ABSTRACT
A shipowner had a difficult decision to make. He had ordered two 280,000 dwt VLCCs which an oil company was prepared to charter for five years at $33,000 per day. This would guarantee revenue to cover his finance costs for the first five years of the ship's life, but the return on his equity worked out at only 6 per cent 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.
