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Indonesia seizes tanker accused of carrying stolen Cambodian oil

Hunt for missing crude comes after collapse of Phnom Penh's first venture

Indonesia has seized the oil tanker MT Strovolos, which Cambodia accuses of carrying 300,000 barrels of stolen crude from it first oil venture.   © Indonesia Navy/AFP/Jiji

PHNOM PENH/JAKARTA/BANGKOK -- Two months after the collapse of Cambodia's first oil venture, the spotlight has turned to the fate of millions of dollars worth of oil pumped from the country's offshore concession before production was halted -- with the focus now on a ship seized by Indonesia.

Indonesia's navy announced on Wednesday that it had taken into custody the Bahamian-flagged tanker MT Strovolos, which Cambodia claims is carrying nearly 300,000 barrels of crude allegedly stolen from the ill-fated oil business.

The MT Strovolos, its captain and 19 crew members were detained by a patrol boat on July 27 in waters off Indonesia's Riau islands after a request by the Cambodian Embassy in Jakarta, the navy said in a statement.

The tanker was "illegally" anchored in Indonesian waters with its transponders turned off and loaded with 297,686 barrels of crude, the navy said. It also said the tanker was taken to a nearby base and all on board were detained, including the Bangladeshi captain and crew members -- 13 Indians, three other Bangladeshis and three citizens of Myanmar.

The ship's Singapore-based operator, World Tankers Management, in a statement late Wednesday "strongly" denied the oil was loaded illegally and rejected the claim that it did not have permission to anchor in Indonesian waters.

The company said Cambodia's "wrongful allegations" had created "humanitarian issues" and, as a result, it has sought the involvement of the U.N. Human Rights Office and "diplomatic channels."

"Our crew are entirely innocent and blameless in this matter and should not come to bear the brunt of commercial and political issues," the statement said.

The episode has added a new twist to the saga behind the collapse of Cambodia's first and only oil venture.

Cambodia's six-month run as a crude oil producer came to an abrupt end in June when well operator, Singapore-traded KrisEnergy, went bankrupt. The company's Cayman Island-registered parent is now in liquidation proceedings.

Attention turned to the fate of the oil in early August when Cambodian Prime Minister Hun Sen accused the MT Strovolos, contracted by KrisEnergy, of fleeing to Thai waters with the crude.

"We couldn't prevent it on time," Hun Sen said of the ship's departure. "They ran away with the oil."

Expanding on his remarks, spokesman for Cambodia's Ministry of Mines and Energy, Cheap Sour, told local media outlet Cambodianess that the tanker "stole" the oil -- some 290,000 barrels worth $21 million -- because it was owed money by KrisEnergy.

World Tankers said in its statement that it had loaded the crude on the understanding that it belonged to its charterers, but added they defaulted on payment and terminated its service.

The company said it had requested "the owners of the cargo" remove the oil by a ship-to-ship transfer at a "convenient and practical location."

However, "no agreement has been reached to enable this to occur," the statement said.

After KrisEnergy defaulted on payments, the tanker sailed to Thailand for a crew change and refueling but was unsuccessful, and then headed for Indonesia, World Tankers said.

During the vessel's stop in Thailand, it was boarded by Thai authorities acting on a request from their Cambodian counterparts.

World Tankers Management said the tanker had "no realistic choice" but to divert to the "nearest appropriate port" -- the port of Map Ta Phut Industrial Estate in Thai territorial waters -- to ensure its crew's safety because KrisEnergy had failed to supply fuel when levels ran "critically low."

According to a report by Thai News Online on June 26, the course-change prompted Tea Sokha, Cambodia's deputy navy commander, to request assistance from Thai Vice Admiral Kowit Inprom to investigate why the ship had "suspiciously departed" the oil field and headed for Thai territorial waters.

The Thai authorities inspected the vessel on June 25 and determined it had not violated the law within the country's territorial waters, the outlet reported.

Thai authorities had planned to escort the vessel and transfer it back to Cambodian authorities, according to Thai News Online, which is affiliated with the Nation Group, one of Thailand's largest multimedia enterprises that includes The Nation English-language online news site.

World Tankers Management said it had engaged lawyers, the International Maritime Organization, and the Bahamas Maritime Authority.

After this "the Royal Thai Navy stepped back and allowed the vessel to sail to Batam, Indonesia, to make the crew change there as it was not permitted in Thailand due to COVID-19 restrictions," World Tankers said.

In line with this version of events, a Thai navy official told Nikkei Asia on Aug. 9 that the tanker had left Thailand and reported its destination as Indonesia.

"This ship did not do [anything] wrong within Thai waters. It arrived to take on fuel, water and food from its contracted company in Thailand," said the official, who requested anonymity because he was not authorized to speak to the media.

"The ship left Thailand about two weeks ago. It reported to the Marine Department's officer that it would go to Indonesia."

Cambodian spokesman Cheap Sour had yet to respond to a request for comment from Nikkei, but told Agence-France Presse that the government was working with Indonesian authorities on a plan to return the oil to Cambodia.

The Indonesian navy said the captain, who it only identified by the initials SSM, faces a year in prison and a fine of up to 200 million rupiah ($13,800) if convicted of anchoring illegally.

World Tankers Management denied it had anchored illegally. It said the ship had "initially waited off Batam in view of the travel restrictions placed by Indonesia due to COVID-19."

It was in the process of organizing the "long overdue" change of the crew, which had been aboard since September, when it was " targeted because of the wrongful allegations made by the Cambodian government."

World Tankers added: "The vessel has been wrongly charged with stealing the cargo. It is not and has never at any time been our intention to misappropriate the cargo."

Further, it said: "It is our express requirement that it is offloaded from the vessel by the party that owns it on terms that we are paid the sums owed to us or otherwise that such amounts are adequately secured in the usual way. The vessel has at all times operated entirely within the trading area agreed in the charter."

Nikkei contacted KrisEnergy for comment, but it directed queries to the appointed receiver, law firm Borrelli Walsh, which had yet to respond.

KrisEnergy had been Cambodia's main hope of pumping oil since 2014, when it bought a controlling stake in the Block A concession from Chevron. It signed a production agreement with Cambodian authorities in 2017 that gave the government a 5% stake.

According to the arrangement, Cambodia was supposed to earn at least $500 million from the first phase of the project, based on oil prices of $50 a barrel. However, production fell significantly short of expectations, and heavily indebted KrisEnergy folded.

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