OIL COMPANIES REFLAG TANKERS

OIL COMPANIES REFLAG TANKERS

U.S. oil companies have begun putting some of their tankers under the British flag to gain protection from the Royal Navy in the Persian Gulf.

The tankers previously were under the Liberian and Bahamian registry, but were considered part of the U.S. effective control fleet because of their U.S. ownership.The companies involved include Chevron Corp., Mobil Shipping Co. Ltd. and Exxon Company International. Over the last several months, they have registered seven or eight tankers in Bermuda, which is a British colony. As a result, the ships fly the British flag and can be protected by the British navy.

Although spokesmen for Mobil and Exxon attributed the move stemmed from a desire to diversify their ship registry base, the underlying reason, according to some industry observers, was their frustration at being unable to obtain protection from the U.S. Navy.

The Reagan administration last summer began offering protection to Kuwaiti-owned tankers that were placed under the U.S. flag, but has resisted industry pleas to extend the same protection to U.S.-owned tankers under foreign flags.

The oil companies got tired of the debate, said one industry executive, noting that the administration apparently fears there would be greater

pressure from Congress to invoke the War Powers Act if it extends military protection to more tankers.

It doesn't surprise me that they're starting to move, said a State Department official who asked not to be identified, adding that there were both political and military pitfalls for the administration to consider.

The bottom line is that protection goes with the flag, a White House spokesman said. If the oil companies switched their tankers to the U.S. registry, then they could gain protection for their tankers in the gulf as well, he said.

Normally, that would require the companies to employ American crews, who generally are paid higher wages than their foreign counterparts. But the spokesman noted that the oil companies could apply for the same waivers that the Kuwaitis have received, allowing them to keep primarily foreign crews on their ships.

Thomas Wyman, manager of corporate affairs for San Francisco-based Chevron Shipping Corp., acknowledged that the basic reason for his company's registration of two tankers in Bermuda was to gain protection of the British navy while the vessels are in the gulf.

But, he said, We have no plans whatsoever to shift more tankers to the Bermudan registry. We're able to meet our requirement, he said, by using the two tankers, the Chevron Edinburgh and the Chevron South America, to carry oil

from the danger zone to other vessels outside theStrait of Hormuz.

Altogether, the company operates 10 tankers in the gulf, with the others all being registered in Liberia. Of the two vessels being transferred, one was registered in Liberia, and the other in the Bahamas.

Mobil has registered three tankers in Bermuda within the past month and a half, a company official said. Although these are the first vessels it has registered there, he said it has a significant number of ships under the British flag.

We try to maintain a diversity of flags, he said, noting that Bermuda offers favorable tax treatment and fees for vessels registered there.

The official, who asked not to be identified, said Washington has a lot of concerns about providing protection to vessels not flying the U.S. flag. We're not second-guessing what they're doing.

Three Exxon tankers that had been laid up have now been registered in Bermuda, a spokesman said, calling the move consistent with a company policy of using British officers and maintaining a diversified fleet registration program. The other members of the crews on these ships are from Spain and the Philippines.

The ships were reactivated because of increased demand for large supertankers, the spokesman said. The most recent to be reactivated was the Esso Geneva, just last month. The other tankers registered in Bermuda are the Esso Hawaii and the Esso Atlantic.

Fred Lyninger, senior deputy commissioner of maritime affairs for Liberia, expressed concern about the loss of the tankers, but said he understands the desire of the oil companies to protect their personnel in the gulf.

But, he said, It's not a major exit, with only four or five Liberian-flag tankers shifted to Bermudan registry.

We're always disappointed to lose any tonnage, even for a short time, but it's an emergency, said Mr. Lyninger, who is based in Reston, Va.