Several shipowners are of two minds on how to invest in a Very Large Crude Carrier (VLCC) tanker of 300,000 dwt and above. This is the most profitable type of ship in recent years as its advantages, such as the high capacity in oil carriage and the ability to cover long distances, combined with the steady rise in oil demand across the world that has led the level of freight rates and of VLCCs themselves far higher. According to a recent report by Clarksons shipbrokers, the cost of building a VLCC for more than 300,000 dwt could even reach $129 million. This is more than double the price of four years ago, as in end-2002 such ships were built for $63.5 million. An additional problem for those ordering new VLCCs is the long periods until delivery, which now reach four years. This means a major risk for shipowners, who have to wait until 2010 to see the first returns of their investment, without even knowing how chartering rates will have shaped by then. Dynacom, of Giorgos Prokopiou, ordered in August two VLCCs of 296,000 dwt at the Jiangnan Changxing shipyards, to be delivered in 2010. The price of $106 million, which each ship reportedly cost, is actually considered a bargain. In end-August Athenian Sea Carriers of the Kyriakou family and Minerva Marine of the Martinos family proceeded to similar orders of two VLCC tankers each at the Korean shipyards Hyundai Heavy Industries, for $127 million per vessel. Both companies will receive their tankers in the first quarter of 2010. Strategy What worries shipowners and depends on strategy and personal approach is whether it is best to have a new VLCC built or acquire it straight from the market at a higher cost. The second option’s advantage is that the buyer receives the vessel far sooner. Depending on the deal, the ship is delivered to its new owner within three months, although in certain cases this period could be extended further. For instance, Neda Maritime of the Lykiardopoulos family paid $135 million for the purchase of Shinyo Fiorentina, a 319,000-dwt VLCC tanker built last year. The company will receive the ship in March 2007. The deal closed at a very favorable price, considering that a little later Frontline sold a new VLCC (built in June 2006) for $142 million. Consequently, the acquisition of a modern VLCC (built in 2005 or 2006) is a more expensive option than building a ship. Depending on the case, the additional cost could rise even to $15 million. The high cash flow of several companies allows them to invest immediately in a ship with daily revenues of $85,000-95,000, one of the highest in the shipping sector. Such freight rates allow for the immediate amortization of the high cost of getting a new VLCC.