Oil tanker ordered by Total, others can’t unload after Malagasy decree

A group of companies including TotalEnergies SE warned that Madagascar’s requisition of the island’s only oil-storage facility could disrupt fuel supplies by preventing tankers from unloading.

The government last week decreed that it would need the Galana storage facility, owned by Rubis Energie SAS, in the port of Toamasina, to unload a tanker that arrived on Wednesday carrying 67 million litres (17.7 million gallons) of diesel for use in power plants operated by state utility Jirama.

The companies, represented by the Groupement Pétrolier de Madagascar, had scheduled their own tanker, carrying diesel, gasoline and kerosene, to arrive at about the same time. The lack of storage will make it difficult for the Torm Eva to offload its cargo. The ship can carry about 71,000 metric tons of oil products, data compiled by Bloomberg show. Madagascar’s total annual consumption of oil products is about 1 million tons.

The order makes “it impossible to unload the vessel chartered under the GPM’s supply program,” the group, whose members also include Rubis and Vitol SA, said in a note on Aug. 11 to customers and seen by Bloomberg. The decision “could affect the balance of available stocks and, consequently, nationwide distribution,” it said.

The diesel shipment for Jirama, carried by the Liberian-flagged Sunda 1 tanker, follows a July 1 law creating a state-run oil company responsible for fuel imports. The move ended a 25-year arrangement under which GPM members, including a unit of local company Axian Group, handled imports.

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“We have imported fuel directly from abroad. This is a major step because, for several years, previous leaders had not dared to undertake such an initiative,” Madagascan President Michael Randrianirina said after the Sunda 1 docked. “We had always depended on our previous partners. I am not saying that these former partners were bad, but we believe that this new approach could help save Jirama.”

Randrianirina said the step will cut fuel costs for the power company but also cautioned the company to avoid losing its fuel to theft.

In letters to the government, seen by Bloomberg earlier, GPM expressed concern that authorities could import oil products from sanctioned suppliers and they would then be unable to handle them.

Russia has held talks with Madagascar over building fuel storage facilities in the country. The GPM declined to comment when contacted by Bloomberg.

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“The GPM stresses that its members cannot be held responsible for any consequences affecting the availability, regularity, or distribution of petroleum products resulting from decisions that unilaterally alter a supply system that had already been planned and committed to,” the group said in a statement sent to its customers seen by Bloomberg.

The Sunda 1, identified as the ship carrying the diesel by the oil minister last week, has been traveling to Toamasina from China’s Qinglanshan Oil Terminal, data compiled by Bloomberg shows. The Torm Eva is a Danish-flagged tanker, that loaded in the Persian Gulf.

“What would be the reason for a disruption in fuel supplies in Madagascar?” Randrianirina said. “An agreement needs to be reached and the situation resolved calmly.”

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