Another OW Bunker unit goes bust in Singapore

SINGAPORE – Dynamic Oil Trading, the Singapore subsidiary responsible for bankrupting OW Bunker following an alleged US$125 million (S$162 million) fraud, filed for liquidation today (Nov 18), making it the second local unit of the Danish shipping fuel trader to go bust.

This comes after OW Bunker Far East (Singapore), filed for liquidation last week. Reports today said OW Bunker Far East will meet with its liquidator KPMG on Dec 4 in Singapore to wind down the unit and receive a list of creditors and an estimated amount of their claims, a letter signed by the Danish firm’s board of directors and seen by Reuters said. The firm’s outstanding debt stands at almost US$1.5 billion globally.

KPMG has also been appointed as provisional liquidator for Dynamic Oil Trading.

OW Bunker, a leading supplier of marine fuel oil, filed for bankruptcy in Denmark earlier this month after it revealed losses of at least US$125 million at Dynamic Oil Trading, prompting banks to refuse to provide new credit lines and sending the bunker fuel market into turmoil.

Oil firms have stepped up legal action against OW Bunker’s Singapore units since the announcement with the arrest of ships, now totalling seven, Singapore court documents show.

Six vessels - Star Quest, Petro Asia, Luna, Nepamora, Zmaga and Arowana Milan - were arrested in the city-state over Nov 15 to 17 by Rajah & Tann Singapore, which earlier this month also arrested ship fuel delivery barge Laguna.

The law firm made the latest six arrests on behalf of Phillips 66 International Trading, a court official said.

On top of the US$750 million OW Bunker owes financers such as banks and pension funds, the firm also owes around 150 trading counterparties globally at least US$730 million in outstanding fuel bills, OW Bunker creditor data dated Nov 7, circulated in the industry and seen by Reuters, showed.

Of the creditors, almost half the fuel debt is owed to 20 firms in amounts of US$10 to US$35 million each, including large energy companies such as Statoil, BP, Sinopec , Glencore subsidiary Chemoil, and Phillips 66, with many other majors like Royal Dutch Shell or Repsol owed slightly less than US$10 million.

Another large creditor is the Aegean group of companies, including US listed Aegean Marine Petroleum, with a combined outstanding debt of more than US$25 million. Agencies