Tanker Hijackings Raise Piracy Concerns in Seas Around Singapore

Published Nov 12, 2013 8:28 AM by The Maritime Executive

Two tanker hijackings in about a month in the South China Sea and Malacca Strait, a route for about a quarter of seaborne oil trade, have fueled fears piracy could be on the rise in the area, potentially driving up ship insurance premiums.

On Nov. 7, pirates hijacked a tanker carrying marine gasoil in the strait near Pulau Kukup, Malaysia, and stole its cargo before the ship and crew were released.

It was the second hijacking in waters around Singapore this year after an attack on a Thai-registered tanker laden with gasoil near Pulau Aur, Malaysia, in the South China Sea on Oct. 10. The ship was released after its cargo was transferred to another tanker.

The attacks follow three similar ship hijackings and gasoil thefts in 2011 and 2012.

"Given previous incidents occurred in clusters this could be the start of a trend," said Mark Pearce, director of marketing for international risk consultant Drum Cussac.

A security source with knowledge of previous attacks said it was unclear whether one or several gangs were responsible for the attacks. "It has to be the work of a syndicate," said the source, citing the level of pre-planning and sophistication that went into the attacks.

The armed gangs could either have links to the crew onboard the hijacking target or inside knowledge about the ship and cargo, according to the Singapore-headquartered Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP).

These intelligence-led hijackings have involved "the seizure of tug boats and barges for resale on the black market and the seizure of tankers so that their cargo, often marine gasoil, can be transferred and sold on the black market," Pearce said.


Tom Fulford-Smith, marine divisional director of international insurance at broker Cooper Gay (Hong Kong), said insurance premiums could rise if there were more attacks.

"If insurers see one or two (incidents), they are going to wonder if it's going to happen again," said Fulford-Smith, whose views echoed those of other brokers including Marco Daini, director of marine cargo at Cambiaso Risso Asia.

The tanker hijacked on Nov. 7 was the 3,254 deadweight tonne (dwt) GPT-21 operated by Singapore firm Global Unique Petroleum, according to anti-piracy sources and ship tracking data.

The firm could not immediately be reached for comment, but one ship broker estimated the gasoil cargo was worth more than $2.7 million if the Panama-flagged ship was fully loaded and all cargo stolen.

Previous tanker hijackings and cargo thefts have involved gangs gaining access to information on routings, what the vessel was carrying, origin and destination and possible locations where the oil transfer could be carried out, ReCAAP said.

ReCAAP had given details about the latest incident to Interpol because it involved cross-border crime.

Attacks by gangs armed with guns and knives on shipping passing through the Malacca Strait have been running at 12 to 20 a year over the last three years, according to ReCAAP figures. Most of these incidents have involved the theft of ship's stores, cash and assaults on the crew.

That compares with a peak in 2000 of 220 recorded attacks, according to the Kuala Lumpur-based International Maritime Bureau which tracks pirate activity.

If there was a spike in incidents in Southeast Asia, it comes as pirate attacks worldwide fell to their lowest level since 2006 in the third quarter, the IMB said.

Reported piracy incidents fell to 188 in the first nine months of this year from 233 in the same period of 2012, according to the IMB's latest piracy report. 

By Keith Wallis (C) Reuters 2013.