By Alaric Nightingale
Nov. 18 (Bloomberg) -- A Saudi Arabian supertanker hijacked off east Africa is anchored close to the Somalian coast, the U.S. Navy and its owner said. Frontline Ltd., the world's largest owner of the ships, said it may divert vessels from the area.
Pirates directed the Sirius Star, the largest merchant ship ever seized, to the Eyl coastal area to the north of Somalia, navy spokesman Lieutenant Nate Christensen said by phone from Bahrain today. Saudi Arabia's state-owned shipping line, Vela International Marine Ltd., said it created negotiation teams to free the vessel and its crew of 25.
``What we've seen typically in the past, the vessel will be held in anchorage off the coast in a pirate stronghold, for want of a better word,'' Christensen said. ``We've had no communication. Sometimes it's a couple of hours, sometimes a couple of days.''
Ships passing close to Somalian waters carry oil from the Middle East via the Suez Canal and Asian-made goods to Europe and the U.S. Some companies including Odfjell SE, the world's largest chemicals shipping line, have said they will shun the canal because of the attacks off Somalia, threatening one of Egypt's biggest foreign-currency earners.
Frontline has yet to make a final decision about sending carriers away from Somalia, Jens Martin Jensen, interim chief executive officer of the company's management unit, said by mobile phone from Singapore today.
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About 11 percent of the world's seaborne petroleum passes through the Gulf of Aden en route to the Suez Canal or regional refineries. Shipping lines should ``seriously consider'' sailing around Africa rather than using the Gulf of Aden, said Simon Stonehouse, a hull underwriter at Brit Syndicates Ltd., a Lloyd's of London syndicate.
Insurance premiums will rise and unless the Egyptian government becomes ``more actively interested'' in combating piracy in the region they risk damaging the business of the Suez canal, Stonehouse said.
The pirates are likely to have fired grappling hooks at the supertanker, allowing them to scale the side of the ship using rope ladders, said Roger Middleton, an analyst at Chatham House in London. Middleton has researched Somalia for the past three years and piracy for nine months.
Somalian pirates have asked for $1 million ransoms on average this year, he said. New supertankers cost $148 million, according to data from Oslo-based shipbroker Astrup Fearnley. The Sirius Star is designed to carry more than 2 million barrels of crude, which at the current price would be worth about $110 million on the New York Mercantile Exchange.
Crew Safe
Ships are normally attacked by five or six pirates, though given the size of the supertanker as many as 15 may have been involved this time, Middleton said. Once the pirates are on board they are normally joined by others, he said. A supertanker is bigger than the Chrysler Building.
The crew of the Sirius are ``believed to be safe'' and Vela is talking to their families, Vela said in an e-mailed statement today. The crew consists of 19 Filipinos, 2 Britons, 2 Poles, 1 Saudi and 1 Croatian.
Saudi Arabia is unlikely to be considering an armed response to the hijacking because it may endanger the crew, according to Nick Day, London-based chief executive officer of Diligence Inc., a security and intelligence group.
``Once in port you've got several hundred people around there, heavily armed,'' said Day, a former member of the U.K.'s Special Boat Service.
Ships Under Attack
Somali pirates are holding 250 crew hostage on board 14 merchant ships in coastal waters, according to the International Maritime Bureau, which compiles data on piracy. There have been 88 attacks against ships in the area since January, of which 36 were hijacked and 14 remain captive, Noel Choong, head of the bureau's reporting center, said by phone from Kuala Lumpur today.
``Every single ship is coming under attack,'' Captain Nasrollah Sardashti, chartering manager of the National Iranian Tanker Co., operator of Iran's supertankers, said by phone from Tehran today. ``That's what the captains are saying to us.''
Shipping lines are increasingly forming convoys to navigate the Gulf of Aden, he said. The European Union last month joined the North Atlantic Treaty Organization, India, Malaysia and Russia in deploying vessels to combat piracy.
``Piracy like terrorism is a disease that affects everyone and we have to deal with,'' Saudi Arabia's Foreign Minister Saud Al-Faisal said today in Athens.
The capture of the Sirius Star on Nov. 15, about 420 nautical miles off Somalia, was the first seizure of a so-called very large crude carrier, the biggest vessels used to carry oil.
The vessel was last tracked on Nov. 10, leaving the Persian Gulf and bound on its original course for St. Eustatius in the Caribbean Sea, where Saudi Arabia leases oil-storage facilities from NuStar Energy LP, according to data compiled by Bloomberg.
To contact the reporters on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net
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