Would you like to buy a boat? Oil tanker who received stolen fuel from Shell Bukom heist for police auction
SINGAPORE: Over the years, police have auctioned off various items seized in connection with crimes: clothes, cameras, computers and, occasionally, a supercar or two.
But the latest item on sale is quite different: it’s over 100m long, weighs over 3 million kg, and according to court documents is valued at US $ 4.5 million (US $ 5.9 million). Singaporean dollars).
The article in question is the Prime South chemical tanker, which police seized in 2018 after it was used to receive stolen marine diesel worth an estimated US $ 7.1 million from the Shell refinery in Pulau Bukom.
The theft was part of the largest marine fuel theft at Shell’s largest petrochemical production and export center in Asia-Pacific.
Few of the items seized by police and auctioned off are valued in the tens of thousands of dollars, making the tanker – valued at millions – an even rarer sale.
The ship was owned by Prime Shipping Corporation, a Vietnamese shipping company.
The ship’s captain and chief officer, both Vietnamese, were sentenced to 70 months and 30 months respectively for conspiring with others to dishonestly receive stolen marine diesel.
READ: Oil tanker chief officer in ‘unprecedented’ $ 3.5million Shell oil theft jailed
READ: Vietnamese tanker captain jailed for Shell oil theft in Singapore
State courts ordered the confiscation of Prime South in October last year, citing Prime Shipping Corporation’s complicity in the offenses, its vessel being widely used in the commission of offenses and the need to deter similar offenses.
In February, the High Court dismissed a request by Prime Shipping Corporation to quash the order, pointing out that the forfeiture was strongly justified.
Police said on Tuesday (May 18th) that they would continue to crack down on crime syndicates operating in Singapore and “will spare no effort to deprive these people of the instruments or benefits of their crimes.”
THE SHIP WILL ATTRACT “A FAIR AMOUNT OF INTEREST”
Prime South will go on sale at a public auction on June 4, with the proceeds going to the state. The auction will be managed by Knight Frank.
Naval brokerage firm Star Asia said the Prime South would attract “some interest”, as it has on the news.
“The size and type of this vessel is popular in the region for transporting small (cargoes),” Star Asia general manager Rohit Goyanka told CNA.
“Buyers will use it primarily for the palm oil trade, easy chemicals and some may also use it to (transport) marine diesel.”
Mr Dennis Tan, partner at DennisMathiew law firm, said it was “quite rare” based on his 24 years of practice to see a freighter in Singapore confiscated in pursuit of a crime.
“When the market price is high and there is a demand for such a vessel, people are hoping to get a good deal,” he told CNA.
READ: Beyond the Shell Bukom heist, a closer look at how marine fuel is stolen in Singapore
While Mr. Goyanka estimated the market value of the vessel to be between US $ 5.75 million and US $ 6 million, he suggested that the auction price could be around 20-25% lower.
“Auctions are a good time to acquire assets as they are usually sold for a price slightly below market value,” he said, adding that potential buyers would usually come from the area.
“If the auction takes place in Singapore, regional buyers from the Far East will generally be more active. Nowadays, many Chinese buyers are buying vessels of this size and type.”
Even though demand is not high and the market price is low, Tan said some people may still be looking to profit from the sale of scrap, especially if the ship is old.
Mr. Martin Marini, shipping industry veteran and consultant to Farallon Law Corporation, said a key consideration is that the vessel has been in storage since 2018 with all machinery on board completely shut down and maintenance free. .
This means that before the vessel can sail, the buyer would likely have to perform repairs or maintenance work on the vessel’s hull and machinery, as well as renew its class and statutory certificates.
With this, some buyers might decide that it is more worthwhile to dismantle the ship before selling the scrap and equipment.
“Much (of the price buyers will offer) depends on his physical condition and investigations,” Goyanka said, referring to how serious buyers will send a third-party inspector to inspect the vessel first.
WHAT ARE BUYERS LOOKING FOR?
The CNA visited Prime South at the Az Marine shipyard on the west coast on Friday, one of two days the public was able to inspect the ship. Prime South, sandwiched between other ships, was moored next to an unmanned police patrol boat.
Getting on board required a steep crossing along a metal gangway – the ship was floating higher than usual as its many tanks, usually filled with marine oil, were drained and were now empty.
The first stop was the ship’s collector, which would have been where the stolen fuel had been received. The section was a tangled mess of pipelines and connectors where oil or chemicals could be loaded or unloaded. The pipes led to tanks below the bridge.
“We would also have a third party inspector inspect the tanks,” Goyanka said.
“Since this is a tanker, we check the slops (mixture of oily water from the washing of the tanks) and the stainless steel heating coils to see if everything is working.”
Surveyors would also check major engine and machinery parts, as well as general indoor and outdoor conditions, he added.
READ: Singapore Strait sea theft incidents on the rise again in 2020
It was another steep descent into the engine room, descending a dark, narrow staircase next to a clear plastic pipe that pumped air into the room. There was no light or ventilation because all of the ship’s systems were turned off.
Once downstairs, workers at the shipyard used smartphone torches to light up what was actually a cavernous space with machinery and gauges in every corner.
To the untrained eye, the area looked clean enough, with no oil leaks or foul fumes. But making sure everything was in working order took more than just a glance, especially since nothing had been turned on for so long.
Then there was the deck or the cockpit of the ship.
Mr Marini said surveyors would like to keep the bridge equipment in good working order, which the crew would use to navigate and steer the vessel, as well as to communicate with other vessels or authorities.
Parts of the bridge appeared to have remained intact since the seizure of the vessel. The workspaces were dotted with charts, tables and unopened packages of Vietnamese instant coffee.
The last stop after getting off the ship was a small table near the entrance to the shipyard, where potential buyers flipped through a clear brief.
This contained important documents such as the vessel’s registration and equipment certificates, some of which had expired.
“The surveyor would look at trade certificates and official technical logs to see if they are all up to date,” Goyanka said, adding that this includes logbooks and records of past accidents.
As for the auction, a Knight Frank spokesperson said it will be held physically with safe management measures. However, the company said it is still monitoring conditions and has not ruled out holding a virtual auction.
Asked about the ship’s reserve price, the spokesperson said it was “strictly confidential”.
Under Knight Frank’s terms and conditions of sale, potential buyers must sign a refraining form from participating in anti-competitive behavior and bring on the day of the auction a S $ 200,000 case order payable to Knight Frank.
Mr. Goyanka said ship auctions in China are usually done online with a password protected entry. Chinese courts are also known to auction foreclosed properties, including ships, on the Taobao e-commerce website.
“But for Singapore, the best deal is usually given and selected,” he added. “So, it’s very simple.”