Arab Petroleum Investments (APICORP) and the National Shipping Company of Saudi Arabia (Bahri) have reached an agreement to launch a $1.5bn fund to buy very large crude carriers (VLCCs).
The APICORP Bahri Oil Shipping Fund (ABOSF) aims at acquiring 15 VLCCs in total, in a three-phased approach.
APICORP will invest 85% in the fund, while Bahri will invest the remaining 15%.
Additionally, APICORP will be the main investor and fund manager, while Bahri will be the exclusive commercial and technical manager.
Bahri chairman Abdulrahman Mohammed Al Mofadhi said: “This fund will not only reduce Saudi Arabia’s dependence on external crude carriers but also its earnings will be reinvested in the local economy.
"As with any other initiative, our growth strategy for this investment, firmly falls in line with Saudi Arabia’s plans for future development as laid out in the Kingdom’s Vision 2030.”
The ABOSF will assist Bahri in increasing its fleet of 36 VLCCs, therefore helping Bahri in becoming the largest operator of VLCC’s in the world.
This closed-end fund with a ten-year life period will deliver returns derived from the commercial employment of the VLCCs.
Bahri also has ten new build orders scheduled for delivery in 2017-18.
The agreement is in line with Saudi Arabia’s long term economic diversification plan to support economic growth and create employment opportunities.
Image: APICORP and Bahri have agreed to launch a new $1.5bn shipping fund. Photo: courtesy of Bahri.