Container Ship Stranded in UK Shipping Lane , by Marex

Container ship

By Wendy Laursen

A container ship adrift in a major shipping lane off the coast of Essex in the UK has managed to restart its journey.

Weather conditions were worsening when lifeboats from the Royal National Lifeboat Institute (RNLI) attended the scene approximately 20 miles off the coast, a key route between Hamburg and the UK on Saturday.

The crew of the ANL Warringa were eventually able to halt the vessel’s drift and get an anchor down near a windfarm. BBC News reports that one lifeboat remained on the scene awaiting the arrival of commercial tugs to tow the ship to port.

About midnight on Saturday, the ship’s engineers were able to restart the engines.

The 50,000 ton vessel, with a crew of 28, was on its way to Hamburg from Tilbury.

Photo: Sheerness ILB Eleanor Credit: RNLI/Sophie Coller-Nielsen

Getting Drawn into China’s New Litigation Laws , by Marex

China arrest

By Steffen Pedersen

New litigation laws have just made China a more attractive place to arrest ships. 

While China cannot yet be considered a jurisdiction of choice for foreign litigants to resolve their disputes, being a major international trading nation and home to the world’s biggest ports makes China an ideal place for parties to seek to arrest ships for security.  

New regulations came into force on March 1, 2015. The regulations, entitled “The Regulations on Certain Issues Concerning the Application of Law relating to Arrest and Auction of Ships”, supplement existing regulations in China’s Special Maritime Procedure Law.  

Some of the key changes are:

Sale of a vessel following arrest for a claim against a bareboat charter

The Special Maritime Procedure Law was unclear about whether a bareboat chartered vessel arrested for a claim against the bareboat charterer could be sold. The logic was that it would deprive the owner of his possession for something he was not liable for. This has now been clarified so that such a vessel can be sold.    

This is a concern for owners in theory. They may lose their vessel. In practice though it is unlikely things would ever get that far. Insurers, charterers, guarantors or the owners themselves could simply put up security to avoid a judicial sale. 

What is certain, however, is that the arrest of bareboat chartered vessels is now more attractive in China. This might be a concern for financing houses that commonly finance vessels by acting as owners in bareboat charters. They could suddenly be drawn into arrest proceedings, and faced with losing their asset. 

Multiple Arrests Are Now Possible

Prior to March 1, 2015, only one arrest could exist at a time over a vessel in China. If a second party wanted to arrest a vessel this could only be done after the prior earlier arrest was lifted.  

The regulations now allow a second (and more) arresters to arrest, but such a subsequent arresting party can also apply for the vessel to be sold at auction even if the party who first arrested the vessel does not make such an application. This clearly increases risks faced by shipowners, and gives an impetus to an arresting party and the shipowner to resolve arrests quickly, before things get out of control. 

“Paper” Arrest Possible 

An applicant may now apply to the Chinese court for an injunction to restrict disposal of, or registration of mortgages over, vessels.

Previously this measure was only possible after a physical arrest had taken place – no longer. In practice such an order from the Chinese courts is only of concern to those who have vessels flying the Chinese flag. But this is a useful tool for litigants to ensure that a vessel is not sold, or otherwise encumbered to such an extent that makes them uninteresting as arrest targets. This will be useful for those with claims against Chinese shipowners.  

Standardization of Counter Security

Previously the method adopted by the courts when calculating the amount of countersecurity required to be posted before an arrest order varied significantly from court to court. 

The regulations provide that the amount of countersecurity to be posted shall be the total of the possible maintenance costs to be incurred during the arresting period, the loss of hire to be caused by the arrest and the respondent’s costs of posting countersecurity to release the ship. 

Unfortunately the regulations do not provide any guidance on how the court will estimate the length of any arrest period and in reality this means that the approach taken to the courts is likely still to vary considerably from court to court. 

Procedure for Auction Sale

The regulations simplify the procedures governing the conduct of a judicial sale. In short the steps are now: 1.    Secret valuation of the vessel by the court. 2.    Reserve price for first auction set at 80 percent of valuation.   3.    If reserve price not attained a second auction is held with the reserve being 80 percent of the original reserve, or 64 percent of the valuation. 4.    If reserve still not met then a sale may take place at 50 percent of the valuation, or above.  5.    If still not sold the vessel can be sold below 50 percent of the valuation if 2/3 of registered creditors by value agree.

The regulations emphasize that the auction of a vessel under arrest shall be executed by the maritime court’s vessel auction committee. The maritime court is prohibited from authorizing a commercial auction company to handle the auction sale.   

Other clarifications

Other clarifications of the regulations include provisions regarding return of counter security, management of the arrested ship, execution of the arrest and the order of payment out of sales proceeds.  

All in all the regulations are to be welcomed as clarifying and standardizing the law in China further. Whilst there is still work to be done, this is a step in the right direction to making China an attractive place seek security.  

This entry has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts.

Greece Rethinks China Port Sale, by Marex


Greek PM

Greek Prime Minister Alexis Tsipras

By MarEx 

As Greece races to raise funds, Deputy Prime Minister Yannis Dragasakis told China’s official Xinhua news agency that Athens will sell its majority stake in the port of Piraeus within weeks, a flip-flop from its previous position.

Speaking during a visit by Greek officials to China, Dragasakis hinted that Chinese firm Cosco Group – short-listed in a process launched by the previous center-right government – was a front runner for the state’s 67 percent stake.

And as Greece seeks to fill its state coffers, the Russian ambassador to Athens told Kathimerini newspaper that Moscow would examine any loan request from Greece, were it to be made.

Greek Prime Minister Alexis Tsipras is due to visit Moscow on April 8 for talks with Russian President Vladimir Putin but the Greek government has stressed it is not seeking funding from the Kremlin.

On Saturday, Greece’s energy ministry said Lafazanis will meet Russian Energy Minister Alexander Novak and Gazprom Chief Executive Alexei Miller on Monday in the capital, a week before Tsipras is due to arrive.

The previous center-right government had planned to accelerate the sale of a 65 percent stake in gas utility DEPA, after an initial attempt to sell to Gazprom in 2013 failed. Within days of Syriza taking power in January, Lafazanis said he would scrap the sale.

DEPA has previously negotiated with Gazprom in a bid to get cheaper gas supplies and was one of the first European companies to obtain a rebate in 2011.

The two countries, which are both Orthodox Christian, have traditionally had good relations and Athens has never strongly supported sanctions against Russia over the conflict in Ukraine. 

Tsipras Placates Europe

Tsipras said on Saturday that he sought no rift with Europe after his cash-strapped country submitted a list of reforms to its lenders in a bid to secure much-needed funds.

Tsipras’ leftist government agreed an extension to its 240-million euro bailout fund in February, albeit with aid frozen, and now must agree on a set of reforms which it sent to its EU-IMF creditors on Friday in order to stave off bankruptcy.

The austerity-weary nation will run out of money by April 20, a source told Reuters on Tuesday, if it does not unlock much-needed funding.

“The liquidity problem is naturally hampering the situation but I believe that will be tackled immediately once we reach an agreement over reforms,” Tsipras said in an interview with Sunday’s Real News newspaper.

After answering a question regarding government attempts to deal with corruption, Tsipras was asked whether he wanted a rift or a solution with Greece’s partners: “My view has always been the same: a break from corruption, a solution with Europe.”

Earlier Energy Minister Panagiotis Lafazanis, one of Tsipras’ most left-wing ministers, hit out at a “Germanized European Union… for tightening week by week the noose around the Greek economy.”

Athens says its reforms will boost state revenues by 3 billion euros ($3.3 billion) in 2015, partly by tackling tax evasion, but that it will oppose any new “recessionary measures” such as further wage or pension cuts.

As talks unfold, Finance Minister Varoufakis told Vima newspaper on Sunday that the reforms would not include a rise in VAT, which had been a concern on Greece’s islands where rates are lower, but changes to tax collection would be made.

Varoufakis was the center of speculation on Friday following a report in the German newspaper Bild that a Greek government source had said it was only a matter of time before he resigned. But Tsipras said Varoufakis was “one of the key members of the government”. (1 US dollar = 0.9185 euro)

ExxonMobil CEO Says U.S. Needs to Change , by Marex

Exxon CEO

By MarEx

The U.S. government needs to adjust its energy policies to ensure that America can realize all the benefits of the new era of energy abundance, Rex W. Tillerson, chairman and chief executive of Exxon Mobil Corporation said on Thursday.

“We need sound energy policies – policies equal to the innovation that has redefined the modern energy landscape,” Tillerson said in an address to The Economic Club of Washington. “It is time to build policies that reflect our newfound abundance – that view the future with optimism, that recognize the power of free markets to drive innovation, and that proceed with the conviction that free trade brings prosperity and progress.”

As examples, Tillerson said that Congress and the White House need to enable U.S. exports of oil and natural gas, approve the Keystone XL pipeline, and make the regulatory process less burdensome and more transparent.

“With free trade in energy and common-sense regulatory reforms, the U.S. energy industry can strengthen U.S. energy security and continue to pioneer the innovations that make possible the safe and responsible development of energy. No one can say for sure how the industry will evolve next or where it will go – but one of the enduring lessons of our industry is that sound policy rewards wide and disciplined investments, spurs economic growth and improved environmental performance, and leads to greater peace and prosperity.”

Tillerson also hailed the recent growth in the U.S. energy sector, and its impact on the American economy, noting that while the energy sector accounts for just under seven percent of the American economy, it has accounted for about 30 percent of the nation’s economic growth since the 2008 financial crisis.

“The energy industry has been an economic engine for the entire nation at a time of recession, slow growth, and falling labor participation rates,” Tillerson said.

A major driver in the industry’s expansion, Tillerson said, has been breakthroughs in the integration of hydraulic fracturing and horizontal drilling, a renaissance that is now bringing economic benefits to all 48 states in the continental U.S. along with unanticipated environmental gains.

“Because natural gas emits up to 60 percent less carbon dioxide than other major sources when used for power generation, our abundant and reliable supplies have been instrumental in reducing our nation’s carbon dioxide emissions to levels not seen since the early 1990s.”

He noted that industry has a responsibility to meet the two-pronged challenge of providing for the world’s energy needs while protecting the environment. “The global economy will need sound economic reasoning and more sensible policies to fully leverage this moment to meet the energy and environmental challenges of the future.” 

Scrubber Discharge Impacts Questioned , by Marex

Scrubber 1

By Wendy Laursen

The ecological risks associated with scrubber use are ignored, while the economic expectations are overestimated, said the German environmental organization Nature and Biodiversity Conservation Union (NABU) on releasing the results of a study conducted by the Dutch research institute CE Delft.

“Obviously, no one has seriously investigated the effects of scrubbers on the marine environment before this technique has been found as a possible solution to the European sulfur directive,” says NABU CEO Leif Miller. “In this case, it really ought to be clear that there is hardly an improvement when pollutants that have been blown into the air, will now be discharged into the sea.”

The study found that while all available monitoring reports show that the IMO discharge guidelines generally can be met, with a few single measurements as exceptions, this does not imply that the wash water discharge cannot have on impact on local ecosystems.

If scrubbers are used at a larger scale, they may have a negative impact on the marine environment due to acidification, eutrophication and the accumulation of hazardous hydrocarbons and heavy metals, the report states.

IMO sets limits on turbidity, pH, polycyclic aromatic hydrocarbons (PAH) concentration and nitrate concentration, and the sludge generated by scrubbers must be delivered to shore reception facilities. However, IMO does not directly limit concentrations of metals in the wash water discharge, rather turbidity is monitored as a surrogate for suspended solids. 

Heavy metals in wash water

The metals found in wash water are reported to be of different origin, and the report indicates that:

  •  System materials, typically iron, copper and zinc may be a source of metals. The reduced pH of the washing water will increase the solubility of the metal ions. Therefore, the choice of materials is very important. •    System inlet water may contain metals found in seawater or from electrochemical protection to prevent fouling of seawater pipes. •    Combustion of fuel and lubricants typically result in the emission of vanadium, nickel, calcium and zinc. The majority of heavy fuel oil consists of metals that naturally occur in oil, principally vanadium and nickel, which are oil soluble.

A research study cited reports the ability of scrubbers to trap nickel and vanadium from exhaust gases as limited, resulting from a measuring campaign on the Ro-Ro Ficaria Seaways. The capture rate of the scrubber for these substances was between less than one and 39 percent, depending on the sulfur content of the fuel.

The report concludes: “The long term impacts of the use of open loop scrubbers, especially in vulnerable coastal areas with a reported moderate water quality, therefore needs to be investigated systematically by measuring and modelling of the water quality. On the basis of such results, it should be evaluated if scrubbers can be used in accordance with the European Water Framework Directive and Marine Strategy Framework Directive that set maximum concentrations for certain hazardous pollutants, prohibit deterioration of water quality, and aim to achieve ‘good environmental status’ respectively.”

Conclusions contrary to earlier findings

However, a Danish EPA study released in 2012 found that, compared to current environmental acceptability levels, the releases from scrubbers can be expected to be considerably below the levels of ecological concern.

“Specific hazardous substances such as heavy metals and metalloids, polycyclic aromatic hydrocarbons (PAH), PCB and oil hydrocarbons will also be released with scrubber water. However, the resulting concentrations in the sea will be orders of magnitude below the levels of concern as expressed e.g. by EU’s environmental quality standards (EQS) for the marine environment. Thus, the concentration of the most critical substances in relation to this criterion, the metals nickel and copper, will still be more than two orders of magnitude below the EQS.”

Comparing ecological impacts

The NABU report calls for the use of low sulfur fuels, in particular LNG, as the increase use of MGO could result in an increase of GHG refinery emissions of around 6.5 percent.

Due to the additional power needed to drive pumps and caustic soda consumption, the estimated additional GHG emissions arising from the use of scrubbers range between 1.5 and 3.5 percent, including caustic soda consumption for the latter figure. 

The full report can be found here.

Scrubber 2

Finance Hitch for Great Barrier Reef Port , by Marex


By MarEx

State Bank of India is preparing to turn down a $1 billion loan request from Adani Enterprises intended for a coal project in Australia, scrapping an agreement signed last year, sources with direct knowledge of the move said.

The sources said India’s largest bank had not yet given Adani official notice of the internal ruling, but they said the decision was now due to be communicated to the group.

A preliminary loan deal struck in November, and signed during a visit to Australia by Indian Prime Minister Narendra Modi, caused uproar in India, where opposition politicians criticized the record loan to a group whose founder is perceived as close to Modi.

State Bank of India (SBI), which like all Indian state banks is under pressure to reduce its bad debts, said at the time that the signed deal was simply a memorandum of understanding. It would, it said, complete proper due diligence and a project appraisal before giving out any cash.

“The credit guys are not comfortable with the project,” said one of the sources. “Nothing is moving on that project.”

A second source said on Friday that SBI weighed factors including poor coal prices and the lengthy timeline of the $7 billion coal project before turning down the loan request. Many Queensland coal mines are running at a loss.

But Adani’s Australian project has also been hit by political and environmental opposition, amid protests over the potential impact to the Great Barrier Reef. Adani has said it met a string of environmental conditions.

“It is a challenging project,” said the second source. “The bank has to look at foreign exchange risk also.”

While the final decision has been keenly awaited, few in the industry had expected the SBI to press ahead with what would have been the largest ever loan granted by an Indian state bank for an overseas project.

But the confirmation brought relief to some investors at a time when India’s state banks are under pressure to clean up their balance sheets and to carry out tougher due diligence after years of profligate lending.

“The assumptions of when Adani bought the project are simply not valid any more, due to the coal price slump,” said U.R. Bhat, managing director at Dalton Capital in Mumbai.

A separate source with knowledge of the loan said Adani, which had more than $11 billion of debt on its balance sheet at the end of September, had been expecting a “no” from SBI and had already begun talks with other lenders.

“They knew things would not go their way …. There was always a plan B, and now plan B is activated,” that source said.

SBI and Adani did not respond to requests for comment.

($1 = 63.0155 Indian rupees)

Copyright Reuters 2015.

Venezuela Claims $46m Tidewater Payout as Win, by Marex


By MarEx

A World Bank tribunal has ordered Venezuela to pay oil service company Tidewater around $46 million in compensation for seized vessels, in a decision the South American country hailed as a victory.

The claim, one of many similar cases, stems from the 14-year rule of late leader Hugo Chavez, who made sweeping nationalizations a cornerstone of his socialist administration.

However, this award is far smaller than the hefty arbitration decisions that have hit cash-strapped Venezuela in recent months.

Eleven Tidewater ships were seized in 2009 by Venezuelan authorities after signing a law to nationalize them, according to Tidewater.

“The much higher amounts claimed were rejected because the tribunal found that the nationalization was lawful,” lawyer George Kahale, who represented Venezuela in the case, told Reuters on Sunday.

“Venezuela’s positions on the central issues of the legality of the nationalization, the appropriate valuation date for determining compensation, and the appropriate discount rate for calculating compensation were all accepted by the tribunal in what is likely to be an important precedent for other cases,” added Kahale, of Curtis, Mallet-Prevost, Colt & Mosle LLP.

The award includes some $44 million in invoices owed.

When asked whether the OPEC country might seek revisions or the annulment of the award, Kahale said the decision would be “carefully reviewed”.

Venezuela was this month ordered to pay U.S. bottle maker Owens-Illinois over $455 million. Last year, the World Bank’s International Center for Settlement of Investment Disputes (ICSID) ordered it pay Exxon Mobil Corp $1.6 billion.

Copyright Reuters 2015.

Modi Marks Out His Territory , by Marex

Modi 2

By Wendy Laursen

The Indian Ocean has been dominated by foreign powers for 300 years, but Indian Prime Minister Narendra Modi’s tour of the Seychelles, Mauritius and Sri Lanka last week demonstrates that he is now reclaiming the deeper cultural connection between Indian Ocean island states and “mother India.”

On his March 10 to 14 tour Modi made a plea for the peaceful resolution of maritime issues and respect for international maritime rules. He called for a strengthening of Indian Ocean relations while in Mauritius where he commissioned the island nation’s latest coastal patrol vessel. 

The 1,300 ton Indian-built patrol boat Barracuda will be used to help Mauritius police its vast 2.3 million square kilometer exclusive economic zone. “She will be there to help in times of disasters and emergencies. But she will do more than that. She will also help make our Indian Ocean safer and more secure,” Modi said.

Rather than grouping regions by land masses, Modi told his host Prime Minister Anerood Jugnauth that he wanted an Indian Ocean grouping. “We will pursue this with new vigour in the years ahead,” he said, adding that Mauritius would make an ideal host for the Indian Ocean Regional Association (IORA).

Modi out to impress China and U.S.

Modi’s island tour is expected to be seen as a move to re-affirm India’s central role in the region in the eyes of both China and the U.S. While acknowledging that China has a growing presence, and that there are other nations around the world with stakes in the region, Modi said those who live in the region have the primary responsibility for peace, stability and prosperity. Around 20 countries border the Indian Ocean including South Africa, Iran, Indonesia and Australia, however India is geographically central. 

Modi has made a string of Indian foreign policy firsts since he came to power in May 2014. He was the first to invite leaders from neighbouring nations to his swearing in, the first to host a U.S. president at the nation’s Republic Day celebrations and the first to articulate the need for India to step in on threats to global peace and security.

Two agreements signed during Modi’s tour reveal a distinctively Indian vision for a security umbrella in the Indian Ocean, reports the Economic Times of India. India has acquired infrastructure development rights for Assumption Island (Seychelles) and the Agalega Islands (Mauritius), two strategic Indian Ocean outposts. By operating and sharing surveillance systems on these islets, India is perceived as explicitly helping the island nations “assess the moves of unsavoury elements in the region.” 

U.S. weak on piracy

Locally in India, the U.S. is perceived as being less interested in policing in the Indian Ocean since its historical establishment of power after the British lessened their role in the region last century. “The most startling evidence that the U.S. is out of the game was the spread of the Somali pirates between 2005 and 2011. Here was the sort of low-tech problem a superpower could handle with a flick of the wrist. Instead, it was Indian and other navies that had to beat the pirates back,” reports an analyst from The Hindustan Times.  

Instead, the piracy problem has given China a valid reason for boosting its naval presence in the Indian Ocean, and last year Chinese intelligence gathering ships began making regular forays into the Indian Ocean. Last year, China also held its first military exercise in the region. 

Sri Lankan oil move

The Indian Ocean carries around 40 percent of China’s oil and gas imports. It also carriers 90 percent of India’s trade and oil imports. Recognition of the importance of oil led to another significant announcement during Modi’s tour – India will develop the oil storage facility near Trincomalee in Eastern Sri Lanka. The China Bay Tank farm is the largest depot between West Asia and Singapore and serves as a major fuel supply hub for ships sailing between the Persian Gulf and East Asia. 

Modi’s island tour marks the first Sri Lankan visit by an Indian leader in over 25 years, and Modi said the security of the two nations is “indivisible”. A statement released by Modi’s Bharatiya Janata Party (BJP) said: “Prime Minister Narendra Modi’s visit after three decades has proved to be a historic visit. Prime Minister’s visit to Jaffna has sent a very positive message to Tamils living in the Northern Province of Sri Lanka. He also flagged the fishermen issue, and his address to the Sri Lankan Parliament was very grandly appreciated.”

The “fishermen issue” relates to a human rights concern. According to BJP spokesperson GVL Narasimha Rao, “there are reports that five fishermen have been attacked by the Sri Lankan Navy, I think this a long time problem. This is a humanitarian issue. Sri Lanka responded favourably when the Prime Minister went to Sri Lanka, Indian fishermen were released.”

The sceptics

The Indian Ocean region is at the top of our policy priorities, said Modi during the tour, but some are dubious about his ability to follow through on promises. “While Modi’s approach to the Indian Ocean region underlines its significance for India’s regional strategic interests and global ambitions and, doubtless, seeks to redress decades of neglect by India’s leadership, the initiative lacks clarity and the necessary capacity to succeed,” says W.P.S Sidhu, a senior fellow for foreign policy at Brookings India and a senior fellow at the Center on International Cooperation, New York University, on Livemint. For example, India is struggling to get financing and construction of Chabahar port in Iran underway and has only supplied Mauritius with one Indian-built coast guard vessel, says Sidhu, far less than what China is pouring in to infrastructure development in the region.

Modi around the world

Modi is off to Europe and Canada next month, with the EU hoping to restart stalled discussions on the Broad-based Trade and Investment Agreement (BTIA) that has been under negotiation since 2007. Modi has made a strong impression globally for his economic reforms, as demonstrated by the EU-owned European Investment Bank which is planning to open its first office in the country this year. 

Additionally, India’s position on the Ukraine crisis is viewed as more sympathetic to Russia than the EU’s position, and the EU thinks that India can play an important role in finding a peaceful solution, reports local Indian media.

Modi Woos Indian Ocean Island Nations , by Marex

12. Modi

By MarEx

Indian Prime Minister Narendra Modi will offer island nations in the Indian Ocean a broad range of military and civilian assistance next week in a bid to wrest back some of the influence China has gained by spending billions of dollars in the region.

Modi will make the pledges during a visit to Sri Lanka, the Maldives, Mauritius and Seychelles after decades of neglect by successive Indian governments. His trip to Sri Lanka will be the first in 28 years by an Indian prime minister.

China has built seaports, power plants and highways across the small island nations. Its navy has also made forays into the Indian Ocean, including when submarines docked last year in Sri Lanka, rattling New Delhi, which has an uneasy relationship with Beijing.

New Delhi is hoping to tie the islands into a closer security embrace, Indian officials said.

“India has a role as a net security provider in the Indian Ocean region,” said a defense official involved in preparations for Modi’s trip, which begins on March 10. “We are providing patrol ships, surveillance radars and ocean mapping for the island states.”

At the top of Modi’s agenda is Sri Lanka, the tear-shaped island off the southern coast of India where a new government, concerned at Beijing’s growing influence, is reviewing infrastructure contracts the previous administration awarded to China. It has also ruled out additional Chinese submarine visits in the near future.

Modi is expected to tighten defense and security cooperation and push for final approval for a 500 MW power plant to be built by India’s state-run National Thermal Power Corporation under a 2012 agreement in Trincomalee, a strategic port in eastern Sri Lanka, Indian officials said.

The two sides were also in talks to upgrade military training, a Sri Lankan government official said.


During the past year, the Indian defense ministry carried out a survey to identify the maritime needs of the island nations and has begun addressing them, the Indian defense official said.

a sanctuary in t

Modi will commission a 1,300-tonne Indian-built patrol vessel in Mauritius, the first of such sales which include fast attack craft under construction in Indian shipyards.

“We have practically given Mauritius a coastguard,” said Commodore Ranjit Rai, a former head of Indian naval intelligence and operations.

Other nations require similar maritime assistance, according to the Indian defense ministry assessment.

Sri Lanka also needs help with fisheries patrols while the Maldives needs assistance with surveillance against piracy as well as the threat of Islamic State supporters finding he island chain.

Meanwhile, India and Seychelles are expected to sign an agreement on mapping of the waters around the archipelago during Modi’s visit.

At the same time, China is upgrading the Maldives’ international airport after authorities cancelled a deal with an Indian firm in 2012.

China has in the past also considered Seychelles as a potential resupply port for navy ships taking part in anti-piracy operations off Africa. Its submarines, one of them nuclear-powered, docked in Sri Lanka on their way to join the anti-piracy operations.

But Modi should not push the smaller states to choose between India and China, said Vijay Sakhuja, director of the government-funded National Maritime Foundation of India and a specialist on Indian Ocean security issues.

“China’s overt military support to the Maldives, Sri Lanka, Seychelles and Mauritius is an issue which has caused enormous anxiety in India. Notwithstanding that, it will be prudent for Modi to avoid raising the issue, which could result in an “India or China” dilemma.” Copyright Reuters 2015.

Coast Guard Monitors Distressed Fuel-carrying Vessel, by Marex

No. 12 Fuel Ship

By MarEx

The Coast Guard is monitoring a vessel that lost propulsion and briefly grounded in the vicinity of Welch Island, Wednesday.

The crew of the 738-foot bulk carrier Miyama is currently underway enroute to Kalama north berth, after having effected repairs to their propulsion system, with the tugs Deschutes and Sommer S escorting the vessel.

Watchstanders at Coast Guard Sector Columbia River received a report from Columbia River Pilots stating the vessel ran aground around 11:20 a.m. The watchstanders directed the launch of an MH-60 Jayhawk helicopter crew, out of Coast Guard Air Station Astoria, to survey the vessel and surrounding area. No visible pollution, damage or injuries have been reported.

An initial attempt to refloat the vessel was made during high tide at 1:30 p.m. with the assistance of the tugs, but was unsuccessful. The vessel floated free about 20 minutes later.

The vessel will be attended by personnel from the NKK class society and Coast Guard inspectors prior to resuming any regularly scheduled voyage.

“The Coast Guard is actively monitoring the cargo vessel Miyama as the vessel makes way toward Kalama,” said Lt. Cmdr. Ben Russell, inspections division chief at Marine Safety Unit Portland. “Coast Guard personnel are investigating the cause of the mechanical failure and will continue to monitor the situation.”

The vessel reportedly lost propulsion due to a cracked cylinder and has approximately 19,500 gallons of fuel and 23 personnel aboard.