New Tanker Company Sets Sail

Thursday, May 06, 2004

Hatem Fawzy, Director, Offsets Ventures; Ahmed Al Wahaibi, Deputy CEO, Oman Oil Company; Hussain M. Sultan, Group Chief Executive and Board Member, ENOC; Khadem Al Qubaisi, Investment Division Manager, International Petroleum Investment Company of Abu Dhabi; Xavier Thuriot, Chairman & CEO, Thales International Middle East.

GEM – Gulf Energy Maritime PJSC – is a new $430m joint venture shipping company, launched today. The venture, headquartered in Dubai, is 35% owned by Emirates National Oil Company (ENOC), 30% by Abu Dhabi-based International Petroleum Investment Company (IPIC), 30% by Oman Oil Company and 5% by Thales, under the UAE Offset Programme.

With an initial fleet of two Double Hull Panamax vessels and four new building of Panamax size, being built by Hyundai Heavy Industries and to be delivered by 2005, the company is set to fill an expanding global niche for independent clean petroleum transportation, as global shipping laws outlaw existing single hulled ships. ENOC Group Chief Executive and Board Member Hussain Sultan said: “With the launch of this clean petroleum product tanker company, we are heralding a new era in environmentally friendly, high quality and commercially-driven shipping in the region.”

GEM will initially only transport ‘clean petroleum products and easy chemicals’, including naphtha, kerosene, MTBE, methanol, jet fuel, MOGAS, and other hydrocarbons. “Gulf Energy Maritime will be a reliable transporter of clean petroleum products and easy chemicals, operating in an environmentally aware and commercially viable manner,” said Sultan.

“We will certainly enjoy market advantage with our fleet of brand new double-hulled ships, and with additional modern acquisitions we will be among the top independent tanker companies in the world. This is a great window of opportunity for us to assume a leading role in the global shipping lanes,” he added.

Gulf Energy Maritime intends to operate vessels in a portfolio of long, medium term and spot charters to minimize risk while benefiting from spot market spikes. Industry commentators speaking at events such as Intertanko – held for the first time in Dubai this year – predicted that Dubai will assume increasing importance as a global shipping hub, and the four companies behind the enormous joint venture clearly believe this prediction. “The GEM investment represents a double first for IPIC, marking IPIC’s first participation in the shipping sector, and its first investment in a UAE-based joint venture. IPIC is convinced that the combination of a compelling business model, a strong shareholder group and top quality management will bring enduring success to GEM,” said Mohamed N. Al Khaily, Managing Director, IPIC.

GEM will be staffed by industry professionals and an experienced team, with a strong emphasis on recruiting and training GCC national employees. GEM will aggressively target international best practice standards for every phase of its operations. The first Chairman will be Hussain Sultan. “The joint venture will operate under a prudent financial strategy” explained Sultan. “Similarly, a formal risk management strategy will be adhered to in areas of financial exposure. Our dividend policy will be conservative with priority being given to long-term business growth for shareholders. GEM will be managed as a stand-alone entity independent of share holders. “Shareholders however, have access to significant amounts of potential cargoes,” said Sultan. “This, coupled with access to competitive finance and the fact that we will be operating from the tax free low cost environment of the UAE, are competitive edges that Gulf Energy Maritime has when benchmarked against other industry players.”

Oman Oil Company welcomed participation in Gulf Energy Maritime. “This project is in line with the clear objectives OOC has set out to achieve from its international investments. Our interest in this particular venture is strongly linked to the growth in the production of clean projects in the region and the subsequent need for more independent shipping capacity. We are also excited about the opportunity to partner with two well respected GCC companies in ENOC and IPIC as well as with Thales of France,” said Ahmed Al Wahaibi, Deputy CEO, Oman Oil Company (OOC).

Xavier Thuriot, Chairman & CEO of Thales International Middle East, added: “The participation of Thales in this project is fully in line with our long-term commitment to the UAE. Through the country’s offset program, we are proud to contribute to the creation of a UAE company able to provide competitive solutions at international standards.”

The UAE Offsets Group (UOG) has also signaled its commitment to the project. “We support and promote all joint ventures that play a role in developing and diversifying the UAE economy and bring new expertise and technology to the country,” said Hatem Fawzy, Director, Offsets Ventures. GEM is already eyeing future opportunities, with Hussain Sultan hinting that the company may well transport LPG in future. It plans to expand its fleet, growing it with the business as and when opportunities arise.

Founder financiers of this world class company are Abu Dhabi Commercial Bank, Emirates Bank and Mashreqbank. Legal counsel involved are Hadef Al Dhahiri and Associates and Norton Rose.

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