Seychelles Petroleum Company pays off loan, a big boost to balance sheet

Seychelles Patriot -- one of SEYPEC's six tankers. (SEYPEC)

(Seychelles News Agency) - The Seychelles Petroleum Company (SEYPEC) is expected to see an increase in cashflow now that the company has paid off a loan taken from a German Bank for its fleet of six oil tankers.

To start off the project of building the tankers, SEYPEC borrowed $158 million from KFW bank, the German government-owned development bank which covered over 50 percent of the money needed.

The chief executive of the company, Conrad Benoiton, told SNA that “having a fleet that we can call our own is a massive plus.”

“The fleet should bring between $6 million to $10 million extra cash every year, a range that depends on the volatility of the charter business and the oil industry. At the moment we are forecasting around $8.5 million,” said Benoiton.

Having settled the loans also means that the company now has a “zero debt exposure which is critical when dealing with major oil suppliers and brokers,” Benoiton told SNA.

The chief executive said that the company took the right decision 16 years ago to diversify its capital financial baseline.

“Today it (SEYPEC) has an asset worth over $100 million with a strengthened balance sheet and when we go out to negotiate our fuel pricing every three years we can dictate our terms,” he added.

Another asset of the company is their mariners. Benoiton explained that when clients,  big oil majors and brokers want to charter a fleet, they look at the crew matrix, their experience and where they were trained among other criteria.

Today, the six tankers -- Seychelles Pride, Seychelles Pioneer, Seychelles Progress, Seychelles Prelude, Seychelles Patriot and Seychelles Paradise -- are operating with 168 Seychellois mariners on board. This at times represents up to 60 percent of the crew on the fleet.

The chief executive said that as mariners need to acquire sea time to ensure their career growth, with only five tankers it would have taken eight more years for the current second officers to become chief engineers.

“By having more vessels, we have shortened that period and so far the SEYPEC fleet has an average of 97 percent charter,” said Benoiton. He added that the fleet has three Seychellois masters with six potential ones coming up.

Seychelles Paradise also known as the 'green tanker -- is the smallest of the six tankers. (SEYPEC) Photo License: CC-BY

Most SEYPEC tankers, apart from Seychelles Paradise, call upon ports in America, Canada, and South Africa. The bulk of their business is transporting Russian fuel into European ports such as Denmark, Netherlands, Belgium, France, Spain, Portugal, and the UK down to Italy.

“Operating in these areas benefit us, as our concentration of vessel is closer to our logistical oversight. This means that it is easier to conduct crew rotation as well as drydocking, maintenance and supplies,” said Benoiton.

At the moment none of the Seychelles owned tankers are supplying the island nation with fuel as the tankers are too big. TOTSA is responsible for supplying Seychelles with fuel.

Benoiton told SNA that investing into another tanker is a decision that needs to be taken by the board member of the company in consultation with the government. Before any move is made, risk factors and assessments need to be run.