Dede’s Law and Business Series: The Very Large Crude Carrier and the factors that lead to its development (2)

By Foluke Akinmoladun

The VLCC can also ply between the Arabian Gulf and various ports around the Indian Ocean and the Red Sea and is a main player on those trade routes. The VLCC is also engaged in the crude oil trade to load in West Africa for ports in India or the Far East. Other ports include the Mediterranean ports such Ceyhan in Turkey and Sidi Kerir in Egypt which serve as pipeline terminals where VLCCs load crude oil. Some VLCCs carry heavy bunker fuel oil from Europe or from the Caribbean to Singapore.

Another major factor that affected the development of VLCCs was the conflict in the Middle East and environs. The closure of the Suez Canal in the 1970s particularly 1974, meant that there was no restriction to the development of the size of oil tankers. This further encouraged the use and growth of VLCCs particularly with the resultant economies of scale. This then meant that the larger the oil tanker, the cheaper it was, fuel and operations wise, to move crude cargo.

Adverse environmental impact of oil spills from oil tankers however had a negative effect on the image of the VLCC. An example was the oil spill caused by the Torrey Canyon in 1967 which raised awareness of how dangerous the impact of oil spills can be and also the dangers of oil tankers. The outcome of that disaster was that oil companies became involved in MARPOL 73.

MARPOL is the International Convention for Prevention of Marine Pollution for Ships. It gives standards for stowing, handling, shipping and transferring toxic waste. The Convention also provides the Rules for the disposal of ship-generated hazardous waste like cleaning agents and cargo hold washing water. MARPOL 73/78, came into force in 1973 and was later first revised by the protocol in 1978 and has been revised a number of times after to address new and varied forms of environmental waste from chemical wastes to sewage, garbage and air pollution from ships.

The objective of the Convention is to ensure that shipping remains the least environmentally damaging mode of transport. In addition, that the marine environment is preserved by the elimination of pollution of all harmful substances discharged from the ship.

This includes the elimination of intentional marine environment pollution through hydrocarbons and other toxic substances and to reduce the accidental discharge of such substances.

In 1968 the International Tanker Owners Pollution Federation was created with the chief aim being to compensate the victims of environmental disasters caused by oil tankers. The result that the Federation, along with the Rules of MARPOL 73 put forward the alteration of the design of VLCCs to include a double hull instead of single hull to better protect the lower bottom of the vessel from damage and ultimately reduce the incidence of spillage.

With the oversupply of VLCCs in the 1970s, to the Middle East crisis that saw the loss of over 20 VLCCs to the reduction in production and order of VLCCs due to low freight rates, VLCCs have come a long way but are certainly here for the long haul.

Foluke Akinmoladun is a lawyer, accountant, mediator and arbitrator. She is the Managing Solicitor of Trizon Law Chambers and can be reached at: