Indonesia: Tanker crew arrested over Cambodia’s offshore oil dispute

The owner of Strovolos, the Bahamas-flagged tanker detained in Indonesia over a Cambodian crude oil dispute, has requested the immediate release of the crew members arrested on Saturday.

In late July, the 47,106 dwt oil tanker was seized by the Indonesian Navy for oil theft and “illegal anchoring” off Batam, Indonesia.

On 25 September, the Indonesian Marine Police boarded the ship, arresting the vessel’s crew over a protracted dispute concerning the tanker’s crude oil cargo.  

“It is understood this police action followed an intervention by the Cambodian government which claims the cargo was transported illegally. This claim is made without foundation and is utterly rejected. The crew members remain under detention and are being interrogated ashore in shifts,” World Tankers, a Singapore-based company that owns Strovolos, said in a statement.

“The crew are the innocent victims of wrongful conduct by the Government of Cambodia in violation of their human rights,” the shipping company pointed out.

The seafarers were serving onboard the 1999-built MR2 tanker when it was chartered to oil exploration firm KrisEnergy (Apsara) Co. Ltd.

Under this charter, the oil that was loaded was extracted by KrisEnergy from the Apsara Oil Field in the Gulf of Thailand. KrisEnergy started producing oil from Cambodia’s first oil field in late December 2020.

“The vessel’s owners understood that the chartering company was contracted by the Government of Cambodia as part of a commercial oil development projection and gave it the right to sell the oil subject to payment of royalties,” World Tankers added.

During the charter, the KrisEnergy Group ran into financial difficulties. In June, the company filed a winding-up petition and said it would proceed to liquidation.

According to World Tankers, when informed by the Master of the vessel that it was running out of fuel, KrisEnergy told the vessel’s owners that they were unable to comply with their obligation to pay hire, which included the supply of fuel.

“It was unsafe for the vessel to remain in the Apsara Oil Field. For the safety of the crew, the cargo and the vessel – to mitigate against any subsequent environmental casualty – the vessel sailed to the nearest convenient port to refuel.”

The charter was terminated due to the charterers’ breaches of key obligations. As a matter of law, the vessel was under no obligation to return to Apsara. Legally, whoever proves ownership and the right to sell the cargo is obliged to make arrangements to offload it upon payment of the sums owed to the owners, as explained by World Tankers.

“The Government of Cambodia has not provided any proof to the owners to support its claim that it owns the cargo on board the vessel. KrisEnergy told the owners that they objected to the cargo being released to the Government of Cambodia as that would be contrary to their ownership rights,” World Tankers further said.

While waiting for a resolution of the dispute, the owners and the crew said they have taken proper care of the cargo and want it to be offloaded by mutual agreement as soon as is practical. In the meantime, they moved the vessel offshore of Batam pending a long-awaited crew change as the seafarers have far exceeded their contractual period of employment.

“There has never been any intention or suggestion that anything would be done with the oil on board other than to offload it as soon as its ownership is proved, and agreement is reached about payment to the owners of the money which they are owed,” World Tankers noted.

“The owners have grave concern that there would not be due and proper process and a fair trial in Cambodia. This concern stems from the fact that the Prime Minister of Cambodia and his ministers have made public statements saying the crew are guilty of theft, which is inappropriate and contrary to the basic principle of justice.”

“The owners hope and expect the Indonesian Government rightly, and in accordance with local and international principles of justice, to reject the Request for Assistance and to order the immediate release of the crew so that they may freely go home to their families.”