SERGEY Frank, president and chief executive of Russia’s largest shipowner, is navigating the 26-year-old company during difficult economic times amid growing geopolitical turmoil over the Federation’s action in Ukraine and Western energy sanctions.
The company released figures showing it was back in the black in the first half of 2014, but Mr Frank still faces his toughest challenges, even after steering the world’s fifth-largest owner of tankers through five successive years of poor rates.
His most pressing task will be to raise more money to fund projects that expand and diversify Sovcomflot from its traditional shipping base to support the Kremlin’s energy projects. It is clear that Sovcomflot, in which the Russian Federation is the main shareholder, has missed the IPO boat and the chance to partially privatise, just as fresh European and US sanctions on Russian energy-related activities make funding harder to secure. Under Mr Frank’s leadership Sovcomflot has put a line underneath the corruption scandals and later court action that attracted unwelcome headlines over the past five years.
By consolidating with other Russian owners, Mr Frank helped to develop the world’s second-largest product tanker fleet, some 50 of its 158 ships of ice-class standard. Sovcomflot provides global leadership in the evolving field of Arctic shipping, and leading test shipments through the northern sea route. Mr Frank is no doubt keeping sweet with his western bankers with newbuilding contracts of nearly $840m in first half of the year, all backed up with time charters. Along with others, the company’s orderbook is worth nearly $1.4bn.
After working hard to promote Sovcomflot on a global footing and expanding into new sectors — a new very large crude carrier launched 12 months ago — the company does appear to be looking inwards, to Russia’s energy sector, for new business. It is forging a role as an industrial shipper for Gazprom and other national companies. It aims to secure contracts for offshore, hydrocarbon fields in the Arctic regions, a goal now in jeopardy as sanctions deter oil major partners. Already supporting energy projects in Sakhalin I and Sakhalin II, Varandey and Prirazlomno, Sovcomflot says its fleet transports 5% of the world’s oil and petrochemicals. Mr Frank appeared in the Lloyd's List Top 100 in 2013, 2012, 2011 and 2010.
Lloyd's List 100 http://www.lloydslist.com/ll/news/top100/article453209.ece