Saturday, June 10, 2023
BusinessEnterprise chooses to sell fuel vessels as swapping remains fruitless

Enterprise chooses to sell fuel vessels as swapping remains fruitless

Ethiopia’s state-owned shipping firm is pressing on with plans to sell its two crude oil tanker ships after an attempt to swap them for a cargo ship failed.

The only multimodal shipping company in the nation, Ethiopian Shipping and Logistics Service Enterprise (ESLSE), rents out its two fuel carrying ships since it is unable to deliver the fuel that Ethiopia buys.

When the loan payments for the two ships were settled, the Enterprise decided to swap them out for a general cargo ship with a 65,000-ton capacity.

- Advertisement -

Wondimu Denbu, the Enterprise’s deputy CEO for corporate services, claims that the initial plan to swap them out didn’t work out.

Named Hawassa and Bahir Dar, the ships drew interest from several Turkiye firms that desired to trade the two for their own cargo ship. However, Wondimu said that the deal has not materialized because the Enterprise was required to pay additional funds on top of the ships.

“It was tough to reach an agreement given the cost and benefit of exchanging it. We are currently weighing the costs and benefits of selling them,” he said. “It is now being discussed, and the interest of numerous companies will be evaluated for this reason.”

When asked whether selling or swapping would be better for the Enterprise, Wondimu responded that it would not make any difference to his company.

However, he is optimistic that their plan to sell them will enable his office to acquire a sizable, high-caliber ship.

In an interview with state media last week, Roba Megersa, CEO of the Enterprise, said that these two ships were bought with consideration for the Ethiopian petroleum market and to deliver the fuel Ethiopia purchases.

The Ethiopian Petroleum Supply Enterprise, the state-owned organization in charge of acquiring fuel and ensuring its delivery to Ethiopia, hasn’t been utilizing them due to the procurement procedures nonetheless.

“The fuel vendors have their own ships, which they use when selling their own fuel and include in the procurement processes,” Roba explained, noting that the supply firm does not have the luxury of selecting which ship to utilize.

The majority of fuel procurement systems are credit-based, with transportation included as a prerequisite.

Roba said the administration had also proposed deploying these mid-sized ships at Djibouti’s port to store Ethiopia’s fuel, but this suggestion was rejected. 

- Advertisement -



More like this

Finance Minister pressed on funding for PM’s “fancy” projects

In a bold challenge to the government's financial practices,...

Convicts of rape, infant murder eligible for pardon under new directive

It will depend on the severity of the crimes...

Amid war challenges, Tigray emerges with new cement project

Mekelle, Tigray Investor appetite is growing in the Togoga Cement...

New capital market rule to curb misleading claims in share sale

Ethiopian Capital Market Authority (ECMA) is expediting steps to...