London marine insurers widen Middle East threat zone after ship attacks

London’s marine insurance market has extended the list of waters deemed high risk to include Oman, the United Arab Emirates and the Gulf after ship attacks off Fujairah. (File/AFP)
Updated 17 May 2019

London marine insurers widen Middle East threat zone after ship attacks

  • The London insurance market’s Joint War Committee said in a statement that the additions cover areas of perceived enhanced risk for marine insurers and reflected enhanced regional risk
  • The Joint War Committee also added adjacent waters around the Gulf of Oman to its high risk list

LONDON: London’s marine insurance market has extended the list of waters deemed high risk to include Oman, the United Arab Emirates and the Gulf after ship attacks off Fujairah, officials said on Friday, in a move that could push up premiums.
The London insurance market’s Joint War Committee said in a statement that the additions cover areas of perceived enhanced risk for marine insurers and reflected enhanced regional risk.
“The situation will be kept under close review,” said the Joint War Committee, whose guidance influences decisions by underwriters on insurance premiums.
Four tankers, comprising Saudi Arabian, UAE and Norwegian-flagged ships, were attacked on Sunday off Fujairah. No one has claimed responsibility for the incident.
The attacks took place against a backdrop of US-Iranian tension following Washington’s decision this month to try to cut Tehran’s oil exports to zero and beef up its military presence in the Gulf in response to what it called Iranian threats.
Iran accuses Washington of stoking tensions and had denied it had any role in the attacks.
The Joint War Committee, made up of syndicate members from the Lloyd’s Market Association (LMA) and representatives from the London insurance company market, normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, terrorism, piracy and related perils.
The Joint War Committee, which met on Thursday after developments in the Middle East ahead of Friday’s decision, also added adjacent waters around the Gulf of Oman to its high risk list. The last update to the list was in June 2018.
The UAE, Saudi Arabia and Norway have launched an investigation and have described the attacks as deliberate. They have not blamed anyone.
“Very little information is to hand about the explosions at Fujairah anchorage on May 12 and the circumstances and methods employed remain unclear,” the Joint War Committee said in further comments.
“There is no doubt that considerable damage was done and there will be significant claims,” it added.
The London marine insurance market plays an influential role in the global marine insurance industry.
A confidential Norwegian insurers’ report seen by Reuters concluded that Iran’s elite Revolutionary Guards were “highly likely” to have facilitated the attacks on the tankers.
Iran has said the attacks on the tankers were a cause for concern and has called for an investigation.
Iran said on Friday it could “easily” hit US warships in the Gulf, the latest verbal broadside in the spat between Washington and Tehran.


Gulf Marine CEO quits after review sparks profit warning

Updated 22 August 2019

Gulf Marine CEO quits after review sparks profit warning

  • Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence

DUBAI: Gulf Marine Services said on Wednesday Chief Executive Officer Duncan Anderson has resigned as the oilfield industry contractor warned a reassessment of its ships and contracts showed profit would fall this year, kicking its shares 12 percent down.

The Abu Dhabi-based offshore services specialist said a review by new finance chief Stephen Kersley of its large E-class vessels operating in Northwest Europe and the Middle East pointed to 2019 core earnings of between $45 million and $48 million, below $58 million that it reported last year.

A source familiar with the matter told Reuters that Anderson, who has served as CEO for 12 years, was asked to step down. Anderson could not be reached for comment.

The company, which in the past predominantly operated in the UAE, expanded operations and deployed large vessels in the North Sea and Saudi Arabia nine years ago and listed its shares in London in 2014.

Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence.

The North Sea has seen a revival in production in recent years due to new fields coming on line and improved performance by operators following the 2014 oil price collapse.

Still, the basin’s production is expected to decline over the next decade, according to Britain’s Oil and Gas Authority.

“(The CFO’s) review has coincided with a pause in renewables-related self-propelled self-elevating support vessels activity in the North Sea, which will impact several of the higher day-rate E-Class vessels,” Investec wrote in a note.

Gulf Marine appointed industry veteran Kersley as chief financial officer in late May as it sought to halt a slide which has seen the company’s shares fall nearly 80 percent last year and another 23 percent so far this year.

The company said market conditions remained challenging and that it was still in talks with its financial advisors regarding a new capital structure.

“Management, the new board and the group’s advisors, have been in negotiation with the group’s banks on resetting its capital structure and progress has been made,” it said in a statement.

Last year, Gulf Marine said contracts were delayed into 2019 as the company was seen to be in breach of certain banking covenants at the end of 2018.

The company said it was still in talks with its banks and individual lenders with hopes of getting a waiver or an agreement to amend the concerned covenants.