Seychelles' tanker fleet makes history with $25 million profit in 2022

The CEO of SEYPEC Sarah Romain (right) and the chair of the board, Jennifer Morel. (Seychelles Nation)

For the first time in its operational history, the Seychelles' tanker fleet made a profit of $25 million for the year 2022, said a top official of the Seychelles Petroleum Company (SEYPEC) on Wednesday.

The chief executive of SEYPEC, Sarah Romain, made the statement to the press while providing an update on the company's performance in 2022, where she also touched on the challenges being faced. 

The update was shared with the press on March 8 to coincide with International Women's Day as the company is headed by two women.

"Last year, the tankers brought us $25 million in profit and this was due to the rates that were brought about, unfortunately, by the Russian-Ukrainian war. The cost of petroleum products has gone up due to this and our tankers that operate in Europe have benefitted from these high costs. The profit has in itself contributed toward the profitability of the company," said Romain.

Seychelles has four tankers - Seychelles Pioneer, Seychelles Progress, Seychelles Prelude and Seychelles Patriot operating in international waters. Seychelles Paradise, known as the green tanker, serves the archipelago of 115 islands in the western Indian Ocean.

Despite the benefits that the war brought for the four Seychelles-owned tankers operating in international waters, it was outlined that it is also bringing about a lot of uncertainties. 

"It still can bring danger as we do not know where the war might move or if it might develop into something worse. We do not know what will happen with the operation of our tankers if this happens. The war is also influencing the price of fuel that we receive and that can create instability in the market," said Romain.

In 2022, Seychelles saw the price of fuel reach $1.87 per litre (SCR 25.20 per litre) at the pump due to the rise in global fuel cost due to high demand and low supply, and fluctuations in foreign exchange rates. 

The CEO of SEYPEC said that the company has seen a reduction in the sale of diesel to fishing vessels since the Indian Ocean Tuna Commission (IOTC) introduced its capping policy on the number of yellowfin tuna that can be caught.

Marine bunkering - providing fuel to fishing vessels - is one of the sectors that bring in the most revenue for SEYPEC.

"About 50 to 55 percent of our revenue comes from the sale of diesel to fishing vessels.  We have seen that sales with these vessels have increased during the past 25 years, but since IOTC introduced the quota on the amount of yellowfin tuna that can be fished, this has helped to reduce the amount of fuel that we sell with these vessels," said Romain.

She outlined that each month around 20,000 tonnes of diesel are sold to fishing vessels and today a tonne of diesel costs around $990.

Going deeper into the company's financial performance for 2022, Romain outlined that a total of 303,929 metric tonnes of product was sold last year, bringing the company a turnover of $480.3 million.

"We made a net operating profit of $46.4 million and SEYPEC paid SCR 250 million ($18,88 million) in dividends to the government. The amount of business tax that we pay amounted to SCR 792 million ($59,83 million). This shows that SEYPEC is a profitable company that contributes greatly towards the economy of the country," said Romain.

Among other challenges that the company faces, Romain stated the company's ageing tanker fleet and the need to make decisions on if or when to sell them and if new tankers should be acquired. 

A local challenge that the company faces is related to the drug issue affecting the country. 

"Here at SEYPEC, we have zero tolerance for alcohol and drugs and we have seen that a lot of time during recruitment, most of the time people fail because of this problem. This reduces our pools from which we can source labour," said Romain.

SEYPEC, a company founded in 1985 following the closure of the then Shell Oil Company that operated in Seychelles, employs a total of 215 workers out of which only one is a foreigner.