ABSTRACT
A shipowner had a difficult decision to make. He was about to take delivery of two 300,000 dwt VLCCs which an oil company was prepared to charter for 5 years at $37,000 per day each. This would guarantee revenue to cover his finance costs for the 5 years of the ship’s life, but the return on his equity worked out at only 6% per annum. Not much for the risk he had taken in ordering the ships. In addition, the time charter would shut him out from the tanker boom he felt sure would happen in the next few years.
