Lunch with OSG

Last week’s guest speaker at the CMA lunch was Mats Berglund of OSG and despite the sad state of the tanker market, he was a pretty happy guy. But then again, he noted that the good news about this year is that 10 months are gone.

Mr. Berglund began with a brief overview of OSG. OSG’s predecessor company was founded in 1948 and currently operates a fleet of 103vessels. OSG is focused on four operating segments: crude oil, refined products, LNG and U.S. flag. With crude being the largest business and his responsibility, he drilled down into that business.

OSG is the market leader in this business through its participation in specialized commercial pools that operate VLCCs, Aframaxes and Panamaxes. These form the core of the crude business but the company has diversified into Suezmax, lightering and FSOs.

In operating its crude fleet, OSG’s strategy has been to operate its vessels in the spot market through pools while achieving scale through chartering-in. In terms of numbers the owned fleet was fairly constant during the period from 2004 to 2008, but the chartered-in fleet grew nine times. The combined effect achieved an aggregate EBITDA of $2.5 billion during this period.

This is only an excerpt of Lunch with OSG

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