New York-headquartered oil and gas driller Hess Corporation has taken the unusual move of chartering three VLCCs to store oil produced from its Bakken shale field in North Dakota.
Hess revealed in its latest quarterly report that the unprecedented reduction in oil demand, combined with the lack of storage in the United States, has led to the chartering of the three vessels. The VLCCs will store 2m barrels of May, June and July Bakken crude oil production.
The company said that the oil is expected to be sold in the fourth quarter of 2020, allowing the company to benefit from any recovery in the price of oil.
Hess did not reveal the tankers it had chartered, however Argus Media reports one of the tankers is Zodiac Maritime’s Blue Nova and another is Andriaki Shipping’s Leonidas. Marine Traffic data shows both vessels headed towards the Gulf of Mexico.
The other vessel, yet to be identified, is already in the Gulf of Mexico ready to hold Hess’s May production according to Bloomberg.
Currently, London tanker brokers Gibson count just over 70 laden VLCCs that have been stationary for at least four weeks. 20 of these tankers have international crude on board, 31 are Iranian (NITC) tankers, whilst the remaining VLCCs are involved in products storage, mainly dirty petroleum products around the Singapore area. In addition to these numbers, Gibson also counts 15 converted VLCCs (now FSOs) in permanent crude and products storage located around Indonesia and Malaysia.