“No lunch?” The Norwegian was disappointed. “Why not?”
“Because I am going back to Athens in a few minutes,” the Greek said, “and it is time for you to leave Chios as well.”
Coco shot the cuffs of his blue shirt, crossed his arms defensively and leaned forward. “Ja, but I am not leaving this little island until the deal is done,” he said.
More than four weeks had passed since Coco’s $150 million yacht, Kon Tiki, dropped her anchors into the azure water off the beautiful island of Chios. Ever since his arrival he had been spending every day the same way: rising late, passing the afternoon commanding and controlling his fleet of supertankers and meeting the Greek for lunch at five o’clock. Like sculptors working clay, the men spent hours going over every detail of the deal – often working until long after the fiery sun had dropped behind the barren mountains of Chios.
“I know,” the Greek said and paused until the waiter had moved safely out of earshot; almost every local resident of Chios was somehow related to a shipowner and it was absolutely critical that their deal remained secret. “It is time to sign the papers and start wiring the money.”
“I’m happy you are feeling so comfortable,” Coco said with smile. He was relieved that his plan had apparently passed muster with the Greek. Over the years, Coco had come to believe that there was simply no one more knowledgeable or harder working than a Greek shipowner with money at risk.
“Comfortable?” the Greek chuckled as he submerged a small piece of bread into a shallow pool of dark green olive oil. “I don’t feel the least bit comfortable, Coco, but if I think too much about this deal I will never do it,” he said. “Don’t forget, if we get this wrong I could lose everything,” the Greek said.
“Ja,” Coco replied with a flash in his pale blue eyes, “but this is exactly what makes it so exciting.”
As Coco turned his eyes to the diamond-studded sea, the self-made tycoon had an epiphany; the cyclicality of life wasn’t so different from the cyclicality of the shipping market in which he trafficked. He had been born poor in the village of Bergen, Norway and he might die poor in a village on a North Aegean island – but he would have had one heck of a ride in the meantime.
“Θεού θέλοντος,” the Greek said solemnly – if God is willing. “There’s just one thing I must ask you before we go any further,” the old man said and placed a giant, callused hand on Coco’s. “I need to know whether you will have your share of the money.”
The Norwegian wanted to scream with frustration as he calmly returned his potential partner’s gaze; Coco had developed this deal himself – the single best money-making opportunity he’d ever seen – but now he was short on cash just when he needed it most. Like most shipowners, he had some “rainy day” funds squirreled away in a variety of offshore banks, $30 million in Liechtenstein and $20 million in Guernsey, but the deal with the Greek required shipping-sized money, ten times what he could scrape together at a moment’s notice.
“Of course I will have my share of the money,” Coco said. A lack of cash had never stopped him before and it wasn’t going to stop him now; he had faith that money would always find its way to the really good deals. “I would, however, be grateful if you put your $500 million in first – while my CEO Robert Fairchild gets my money together.”
“Okay,” the Greek said, “but let me be clear, Coco. If you do not come up with your share of the money in time for the next payment, you will no longer be a part of this deal.”
The old man removed a tiny talisman from the front pocket of his short-sleeved button-down shirt and pushed it across the rough wooden table toward Coco.
“What’s this thing?” Coco asked as he inspected the pea-sized blue and white eyeball attached to a short gold chain.
“It’s called the evil eye,” the Greek explained and shot a furtive glance around the room, “and my people have been using it since the sixth century BC. I want you to keep it close to you until the deal is done; it will keep us safe when things get rough.”
“You really shouldn’t worry so much,” Coco said and tightened his fist around the charm. The pragmatic Norwegian usually wasn’t much for voodoo, but he knew he needed all the help he could get.
“I’m afraid it is you who should worry…” the Greek said slowly as the two Russians rose from their chairs and came to escort their employer to the Mercedes idling outside the taverna, “you and Mr. Fairchild.”
Chapter 2
Hilmar Reksten
Few businesses are as nerve-racking as the chartering of behemoth supertankers to carry oil, and until recently few tycoons played the risks with such consummate cool as Norway’s Hilmar Reksten. Reksten, a ramrod-straight six-footer and lone-wolf operator, started out as a shipping clerk; in 1929 he bought a freighter cheap, parlayed it into a modest fleet (thanks in part to two rich wives), then seized on slumps to buy up tonnage cut-rate. By 1973 he had amassed a flotilla worth, by some estimates, $600 million. Now, one of the worst depressions ever in the tanker business has left Reksten financially becalmed, if not yet dead in the water.
Time Magazine, 1975
Robert Fairchild’s six-foot frame was trembling with terror as he clung to the fluorescent-green safety railing and stared down into the six-story engine room of the supertanker – a vessel longer than the Empire State Building is tall.
Viking Alexandra’s 36,000-horsepower engine had slowed to an idle as her turbine-driven pumps regurgitated the last million barrels of sour Saudi crude into a Philadelphia refinery – enough juice to light up Spain for forty-eight hours – but even at rest the bowels of the ship were so hot and loud that it felt as though he’d descended into hell.
Like many ship financiers, Robert didn’t have much to do aboard an actual ship. The only reason he was spending the day on the Viking Alexandra was because his boss, Coco Jacobsen, wanted him to experience some of the less glamorous, but altogether vital, aspects of owning and operating vessels…“Just in case I decide to change your job description.”
Robert had only been aboard the Alexandra for a few hours, but even that small dose was enough to shock the system of a man accustomed to the life of a shipping dealmaker. Instead of dining in Michelin-starred restaurants and ruminating over hundred-million-dollar transactions, he had spent the day sipping cold Sanka in the Captain’s day room and reviewing the horrifying hemorrhage of cash that started before the ship had even come in to port.
From the four over-budget tugboats that strained to bring the 1,500-hundred-foot vessel into her berth to the longshoremen’s union that demanded overtime because Alexandra arrived on a weekend after being re-routed to avoid the wrath of Hurricane Ebbel, Robert quickly gained a better understanding of just how quickly cash evaporated in the shipping business.
He also learned why shipowners like Coco Jacobsen, irrespective of their wealth, fought for every penny as if it was their last: because it might be. Alistair Gooding, Viking Tankers’ lender in London, had once told him that copper wire had been invented by two shipowners fighting over a penny and now he understood the joke. The only predictable thing about being a shipowner was its unpredictability.
After spending just ten minutes on his self-guided tour through the stifling heat, acrid air and pounding cylinders of the ship’s floating power plant, Robert’s pulse was racing and his anxiety was in the red zone; he couldn’t wait to get off the ship and start the weekend. While he was visiting the ship, his wife Grace was dropping off their nine-year-old son, Oliver, at her mother’s house in Greenwich, Connecticut. Robert had made a dinner reservation at their favorite restaurant, Il Cantinori, that evening and in the morning they would fly to the New England island of Martha’s Vineyard.
In addition to spending the weekend celebrating their twelfth anniversary on the island where they were married, they were also planning to attend an open house at their dream home – a nineteenth century Federal-style mansion in a former whaling village called Edgart
own. The house had serendipitously come onto the market a few days earlier for the first time in three generations and Robert believed the timing of the listing was a sign from above. Although he had neither the cash nor the income to support the purchase and ongoing maintenance of a $3 million second home, Robert knew he probably wouldn’t get another chance at the house; the best opportunities in life, he’d noticed, only came around once.
Desperate to exit the unremitting violence of the engine room, he turned around and climbed up the steep and narrow stairway that stitched together the seven levels of the floating dungeon. Once he reached the next floor, he looked across the canyon of pounding cylinders and spotted a small, brightly lit room populated by a small group of men. With his leather-soled Gucci loafers slipping on the oil-slick diamond-plate floor and his hands gripping the greasy green safety railing, Robert carefully edged around the parapet, pulled open the heavy bulkhead door and stepped inside the engine control room.
When the door latch clicked, Robert exhaled with relief. He savored the room’s soundproof walls and inhaled the air-conditioning like it was cold water. After he pulled out the fluorescent-yellow foam plugs from his ears, he cleared his throat but the four Indian officers didn’t look up. They were transfixed on the long bank of computer screens that monitored the vital signs of the mighty machinery like bond traders watching the testimony of Fed Chairman Benjamin Bernanke.
A tall man with a long, shiny mustache and a warm smile finally broke away from the intense huddle and moved toward him. All but one tendril of his shoulder-length hair was concealed beneath a fuchsia turban and his lanky body was zipped into blue and red coveralls bearing the infamous, and menacing, logo of Viking Tankers – a Norse longboat resplendent with a serpent’s fire breathing head and five sets of oars and shields.
In an attempt to look the part of CEO, Robert secured his hardhat under his arm, straightened his tortoiseshell glasses and mopped the sweat from his forehead with the sleeve of his blue gingham button-down. “Robert Fairchild,” he said and extended his hand, “Chief Executive Officer of Viking Tankers.”
“Prasanth,” the Indian said, playfully echoing Robert’s serious tone of voice, “Chief Engineer of Viking Alexandra.”
Once the introductions had been made, the two men looked each other over in silence. Unsure what to say next, Robert offered the only compliment he could think of. “This engine room is very clean.”
“She’s a cougar,” the Indian acknowledged proudly as he gazed through the window.
“A cougar?” Robert asked, ready to learn more of the lingo associated with the jargon-filled shipping industry. “Do you mean she’s a Cougar-type? Is that the specific model of this ship?”
“No, it means she may not be youngest ship on the sea,” the Indian said with a wink, “but she remains highly desirable thanks to a good maintenance regime. There are some charterers who even prefer her to the younger models.”
“There’s no substitute for experience,” Robert said, as he chuckled for the first time since boarding the ship. He appreciated the good humor coming from a man who lived his life in a blast furnace below the waterline.
Robert briefly considered making an offhanded remark about Alexandra Meriwether, the forty-year-old investment banker who Coco had named the aging supertanker after during a brief and tumultuous romance, but he quickly thought the better of it; Alex was one of the few topics in which Coco Jacobsen did not find humor.
“Any idea when this cougar will finish her discharge and sail?” Robert asked.
As the money-man at Viking Tankers, Robert was eager to send the $3 million invoice to a trading house in Switzerland for Alexandra’s delivery of two million barrels of Saudi crude oil. Unlike dry cargo shipping, in which customers like grain houses and steel mills paid 90% of the ocean transportation cost upon loading, spot market tanker owners didn’t get anything until the cargo was discharged. That meant Viking Alexandra, a $50 million ship, was living hand-to-mouth, paycheck-to-paycheck – just like her enigmatic owner.
“We are hoping to finish the discharge before tomorrow morning’s high tide,” Prasanth said proudly, “but I’m not certain when we will sail.”
“Time is money when you get paid by the day the way a ship does,” Robert said.
“I am familiar with how it works,” Prasanth replied.
“What’s the reason for the delay?” Robert asked.
“The terminal is having a reception after we finish and they’ve asked us to stay for photographs,” Prasanth said.
“I’ve never heard of anyone celebrating the discharge of a tanker,” Robert laughed.
“That’s correct,” Prasanth said. “Americans only care about oil tankers when they have a spill.”
“So why the party?” Robert asked.
“It is more like a funeral,” Prasanth replied.
“Not ours, I hope.”
“I’m afraid so,” Prasanth said. “After more than one hundred years in operation, Alexandra will be the last tanker to ever discharge crude oil into this refinery,” the Indian engineer said.
“I hope it wasn’t something we did,” Robert said.
“Not exactly,” Prasanth replied. “The new owners are going to use this facility to export products like propane, butane and ethane that are made from U.S. shale gas; the U.S. is producing more gas than they know what to do with these days.”
Robert was stunned. “Does that mean they won’t import any foreign crude oil to make products like gasoline and jet fuel?”
“That’s exactly what it means,” the Chief Engineer said. “The U.S. is on the road to energy independence; your country will be an exporter of energy once the laws catch up with the reality of the market.”
While Robert had been expecting to learn much during his field trip to the ship, he had not been expecting to receive an education on hydrocarbon production and marketing from the Chief Engineer – a graduate of the Indian Institute of Technology (IIT) who had received a considerably more rigorous education than Robert had at Harvard.
“That really does sound like a funeral,” Robert said, “at least for crude oil tankers like this one.”
After decades of tirelessly trying, a group of maverick energy entrepreneurs in America had figured out how to extract oil and gas from nooks and crannies beneath the U.S. and Canada by combining the established processes of horizontal drilling and fracking, shorthand for hydraulic fracturing, with new technology. As a result of this newfound domestic production, U.S. imports of crude oil had recently hit a twenty-year low and North American production was increasing each year by almost one million barrels per day – all of which was apparently starting to have a profound impact on the seaborne transportation of energy.
“It may be a funeral for us, Mr. Fairchild, but it is the beginning of a new life for the people who own the ships that can carry the exported gas around the world,” the Indian said.
Too bad we don’t have any super-cooling gas tankers, Robert thought, and not just a clutch of middle-aged crude carriers. This was the problem with having a “pure play” shipping company – one that had only a single type of vessel: if the market went against you as the crude oil tanker market appeared to be going against them, you were toast – especially if you didn’t have time charters and were as overleveraged as Viking Tankers.
The imminent threat to Robert’s livelihood further aggravated his anxiety. He simply had to get off the ship, take a taxi to 30th Street Station in Philadelphia and catch the next Amtrak back to Manhattan. He placed the yellow hardhat back on his pomade-stiffened hair, wrapped his hand around the heavy handle of the bulkhead door and prepared to step back into the hellish engine room. But just as he was opening the door, he felt his BlackBerry begin to vibrate in the pocket of his blue cashmere blazer. Assuming it was Grace calling to tell him Oliver was safely tucked away at grandma’s house in Connecticut, he answered the call without bothering to glance at the caller ID.
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br /> “Hey baby cakes,” Robert said softly so the engineers wouldn’t hear him. “I sure hope you’re going to wear that tight little black dress to dinner tonight.”
“Ja, but only if you find me the $500 million!” Coco Jacobsen shouted over the roar of the Marshall Islands flag flapping violently on the stern of the Kon Tiki.
“Oh, um, hi, Coco,” Robert stammered as he worked hard to overcome his embarrassment. “What did you just say?”
“You heard me, Fairchild!” the Norwegian insisted as he stared across the teal-green sea speckled with whitecaps. “I need the half billion and I need it now!”
“Half a billion dollars!” Robert recoiled. “But, I…”
“Just tell me you with the lawyers right now and everything will be fine,” Coco screamed as if force might overcome fact. “Tell me you are getting the paperwork ready. Tell me you are setting up the wiring instructions!” Coco demanded. “I love the smell of an incoming wire transfer in the morning!”
“The wiring instructions?” Robert choked incredulously. “Are you crazy?”
Coco had been asking him to find money on Wall Street for months, ever since they bought back the $300 million junk bond, but the more Coco asked, the less Robert listened. But judging from the desperation in his boss’s voice, Robert knew the situation had become more serious.
The problem wasn’t just the staggering sum Coco was demanding; it was that the Norwegian’s fleet was old and leveraged to the hilt which meant Robert couldn’t get his hands on any more debt in the newly sober commercial banking market. Moreover, Coco categorically refused to sell shares in Viking Tankers which meant raising equity was out of the question as well; playing Lotto appeared to be Robert’s most likely way of raising capital for the shipowner.
“Of course I’m crazy!” Coco shouted above the wind. “If I wasn’t crazy I wouldn’t be shipowner! So do you have the money or not?”
Viking Raid Page 2