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BRIGHTOIL / INSURANCE full sTeam ahead for BrighToil Over the past four years, Sit steered his

company to gain a backdoor listing in Hong Kong, opened up more bunkering service stations across the globe, buy assets such as oil tankers and commercial properties, and diversify into the upstream gas business. "The group will relentlessly develop its

upstream and downstream oil related businesses, which include oil and gas exploration, oil storage and terminal facilities, and marine transportation. We will continue to strengthen our supply chain and develop our global marine bunkering network in order to become a fully integrated upstream and downstream global energy conglomerate," says Sit. The company is splurging $3bn on

For the last four years, privately-owned Chinese bunker supplier Brightoil Petroleum has been expanding at a breathtaking pace. The previously little known company started gaining public attention when it opened its Singapore office in December 2006, run by a team of media-friendly officials. As the company's growth quickened it

became increasingly private. Brightoil had a lot to deal with, especially in an oligopolistic Chinese bunker market controlled by four other state-backed suppliers, including leader Chimbusco and oil refiner Sinopec's spinoff Sinobunker. The man behind Brightoil, Sit Kwong

Lam, has deep political connections as he is

a member of the Chinese People's Political Consultative Conference, an influential advisory body to China's parliament. Former Brightoil employees and

sources close to the company said chairman Sit runs his company in a no- nonsense, military-like style. His iron- handed approach, nonetheless, has reaped rewards for the company with a market capitalisation of some HK$17.2bn ($2.2bn). Brightoil masterminded its expansion

from its stronghold in Shenzhen, where it owns and operates about 300,000 cu m of bonded oil terminal capacity, equipped with jetties and a dedicated fleet of bunker tankers.

have a potential environmental risk and therefore a liability to large claims should there be a spill. A major insurer of the bunkering fleet is

Shipowners P&I Club. Bunkering fits the club’s business profile with it specialising in insuring almost exclusively vessels of 10,000 gt or under. “If you take all the main ports in the world that have a bunker capability and in one shape or form we have an involvement,” says Steve Randall, general manager and director of Shipowners P&I in Singapore. The Club has a major involvement in the market in ports such as Rotterdam and Singapore.

A specialised risk B

unkering as a business carries its own inherent risks, the handling of heavy fuel oil and ship-to-ship transfers mean bunker operators

In Singapore, the world’s largest

bunkering port the Club holds a dominant position insuring around 90% of the bunker fleet. Opening up in the city-state in 2009 the insurer has moved to be closer to its clients in this region. The continually growing Singapore market has seen a few new entrants in the last few

upstream oil and gas assets, a move to reinforce its position as an integrated energy corporation. It has teamed up with state-owned China National Petroleum Corp (CNPC) to develop its first natural gas field project in northwest China's Xinjiang Autonomous Region. Its marine fuel supply business is not

lagging behind as the company has established a network of oil storage depots at key coastal ports in China and is planning to construct more oil depots in China, and as far as Europe and the US. Brightoil's grand oil terminal network

plan in China needs to be supported by competitive bunker pricing if it is to attract the buying volumes. With more Chinese suppliers expected to enter the bonded bunker market, Brightoil may find the competition needed for it to grow bigger.

years including Brightoil Petroleum and Aegean Marine Petroleum Network. Shipowners P&I is also active in other

ports in the region insuring smaller bunkering fleets such as Port Klang in Malaysia, and a smaller presence in Hong Kong and Indonesia. While bunker tankers do carry an

inherent risk due to their cargoes and the operations they carry out Randall says that this is lowered given the regulation of the Singapore market. “It’s a lot more stable now, there’s a lot more regulation these days. From an insurance perspective we have got a much improved risk,” he explains. “There is a lot of cost attached to operating bunker vessels in Singapore these days.” Under a licensing scheme only what

are classed as “category A” vessels with double-hull or a double-bottom are allowed to deliver bunkers in Singapore’s huge container port.

Seatrade Bunkering Report 2011 21

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