DNV board member Linda Adamany is chief executive of BP Shipping. BP has a major newbuilding programme under way, which it sees as essential to bolstering its present fleet of tankers; it also relies extensively on voyage or time-chartered vessels, all of which must meet the company’s stringent quality standards.
What is BP doing to monitor the quality of the ships it charters?
We dedicate a significant amount of our resources to what we call the assurance activity. This is very much about assessing the quality of the ships we consider chartering. We have a rigorous process for carrying out those assessments and vetting the ships before we actually start to use them. In this connection, we, like other oil companies, are highly dependent on classification societies. This whole industry is, in my opinion, only as strong as its weakest link. We depend on each other to bring to bear the skills and resources which each of us delivers. Class, in particular, touches so many aspects of what we do and what we need. Making use of condition assessment surveys and being able to rely on the class societies evaluations are hugely important to our ability to accept a vessel or not.
How do you see the status of the shipping industry today,
and how do you see it developing in light of the current economic slowdown?
Certainly, an oil company like BP has a really fundamental need for ships, they are the backbone of our transport system. And that need is not going to change. Around the margins, the economy may have a potential impact on us, to the extent that some businesses may cease to exist and therefore dont need what ships provide, but, generally speaking, the robust freight rates that we have seen during the past year, basically since the Erika incident, have fallen in the past few months. As to the prospects for next year, I leave it up to those who are closer to the market to forecast those, but I dont think we are likely to see the kind of rates that we have seen over the past 1218 months. Shipowners certainly have every right to expect fair returns on their very significant investment, so, over the coming years, companies like BP that depend on very high quality ships for their business will be looking to the quality shipowner. What rates might look like remains to be seen.
There has been a spate of industry mergers and consolidations of late.
Do you see this trend continuing?
In general, I think it will probably continue wherever synergies exist. The collaborative approach to business certainly seems to work. Business in general has evolved over the years to a state where competition is intense and I think this keeps us all on our toes to find ways to do even better. I do believe you will see shipowners continue to form joint ventures and operating pools for that reason.
The Erika loss reopened the debate over multilateral versus regional regulation of shipping. In your opinion, how will this debate be resolved?
Weve been active at BP, both as an independent company and as a member of the Oil Companies International Marine Forum (OCIMF), and we take an international approach to regulation. I am very averse to a regional solution which, in my opinion, introduces a much greater probability of shifting the problem to a different part of the world and thats not what we should be about. We should be about raising the game and operating in the same way across the globe, so that the environment and safety of people are upheld as extremely important aspects of what we do. I think this is most effective at the IMO level.
Regarding the policing of the industry and the roles of port state, flag state and class.Is this the optimum structure or is there a case for the redefinition of any of these roles?
I do think that all of those entities can play a more robust role, whether its class, flag or port state control. And I have to say that DNV has really taken on a leadership role to harmonise the classification societies, with the aim of providing the robust kind of assurance that we need.
What are the safety responsibilities of the key players in the safety chain, including charterers, underwriters and shipbuilders?
As I said, were all as strong as the weakest link in the chain. While I certainly believe the focus on shipowners is appropriate, all parties need to understand that what they do is critical with regard to decisions on how ships are to be built and operated.
What are the implications of the accelerated phase-out of single-hull tankers? Recapitalisation. In an ideal world, reinvesting in high-quality ships should be rewarded, and an attractive option for a shipowner. It is unfortunate that it has taken an incident like the Erika and legislation to force people to do things that might otherwise have taken many more years. So i welcome the change. I just lament the factors that actually triggered it.
What is your opinion of the LAN agreement between LR, ABS and DNV to improve ship safety?
Since Erika a lot of questions have been raised regarding the role of class, and OCIMF in particular was very keen to work with class to discuss the needs of the oil companies and allow the class societies to respond appropriately. There was a series of meetings last year that I think produced some invaluable results, and ABS, LR and DNV were crucial to making those things happen. I think it is fair to say that BP Shippings concerns had been understood and listened to, and Im very encouraged by the changes that are being made and endorsed by the classification societies. A number of issues are being addressed. I believe that some of these are particularly critical, especially the transparency of information and how to make transfer agreements more robust so that they are understood and on record when there is a suspension or transfer of class.
Certainly, I will say that Im very concerned about the lack of harmony between IACS members in terms of standards.