Euronav CEO confirms contaminated bunkers impact

Belgium-based, New York-listed crude oil tanker company Euronav was affected by a substantial fuel contamination originating in the Gulf of Mexico earlier this year, CEO Paddy Rogers said in a Q3 earnings call.

Three or four ships had been affected and the faulty fuel was not detected by the normal bunker survey on delivery of the product because there was no question of the fuel being out of spec. In fact, said Rogers, the fuel was on-spec, “but somebody has dumped a waste material into the fuel in large quantities”.

Rogers claimed that “initially it was in the US Gulf where people had loaded it, then additional loads were picked up in both [Nigeria] and Singapore where people, realising that they had bought back fuel, and I don’t mean shipowners, I mean bunker operators, resold it in order to get rid of it before it was detected. So, it was spread quite widely.”

Rogers said that this was a continuing problem with the bunker pool, specifically residual fuel, and that this could impact vessels equipped with scrubbers, which after January 1st 2020 will be the only vessels permitted to burn heavy fuel oil.

The fuel oil would become more sulphurous and it would become “the obvious place to tip any waste product”, claimed Rogers.

He predicted that fuels which fall under the 0.50% sulphur threshold were unlikely to cause such issues.

“I think we’re going to see the potential for some of the key oil refiners to say that they want to re-enter the bunker market because as they think that that’s a real product again rather than a waste product, then they don’t have to distance themselves from the way they have done in the past…they can re-enter it and perhaps gain some brand premium for reliability assurance of quality and provenance”, Rogers said.