Oil Majors’ Acquisition Techniques

By Koon Lee of Compass Maritime Services LLC

With OPA90 and numerous industry regulations enacted within the last decade, major oil companies were faced with the task of replacing their aging fleets. Coupled with a period of low crude prices that placed a burden on limited corporate funds and the drive to generate 12+% return on capital employed (ROCE) to meet Wall Street expectations, and remain competitive, the oil companies were forced to develop new and innovative, “out of the box” solutions to replace their tonnage requirements. No longer do oil majors use their own equity capital to fund vessel acquisitions, instead various types of lease arrangements were concluded. The purpose of this article is to summarize each major oil company’s strategy in acquiring replacement tonnage over the past decade.

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