World Tankers Management has lambasted the arrest of 19 crew members on board a vessel being held in Indonesia over a commercial dispute between oil producer KrisEnergy and the Cambodian government.

In a disturbing development, the Indonesian Maritime Police boarded the 47,100-dwt Strovolos (built 1999) last Friday to arrest the crew, whom the Cambodian government wants extradited to face charges of oil theft.

Polys Haji-Ioannou-linked World Tankers described the arrest as a blatant, unethical example of innocent seafarers being used as pawns in a commercial battle.

The dispute stems from a charter of the Strovolos to Singapore's KrisEnergy to store oil extracted from the Apsara field that the independent upstream producer was developing off the Cambodian coast.

World Tankers said it understood that KrisEnergy had the right to sell the 300,000 barrels of oil, subject to payment of royalties to the Cambodian government.

TradeWinds' sister publication Upstream reported in June that KrisEnergy had been banking on revenues from Apsara, but ran out of cash after production proved lacklustre.

KrisEnergy submitted a winding-up petition to the Grand Court of the Cayman Islands on 4 June.

'Breach of obligations'

KrisEnergy's investment in Apsara off Cambodia led to its downfall as the field failed to produce much oil. Photo: Cambodian Ministry of Mines & Energy

World Tankers said the Strovolos was forced to leave the oilfield for safety and humanitarian reasons — it was dangerously low on fuel and the crew needed to be changed out.

The company terminated the charter with KrisEnergy due to breaches of key obligations — industry sources with knowledge of the situation said it had not been paid hire in months — and requested that the owner of the cargo arrange to remove it from the vessel by ship-to-ship transfer at a convenient and practical location.

"World Tankers had been screaming for months for KrisEnergy to come and it get its oil. It received no response from the company nor its liquidators," said one observer with knowledge of the situation.

After refuelling in Thailand, the Strovolos proceeded to Indonesia to carry out a crew change, as the seafarers on board had far exceeded their contractual employment time. This could not be done in Thailand due to Covid-19 restrictions.

The tanker was seized by the Indonesian Navy upon arrival off the island off Batam at the end of July. Cambodian authorities had issued an Interpol red alert over claims that it stole the country's crude.

World Tankers vehemently denied that any form of oil heist was taking place.

The company said 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 was proved and an agreement reached for the payment of money owed for the hire.

The Cambodian government, it said, has not proved its claim that it owns the oil on board, nor has KrisEnergy revoked its statement objecting to the oil being released to the Cambodian government.

Hefty claims

The Strovolos was seized by the Indonesian Navy in late July with 300,000 barrels of crude on board. Photo: Indonesian Navy

Discharging the cargo under these circumstances, legal observers told TradeWinds, would open World Tankers up to hefty claims from both parties.

World Tankers said it believed there were talks between the Cambodian government, KrisEnergy and its receivers to come to an agreement about the sale of the oil on board, and the charter payments.

"World Tankers believes the government of Cambodia has failed to resolve matters with KrisEnergy and is now adopting the unpleasant and unethical tactic of trying to use the [Interpol] request for assistance to coerce owners to accept their claim without proof or payment. This is unacceptable," the company said.

AJCapital Advisory, the Singapore-based joint liquidator of KrisEnergy, did not immediately respond to an emailed request for comment on Tuesday.

World Tankers will raise its "deep concern" at the highest diplomatic and government levels, as "this conduct violates the human rights of an innocent crew".

"The owners have grave concern that there would not be due and proper process and a fair trial in Cambodia," it added.

"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."