The Oil Road

by James Marriott

  No passenger ferries, nor container ships with room for travellers, sail from this corner of the eastern Mediterranean to the northern reaches of the Adriatic. So, as when we sat in Bulvar Park on the harbour front in Baku and gazed in the direction of the Caspian platforms, we shall have to follow the tanker’s four-day sea journey by other means.

  We settle into an internet café just down the road from the Yumurtalık harbour, where the battle between the fishermen and the coastguard had taken place. Through the window we can see the beach and Yumurtalık Bay, with its Venetian ruins. Earlier this morning we stood by the fishing boats in Gölovası and watched the great bulk of the Dugi Otok tanker prepare to depart from the jetty of the Ceyhan Terminal. Now we log into the computer to track the ship’s movement online. The website marinetraffic.com records the routes of a vast array of vessels, among them passenger ferries, yachts, container ships and tankers. A quick search brings up the details of the Dugi Otok, built in the Croatian city of Split and apparently launched only last year, in 2008. The website gives the exact latitude and longitude of the ship’s last announced position. A Google map shows it as a red arrowhead on the blue ground of the Mediterranean Sea by the coast of Turkey, next to the tiny white line of the terminal jetty.

  We will track the journey of the Dugi Otok to Muggia, with the use of this website and shipping forecasts, as we travel there ourselves by train via İstanbul, Bucharest and Vienna.

  DAY 1, 08:43 – 0 NM – 1,955 KM – İSKENDERUN BAY, TURKEY

  Deep in the belly of the tanker, the oilers and engineers are starting up the enormous diesel engine that will propel these 108,000 tonnes of steel across the water. The noise will be immense, all the crew wearing headphones. The injectors spray vaporised fuel into the six cylinders, shooting a mist of diesel molecules towards hot, densely compressed air. When the two substances collide, they ignite and combust, forcing the pistons in each cylinder up and down. The propeller shaft rotates, and with it the screw of the propeller itself, churning the water behind the ship and pushing the super-tanker forwards.

  Reaching the shipping channel, the tugs release Dugi Otok to its own steerage. The ship’s red prow smashes through the glassy Mediterranean waters, ploughing the clear blue into a mass of white. We watch from the shore as the tanker steams to the horizon, a thin plume of smoke rising from its funnel. On the ship itself, the captain and officers on the bridge will be able to see the Turkish coast dwindle to a purple line of mountains, the Taurus floating like a distant cloud.

  These tankers are the emissaries of Azeri geology, camel trains of the industrial age. Picking up where the pipeline leaves off, they distribute the dark matter across the surface of the earth. Having pumped their quota of crude 1,768 kilometres down a pipe, the oil companies either sell it directly at the Ceyhan Marine Terminal or ship it onwards to refineries abroad. Tankers flagged in Liberia, the Isle of Man and Panama ply the oceans, delivering Caspian crude to import terminals in Italy, Chile, England, China and elsewhere.

  This global oil trade does not just flow by itself. Every day, close to 100 million barrels of crude are collected from zones of extraction and delivered to points of consumption. Developing the Azeri–Chirag–Gunashli oilfield and constructing BTC meant more ships were built to carry the additional 1 million barrels per day. The Dugi Otok is one such vessel, for although she transports crude from and to a range of different terminals, the route from Ceyhan to Muggia is a key part of her itinerary.

  This mass relocation of great volumes of fossil fuels requires constant coordination of logistical and financial resources. Analysts in Geneva and London assess and counter-assess the profitability of particular shipments, aiming to maximise their return. Some deliveries are based on long-term commitments, but many others are short-term contracts betting on swings in the global oil price. Shifts in local demand redirect tankers from a short Mediterranean delivery to a major voyage across the Atlantic and through the Panama Canal.

  The paths taken across the water are less predetermined than rigid pipelines, yet there is nevertheless a global network of preferred tanker routes running across seas and oceans, through straits and canals, towards the destination ports. From the Ceyhan Terminal there are two primary marine Oil Roads: one runs south along the Syrian, Lebanese and Palestinian–Israeli coast to the Suez Canal, while the other initially heads west through the Greek islands towards either the Adriatic or southern Italy, the western Mediterranean or the Straits of Gibraltar.

  DAY 1, 11:09 – 48 NM – 2,044 KM – NORTH-EASTERN MEDITERRANEAN

  After the Dugi Otok passes over the horizon, a second tanker, the British Hawthorn, remains moored at the terminal jetty. Both vessels are bearing Azeri crude belonging to BP, but the British Hawthorn is managed directly by the oil company – a rarity in the world of crude shipments. BP Shipping operates forty oil tankers itself, named mostly after trees or birds: British Laurel, British Oak, British Eagle. But usually the oil major contracts in shipping companies such as the Croatian firm, Tankerska Plovidba, which manages Dugi Otok.

  The British Hawthorn will head for Thailand via the Suez Canal, and she is rigged to deter the threat of ‘Somali Pirates’. All BP ships travelling through the Gulf of Aden are under instruction to fix double rolls of concertina razor-wire around all their decks, and carry high-pressure water and foam hoses. In the past year, fast skiffs have launched from coves along Somalia’s 3,000 kilometres of coast, carrying grappling hooks and rope ladders. Since the Sirius Star, transporting 2 million barrels of Saudi oil, was captured in November 2008 and held for $3 million in ransom, tankers have become high-profile targets.

  The vessels and crew are usually released unharmed once a ransom is paid, but shipping associations nevertheless perceive themselves as a ‘system under attack’. The Gulf of Aden is publicly presented as ‘an important energy supply route’ and a ‘vital strategic artery’.1 By late 2010, Jan Kopernicki, the president of the British Chamber of Shipping, was doing the rounds of political and military leaders, speaking of the danger to European energy supplies. ‘I don’t want to be alarmist, but I provide transport for essential oil and gas for this country and I want to be sure that the lights are on in Birmingham, my home city’, he says. Kopernicki is also vice-president of Shell’s shipping arm. In this capacity he has argued that there is a ‘gaping hole in the UK’s defence strategy’. He insists that British Prime Minister David Cameron increase Royal Navy spending and bring forward the acquisition of a new generation of warships currently scheduled for after 2020.2

  UK, US, EU and NATO forces – including the HMS Portland, a British frigate – are already prowling the waters off Somalia. Armed with Lynx helicopters, torpedos and heavy artillery, the Portland can easily overpower the pirate’s skiffs and ‘mother ships’. It forms part of the US-led Combined Task Force 151, as do Marines, SuperCobra attack helicopters and unmanned MQ-9 Reaper drones. The Task Force is just one of various naval fleets patrolling these waters. When the British Hawthorn passes through the Gulf of Aden, she will probably register with Operation ATALANTA. This European fleet includes warships from Germany, France, Spain and Italy empowered by the UN to use ‘all necessary means’ to repress piracy.3

  ATALANTA is run from Northwood HQ, an extensive underground military complex beneath an oak wood in north-west London, just inside the M25 motorway. Many floors deep, behind steel blast-doors, Royal Navy officers coordinate the warships with nearby tanker traffic. Vessels are advised to travel in groups and at night, as ‘this enables military forces to “sanitise” the area ahead of the merchant ships’.4

  While the action takes place on the Indian Ocean, ultimate control is situated here in the bunker. Major General ‘Buster’ Howes is in overall command, but consults regularly with the most senior officer at sea, Rear Admiral Philippe Coindreau, a veteran of several 1980s French wars in Africa.5 Satellite imagery is beamed in from the EU Satellite Centre in Madrid and combined with geospatial intelligence shared by US GEOINT sta
ff at Fort Hood in Texas and Bethesda in Washington, DC. Real-time images are streamed from US drones scouring the waters off Somalia, remotely piloted from Creech Air Force Base in the Nevada Desert.6

  The communication between Northwood and the shipping companies is conducted by Merchant Navy liaison officers such as Captain Colin Shoolbraid and Captain Michael Hawkins. Although they’re based in the bunkers, and are part of the military operation, neither is actually a Royal Navy officer; both are employed by BP Shipping and seconded to the Navy.7

  So if the drone and satellite surveillance over these distant waters shows a skiff approaching the British Hawthorn, it might well be BP’s Captain Shoolbraid or Captain Hawkins who picks up the phone to Sunbury-on-Thames. Only a few kilometres south of Northwood, two exits down the M25, Sunbury is BP’s largest global office. From here, BP Shipping monitors and manages the company’s fleet.

  Backed by a global military network with nodes in Texas, Madrid, Nevada, Washington, Brussels, London and the Seychelles, the British Hawthorn will traverse the waters near Somalia. If need be, the HMS Portland, Reaper drones or SuperCobra helicopters will be dispatched to ensure that this part of the Oil Road is ‘sanitised’.

  DAY 2, 14:17 – 428 NM – 2,748 KM – ΡΌΔΟΣ (RHODES), GREECE

  We pick up the Dugi Otok on the marinetraffic.com website as she passes between the islands of Rhodes and Karpathos, and enters Greek territorial waters. The onscreen map shows holiday yachts, fast ferries and container ships dotted about the busy straits. The tanker is crossing the path taken by an earlier ship that carried the output of Baku oil wells in 1892, and changed the history of the global oil industry: the Murex. This famous ship broke John Rockefeller’s monopoly of the kerosene trade in the Far East by opening the Suez Canal to oil transportation. Her voyage is celebrated as the genesis of the Royal Dutch Shell company, but is also a story of nineteenth-century businessmen weakening health and safety regulations.

  By the late 1880s, the Rothschilds’ Batumi Oil Refining and Trading Company was struggling to maintain its profits from Caspian oil. The challenge lay not in extracting crude, for the oilfields around Baku were proving plentiful, but in where to sell the product from the refinery. The European kerosene market was saturated with supplies from the Caspian and the US. It came not only from the Rothschilds but also from the Nobels and Rockefeller’s Standard Oil. Threatened by a peak in European demand, the Rothschilds needed to expand into other markets. To do so, they had to break Standard Oil’s monopoly by selling their product cheaper.

  The cities of the Far East offered huge potential, but a means of transporting kerosene in bulk to these cities had to be developed. The product from the refinery at Batumi was packaged in large cans and exported. But transporting kerosene in cans across the Mediterranean and around the Cape of Good Hope made it too expensive and unable to undercut Standard Oil. A new type of ship would have to be built – an ocean-going tanker modelled on Ludvig Nobel’s Zoroaster, which shuttled across the Caspian. Furthermore, a new shipping route to the East would need to be developed.

  The Suez Canal, opened in 1869, offered a shorter journey time, which should have drastically reduced costs, but the Suez Canal Company had expressly forbidden the transit of kerosene for safety reasons. To tackle this problem, the Rothschilds went into partnership with Marcus Samuel, a merchant based in Aldgate, in the City of London. Samuel was to use his extensive network of contacts in the British trading houses that dominated European business in China, Japan and beyond. But in order to the make kerosene exports profitable, he would also need to use his political connections to dismantle the regulations governing the canal.

  Samuel travelled to Batumi and then, via the railway, to Baku. On his return to London he proposed an audacious plan to lobby the British government, a major shareholder in the Suez Canal Company, to alter the restrictions set down by the company. His persuasion worked. The Conservative government of the 3rd Marquess of Salisbury supported the proposal that would enable a British company, rather than an American one, to serve the markets of the Indian Raj and imperial possessions beyond. With this achieved, Samuel set about the construction of eight tank farms across the Far East, and commissioned ten tankers to be built at shipyards in the north-east of England. The innovative design of these vessels secured insurance approval from Lloyds of London – an essential condition for passage through the canal under the now weakened regulations.

  The first vessel, the Murex, was launched by Samuel’s wife on 28 May 1892. It arrived at Batumi under the command of Captain John Coundon two months later. Within weeks, the ship had travelled back across the Black Sea, passed through the Bosphorus, and made its way through the Greek islands, bound for the Suez Canal and the East.8

  DAY 3, 03:38 – 615 NM – 3,094 KM – NORTH OF CRETE

  As our train travels westwards from İstanbul through this moonless night, we think of the tanker far to the south, in the Sea of Crete. The weather is fine – no doubt gulls swoop around the ship, riding on the Dugi Otok’s tailwind. The vessel will be quiet, with just one officer alone on the night watch. The pale green light from the screens of the radar tracking devices will dimly illuminate the bridge. The display panels show the presence of other craft, but the seascape beyond the windows is utter blackness. Even through his binoculars, the officer cannot see a single light in any direction, neither from a ship nor from the land. The Dugi Otok is invisible.

  This is the usual condition for the oil tankers that constantly convey crude across the oceans. At any time of day or night, two-thirds of the world’s oil supply is afloat in the holds of ships travelling far offshore.9 These shy and awkward vessels are elusive, glimpsed only when they are docked at terminals or moored in sight of land, loaded with crude, waiting for the oil price to rise before they deliver their cargo.

  But when something goes wrong, when a vessel is hijacked or runs aground, this passage of the Oil Road drops its cloak of invisibility. The Torrey Canyon, the Amoco Cadiz, the Exxon Valdez: the names of these tankers are iconic because oil intended to remain invisible was unleashed as a poisonous reality. Their cargoes burst like a roaring tempest into the media and our memories.

  At 8 a.m. on 19 November 2002, the Prestige sank off Spain. It spilled 420,000 barrels of heavy fuel oil into the Atlantic, much of which washed up on the Galician coast. After the Greek captain was arrested and the clean-up began, there was an international investigation to discover whether the vessel was safe and who was responsible. The tanker was Greek-operated, owned by a Greek family using a Liberian shell company. She was officially registered in the Bahamas, and had been chartered by a Swiss-based subsidiary of a Russian conglomerate, also registered in the Bahamas. She was insured by the London Steam-Ship Owners’ Mutual Insurance Association, and classed – approved as being in compliance with all rules and regulations – by the American Bureau of Shipping. For four years, the government of Spain tried to claim $700 million for damages from the American Bureau of Shipping, but got nowhere.

  The Dugi Otok could run aground on any part of the Greek coastline. Her 790,000 barrels of Azeri Light, if spilled, would destroy the fisheries and marine life, as well as the allure of the Aegean and Ionian Islands for European holiday-makers. As tourism becomes increasingly the most lucrative industry in Greece, every passing tanker poses a disproportionate threat to the Greek economy. Yet the state gains no income, nor any transit fees, from this passage of oil through its territory. Should a disaster happen, who would carry the financial, reputational and legal consequences? Who would the Greek government try to sue? This ship, which flies a Croatian flag, is owned by Donat Maritime in Malta, managed by Tankerska Plovidba in Zadar, insured by Lloyds of London, and classed by Bureau Veritas, also in London. For this particular voyage, she has been chartered by BP Integrated Supply and Trading at Canary Wharf. On this night, the Dugi Otok is invisible, but her passage is watched over by the Hellenic Coast Guard, and her journey is logged by that web of companies in London
.

  The tanker sails on, her cargo intact, the coastal communities and the seas unscathed for now. But what remains in the hold of the Dugi Otok is still lethal to the environment and humanity. For the vessel is a bomb – a climatic bomb. When the crude that she carries is burned, in everything from refineries to car engines, it will release over 250,000 tonnes of carbon dioxide.10 On average, 500 such bombs will depart from Ceyhan each year, helping to convey 125 million tonnes of carbon dioxide from the lithosphere beneath the Caspian into the global atmosphere. The pipeline system is built on the assumption that it will continue to make this delivery for forty years.

  DAY 3, 12:55 – 745 NM – 3,335 KM – ΜΕΘΏΝΗ (METHONI), GREECE

  The Dugi Otok passes around the south-western tip of the Peloponnese, just offshore from the town of Methoni and its ruined fortress. This was a Venetian trading post, guarding the route from Venice to Laiazzo and other ports and colonies in the eastern Mediterranean. We catch a glimpse of the tanker on the marinetraffic.com website – a vessel on collision course with the global climate.

  The impending crash between hydrocarbons and climatic limits began to be understood in the 1970s, but was only raised seriously within government and industry in the run-up to the 1992 UN Earth Summit. Five years later, on 19 May 1997, with BP’s foothold in Azerbaijan secure and the Chirag oilfield about to come on stream, BP CEO John Browne gave a pivotal speech at Stanford University in California:

  The concentration of carbon dioxide in the atmosphere is rising, and the temperature of the earth’s surface is increasing. The time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven . . . but when the possibility cannot be discounted and is taken seriously by the society of which we are part.11

  He went on to disagree with those ‘who say we have to abandon the use of oil and gas’, but announced that BP would control its own carbon dioxide emissions, fund scientific research into climate change, develop alternative fuels and contribute to the public policy debate.