Number juggler?

Tanker consultant Colin Pearce has been accused of a lack of expertise in deciding market levels while giving evidence at the $800m Sovcomflot corruption trial in London.

Pearce, a former Shell and Angelicoussis chartering supremo, was attacked by defendant Yuri Nikitin’s barrister Steven Berry over his assessment of the charter of two Sovcomflot aframaxes to Nikitin companies.

The 114,000-dwt Nevskiy Prospect and Ligovsky Prospect (built 2003) were chartered in March and May 2003 for $20,500 per day.

(Click here to read earlier exclusive reports from the Sovcomflot corruption trial as well as the interlocutory judgments in full.)

Berry said that in April, a sistership was fixed to Stena at the same rate.

He added: “Surely the Stena deal is the very best evidence of the market rate?”

Pearce responded: “Yes, I consider the Stena fixture to be a marker and a very good marker of the market.”

But Berry said Pearce’s report to the court preferred to base his market assessment on a later sub-charter of one of the Prospect tankers to Dukkar of Geneva and contains his opinion that the Nikitin Prospect deals "did not reflect a sufficient ice-class premium.”

Pearce said: “The fixtures undervalued the ice rate. The Stena deal was below market opinion.”

After questioning Pearce’s own experience of ice-class chartering, which the consultant admitted was limited, Berry countered: “Aren’t you just juggling the figures here from a position of no expertise?”

Pearce answered: “No, I was giving an opinion of what the market was worth.”

Later, when discussing the big gap between the upper and lower limits of a market range for suezmax time charters suggested by Pearce, Berry said again: “Doesn’t this show you can juggle as many numbers as you like but due to the paucity of fixtures, what you call a market rate is just a guess?”

Pearce said: “I don’t juggle numbers. I tried to do my best based on my opinion and the figures available to me.”

Berry then highlighted Pearce’s view of the charter of Sovcomflot’s 155,000-dwt suezmax Romea Champion (built 1992) to a Nikitin company in 2004.

The Russian owner received $30,500 per day for two years with a two-year charterer’s option.

In his report, Pearce added a $20,000 per day ice premium to his assessment of the market, giving a figure of $50,000 per day.

Berry said: “Isn’t this a totally invalid method?”

Pearce responded: “No.”

The trial continues.

Printable version Newsletter sign up