Rising tanker hire costs delay UN plan to offload oil from FSO Safer

The plan to offload oil from the decaying offshore storage tanker FSO Safer, which has been sitting off the coast of Yemen since 2015, has hit another obstacle.

UN officials said that the rising cost of tanker hire was making it difficult to find an affordable tanker to take on board the oil to be removed from the Safer. In a briefing at UN headquarters, the officials said that they were making “good progress” both in the financing and planning for the effort, but that the cost and availability of tankers was their latest challenge.

Farhan Haq, Deputy Spokesperson for the UN Secretary-General, said that “the availability of very large crude carriers has decreased in the past six months, basically due to events having to do with the war in Ukraine. So, just as we were gearing up for operations, the cost to both lease and purchase this type of vessel increased. A very large crude carrier now costs about 50% more than what’s budgeted in the original plan. So, we have some additional expenses and it’s a little bit harder finding the right ships, but we’re proceeding with the work.”

Long-running negotiations to empty the FSO Safer of more than 1m barrels of oil before the hull rusted away reached an agreement last year when the Houthi rebels agreed that the oil could be moved, provided it retained its claim to ownership of the crude. The UN reached an agreement that called for the transfer of the oil from the FSO Safer to a replacement tanker until a permanent storage solution was agreed.

The Safer, a 1970s-vintage oil tanker, was converted into an FSO in 1987, but work on the vessel stopped in 2015 due to the Yemeni civil war.

Haq said that “all of the technical expertise is in place to undertake the procurement for the complex operation”. This included a marine management consultancy firm, maritime legal firm, insurance and ship brokers, and oil spill experts. “The contracting of the salvage company that will carry out the emergency operation is at an advanced stage” Haq added.

The UN says it remains confident the work can begin in the coming months.

Late last week France said that it was increasing its financial contribution to help with the increased cost of the plan. The French government is making an extra contribution of €1m, bringing its total contribution to €2.26m.

A French Foreign Ministry statement said that increasing its funding commitments to the Safer’s rescue plan illustrated the country’s commitment to protecting the environment in the Red Sea region and its steadfast support for the UN-led rescue plan. “France calls on the Houthis, who currently control the Safer tanker, to cooperate fully with the United Nations on the implementation of the rescue plan,” France said.

The UN said that to date it had received $73m of the pledges that total more than $84 million coming from countries, corporations, and individuals in a crowdfunding campaign. Haq said that additional funding from the private sector was expected soon.

Apart from funding for the emergency operation, the UN plan initially estimated that an additional $38m would be required for the installation of safe long-term replacement capacity for the Safer during Phase II of the operation. The oil would remain in Yemen, while the Safer would be removed and sold for scrap. The proceeds from that sale would be used to offset in part the cost of the salvage operation.