 1). The cost to the shipping industry has been

    enormous whether involving risk mitigation (in whatever guise), the purchase of additional insurance cover

    and the cost of maintaining the range of policies required, or simply paying the cost as an uninsured event.

    The assessment of risk to other vessels has resulted in sporting events being cancelled and greater appre-

    ciation of a no-go zone without suitable anti piracy measures. Ship owners face the prospect that crew will

    simply not transit high risk areas until appropriate mitigation measures are in place or unless armed guards

    are placed on particularly vulnerable vessels.

    Risk mitigation Ship owners, managers and charterers have various means to limit the risk of a vessel being taken. The

    fourth version of Best Management Practices for protection against Somalia based piracy (BMP4) has re-

    cently been published and reiterates guidelines for vessels transiting high risk areas. Notwithstanding these

    guidelines, there still appears to be a large number of vessels paying scant regard to their implementation.

    BMP4 continues to underline the importance of registration with UKMTO and MSCHOA thus allowing

    coalition forces to at least be aware of what traffic is where. Increased use of tracking systems for vessels

    eg NYA Internationals MarTrack, is also being used by owners and operators to manage vessel positioning

    in relation to known pirate activity.

    Increasingly both unarmed and armed guards are being used to deter pirates from coming close to vessels.

    Unarmed guards have been successful in training crew and spotting potential or actual danger armed

    guards have increasingly found the need to discharge their weapons to avert pirate skiffs. At the time of go-

    Executive Summary

    piracy report nafs mag. issue 8330

    Contact details: Mr. George Turner, Marine Business Development Manager, Tel:2130177100, e-mail: [email protected]

  • ing to print, no vessels have been taken with armed

    guards on board and Aon has regularly stated its

    endorsement of armed guards as an alternative

    insurance policy. That said, with an increasing

    number of ship owners agreeing to the use of

    armed guards, quality control; proper training; the

    right experience and established protocols are

    critical in avoiding the potential of unregulated and

    indiscriminate use of weapons with potentially tragic

    consequences. There is also a very real risk that

    there simply wont be sufficient quality resources

    to satisfy demand.

    It is nonetheless a fact that vessels identified as

    being low and slow, without sufficient ability to dem-

    onstrate risk mitigation or general awareness, will

    be greater targets than those bristling with guards

    and a sense of preparation for attack.

    Insurers differ in their views on preventative

    measures and the K&R market in particular seems

    to be acutely more aware of differing risk profiles of

    vessels than the War market, which charges a fixed

    breach premium based on the value of a vessel. It

    is of particular note that the War market does not

    pay attention to a vessels state of preparedness for

    transits through high risk areas and this may be one

    of the major reasons as to why the K&R market is

    picking up a proportionately lower number of losses

    than the War market.

    The K&R market views the following as being a pre-

    requisite for cover:

    Maximum speed for weather conditions

    Registration with MSCHOA and UKMTO

    Compliance with BMP4

    A citadel capable of withstanding attack and ca-

    pable of being occupied in comfort and safety (with

    communications and ability to control the vessel) for

    a period in excess of at least 48 hours

    Razor wire

    Crew training

    A cohesive awareness and piracy plan for all

    transits through high risk areas

    For those vessels at higher risk of attack, armed

    guards or an escort vessel become a requirement.

    Armed guards and providers of escort vessels must

    be able to prove their ability and experience in

    defending vessels. It is expected that most, if not all,

    should have maritime experience, should have high

    velocity weapons and sufficient ammunition to repel

    multiple attacks and should carry requisite licences.

    It is also expected that they should buy adequate

    liability insurance. Aon advocates that providers of

    armed guards buy their own K&R policy to protect

    themselves against a situation where a vessel is

    taken by pirates with armed guards on board but

    separate and additional demands are made to the

    security company.

    Risk transfer For those buying stand-alone Marine Kidnap and

    Ransom (K&R) insurance, insurers are increasingly

    putting conditions (and sometimes conditions prec-

    edent or warranties) on contracts of insurance. The

    existence of such conditions requires the assured

    to stand by the information provided to the industry

    with particular focus on minimum freeboard and

    speed as well as preventative measures. Failure

    to do so simply means coverage may be null and

    void. Aon encourages that buyers take care in the

    submission of information to brokers and insurers.

    Buyers of Marine K&R cover should be given

    discounts by their War risk insurers (as long as

    the K&R policies have the right waivers of rights of

    subrogation) and charterers should ensure that they

    are paying the right price per transit. Charterers can

    also purchase their own annual cover rather than

    risk paying potentially inflated prices through own-

    ers arrangements. Loss of Hire as a result of the

    seizure of vessels is also available from the K&R

    market. Significant limits and extensive coverage

    are available on a bespoke basis providing peace

    of mind and cover not available from the traditional

    War market.

    Losses resulting from piracy can be claimed from

    the War insurance market through the process of

    General Average (GA) and have also been claimed

    from the Hull market. Many more losses have been

    covered by War policies than K&R policies. This

    suggests that there are still many ship owners either

    refusing to pay additional insurance costs or not

    appreciating the advantages associated with K&R

    policies.

    Benefits of insuring vessels in the K&R market are

    principally:

    Speed of resolution (ransoms reimbursed within

    10 days)

    Guaranteed and unlimited access to preferred

    consultants (to advise on the process of negotiation)

    The avoidance of the need to go through lengthy

    and costly GA adjustment

    Protecting the loss record of War and/or Hull

    policies

    The reimbursement of all reasonable costs,

    including the costs of delivering ransom and loss of

    ransom while in transit

    Aons unique perspective The costs and inconvenience of the Somali piracy

    problem are at an all time high. Aons unique exper-

    tise in this area, and our commitment to researching

    the factual perspective, enables us to create the

    best solution for our clients.

    We are proactively working with our clients and the

    insurance market to highlight a number of trends

    and we constantly review our wordings to ensure

    that coverage is available in the broadest sense.

    We have recently incorporated a number of valu-

    able enhancements for the benefit of our customers.

    We are using statistical data to negotiate the best

    pricing according to season and risk profile, and

    work with the shipping community to ensure that

    the most advantageous terms are obtained from

    insurers.

    We recognize the need for detailed and accurate

    presentation of risk the better the information, the

    more receptive the insurance market will be to the

    risk.

    Our Crisis Management team believes passionately

    in the importance of closely supporting our clients

    throughout the whole process, in terms of present-

    ing risk, negotiating insurance coverage and price

    and assisting should you be involved in an incident.

    Insurance market Traditional marine insurance Marine insurance has evolved greatly since its

    beginnings in Lloyds coffee house in London at the

    end of the 17th century. The SG policy wording

    which extended coverage to the activity of pirates,

    rovers, thieves was replaced with more user

    friendly wording in the early 1980s. Piracy is still,

    however, an insured peril whether included in the

    marine or more likely these days the war risks

    cover. With the emergence of the modern piracy

    phenomenon, initially off Somalia and the Horn

    of Africa but increasingly across a wide area of

    the Indian Ocean, a consensus has finally been

    reached that ransom payments and ancillary costs

    are treatable as General Average (GA) and as such

    can be shared in proportion by the various interests

    on board at the time of the taking, according to the

    principles of GA.

    GA does not depend upon any particular written

    instrument, such as an insurance policy, but on a

    general rule of maritime law which is triggered by

    the existence of a peril.

    There are drawbacks in taking the GA route where

    piracy is concerned. The ship owner is obliged to

    fund all of the costs involved, including the eventual

    payment of the ransom and release of vessel, crew

    and cargo. Accordingly ship owners are advised

    to protect their rights to receive payment from the

    contributing interests in the form General Average

    security, which should be collected from all inter-

    ested parties in the voyage.

    Only once all documentation has been collated

    and passed to the appointed GA adjuster and a

    statement prepared and sent to interested parties

    can the ship owner begin to seek settlement of the

    contributions due. There are numerous examples

    of ship owners experiencing long delays in the

    recovery of GA contributions, with cargo interests

  • in particular putting up strong resistance - in some

    cases alleging the vessel was not seaworthy.

    Lawyers, insurers and the shipping community

    have thus reluctantly concluded that traditional ma-

    rine policies are not always geared to coping with

    the Somali activity. Thus, a relatively new insurance

    policy (created in 2008) has emerged for those ship

    owners making voyages across high risk areas.

    The market has materialised amongst non-mariners

    whose main focus has always been land based

    kidnap for ransom and extortion. The policies are

    triggered by demands made by criminal gangs

    often threatening to kill, injure or damage property,

    unless a financial demand is met.

    The Kidnap and Ransom market The Kidnap and Ransom (K&R) market provides

    policies that clients simply hope they never have to

    use. Kept confidential, with restricted knowledge of

    their existence, the K&R market has been relatively

    small and dominated by Hiscox (the well known

    Lloyds syndicate) which, with its exclusive associa-

    tion with Control Risks, has offered policies on a

    worldwide basis with few, if any, exceptions.

    In 2008, when the Somali pirates started to become

    more active, the K&R market launched products

    and services to cater for the needs of the shipping

    community

    convinced that the risks they were seeing were

    actually no more than waterborne acts of kidnap

    and extortion. A new product allowed for new par-

    ticipants and competition fuelled by a combination

    of supply and demand. Today, almost three years to

    the day that the marine coverage became a focus

    of the market, the annual premium being paid by

    buyers of marine piracy insurance is as big as the

    annual land based K&R premium which has been

    developed over more than 40 years. It is a stag-

    gering statistic, but acknowledges a combination of

    the scale of the problem, the exposure the shipping

    industry has, the cost of losses to both industries

    (shipping and insurance), and the fact that the

    insurance is only a small part of the overall cost.

    Tday, policies are available from a

    number of carriers. Below is a list of the main

    London based markets, together with their retained

    consultants.

    K&R policies Marine K&R policies reimburse ransoms and pro-

    vide indemnification of other expenses potentially

    arising from the seizure of vessels or crew.

    Key elements of cover

    Reimbursement of ransom

    Loss of ransom in transit

    Response consultants fees and expenses

    Additional costs

    Legal expenses

    Personal accident

    Limits Limits are typically expressed per insured event and

    do not normally have an aggregate limit.

    Limits apply separately per section of cover and are

    bought on a fixed limit basis. The limit applicable to

    any one section is separate and in addition to any

    other. Consultants fees and expenses are payable

    on an unlimited basis.

    Consultants Consultants act as advisors to the assured. They

    will not act as negotiators but will train an appropri-

    ate communicator to deliver messages to the op-

    position. The consultants will stay with the assured

    24/7 during an incident from start to finish.

    They will train the crisis management team, offer

    advice and work with the assured to resolve the

    incident, taking into consideration the welfare of

    the victims and their families, availability of funds

    to pay ransoms, speed of settlement etc. They act

    independently of insurers and will work for, and

    follow the instructions of, the assured during an

    incident. The assured is expected but not obliged to

    follow their advice and may, with the prior consent

    of insurers, appoint a preferred alternative.

    Some key issues Covered persons includes anyone on the vessel

    with the Masters permission

    Covered vessels are typically declared at incep-

    tion of the policy

    Coverage is triggered by demands made against

    an owner, manager, charterer or any other party

    with an insurable interest

    Ransom is reimbursed not funded

    Additional expenses are covered, most notably:

    Lawyers fees

    150% of crews salary

    Interest on loans

    Cost of fuel oil (sublimited)

    Costs paid to port authorities / agents (sublimited)

    Costs of delivering ransom

    Exclusions and conditions Any claim that breaches trade, economic sanctions

    of various countries/states.

    Robbery or theft of property and damage to vessels

    or cargo is excluded under K&R policies.

    Restricting knowledge of the existence of the policy

    (confidentiality).

    Extensions of cover

    Loss of Hire is available by extension and based on

    an agreed daily rate of indemnity for a fixed period.

    Aons perspective on limits Aon has been able to obtain limits up to USD50

    million for K&R and Loss of Hire arising from the

    seizure of a vessel. Whilst we do not necessar-

    ily advocate the purchase of such limits, given an

    increase in demands and payments, we do urge

    buyers of K&R cover to take out adequate cover

    and we do believe that a minimum level of USD5

    million should be recognised. Demands made for

    the release of trophy vessels may be considerably

    higher than USD5 million.

    Aons perspective on cost Aon has long advocated the purchase of annual

    policies rather than those on a per transit basis.

    Policies are tailored so that individual transits can

    be invoiced separately on a voyage basis if required

    for the purposes of billing third parties (eg charter-

    ers).

    The cost of annual policies is lower and coverage

    is typically offered on a 24/7 worldwide basis to

    ensure coverage both inside and outside areas

    perceived to be high risk.

    Aon is currently seeing varying rates from different

    markets but for vessels with good protection (includ-

    ing armed guards), freeboard in excess of 6 metres

    and speed in excess of 14/15 knots, a client buying

    USD5 million of cover might expect to pay between

    USD5,000-7,500 per transit across high risk areas.

    piracy report nafs mag. issue 8332

  • Section A East Africa

    We have established four zones in order to easily identify the

    areas of risk. These are: Zone 1: N of 10N E of 55E (Arabian

    Sea and Persian Gulf) Zone 2: N of 10N W of 55E (Gulf of

    Aden and Red Sea) Zone 3: S of 10N W of 55E (Somali Basin

    and southerly parts including the

    Mozambique Channel) Zone 4: S of 10N E of 55E (Indian

    Ocean)

    General statistics Our analysis looks at 509 attacks by pirates being successful

    and/or unsuccessful attempts to pirate vessels in the Red Sea,

    Gulf of Aden, Somali Basin, Arabian Sea and Indian Ocean.

    There has been an increase in attacks year on year from

    2009/10 to 2010/11. There were 231 attacks in 2009/10 compared

    to 278 attacks 2010/11 representing a 17% increase.

    Of these attacks, there was a 19% success rate of attack to

    pirating in 2009/10 but in 2010/11 this figure dropped to 16%

    reflecting the success of and general increase in anti-piracy

    measures.

    Activity by zone The majority of pirate attacks have moved from Zone 2 (Gulf of

    Aden and Red Sea) to Zone 1 (Arabian Sea). In 2010/11 in Zone

    1, there has been a 267% increase on the 2009/10 figures.

    Zones 2 (Gulf of Aden and Red Sea) and Zone 3 (Somali Basin

    and southerly parts including the Mozambique Channel) experi-

    enced the same volume of activity in 2010/11 as in 2009/10.

    Zone 4 (Indian Ocean) experienced the same volume of activity.

    piracy report nafs mag. issue 8334

  • The conclusion we draw from this is that there are

    vessels which have not realised the extent of pirate

    activity outside of the Gulf of Aden, letting their

    guard down as they fan out from or into the eastern

    end of the Internationally Recommended Transit

    Corridor (IRTC).

    Some vessels heading east through the IRTC may

    have dropped armed guards at

    either end of the IRTC thus making themselves

    more vulnerable. Nonetheless the figures demon-

    strate the success of the IRTC and yet the difficulty

    of providing Naval support throughout this vast

    expanse of sea this being most evident in Zone 4

    which is the furthest from the Somali coastline.

    Pirates have increasingly used mother vessels to

    get further from the Somali coastline.

    Success rates The graph below shows the following highlights:

    Zone 1 (Arabian Sea and Persian Gulf) has pro-

    duced a success rate of 30% in 2009/10 and 19%

    in 2010/11.

    Zone 2 (Gulf of Aden and Red Sea) has produced

    a success rate of 14% in 2009/10 and 10% in

    2010/11

    Zone 3 (Somali Basin and southerly parts includ-

    ing the Mozambique Channel) has produced a suc-

    cess rate of 21% in 2009/10 and 15% in 2010/11

    Zone 4 (Indian Ocean) is the second most suc-

    cessful with rates of 22% in 2009/2010 and 16%

    in 2010/2011 Anti-piracy measures, be they active

    (eg armed guards and use of Naval resources) or

    passive (eg compliance with BMP4 or use of cita-

    dels), have been successful in protecting vessels.

    Aon advocates continued focus on risk mitigation

    and preventative measures to protect vessels and

    crew even in areas where attacks might be least

    expected (eg Zone 4).

    Seasonal variation It is well recognized that weather greatly affects

    pirate activity.

    During the period 2009/10 we can see spikes of

    activity in certain areas and more consistent activity

    in other zones.

    Zone 1 was relatively quiet until March and April

    when weather conditions supported more daring

    enterprise then quiet again until July and August

    Zone 2 was consistently active throughout the

    year and notably so during the southwesterly mon-

    soon period

    Zones 3 and 4 appear to have two periods of

    activity, each lasting 3 months when pirate attack

    groups focus their efforts in this region probably

    due to weather conditions and the ability to operate

    more easily during these periods in these zones

    During 2009/10 the Gulf of Aden was very active

    and pirates were only just learning how to get

    further from their own coastline which they were

    only prepared to do when they knew the weather

    conditions could safely support such activity. During

    the period 2010/11 it is of note that the graph below

    shows more than 30 attacks in one month in one

    zone, compared to a monthly high of 18 during the

    previous year.

    Zone 1 saw record breaking figure in January,

    but attacks were consistently higher throughout

    the year compared with 2009/2010. This includes

    a concentration of attacks in the area east of 15

    degrees east, north of 10 degrees south, south of

    20 degrees north and west of 65 degrees east

    piracy report nafs mag. issue 8336

  • Zone 2 has become much quieter but activity

    increases in July when attacks were seen in the

    southern Red Sea and Bab el Mandeb straits

    Zone 3 peaks in activity in October before reduc-

    ing. There are however sporadic attacks taking

    place over similar three monthly periods as the

    previous year

    Zone 4 peaks in activity in November with activity

    tailing off after March It is clearly evident that whilst

    the IRTC is a convenient hunting ground, in 2010/11

    it has become easier to attack vessels in Zone 1.

    From a more detailed analysis we can see that the

    majority of attacks occur west of 68 degrees east

    with only two attacks registered south of 00 degrees

    and east of 65 degrees east. It is also evident that

    there are no attacks south of 4 degrees south and

    east of 55 degrees east. There were 14 attacks

    in the Red Sea including 5 outside the area as

    decreed by the JWLA/018 during June, July and

    August of 2011.

    Attack times The data proves that no day of the week is any

    safer (or more dangerous) than another.

    The most popular time to attack is between 03:00

    and 08:59. In 2009/10, 39% of attacks took place

    during this period and in 2010/11 37% occurred

    during this period.

    The period between 22:00 and 02:59 is consistently

    less active than any other.

    Vessels are attacked regularly during daylight hours

    and despite a view that dusk may be as danger-

    ous as dawn, the figures do not prove this to be

    the case. Vessels need to keep up their guard

    during periods of darkness but the period around

    dawn is statistically the most dangerous period for

    any vessel in high risk areas. The statistics also

    demonstrate that there is a greater success rate

    associated with attacks during 22:00 and 02:59 than

    at any other time (albeit overall a smaller number of

    attacks take place).

    Most attacked vessels by type The categories of vessel listed below were the most

    targeted over the two year period and represent

    almost 80% of the attacks. For the purposes of the

    graph we have included chemical tankers in the

    product tanker category.

    Average duration of incidents As at 7 September, the average duration of inci-

    dents was as follows:

    2009/10 189 days

    2010/11 156 days

    This represents a 17% decrease in the duration of

    incidents of Somali piracy year on year.

    It is difficult to draw any conclusions from this since

    there are so many factors involved in the resolution

    of incidents.

    piracy report nafs mag. issue 8338

  • In this section we consider the situation on the west coast of Africa in particular the Gulf of Guinea. The data is not as plentiful for this region, which is

    developing as an area of high risk. Nonetheless we have drawn conclusions from 89 recorded attacks on vessels off west Africa.

    The reality is that the coast of Nigeria has been unsettled for some time. Fishermen have historically used dynamite to stun fish around the natural

    reefs that have grown up around offshore oil installations. MEND (Movement for the Emancipation of the Niger Delta) has consistently kidnapped crew

    members from vessels approaching the Delta region or the port area in and around Port Harcourt. Robbery from vessels, either at anchor or in port, is

    widespread. Recently however the areas around the coastline of Benin, Guinea, Cameroon and Congo have seen an increase in crime including the

    seizure of vessels, the boarding of vessels, the kidnap of crew as well as general attacks and the usual robbery. We are inclined to believe that the

    west African problem is inspired by the activity on the east coast. The political climate and relative stability in countries on the west coast does however

    make it difficult for pirates to find safe anchorages from which ransom demands and negotiations can be conducted.

    The attacks can be categorized by those that take place at anchorage or port and those that occur offshore. The data shows a general increase from

    2009/10 to 2010/11.

    By category of incident, it is notable to see the emergence of a new threat in 2010/11 being piracy predominantly off the coast of Benin. Levels of

    other crime remain relatively consistent.

    Of the vessels pirated, four were taken whilst at anchorage and five were taken offshore. Vessels offshore were on average twenty one miles from

    shore.

    There are some interesting points to note from the above statistics:

    Of the nine seizures, three of them started and finished on the same day.

    The average duration of the nine seizures was four days

    Seven of the nine seizures were off Benin with one off Nigeria and one off Guinea

    Eight of the nine seizures have taken place in the last four months

    All the vessels concerned were product tankers We conclude that there is an issue off the coast of Benin and a trend towards an increased number

    of seizures of vessels. Notwithstanding, there is evidence to suggest that once the west coast pirates have seized the vessels, they dont know what to

    do with them. We believe that whilst the threat of piracy exists off the west coast, it is as likely that criminals will travel from the west coast to the east

    coast to join the Somali based activity and that other forms of crime will continue to plague the area.

    Section B West Africa

    SummaryEast Africa

    The main points from the analysis of data comparing 2009/10 activity to 2010/11 are as follows for the east

    coast of Africa

    A 17% increase in the number of attacks

    A lower rate of attacks leading to actual piracy

    A 267% increase in attacks in Zone 1 (Arabian Sea) with a reduced rate of success (30% in 2009/10

    reducing to 19% in 2010/11)

    Reduced activity in the Gulf of Aden recognizing the success of the IRTC

    Pirate attacks significantly further from the Somali coast as weather conditions allow but recognizing

    seasonal variations in activity in more sheltered areas

    The period from 03:00-08:59 being statistically the most dangerous time for vulnerable vessels

    A reduction in the average length of incidents of Somali piracy

    West Africa

    The main points from the analysis of data comparing 2009/10 activity to 2010/11 are as follows for the

    west coast of Africa

    9 seizures (acts of piracy) are recorded in 2010/11 from a total of 89 attacks over a two year period

    The seizures have all taken place in the last 4 months

    The average duration of the incidents is 4 days

    The problems off the west coast are still mainly robbery with a small number of kidnaps but things may

    be changing

    About AonAon Corporation (NYSE:AON) is the leading

    global provider of risk management services,

    insurance and reinsurance brokerage, and human

    resources solutions and outsourcing. Through

    its more than 59,000 colleagues worldwide, Aon

    unites to deliver distinctive client value via innova-

    tive and effective risk management and workforce

    productivity solutions. Aons industry-leading

    global resources and technical expertise are

    delivered locally in over 120 countries. Named

    the worlds best broker by Euromoney magazines

    2008, 2009 and 2010 Insurance Survey, Aon also

    ranked highest on Business Insurances listing of

    the worlds insurance brokers based on commer-

    cial retail, wholesale, reinsurance and personal

    lines brokerage revenues in 2008 and 2009. A.M.

    Best deemed Aon the number one insurance bro-

    ker based on revenues in 2007, 2008 and 2009,

    and Aon was voted best insurance intermediary

    2007-2010, best reinsurance intermediary 2006-

    2010, best captives manager 2009-2010, and

    best employee benefits consulting firm 2007-2009

    by the readers of Business Insurance. Visit http://

    www.aon.com for more information on Aon and

    http://www.aon.com/manchesterunited to learn

    about Aons global partnership and shirt sponsor-

    ship with Manchester United.

    piracy report nafs mag. issue 8340

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  • safety news nafs mag. issue 8344New research identifies Health & Safety Information Gap in the Oil & Gas industryAVEVA (LSE:AVV), a leader in engineering design

    and information management solutions for the plant,

    power and marine industries, today announces the

    global launch of The Health & Safety Information

    Gap, undertaken by Aberdeen Business School,

    Robert Gordon University (RGU) at Offshore Europe

    2011. Concentrating on information systems within

    the health & safety environment, the far reaching re-

    port documents a number of insightful findings. For

    example, 40% of respondents dont know where to

    search for safety information and are working on a

    mixture of corporate, local and external information

    systems.

    The report is based on RGUs researcnh which gath-

    ered information from health & safety (H&S) man-

    agers, senior managers and engineers in the global

    oil & gas industry, through an online questionnaire.

    Respondents business types included operating

    companies, contractors, service companies and

    suppliers. Confidential, in-depth Critical Incident

    case studies were carried out in four representa-

    tive businesses, interviewing key individuals able to

    comment authoritatively on the information aspects

    of dealing with the incidents.

    Whereas internal channels such as Intranets and

    team meetings did offer access, respondents found

    that they often searched the internet for relevant in-

    formation. Half of respondents identified the need for

    better information systems and a quarter believe that

    they are not shared information within the company

    environment. On the whole, there was a strong de-

    mand for a shared integrated system to enable better

    access to all appropriate information. Respondents

    comments support this:

    The problem is theres too much information

    I dont think the information systems that we are

    talking about are very user friendly

    It was fragmented information and it was incon-

    sistent

    In depth one-on-one interviews as part of this sur-

    vey exposed the silos of information and discon-

    nected processes that can contribute to operational

    risk. This is consistent with our own industry ex-

    perience; there is clearly an information gap, said

    Steve Tongish, VP Marketing, AVEVA. In response

    to the report, we have identified the three main ar-

    eas where the greatest deficiencies can be found;

    fragmentation of information, failure to capture and

    exploit the value of standards, and poor accessibility

    to data. The research done by RGU will benefit our

    customers by providing further input into our strategy

    for Operational Integrity Management solutions.

    There are particular concerns that current infor-

    mation systems are not a