In a letter to shareholders Herbjorn Hansson , chairman & ceo of NAT, said that a cut in oil production seemed unlikely the driver behind an increase in the oil price would be growth in demand.
“This in turn keeps tanker demand high. It is true that the number of ships is expected to increase over the next couple of years. There is still plenty of work for tankers and the entry of new vessels into the fleet does not alter our general belief that the fundamentals remain positive going forward,” he said.
Despite the optimism NAT is not planned to add any newbuilding orders to two due for delivery in August 2016 and January 2017, which will bring its fleet to 24 vessels. Hansson noted some discussions around the age of its vessels to which he said they were “not concerned”.
Ten of the vessels in NAT’s fleet are over 16 years old but “keeping up with the Joneses” is not on the agenda.
“We are not in the business of constantly acquiring shiny new toys, because that really is not in the interest of shareholders. It is the difference between owning and maintaining a durable and dependable car and buying a new car every year just for the sake of showing off the latest model to your neighbours,” Hansson explained.
“We could sell two or three older tankers and use the proceeds to buy a new shiny one, which may earn a little more in the spot market. The problem is that we then have one ship instead of two or three. As the market stands today, and given the quality of our vessels and our relationships with our customers, there is nothing to suggest this would be right for our shareholders.”
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