By John Lee.
Iraq's Minister of Oil, Hayan Abdul Ghani, has affirmed the Ministry's commitment to building a fleet of oil tankers.
His statement came during a meeting with the Chairman of the Norwegian company Batservice Mandal [Båtservice Mandal AS], Bjørn Fjellhaugen, and the accompanying delegation.
The Minister praised the role of Batservice, in cooperation with the Iraqi Oil Tankers Company (IOTC), in building the tankers "Sumer" and "Akkad [Aked]".
During the meeting, ways to enhance cooperation opportunities between the company and the national carrier were discussed.
The meeting was attended by the Deputy General Manager of the Iraqi Oil Tankers Company, Mr. Hadi Salman Fadil.
In August 2020, Iraq Business News Expert Blogger, Ahmed Mousa Jiyad, demanded an investigation into Iraq's reported contract to buy tankers from the company.
(Source: Ministry of Oil)
Tankers are complicated and more Technical than Cargo Ships , the above built tankers are product carriers.
Unlike crude Oil Carriers they are easier to handle, there is no Crude oil wash or Inert Gas System during Discharge.
I think Norway is Acting as Managers they will employ suitable Crew to handle Loading and discharge of Product oil cargo and Navigate the tankers, Good luck with your project.
Follow-up on Båtservice contract with IOTC
My follow-up on this dubious deal indicates the following:
First: The delivery of the first tanker, Sumer, was delayed by 18 months, equivalent to the contract period. As for the second tanker, Akkad, it has not been delivered to date, that is, with a delay of approximately 24 months. Nothing is clear from the Ministry of Oil’s statement on activating the “delay fine” clause, if any, in the “secret” contract related to this deal!!
Second: The two tankers were manufactured and built in China, not in Norway and not by the Norwegian company- Båtservice. This means the Norwegian company was the "middleman" and not manufacturing and building the two tankers.
I believe this contradicts the laws and instructions for implementing state/ official contracts, which prohibit contracting through intermediaries in such cases. The Iraqi Oil Tanker Company-IOTC and the Ministry of Oil could have contracted directly the Chinese company. Also, I suspects this case represents contracts of questionable legal legitimacy, if not a clear example of official, high-level corruption, which is increasing at a rapid and damaging pace in Iraq.
If the role of the Norwegian company is an intermediary, what is the amount of its share (Commission) of the value of the contract, and who is the contractual party that bears the consequences of violationg contractual terms, especially those related to qualitative, technical and operational specifications and other matters related to guarantees in the post-delivery phase of the two tankers.
Third - What is strange is that I did not find on the website of the Båtservice Company any mention of the two tankers, nor pictures of them, nor about the visit of the company delegation to Baghdad, nor about any established cooperation relations with Chinese company, which built the two tankers.
Fourth - A specialist at Lloyd's List Intelligence was quoted as saying that the Norwegian company, as of December 6, 2023, is the “beneficial owner” of the tanker Sumer, in light of the contractual practices recognized in transactions for leasing and operating tankers, including oil tankers, such as “bareboat charter and leaseback deal.”
But the aforementioned tanker arrived at Khor Al-Zubair/ Basra on September 28, 2023, and thus its ownership belongs to IOTC. Therefore, what are the legal or contractual basis that allows the Norwegian company to continue as the beneficial owner, and its real implications!!!
This is a very disturbing matter, if true, not only for the Sumer tanker, but also for the second tanker, Akkad. Due to the importance and seriousness of the issue, I find it necessary for both the Ministry of Oil and IOTC explain the matter fully with complete transparency. If the matter is correct, the concerned authorities, especially the Federal Board of Supreme Audit must investigate this matter and determine the extent of its legality, legitimacy, and compatibility with the national interest; and take the necessary legal actions.
Fifth - In light of what was mentioned above, and especially when their validity is proven, the Ministry of Oil and IOTC must stop these dubious irregular contracts surrounded by abhorrent secrecy on the one hand and prohibit dealing with this Norwegian company in the future as a commercial intermediary, after settling all matters relating to the two tankers, Sumer and Akkad, on the other hand.
The above was part of my follow-up detailed commentary, in Arabic, on this deal that was communicated to the high levels at the three authorities in the country, and widely circulated within my networking contacts and other websites.
Ahmed Mousa Jiyad,
Norway
11 February 2024