INTERVIEW: Oman Shipping Company CEO Tarik Al Junaidi
How would you describe OSC and what it does?
Oman Shipping Company (OSC) was incorporated in 2003 and is owned by the Government of Sultanate of Oman through Ministry of Finance (80%) and Oman Oil Company SAOC (20%). OSC is the parent company which is the investment arm, while Oman Charter Company SAOC (OCC) undertakes chartering and broking activities, Oman Ship Management Company SAOC (OSMC) looks after in-house ship management activities and Oman Container Lines (OCL) Inc. undertakes container related activities. All these three companies are fully owned subsidiaries of OSC.
OSC was launched with the acquisition of six LNG vessels, which were employed to transport Omani LNG to the world markets in partnership with Mitsui OSK Lines (MOL). The company has since diversified into Crude Oil, Chemicals and Products, Dry Bulk, LPG and also Container and General Cargo market segments.
What sets OSC apart from other shipping companies in the region?
OSC’s continuous commitment to providing maritime transport to Omani Exim trade, as well as its efforts to enhance Omani maritime traditions, makes it a company distinct from others in the region. With its focus on Omani youth and its aim to develop young Omanis to be future seafarers, places OSC on a different platform vis-à-vis other shipping companies.
In addition to the development of Omani seafarers, OSC has also focused on strengthening its in-house technical management of ships to ensure efficiency in operations covering following areas and adhering to the highest standards. It covers areas like vessel operations, maintenance, crew management, vessel inspections, bunker operations etc. For OSC, operational efficiency is paramount and the key capabilities for this include, among others, high safety standards, practicability and reliability and also innovations in environmental management which in future will increasingly become a major area of concern for the world shipping.
How many vessels do you currently have in your fleet?
Currently OSC operates 43 ships of different types and sizes with a total cargo carrying capacity of about 8 million tons including the state-of-the-art 7th LNG ship “Adam LNG” just delivered on 12th September 2014 and has further 10 Medium Range (MR) product tankers under construction which will be delivered in 2015/16. After the delivery of all these vessels presently under construction, the company will operate a total fleet of about 8.5 million DWT.
What sectors do you cover?
Oil, Gas and Petrochemicals are the core sectors for OSC. These vessels trade internationally. As regards the dry bulk transport, OSC is mainly in the international transport of minerals. The company also provides coastal services for movement of products along the Omani coast and a container feeder service connecting Omani ports with UAE ports.
OSC seems to have bulkers, tankers, LNG vessels and even a small boxship in its fleet, is the company looking to branch out into further sectors, and if so what?
OSC continues to look for areas for growth that directly benefit Oman and enhance its economy. At this point of time, there is no firm plan to branch out into any new sector, but we are always on the lookout for a suitable opportunity for growth and diversification.
What else is in store for OSC in 2015 and beyond?
In 2015, OSC expects delivery of the first of its series of 10 MR product tankers which are under construction in South Korea. The company will also ensure readiness of its ship management staff, which will be prepared in every respect to manage these MR tankers in-house.
How has OSC evolved to meet your clients’ needs and who are your clients?
We work very closely with our clients and always ensure that the customer needs are given the top most priority. Our customers vary from domestic to international customers and the list includes many reputed organizations such as OLNG, ORPIC, OTI, Sohar Aluminium, Vale Oman, Mitsubishi, Itochu, Mitsui, Vela, Reliance, UNIPEC and Oil Majors like Shell, Exxon, Chevron etc. to name a few. OSC and its ship management subsidiary, OSMC, support their clients by having their cargo transported in the safest and in the most efficient manner.
You have 11 vessels currently on order, including 10 MR Tankers – what made you decide to order these vessels and why have you chosen Hyundai Mipo as your preferred shipyard?
OSC’s core activity is in Oil and Gas transport, which is also the main business area in the Middle Eastern region. We are interested in becoming one of the leading players in oil and gas maritime transport internationally and that makes MR product tankers segment attractive for us, especially keeping in view the rising demand for clean petroleum products. We, therefore, thought of expanding our fleet in the MR product tanker segment to strengthen our tanker fleet.
Hyundai Mipo is a well-known South Korean shipyard for Medium Range vessels and we looked at their track record in terms of building quality ships and timely deliveries and felt that this shipyard would be the best fit to meet OSC’s requirements for MR tankers.
Are there plans to order more newbuilds? If so will you again be looking to Korean yards?
At this point in time, there is no immediate requirement for any new build. However, if there is any, we will always look for quality shipyards and place orders with such a yard that meets OSC’s requirements the best. Some of the leading South Korean shipyards can certainly be reckoned in such a list in future.
You recently pledged to utilise the services of Oman Drydock Company’s ship repair yard at Duqm for the dry-docking and maintenance of your fleet. How important is it for firms in Oman’s maritime industry to support each other and do you believe Oman has the potential to set up a world class maritime hub?
OSC is a national company that tries to support Omani economy in every possible way and strongly favours “In-Country-Value”. OSC has always worked and will continue to work hand-in-hand with Oman Dry dock Company (ODC) for mutual benefit. We have seen our relationship growing from 1 vessel for dry docking repairs to ODC in 2011 up to 7 vessels in 2014 and more are in the pipeline. OSC sees ODC as a partner in the rapidly growing Omani maritime cluster. The future strategy for progress for both our companies lies in developing the local skill sets to ensure that we keep pace with the advancements in the maritime industry.
Due to Oman’s geographical location, the maritime industry is an inheritance to the local population. And Oman, undoubtedly, is playing a major role in the maritime transport in terms of increasing the port infrastructure and offering an increasing array of services at these ports, including their connectivity to other modes of transport.
What would be needed to make this happen?
To make Oman as a world class maritime hub, in addition to the hardware such as the state- of-art infrastructure, also efficient software needs to be developed in an accelerated manner, such as increasing the skill sets of the local population. Very strong efforts are being made in this direction both at Governmental level as well as by the individual companies.
Do you currently have any education / training programmes in place?
OSC is the only national ship owning company in Oman which is carrying Omani Exim cargos internationally and one of its missions is to revive the sailing traditions of the country. Therefore, as a part of its Corporate Social Responsibility, OSC has been making a big contribution to the shipping industry in the region through its Scholarship Program (cadetship), in which OSC offers scholarships every year since its inception in 2013 for high school fresh graduates to study either Nautical Science or Marine Engineering in maritime colleges in Oman or the United Kingdom. As of today, it has already sponsored 172 such cadets. It also offers job opportunities to such sponsored cadets after they successfully complete their studies. Furthermore, OSC is also keen on developing its seafarers through the Scholarship Program for securing management level certificates, under which fully paid Scholarships are made available to the local seafarers enrolled with the company. In addition, there are also Scholarship Programs for Ratings and Cooks.
In the year 2013, OSC signed an agreement with IMCO to provide training berths to all its cadets including non-Omanis, to complete their required sea service on board its vessels. In the last year, as a result of this arrangement, 112 training berths were provided by the company and it has spent more than US$ 600,000 for this purpose alone.
How difficult is it to find the right local talent for your company?
The maritime industry is growing very rapidly in Oman and that results in a gap between the supply and the demand of the right talents in terms of their local availability. OSC has tackled this issue by way of offering different education and training programs as mentioned earlier to bridge this gap between the supply and demand and also by contributing to qualifying the national cadres.
There has been talk lately of Iran starting to export LNG to Asia and Europe, assuming the sanctions are lifted and Iran does begin with mass export of LNG will the Oman Shipping Company be looking to capitalise on this?
OSC has been closely tracking the political developments with Iran in focus from the international perspective and assessing any business opportunities that can spur from these developments. OSC always looks for business opportunities both regionally and in the international context, especially in the Oil and Gas sector, and if such an opportunity were to arise, OSC would certainly consider offering its services provided there are appreciable returns with minimum risks in these projects.