The Bucyrus
While I was at Aminoil, their marketing and trading department had a most unusual sales problem. It had nothing to do with my work in New York, but the marketing people were in the office several evenings – late into the night , and I was privy to some of their discussions. The problem arose because of a trade the Aminoil people made. They used their knowledge of worldwide oil prices to occasionally buy oil and ship it to another part of the world for a trading profit.
Aminoil had chartered a tanker, the Bucyrus, to transport just such oil from a refinery in the Mediterranean to a loyal customer in Japan. When the ship arrived at the port in Japan, the man who opened the hold actually walked on the oil. The oil had solidified. And Aminoil now owned what was jokingly called “a floating candle.” Although at this moment, nobody saw much humor in the situation. Oil trading was a wild business with many unsavory characters, and “caveat emptor” was very much the rule of the day. In parts of the world, a few dollars to the right customs official could buy almost any inspection report one wanted.
The Bucyrus had delivered a cargo that was perhaps going to be worthless. But over several days, with lots of phone calls and even trips to Japan, the head of Aminoil marketing called in many favors and salvaged a big part of the shipment.
The ship had been chartered for this single voyage. When Aminoil maritime attorneys tried to contact the charter operator, they found that the ship was registered to a Panamanian company whose only asset was a rented office with a telephone and no one against whom to seek recourse.
The facts slowly emerged. On the voyage to Japan, heating coils in the sides of the ship were supposed to warm this oil with a high paraffin content. The ship’s captain had decided to save costs by turning off the heating elements and the paraffin turned to wax.
Fortunately, the outcome was not disastrous for Aminoil, but the incident illustrated the difficulties in oil trading market and the importance of knowing who you were dealing with.