Vela brings management in-house

23 August 1996

VELA Marine International is a major operator by any standards. By virtue of being the shipping arm of Saudi Aramco, the world's largest oil company. it is the world's largest charterer of very large crude carriers (VLCCs). and one of the world's largest marine shipping companies.

Despite its size Vela has farmed out ship management to others, until now. By early next year, the process of ringing management in-house will be complete and Vela will be self-managing its entire fleet for the first time.

Vela is moving its management to a high-tech blue-and-white glass building in Dubai, which will have a staff of 30. Dubai was chosen as it offers facilities for both major and minor ship repairs, including dry dock facilities that are not available in Dhahran. It is also close to Fujairah, a provisioning point and crew depot for tanker traffic through the Straits of Hormuz.

The team will be managing a huge operation. The company has a fleet of 27 VLCCs. It owns or leases bunkering facilities in Rotterdam and the Caribbean islands of St Eustatius and St Lucia with a combined capacity of more than 16 million barrels. Vela took delivery of a 300,000 dead weight-tonne (dwt) VLCC from Denmark's Odense Steel Shipyard Company in early 1995, the last of a purchasing programme which added 15 VLCC newbuilds to the fleet. Each of the new vessels is capable of carrying more than 2 million barrels of oil

More capacity

The order was the industry's largest for two decades, but Vela needed still more capacity. In June, it signed an agreement leasing five VLCC newbuilds which are being delivered to the National Shipping Company of Saudi Arabia by Mitsubishi Heavy Industries of Japan. The last is due for delivery in January 1997.

The take-over of operations management began in 1994 when a transition team started assuming duties from commercial firms. The process began with the first of the new VLCCs to be delivered, the Libra Star, which Vela took charge of from the outset. From then on, the handover has run at a rate of one ship a month. The takeover allows standardisation of operation procedures, gives economies of scale, and enables Vela to select and appoint its own crews. Accounting services for all its managed vessels are centred on Dubai, from where all purchasing requirements are controlled. The Dubai office has also taken control of Vela's four smaller carriers that transport fuel oil and other refined products around the Red Sea.

By the time the Dubai office is fully operational, Vela will be well on the way to achieving its mission statement to provide high quality, reliable international marine oil transportation and related services to Saudi Aramco and its subsidiaries.

In the meantime, it will have carved out a major share of the world crude oil transport business.

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