Exclusive: Brazil oil tanker collision reveals offshore regulatory gaps

November 28, 2018

By Alexandra Alper and Marianna Parraga

RIO DE JANEIRO (Reuters) – Brazil has more than doubled the number of risky ship-to-ship oil transfers this year, but its monitoring of such offshore maneuvers is lax, to a point where a July 2017 collision between two tankers was not reported, according to a Reuters review of government and shipping records.

Transfers are projected to keep rising as the country’s deep-water discoveries have lured major companies including Exxon Mobil Corp (N:XOM) and Royal Dutch Shell Plc (AS:RDSa) to recent offshore auctions. During these maneuvers, ships pull alongside one another and oil is transferred to a vessel via high-pressure hoses. The practice has only been allowed since 2013 in Brazilian waters.

However, weak monitoring makes it difficult to track the most basic statistic: how many transfers have taken place.

The Brazilian Navy said it has logged 59 ship-to-ship deliveries by oil producers through Oct. 30, up from 28 last year, but Shell and a Repsol (MC:REP) Sinopec joint venture have already done 65 transfers through October. A Navy spokesman was unable to immediately account for its lower figure.