Max Tingyao Lin<\/a><\/p>\n\n\n\nEnergy majors including Shell and ExxonMobil have obtained patents for their low-sulphur fuel oil (LSFO) products, raising fears over potential infringement of intellectual property and a bunker market oligopoly post-2020.<\/p>\n\n\n\n
Those patents \u2014 with broad content specifications \u2014 might deter smaller bunker blenders and producers from entering the IMO-\u00adcompliant fuel market, possibly sending a shock wave through the supply chain all the way down to shipowners.<\/p>\n\n\n\n
\u201cThe threat of expensive and lengthy lawsuits for patent infringement will kill [the patent holders\u2019] competitors,\u201d Ara Barsa\u00admian, chief executive of consultancy Refinery Automation Institute, told TradeWinds. \u201cShipowners will hate to get dragged [into] court for buying \u2018infringing\u2019 products.\u201d<\/p>\n\n\n\n
Global sulphur limits in bunker fuels will be lowered to 0.5% from 2020, compared with the current level of 3.5%.<\/p>\n\n\n\n
While distillates could dominate the IMO-compliant fuel \u00admarket initially, LSFO will be the preferred choice in the long run due to price competitiveness, many oil officials have predicted.<\/p>\n\n\n\n
However, ClipperData energy \u00adanalyst Josh Lowell warned that there could be a limited number of LSFO sup\u00adpliers, as those bunker players without deep pockets to compete with patent holders may be driven out of the market.<\/p>\n\n\n\n
Bunker firms can either negotiate royalty agreements with the majors, challenge those patents or simply ignore them. All the solutions can be costly, while involving \u00adlegal risks, not to mention the potential loss of customers during legal proceedings.A containership takes on bunkers off Singapore <\/p>\n\n\n\n
\u201cThose [patents] are really broad. They are covering as much as possible,\u201d Lowell said. \u201cWhile this may be a positive for fuel compatibility and stability concerns, it may marginalise fringe LSFO producers.<\/p>\n\n\n\n
\u201cIf the patents are going to be widely enforced, this could centralise LSFO [production] among a few people.\u201d<\/p>\n\n\n\n
Rather than seeking to take control of the LSFO market, the oil majors are most likely playing defence against other players, \u00adaccording to Barsamian.<\/p>\n\n\n\n
In the 1990s, Unocal patented its clean gasoline formulas, which \u00adbecame Californian standards, \u00adenabling it to extract substantial royalties from some majors.<\/p>\n\n\n\n
\u201cOnce you have a patent \u2026 you can cross-license with your competitors,\u201d Barsamian explained.<\/p>\n\n\n\n
ExxonMobil did not respond to repeated emails by TradeWinds\u2019 press time. TradeWinds understands that Shell may have considered having patents as part of its usual business activity.<\/p>\n\n\n\n
Based on several patent examples obtained by TradeWinds, the LSFO products are mainly blending components. In terms of jurisdictions, their applications can cover the US, China, Russia, Singapore and some other countries.<\/p>\n\n\n\n
\u201cThese would seem to be sensible targets, given the apparent \u00adrelevance of these patents to both the fuel production and shipping industries,\u201d said Simon Parry, a partner at UK-based law firm Mewburn Ellis.<\/p>\n\n\n\n
As wide-ranging as those patents\u2019 contents and geographical coverage seem to be, how powerful they are will depend on whether they can be enforced.<\/p>\n\n\n\n
\u201cSome of these patents do seem, from a cursory look, to have rather broad [claims]. Broad patent claims are generally likely to be at a greater risk of being found to be invalid than narrower claims, \u00adbecause they will be more likely to cover, or come close to covering, prior disclosures,\u201d Parry said.<\/p>\n\n\n\n
\u201cThey, therefore, may be more vulnerable to finding of \u2018lack \u00adnovelty\u2019 or \u2018inventive step\u2019 [that a patent requires].\u201d<\/p>\n\n\n\n
According to Monjasa chief \u00adexecutive Anders Ostergaard, \u201cestablish\u00ading governance and enforcement of multiple component blending processes will certainly not be an easy task for any authority, since it [LSFO] will soon become a mainstream commodity\u201d.<\/p>\n\n\n\n
Ostergaard pointed out that \u00adupstream and midstream players \u00adengaged in blending activities could be more affected by the \u00adpatents, while physical suppliers such as his company are probably less exposed.<\/p>\n\n\n\n
\u201cMonjasa does not plan to \u00adengage much in blending of IMO-\u00adcompliant fuels, but instead works closely with the oil majors to make new 0.5% products timely avail\u00adable across our operations,\u201d he said. \u201cSo, for our part as reseller of oil products, we do not expect to see any rise in legal disputes.\u201d<\/p>\n\n\n\n
As for vessel operators, there are varying degrees of risks for them as bunker consumers.<\/p>\n\n\n\n
In the US, the UK and some \u00adother jurisdictions, using bunker fuels in infringement of patents would not constitute an offence, provided the vessels are entering the jurisdiction temporarily or \u00adaccidentally, according to Parry.<\/p>\n\n\n\n
However, carrying the products in infringement to and from those jurisdictions for sale or consumption by others is still forbidden.<\/p>\n","protected":false},"excerpt":{"rendered":"
From Tradewinds: \u201cOil majors\u2019 LSFO patents raise fears over bunker supply\u201d Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules February 28th, 2019 11:23 GMT by Max Tingyao Lin Energy majors including Shell and ExxonMobil have obtained patents for their low-sulphur fuel oil (LSFO) products,…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"\n
Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis<\/title>\n<meta name=\"description\" content=\"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis\" \/>\n<meta property=\"og:description\" content=\"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\" \/>\n<meta property=\"og:site_name\" content=\"Avantis Marine\" \/>\n<meta property=\"article:published_time\" content=\"2019-02-28T09:56:20+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-01-27T09:19:47+00:00\" \/>\n<meta name=\"author\" content=\"Steven Meikle\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@avantismarine\" \/>\n<meta name=\"twitter:site\" content=\"@avantismarine\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Steven Meikle\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\"},\"author\":{\"name\":\"Steven Meikle\",\"@id\":\"https:\/\/www.avantismarine.com\/#\/schema\/person\/e19e270a93417df9db15da92d10809e2\"},\"headline\":\"Oil majors\u2019 LSFO patents raise fears over bunker supply\",\"datePublished\":\"2019-02-28T09:56:20+00:00\",\"dateModified\":\"2021-01-27T09:19:47+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\"},\"wordCount\":759,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.avantismarine.com\/#organization\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\",\"url\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\",\"name\":\"Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis\",\"isPartOf\":{\"@id\":\"https:\/\/www.avantismarine.com\/#website\"},\"datePublished\":\"2019-02-28T09:56:20+00:00\",\"dateModified\":\"2021-01-27T09:19:47+00:00\",\"description\":\"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules\",\"breadcrumb\":{\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.avantismarine.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Oil majors\u2019 LSFO patents raise fears over bunker supply\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.avantismarine.com\/#website\",\"url\":\"https:\/\/www.avantismarine.com\/\",\"name\":\"Avantis Marine\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.avantismarine.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.avantismarine.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.avantismarine.com\/#organization\",\"name\":\"Avantis Marine\",\"url\":\"https:\/\/www.avantismarine.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.avantismarine.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.avantismarine.com\/wp-content\/uploads\/2020\/10\/Logo-Mark.png\",\"contentUrl\":\"https:\/\/www.avantismarine.com\/wp-content\/uploads\/2020\/10\/Logo-Mark.png\",\"width\":2170,\"height\":1928,\"caption\":\"Avantis Marine\"},\"image\":{\"@id\":\"https:\/\/www.avantismarine.com\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/x.com\/avantismarine\",\"https:\/\/www.linkedin.com\/company\/avantis-marine\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.avantismarine.com\/#\/schema\/person\/e19e270a93417df9db15da92d10809e2\",\"name\":\"Steven Meikle\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.avantismarine.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/64c96760befe3dfa2deddf6b52885ee4?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/64c96760befe3dfa2deddf6b52885ee4?s=96&d=mm&r=g\",\"caption\":\"Steven Meikle\"},\"url\":\"https:\/\/www.avantismarine.com\/author\/steven-meikle\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis","description":"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/","og_locale":"en_US","og_type":"article","og_title":"Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis","og_description":"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules","og_url":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/","og_site_name":"Avantis Marine","article_published_time":"2019-02-28T09:56:20+00:00","article_modified_time":"2021-01-27T09:19:47+00:00","author":"Steven Meikle","twitter_card":"summary_large_image","twitter_creator":"@avantismarine","twitter_site":"@avantismarine","twitter_misc":{"Written by":"Steven Meikle","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#article","isPartOf":{"@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/"},"author":{"name":"Steven Meikle","@id":"https:\/\/www.avantismarine.com\/#\/schema\/person\/e19e270a93417df9db15da92d10809e2"},"headline":"Oil majors\u2019 LSFO patents raise fears over bunker supply","datePublished":"2019-02-28T09:56:20+00:00","dateModified":"2021-01-27T09:19:47+00:00","mainEntityOfPage":{"@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/"},"wordCount":759,"commentCount":0,"publisher":{"@id":"https:\/\/www.avantismarine.com\/#organization"},"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/","url":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/","name":"Oil majors\u2019 LSFO patents raise fears over bunker supply | Avantis","isPartOf":{"@id":"https:\/\/www.avantismarine.com\/#website"},"datePublished":"2019-02-28T09:56:20+00:00","dateModified":"2021-01-27T09:19:47+00:00","description":"Ship operators could be hurt by fallout of producers\u2019 rush to adapt to 2020 rules","breadcrumb":{"@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.avantismarine.com\/oil-majors-lsfo-patents-raise-fears-over-bunker-supply\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.avantismarine.com\/"},{"@type":"ListItem","position":2,"name":"Oil majors\u2019 LSFO patents raise fears over bunker supply"}]},{"@type":"WebSite","@id":"https:\/\/www.avantismarine.com\/#website","url":"https:\/\/www.avantismarine.com\/","name":"Avantis Marine","description":"","publisher":{"@id":"https:\/\/www.avantismarine.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.avantismarine.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.avantismarine.com\/#organization","name":"Avantis Marine","url":"https:\/\/www.avantismarine.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.avantismarine.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.avantismarine.com\/wp-content\/uploads\/2020\/10\/Logo-Mark.png","contentUrl":"https:\/\/www.avantismarine.com\/wp-content\/uploads\/2020\/10\/Logo-Mark.png","width":2170,"height":1928,"caption":"Avantis Marine"},"image":{"@id":"https:\/\/www.avantismarine.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/x.com\/avantismarine","https:\/\/www.linkedin.com\/company\/avantis-marine"]},{"@type":"Person","@id":"https:\/\/www.avantismarine.com\/#\/schema\/person\/e19e270a93417df9db15da92d10809e2","name":"Steven Meikle","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.avantismarine.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/64c96760befe3dfa2deddf6b52885ee4?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/64c96760befe3dfa2deddf6b52885ee4?s=96&d=mm&r=g","caption":"Steven Meikle"},"url":"https:\/\/www.avantismarine.com\/author\/steven-meikle\/"}]}},"_links":{"self":[{"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/posts\/1459"}],"collection":[{"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/comments?post=1459"}],"version-history":[{"count":2,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/posts\/1459\/revisions"}],"predecessor-version":[{"id":2624,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/posts\/1459\/revisions\/2624"}],"wp:attachment":[{"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/media?parent=1459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/categories?post=1459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.avantismarine.com\/wp-json\/wp\/v2\/tags?post=1459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}