38 Robert Bugbee and Emanuele Lauro, Scorpio Group
As one of the shipping industry’s biggest cheerleaders for scrubber technology, Robert Bugbee and Emanuele Lauro are betting big that 2020 is going to be a stellar year for Scorpio Tankers, operating the world’s largest fleet of product tankers
After evangelising about an 'eco-fleet' of tankers, the president and chief executive are now staking the group's profitability on 75 of its vessels being fitted with scrubbers
THE shipping market upturn cannot come soon enough for Robert Bugbee and Emanuele Lauro, with their publicly listed Scorpio Tankers and Scorpio Bulkers failing to turn a profit since at least 2015.
However, revenue is up for both companies and there are hopes for a stellar 2020 — especially since the tanker company has bet big on the efficacy and economy of scrubber technology.
This year, Scorpio Tankers also completed a so-called ships-for-shares deal with oil trader Trafigura. The shipowner and operator of 138 refined product tankers acquired Trafigura’s leasehold interests in 19 product tankers in a deal valued at $803m.
Trafigura bought $135m in shares, giving it a 10% stake in the company, while Scorpio took on the $668m finance leasing agreement that covers the vessels.
However, the biggest bet Scorpio is taking is not in the sale and purchase market, but the fuel oil spread.
Scorpio is one of the biggest cheerleaders for scrubbers, the sulphur abatement system installed on board vessels that allows them to use cheaper, 3.5% fuel oil after January 2020.
Some 75 vessels in the fleet — all the long range and medium range tankers — are being retrofitted, with most ready in time for the regulatory change to lower-sulphur marine bunkers.
The evangelising of the benefits of Scorpio’s so-called 'eco-fleet' has long since abated.
Instead, Mr Bugbee and Mr Lauro now loudly champion scrubber technology, as well as a market rebalancing in 2019, with both arguing that demand for refined product tankers is finally catching up with supply.