Can Besev Managing Analyst, EMEA

Analysing the heightened credit
risk in the Mediterranean
marine fuel markets
Can Besev – Managing Analyst EMEA
Today’s Agenda
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About OI
Comparative prices
Possible Margins
Istanbul and Piraeus volumes?
How credit management practices differ in the
Mediterranean
• How to survive in difficult markets
Who are we?
Founded by Adam Dupre, co-founder of MRC
(later Lloyds MIU) and marine credit report.
Led by MD John Phillips 30+ years experience in
maritime sector
Our Key Team
John Phillips
MD Singapore
Jason Lim
Managing Analyst
Asiapac
Can Besev
Managing
Analyst
EMEA
Nikki WaltersCresswell
Senior Analyst
EMEA
Jacqui Phillips
Senior Analyst
Asiapac
Malcolm Lee
Senior Analyst
EMEA
How do we deliver?
We are continuously developing new tools to
gain deeper insights for credit managers
We deliver through our
Specialism in marine fuels
In-house marine credit management and credit
reporting expertise
Not Much Difference in margins
COST
Platts 3.5% FO Med CIF High (Genova/Lavera)
+10
21 Nov 2012: 587
Platts Fuel Oil 3.5% FOB Med (Italy) & other formulas..
+cost
21 Nov 2012: 572.75
Storage & Operation
Other costs
+10
+5
TOTAL COSTS - ISTANBUL
Platts fuel oil 3.5% CIF Med (Genova/Lavera)
612
TOTAL COST - PIREAUS
600
www.bunkerworld.com/prices
Nov 23
Istanbul
HSFO
IFO380
IFO180
617.00
644.50
LSFO
Piraeus
MGO
MDO
-
998.00
-
HSFO
605.00
640.50
973.50
-
LSFO
672.00
701.00
973.50
-
Alignment Ports
Price History 2002 - 2012
Price History with BW380 Index
Mustafa Muhtaroglu
“We are the ones sourcing large cargoes from
distant corners, carrying it, leasing tanks, storing
all grades, carrying all the unsecured
commercial risk and price fluctuations, testing it,
heating it, blending it, owned or charter barges
and so on ...
... dealing with many unprofessional
counterparties day and night”
‘Financiers’ of Shipping
300 mts (45 days)
$612
$185,100
$185,100 (sale on credit)
£1,500
0.8% gross margin
BunkerBank Ltd
Cheapest finance & hard work...
unbeatable value for shipping
ISTANBUL
Bunker Port Profiles
Sustainable…?
Bunker Port Profiles
Istanbul: 9 Suppliers
Piraeus: 8 Suppliers
PIREAUS
YEAR
TOTALS
2007
2,900,000 mt
2008
2,800,000 mt
2009
2,600,000 mt
2010
1,900,000 mt
2011
2,300,000 mt
Greece players
Bunker Port Profiles
Adam Dupré
“There are no winners of fights
there are only survivors…
The market is big enough
for 4 players”
Gregory Elder (CIA)
“History repeatedly has demonstrated that
numerically inferior forces can win when leaders
are armed with accurate intelligence they
believe they can act upon.
Such intelligence can be a force multiplier. …
considering the value of force without placing a
corresponding value on intelligence is a
mistake”.
Credit Management Approach
• Not a part-time occupation
• Regulator between profits and risk
• A growth catalyst
• Trading and credit must be harmonious
Evolution Credit Management In
Europe
 Tramp Oil (now WFS) 1986 - R. Warwick
 Cockett Marine Oil Ltd 1998 - K. Beeseon
 Peninsula Petroleum 2005 - J. McIlroy
Impact Credit Management?
World Fuel Services, Chemoil, Bomin, O.W,
Monjasa, Peninsula, Integra Fuels, Cockett
Marine Oil, GAC, Bunker Holding A/S, Hess
Corp, Bunkers International, Rudder, Seka
Bunker Stations, Lukoil/Litasco, Neste Oil, Bright
Oil, Wilhemsen, TransMontaigne, North Sea
Group, Global Vision Bunkers... & Oil Majors
Critical Success Factor in the
Mediterranean?
World Fuel Services, Chemoil, Bomin, O.W,
Monjasa, Peninsula, Integra Fuels, Cockett
Marine Oil, GAC, Bunker Holding A/S, Hess
Corp, Bunkers International, Rudder, Seka
Bunker Stations, Majors, Lukoil/Litasco, Neste
Oil, Bright Oil, Wilhemsen, TransMontaigne,
North Sea Group, Global Vision Bunkers...
A Great Bunker Credit Manager...
• Knows the market
• Supports sales & business development
• Knows culture and people
• Knows customers like his relatives
Best Practice
• Information of commercial nature
• Information of a financial nature
• Reputation and intelligence
• Information which mitigates the risk (e.g.
guarantees, insurance)
A Credit Manager’s tool box…
Two-sided Coin
Counterparty risk management is about:
Minimising Loss
Maximising Profit
Master Blenders...
Last word
“Without passion
self is worthless…”