Frontline, the world's biggest oil tanker company, has said that it has won a contract to transport crude oil for BP, the world's third largest publicly traded oil company.
The Bermuda shipping group, which is controlled by the Norwegian shipowner John Fredriksen, will have the exclusive right for BP shipments of two million barrels of oil, which are transported on Very Large Crude Carriers, or VLCCs. Frontline will also take over the operation of four of BP's VLCC supertankers.
“This will reduce the time that our ships go without cargo,” said Ola Lorentzon, the chief executive officer at Frontline, in an interview. “This will improve the efficiency of our ships which again will increase our profits.” He declined to comment on financial details.
Frontline mainly sails its tankers on single voyages in the spot market, making it vulnerable to sliding shipping rates. By signing contracts that secure more cargo, it will ensure its ships are not idle and will help to stabilize earnings, analysts have said. The BP accord will yield about a hundred cargos annually, Lorentzon said.