The Hindu Business Line : New age norms for chartering crude tankers — DG (Shipping) convenes meeting with oil industry, ship owners tomorrow

WITH less than a month left for the new age norms on chartering of crude and product tankers issued separately by the Director General of Shipping and the Petroleum Ministry to come into force from April 1, an attempt is being made by the national maritime regulator to settle the controversy over the subject.

The DG (Shipping) has convened a meeting with the oil industry and the ship owners on March 4 to discuss and sort out the matter, Government sources said.

"During the meeting, the DG (Shipping) will hear out all the parties and may follow it up later with a new order incorporating their views on the age norms for chartering oil tankers. Alternatively, the DG (Shipping) may stand by its August 14, 2003 circular while asking the Petroleum Ministry to withdraw its order on age norms for chartering tankers issued in June last year," the sources disclosed.

The separate orders, both conflicting each other, issued by the DG (Shipping) and the Petroleum Ministry last year had left the ship owners and the charterers confused over whose jurisdiction should prevail on the subject.

The March 4 meeting comes after the Petroleum Ministry finally yielded ground to the Shipping Ministry in December last year over the authority for issuing orders regarding age norms for chartering of crude and product tankers.

At a high-level meeting between the Secretaries of Shipping and Petroleum and Natural Gas on December 9, the Petroleum Secretary had clarified that "the Shipping Ministry being the Administrative Ministry dealing with the subject, the Ministry of Petroleum and Natural Gas is willing to go along with the decision of the Shipping Ministry in this regard".

Following the clarification from the Oil Ministry, the Shipping Ministry had asked the DG (Shipping) to hold a meeting with the oil industry and the ship owners and, if necessary, issue a fresh order incorporating their views on the guidelines to be followed while chartering oil tankers for oil transportation.

In June last year, the Oil Ministry had issued stringent directives to IOC, ONGC, HPCL and BPCL on chartering oil tankers for moving their cargo. The order directed the four oil PSUs not to charter tankers that are over 15 years old, whether foreign flag or Indian flag, if they do not have the Condition Assessment Programme (CAP) rating with effect from April 1 this year.

Subsequently, the DG (Shipping) issued a circular on August 14 last year, imposing age restrictions on tankers for moving oil cargo, which is to come into force from April 1 this year. As per the guidelines outlined in the circular, the DG (Shipping) had banned all crude and product tankers (both foreign and Indian flag) that are more than 25 years of age from entering Indian waters.

Besides, all crude and product tankers above 20 years which do not have the CAP 2 rating for hull, machinery and cargo equipment either from a full member of the International Association of Classification Society (IACS) or the Indian Register of Shipping (IRS) will also be banned from entering Indian shores.

While the DG (Shipping) circular was applicable to all domestic charterers and oil terminal operators including the oil PSUs, the Petroleum Ministry order will cover only the four oil PSUs.

The Shipping industry is of the view that the implementation of the orders on age criteria for tankers would pose a problem, particularly for a string of minor ports in the country that cater to oil traffic.

"Many of the minor ports are ill-equipped to implement the age criteria for tankers. How will these ports oversee whether the tankers calling at their ports are more than 15, 20 or 25 years of age and whether they have the mandatory CAP ratings or not," a shipping industry official asked.

Besides, a CAP rating is a requirement sought by the charterers. "The maritime administration has nothing to do with CAP ratings," he opined.