Shipping Company Accuses Cambodia of ‘Unethical’ Tactics in Oil Fracas

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Shipping Company Accuses Cambodia of ‘Unethical’ Tactics in Oil Fracas

Oil tanker crew “interrogated” amid dispute between Cambodia and Singaporean firm KrisEnergy

Shipping Company Accuses Cambodia of ‘Unethical’ Tactics in Oil Fracas
Credit: Flickr/Adam Jones

The Cambodian government has been accused of using “unpleasant and unethical” tactics in an attempt to win control of 300,000 barrels of oil, currently on board the MT Strovolos, which was seized in July by Indonesian maritime authorities.

Also at stake is the freedom of at least 19 crew members who manned the vessel chartered by Singaporean firm KrisEnergy to support a much-vaunted attempt to produce oil from a field in the Cambodian sector of the Gulf of Thailand.

They were deployed as production began in December last year at Phase 1A, a small-scale pilot in the Apsara oil field, from which KrisEnergy hoped to retrieve 7,500 barrels per day and provide a major revenue stream for themselves and the Cambodian government.

The crude oil on board the MT Strovolos has been valued at $21 million.

“The year 2021 is coming … and we have received a huge gift for our nation – the first oil production in our territory,” Prime Minister Hun Sen said in a Facebook post in December.

But since then that deal has fallen apart dramatically.

KrisEnergy acquired its stake in the oil field from Chevron in 2014 after the U.S. oil giant failed to reach a revenue sharing agreement with the Cambodian government.

However, output fell far short of expectations and KrisEnergy, which held a 95 percent stake with the Cambodian government holding the remaining 5 percent, filed for liquidation in June, leaving the Bahamian-flagged MT Strovolos and its crew essentially stranded at sea.

They set sail but were picked up in July off the coast of Sumatra after Phnom Penh issued a red notice through Interpol, seeking the seizure of the vessel, alleging the kingdom’s crude had been stolen.

World Tankers Management (WTM), operator of the MT Strovolos, has vigorously denied any theft occurred and said the vessel was short on fuel and that it had contacted KrisEnergy to resolve its bunkering issues but was told the company could not pay the vessel’s hire.

At that point, WTM says – for the safety of the crew, the cargo, and the vessel – the MT Strovolos set sail for the nearest convenient port to refuel and then headed south to Batam in Indonesia for a crew change.

It also says it has not received proper proof of ownership of the crude and that proper payment is needed before it can release the cargo to any party. It also added that negotiations between Cambodia and KrisEnergy, which theoretically owns 95 percent of the oil, “may not be going well.”

Then, in the early hours of last Friday morning, Indonesian Marine Police boarded the vessel and arrested its crew. According to Singapore-based WTM, they were “interrogated ashore in shifts.”

WTM said it was concerned that Cambodia was using its diplomatic contacts in Indonesia to put pressure on the crew after seeking help from Jakarta in arresting the tanker for oil theft.

“World Tankers believes the Government of Cambodia has failed to resolve matters with KrisEnergy and is now adopting the unpleasant and unethical tactic of trying to use [Indonesian government contacts] to coerce the owners to accept their claims without proof or payment.

“This is totally unacceptable,” it said. “The crew have far exceeded their contractual period of employment and are entitled to be repatriated to their families. All they have done is to perform their duties as seafarers in bringing the vessel, first to a safe place to refuel, and then to anchor off Batam to await the crew change.”

The Indonesia navy has confirmed it was questioning a crew of 13 Indians, three Bangladeshis and three from Myanmar, and it has accused the vessel’s crew of anchoring illegally in its waters and and turning off its AIS identification system.

WTM has also denied the allegations while Cambodia insists the issue is now a matter for the courts in Indonesia and is neither political nor commercial. This is cold comfort for the crew, who deserve to be compensated if claims by WTM prove correct.

Luke Hunt can be followed on Patreon and Twitter.