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Argus Media: HSBC accuses Singapore’s Zenrock of ‘suspicious’ trades

Court documents give two examples of what HSBC described as “highly dishonest transactions”, both involving cargoes of Djeno crude booked since February, it said.

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Global energy and commodity price reporting agency Argus Media on Friday (8 May) published an update on the recent Zenrock Commodities Trading troubles, exposing some details of HSBC’s accusations: 

UK bank HSBC has accused Singapore oil trading company Zenrock Commodities Trading of dishonestly obtaining multiple sources of financing for crude cargoes, according to court documents seen by Argus.

HSBC filed a court application on 4 May to place Zenrock under judicial management, a form of debt restructuring, to recover funds it said it is owed.

Zenrock has outstanding debts to HSBC of around $49mn and owes a total of around $165mn to lenders, the court filing alleges. HSBC said it believes the company is unable to pay its debts.

Neither Zenrock nor HSBC responded to requests for comment. The case is due to be heard in Singapore's Supreme Court today.

The collapse in oil prices this year has caused a fall in the value of the oil and related products that Zenrock uses to secure bank facilities to finance its trading activity, HSBC said in the court filing. This has led many banks to require oil trading companies to provide cash to cover their outstanding liabilities, or to stop extending fresh financing altogether.

This "inability to raise fresh financing has exposed certain trade practices by [Zenrock] which appear on their face to be shams, or at the very least, extremely suspicious," HSBC said.

It accused Zenrock of using the same cargo to obtain double or multiple financing from lenders, by issuing duplicate invoices with different payment instructions.

The court documents give two examples of what HSBC described as "highly dishonest transactions", both involving cargoes of Djeno crude booked since February. Medium sweet Djeno crude is produced in Congo (Brazzaville). The details of the transactions could not be confirmed.

HSBC filed a police report against Zenrock in Singapore at the end of April, the documents show.

Zenrock traded over 15mn t of products in 2019. It is mainly active in oil product markets, particularly middle distillates, but also has a presence in crude and petrochemicals. The company last month acknowledged it was facing "adverse conditions" because of the impact of slowing demand in China, the Covid-19 pandemic and oversupply of oil, but said it believed it had the ability and experience to work through these issues profitably. It has not made any comment since HSBC filed its court case.

Zenrock's problems are the latest blow to Singapore's trading sector following the collapse of domestic oil trading company Hin Leong, which filed for court protection last month with net liabilities of over $3bn.

The Monetary Authority of Singapore said last month it was watching developments related to Hin Leong and "has reminded banks not to de-risk indiscriminately from the bunkering and oil trading sectors".


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Argus Media
Published: 11 May, 2020

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Interview

ZeroNorth: Singapore’s pioneering e-BDN bunkering project makes waves internationally

‘This is very much commercially driven as parties in the regions are still trying to figure out how e-BDNs are relevant for their respective locations,’ Kenneth Juhls, Managing Director of ZeroNorth Bunker tells Manifold Times.

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Kenneth Juhls, Managing Director, ZeroNorth Bunker,

The Maritime and Port Authority of Singapore (MPA)’s pioneering electronic bunker delivery note (e-BDN) project for the republic’s maritime sector has been steadily gaining attention from      overseas, observes the Managing Director of digital bunkering platform solutions provider ZeroNorth Bunker.

“We currently see interest from bunker buyers, shipping firms, barge owners and operators, fuel suppliers and a few port authorities based at the ARA, Mediterranean, Middle East, and the U.S. who are all eyeing to see how the e-BDN project at Singapore turns out,” Kenneth Juhls told Manifold Times.

“This is very much commercially driven as parties in the regions are still trying to figure out how e-BDNs are relevant for their respective locations.”

According to Juhls, recent implementation of the Singapore-Rotterdam Green and Digital Shipping Corridor (GDSC) would suggest that the Amsterdam-Rotterdam-Antwerp (ARA) region would be the “next step” to expand e-BDN bunkering operations.

“I see ARA as a good next step to expand e-BDN. ZeroNorth is very keen to engage with all port authorities to share knowledge and hands on experience based on the deployment of e-BDN bunkering operations at Singapore,” he said.

“Obviously, we would love to have a full end-to-end digital solution where the e-BDN is receiving verified information from the mass flowmeter (MFM) so there is no manual intervention; much like Singapore port.

“However, in practise one does not need a MFM-equipped bunker tanker to be able to perform e-BDN bunkering operations.”

Juhls explained digital bunkering platforms are also designed to be adaptive to different situations by allowing manual entry of data in certain circumstances.

“In Singapore, we are still in the integration phase of seamlessly connecting MFM data to the e-BDN system. In the interim, manual data entry, where personnel the tablet to take a photo of the bunker metering ticket and the eBDN app using OCR technology to auto extract the data receipt and key similar information into the tablet, is still being performed,” he said.

“In my understanding, phase two of MPA’s e-BDN integration will look into eliminating this action.”

Moving forward, Juhls says that he wishes for the shipping industry to adopt e-BDN solutions at a quicker pace.

“Singapore is the biggest bunkering port, and thus is a perfect location to kickstart momentum on e-BDN. But we also need to include the whole shipping industry for      it to work well,” he said. “We hope that together we’ll be able to spur faster global adoption of e-BDN and enable widespread digital transformation.”

Related: SMW 2024: Singapore-Rotterdam Green and Digital Shipping Corridor partners to implement first-mover pilot projects

 

Photo credit: ZeroNorth
Published: 24 April 2024

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Alternative Fuels

Platts proposes to launch Singapore bio-bunker fuels market-based assessment

Proposal is on the back of growing interest for blended bio-bunkers in Singapore, the world’s largest bunkering hub, amid increasing pressure on the shipping sector to decarbonise.

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Platts, part of S&P Global Commodity Insights, on Tuesday (23 April) proposed to launch a new daily market-based delivered Singapore bio-bunker assessment, effective 1 August.

This proposal is on the back of growing interest for blended bio-bunkers in Singapore, the world's largest bunkering hub, amid increasing pressure on the shipping sector to decarbonise.

The new assessment would reflect marine fuel blend of biodiesel with low sulphur fuel oil. Platts would publish the Singapore bio-bunkers market-based assessment as a differential to Platts Marine Fuel 0.5% (AMFSA00), and as an outright value.

The assessment specifications would be as follows:

Platts proposes to launch Singapore bio-bunker fuels market-based assessment

Other delivery periods and volumes may be considered in the Platts Market on Close assessment process and normalised back to the above specifications.

Bio-bunkers stems must be incompliance with the EU's Renewable Energy Directive, or RED requirements, and meet sustainability requirements such as ISCC or RSB sustainability criterions.

Platts will not consider bio-bunkers that use palm oil as a bio-component.

International Organization for Standardization is revising the ISO 8217 standards to include additional requirements for blended bio-bunker. The assessment would reflect standards set in the document ISO 8217:2024 Petroleum products -- Fuels (class F) -- specifications of marine fuels, as well as standards set by Singapore's Maritime Port Authority on specifications of marine biofuels (WA 2:2022). Platts is seeking specific feedback on these standard requirements.

Platts is also seeking specific feedback on the reference density of blended bio-bunkers.

The assessment would be published on Platts Biofuels Alert (PBF2500), in the Bunkerwire Report, Bunkerwire Monthly, Biofuelscan report and Biomass-Based Diesel Report.

The new daily bio-bunkers assessment would be timestamped to 5.30 pm Singapore time and follow the Singapore publishing schedule.

Platts spot price assessments consider market information reported to Platts and published throughout the day, including firm bids and offers, transactions and indications of value. In the absence of observable spot market activity, Platts may consider other verifiable data reported. This information will be published as price heards.

At present, Platts publishes a daily cost-based B24 Singapore bio-bunkers assessment reflecting a ratio of 76% fuel oil based on Platts benchmark Marine Fuel 0.5% Bunker Dlvd Spore $/mt assessment (MFSPD00) and 24% used cooking oil methyl ester based on the Platts UCOME FOB Straits $/mt assessment (UCFCB00). This calculated price assessment will continue to be published alongside the proposed new assessment and will be renamed “Platts B24 calculated bio-bunker Singapore.”

Related: Platts launches new blended bio-bunkers assessment in Singapore

 

Photo credit: Justin Lim on Unsplash
Published: 25 April 2024

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Winding up

Singapore: Annual general meetings scheduled for Xihe Holdings subsidiaries

Annual general meetings will be held between 8 to 9 May for Hua Zhong Shipping, Dong Ya Tankers, Dong Sheng Tankers and Da Xin Tankers to receive an update on firms’ liquidation.

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Several notices were published on the Government Gazette on Tuesday (23 April) regarding the annual general meetings to be held between 8 to 9 May for Xihe Holdings subsidiaries Hua Zhong Shipping, Dong Ya Tankers, Dong Sheng Tankers and Da Xin Tankers. 

Annual general meetings for Hua Zhong Shipping are to be held on 8 May at the following times:

For the company: 2pm
For the creditors: 3pm

Annual general meetings for Dong Ya Tankers are to be held on 9 May at the following times:

For the company: 10am
For the creditors: 11am

Annual general meetings for Dong Sheng Tankers are to be held on 9 May at the following times:

For the company: 2pm

Annual general meetings for Da Xin Tankers are to be held on 8 May at the following times:

For the company: 10am
For the creditors: 11am

The agenda for all the meetings are:

  1. To receive an update on the liquidation.
  2. To receive an account of the Liquidators’ acts and dealings, and of the conduct of the winding up

The following are the details of the liquidator:

Ho May Kee
Liquidator
c/o 8 Marina View
#40-04/05 Asia Square Tower 1
Singapore 018960

Xihe Holdings Pte Ltd and its subsidiaries are owned by the Lim family, who are also the owners of the embattled Hin Leong Trading.

Related: Singapore: Da Xin Tankers, Dong Ya Tankers, Hua Zhong Shipping to be wound up
Related: Singapore: Annual general meetings scheduled for Xihe Holdings subsidiaries

 

Photo credit: Jo_Johnston from Pixabay
Published: 25 April 2024

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