Euronav: Tanker consolidation installs market discipline

Euronav: Tanker consolidation installs market discipline

Antwerp: Paddy Rodgers, ceo of tanker giant Euronav, reckons the consolidation seen in his sector is very good for holding up rates.

“There has already been a move toward more consolidation in recent quarters in which we have been a leading player in with the acquisition of 23 VLCCs since December 2013 and options on four further VLCCs from Metrostar which we announced last month,” Rodgers, one of the key architects in the changing global tanker fortunes, tells Maritime CEO.

“We welcome the developments at Frontline and Gener8’s recent IPO on the NYSE as this will further consolidate the sector and install underlying discipline within large tanker owners,” he adds.

Rodgers is a big proponent of commercial consolidation via pools. The Tankers International Pool is where his VLCC fleet is operated from.

“We have seen this pool continue to expand and encourage others to join in the benefits of pooled operation,” he says.

As to whether his firm will get involved in further consolidation activities, Rodgers, a trained lawyer, says his company will remain disciplined and any acquisitions will have to meet two criteria. Any fleet addition should reduce or at least match the breakeven cost per vessel of the overall fleet and secondly if Euronav were to issue equity it would have to be at a premium to its own NAV in order to create shareholder value.

Looking at suppy and demand, Rodgers is confident the current tanker bullrun can continue, predicting “a robust tanker cycle” for at least the next 12 months and beyond.

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