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Great Eastern Shipping Company

Great Eastern Shipping Company

Industry: 
Shipping
Country: 
India
Contact Information: 
Sources: 

"Two of India's largest shipping companies which carry crude from Iran haven't yet been able to find suitable insurance cover, a situation which could hurt the flow of oil from the sanctions-hit Middle Eastern country . . . Great Eastern Shipping Co. Ltd., India's other prominent crude shipper from Iran, has also not agreed to take local insurance covers. Great Eastern Shipping spokeswoman Anjali Kumar, rejecting recent media reports which said the government is pressuring the company to carry Iran cargo, said: 'We still haven't agreed to the cover. Also, we haven't received any letter from the government telling us to offer vessels for Iran cargo.'" (Wall Street Journal, "Shipping Corp: Insurance Cover for Iran Crude Not Adequate," 8/8/12)

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"The shipping ministry has told private company Great Eastern Shipping Co (Gesco)(GESC.NS) to supply tankers to import Iranian oil for state-run refiner MRPL, which had to slash imports from Iran in July because the shipper was unwilling to carry them. Mangalore Refinery and Petrochemicals (MRPL) (MRPL.NS), Iran's biggest Indian client, has an annual contract with Gesco through Transchart, an agency of the federal shipping ministry. But Gesco refused last month to lift cargoes for MRPL because of the lack of insurance cover after European sanctions came into effect barring insurance and reinsurance for Iranian shipments. An industry official, with access to a letter sent by the shipping ministry to Gesco on Monday, said it made clear India had now allowed state-run insurers to provide some cover for Iranian shipments and told the company to provide vessels for MRPL . . . Gesco, the country's biggest private shipper, said it has not yet received the letter and had told MRPL that insurance in its current form was inadequate for voyages to Iran. 'We have conveyed to MRPL that we will not be able to lift cargoes from the sanctions-hit country due to inadequacy of the insurance cover offered by the Indian insurer United India Insurance Co,' Gesco spokeswoman Anjali Kumar said. Indian insurers have agreed to provide cover of $50 million each against pollution and personal injury claims, also known as protection and indemnity (P&I) insurance, and for hull and machinery to protect ships against physical damage. India is permitting refiners on a case-by case basis to use Iranian tankers and insurance for oil purchases." (Reuters, "India instructs private firm Gesco to ship Iranian oil,"8/6/12)

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"India's biggest buyer of Iranian oil may only import one-fifth of the 3.3 million barrels of crude it had scheduled for July due to insurance and shipping difficulties caused by European Union sanctions on Tehran, industry sources said.

The possible drop in imports by state-owned refiner Mangalore Refinery and Petrochemicals Ltd (MRPL) underscores the problems the EU sanctions, which ban most of the world's major insurance firms from covering shipments of Iranian oil, have created for Iran's major Asian customers China, India and Japan since coming into effect on July 1.

Along with U.S. sanctions, the EU measures, which include an oil embargo, has so far halved Iran's year-on-year oil sales…India had initially allowed state-owned refiners to use Iranian tankers to ship oil purchases from Iran but swiftly backtracked to benefit its own shipping industry, stipulating that state-run oil firms must use Indian ships and allowing limited coverage by state-run insurers for Iranian cargoes. 

The company may not be able to transport any more cargoes as its shipping firm, the privately-owned Great Eastern Shipping Company (GESCO), is unwilling to carry Iranian crude due to the limited insurance cover.

'MRPL is talking to Great Eastern, but it looks unlikely that it will use its vessels for Iranian oil imports.'

MRPL has an annual shipping contract with GESCO. Indian insurers will only give shipping firms carrying Iranian oil $50 million per tanker in protection and indemnity cover, a fraction of the typical $1 billion in insurance that Western firms provide for a very large crude carrier."  (Reuters, "India's main Iran oil buyer may cut July imports," 7/12/12)

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"India has been forced to seek its own arrangements to insure its purchases of Iranian oil, officials said, even as it reduces imports under pressure from U.S. and European Union sanctions.

Indian state-owned insurers, shipping lines and government officials met to discuss the situation in Mumbai on Wednesday. India's state-run insurance firms have agreed to offer coverage of up to $50 million for each Indian ship carrying Iranian crude. Such coverage is much lower than the up to $1 billion that European insurers would normally give per ship to cover third-party claims in the event of an oil spill or other accident…The problems facing India show the effectiveness of policies aimed at squeezing Iran financially in a bid to force the country to take measures that guarantee its nuclear program isn't being used for weapons development. Tehran says the program is for peaceful purposes…Indian shippers, such as Shipping Corp. of India, Great Eastern Shipping Co. and Mercator Ltd., handled a total of about six to seven ships carrying Iranian crude every month before the EU ban, said Anil Devli, head of the Indian National Shipowners Association.

For some Indian shipping companies, the new insurance coverage is too low. A spokeswoman for Great Eastern Shipping, a private company, said it had stopped transporting Iranian crude from July 1 because of insurance concerns.

The Indian shipping industry was also pushed to accept low insurance coverage because it doesn't want to see its business going to Iranian tankers, the executive said.

'The petroleum ministry wants to bring crude in Iranian vessels which will hurt business for Indian ships, so we accepted this figure,' he said." (The Wall Street Journal, "Insurance Woes Slow India Deals for Iran Oil," 7/11/2012)

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"India has given state-run insurers approval to provide limited cover to its ships transporting Iran's oil, allowing refiners to avoid any interruption in supplies because of the constraints of an Iranian fleet struggling with tough Western sanctions . . . Great Eastern has yet to make a decision on the limited insurance cover. 'We have informed MRPL that we will not be able to go to Iran. However, we are waiting for details of the new insurance plan offered by Indian insurers and will make a decision accordingly,' said firm spokeswoman Anjali Kumar." (Reuters, "India insures Iran oil imports to safeguard flow -sources," 7/10/12)

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"Indian shipping firms will continue to transport Iranian crude even if limited insurance coverage due to tightening Western sanctions leaves them financially exposed to a spill or accident, a top executive and industry sources said... Shipping Corp of India, which is the country's largest shipping firm, Great Eastern and other Indian tanker firms have asked state insurers to step in and provide up to $50 million in third-party liability coverage per tanker voyage. The amount is a fraction of the typical $1 billion coverage that a supertanker carrying around 2 million barrels of crude would have from reinsurers against personal injury and pollution claims. India's shipping companies would run the risk of shipping the crude even though they would be liable for any claims above $50 million in the case of an incident, industry sources said... The shipping firms have sent their request to state insurers United India Insurance, General Insurance Company, New India Assurance Co. Ltd., National Insurance Co. Ltd. and the Oriental Insurance Co. Ltd., said a shipping source. The shipping and finance ministries were also looking at the proposal." (Chicago Tribune, "Indian firms to carry Iran crude despite reduced insurance," 4/24/12)