“The pleasure is mine,” Mr. Xing replied as he withdrew a business card from a silver case and used both hands to solemnly present it to Piper Pearl. Piper responded by casually passing Mr. Xing one of his cards and said, “This is my colleague, Alexandra Meriwether.”
“It’s nice to meet you,” Alex said as she lowered her head and presented Mr. Xing with her business card using the same respectful protocol that he had used.
A few second later, a perky waitress wearing a black skirt glided toward the table. She punctuated her arrival by shifting her thick blonde French braid and her narrow hips in opposite directions. “Hiya, Pipes!” she said.
“Good afternoon, Samantha,” Piper said proudly before turning to his guest. “What can Samantha bring you, Mr. Xing?”
Although she had no idea what Piper Pearl did for a living, Samantha Algood couldn’t help but enjoy the thrill of being the man’s co-conspirator. Had the Juilliard-trained hostess been a student of global leveraged finance rather than classical cello she might have confused Piper as a minor character in the book Liar’s Poker – and would definitely have had more insight into the capital-seeking people whose inhibitions she had lowered over the years.
Parked at Piper’s round corner table had been Icelandic investors, Brazilian oil executives, Argentine soybean farmers, social media moguls, dot com geeks, buyers and sellers of sub-prime mortgages, Australian iron ore promoters, South African gold miners, Montenegro waterfront developers, Angolan plantation owners…and now the youthful but exhausted looking man with the backpack.
“Ladies first,” Mr. Xing said and smiled politely at Alex.
“It’s good to know there really is one gentleman left in the world,” Alex said and shot a glance at Piper. Mr. Xing blushed.
“What would you like?” Samantha asked.
“A glass of Montrachet, please,” Alex said with a smile.
Alex’s accidental pregnancy with the Norwegian prevented her from drinking her favorite white wine, but that was beside the point. The critical thing now was that Piper Pearl didn’t discover that her BlackBerry wasn’t the only thing she was carrying 24/7. Her boss had a bad habit of hoarding every scrap of information until he found a way to use it to his advantage; she needed to collect her $8 million bonus before he figured out she might resign.
“Your turn, sweetie,” Samantha said after her eyes flashed at Mr. Xing.
“May I have a ginger ale, please,” Mr. Xing said politely, hoping it would soothe his troubled stomach.
“I must apologize, Mr. Pearl,” Mr. Xing said after Piper Pearl had ordered his third martini. “The last flight to Beijing leaves in two-and-a-half hours and I must be on it. I am meeting with our president upon my arrival tomorrow evening to update him on our country’s most recent energy acquisitions.”
Mr. Xing had spent the last forty-five days on a billion-dollar shopping spree all over Africa and the Americas during which he had acquired massive oil reserves in Angola, bought a mountain made of coal in Canada and loaned Venezuela $50 billion in exchange for one supertanker full of staggeringly sour crude oil every week for the next twenty years. His country had committed to spending about $1 trillion on natural resources in Africa alone in the coming years which meant Mr. Xing still had plenty of work ahead of him.
He had bought everything on the shopping list his colleagues in Beijing had given him – everything except the one commodity his country wanted and needed most of all – clean burning liquid natural gas and the products made from it.
“Then let’s just get down to business,” Piper smiled with excitement as he unhitched his cufflinks, a pair of bulls cast in gold, and methodically folded back his starched sleeves.
Like most serial dealmakers, Piper Pearl preferred the excitement of doing transactions to just about anything else in his life: more than playing golf at St. Andrew’s or sail fishing off Bimini, more than buying trophy real estate in the Hamptons or collecting early twentieth century Impressionist paintings at Sotheby’s and even more than the earthly delight of the many beautiful women he had known during his endless bachelorhood. The business of doing deals, it turned out, was the perfect therapy for Piper’s Attention Deficit Disorder.
“Thank you,” Mr. Xing said as he inspected a singular smoked almond before laying it on his tongue like a Communion Wafer.
“Mr. Xing, I suspect it will come as no surprise to you that the natural resource complex is under a severe capacity strain these days,” Piper said clinically before lowering his lips to the wide rimmed martini glass and slurping Ketel One like it was a Slush Puppy.
“We are painfully aware of this,” Mr. Xing acknowledged.
Mr. Xing knew all too well that the price of every industrial commodity had skyrocketed in the last ten years mostly due to the hyper-development of his populous country. From food to energy to iron ore, China’s raging consumption had caused the collective and disturbing realization that maybe the planet’s supply of cheap natural resources, and the environment’s capacity to absorb pollution, weren’t sustainable after all.
It wasn’t simply a question of money and industrial growth, it was also food; global production of carbohydrates and protein was now barely adequate to meet current demand and that was only thanks to enhanced yields from genetically modified crops. Throw in extreme weather events caused by climate change and a diminishing supply of fresh water and it was clear that the world was approaching an entirely new phase in its development. Mr. Xing’s noble job was to make sure that his country had access to the energy needed to power a rapidly improving standard of living.
“I’m here to relieve your pain,” Piper said dramatically.
Before continuing his riff, the investment banker raked a pair of green olives off a plastic toothpick with his gleaming incisors. Then he winked at Alexandra and gave her his aren’t-I-the-best-little-boy-in-the-world look. Alex rolled her eyes and formed a dubious smile – the complex expression of a mother who was secretly amused by her impish son.
“What do you have in mind?” Mr. Xing asked as he checked his watch.
It wasn’t in Mr. Xing’s cultural profile to be so direct. He had been trained to always act indifferent but respectful for as long as humanly possible. However, he had spent so much time with American oilmen lately that he’d been infected with their blunt protocol and high efficiency.
“American Refining Corporation,” Piper said the words slowly.
Mr. Xing was silent, and stunned. He had been watching fracking pioneer American Refining Corporation for years – and even more closely since ARC had become America’s largest producer of domestic shale gas in addition to its foreign oil holdings. He’d taken a meeting with Rocky DuBois, ARC’s maverick CEO, when he was in Houston the previous week. Mr. Xing admired the organization and envied its 550,000 acres of oil- and gas-rich American farmlands, but he hadn’t made an offer for fear of the political backlash.
“Are you actually proposing that China buy ARC?” Mr. Xing asked as he carefully experimented with a beer nut.
“That’s why we’re here,” Piper smiled and then poured a handful of mixed nuts into his mouth. “This is the most exciting transaction I have ever been involved with; it’s real win-win.”
“Are you suggesting that my country import American oil and gas products from America?” Mr. Xing asked.
“Fill up the boats and haul it away,” Piper said.
Easier said than done, Mr. Xing thought with frustration. His country had spent hundreds of billions of dollars in its quest to dominate the global shipbuilding industry and had succeeded spectacularly when it came to building low cost bulk carriers. But in the realm of designing and building technologically complex vessels like the ones that carried LNG, Korea and Japan still controlled the market…for now.
“Correct me if I am wrong,” Mr. Xing said, “but aren’t there certain laws that prohibit the export of U.S. energy?” He knew the official answer, of course, but wa
s always curious to hear how Americans viewed their country’s policy on energy.
“Actually,” Alex interjected, “the U.S. only prohibits the export of crude oil and it looks like even that might change soon as long as the exporters pay a tax. There is no law against exporting products made from gas such as ethane, butane and propane and you can even export LNG; all you need is a permit and they are being issued all the time.”
“Interesting,” he said. While Alex’s over-simplification of American LNG export-laws was technically correct, in reality the government had issued few permits for the export of gas.
Mr. Xing knew that the acquisition of a company like ARC, with its massive reserves of gas, was exactly what his country had been searching for. Ever since the U.S. Embassy in Beijing had begun tracking the city’s air quality, people from China and around the world had been demanding that the country enforce tighter emissions standards and use higher-quality fuels. Everyone recognized that it was impossible to increase the standard of living without improving the quality of life.
In response to those concerns, China had made a commitment to spend billions of dollars converting some of their six-hundred and fifty power plants from coal and oil to clean burning natural gas. Mr. Xing’s job was to find the gas – and figure out how to get it to China.
On a personal level there was no one who was more committed to improving the air quality in China than Mr. Xing whose own son had developed severe asthma. That was why he’d made it his personal as well as professional mission in life to do whatever was necessary to import as much clean burning gas as he could find around the world.
Mr. Xing had heard all he needed to hear – and he had a plane to catch. “I am afraid I must leave now to reach the airport,” he said as he stood up and prepared to exit the bar. “I thank you for presenting me with this opportunity. I will discuss it with my colleagues upon my return; if there is interest I will contact you immediately,” he said, hoping they had not seen the appetite in his eyes.
“That sure was weird,” Piper said after Mr. Xing had disappeared down the stairs toward 57th Street. “Was it something I said?” Piper asked, disappointed that his deal got so little traction.
“No way,” she smiled. “You were awesome.”
Although she did see the nobility in sharing natural resources like food and energy, Alexandra Meriwether was relieved that the politically-charged deal between the People’s Republic of China and American Refining Corporation was dead on arrival – but she couldn’t have been more wrong.
Chapter 7
Playing Hunches
Each fleet is customarily treated as an extension of one man’s personality – never “National Bulk Carriers” or “Olympic Maritime” but “Ludwig” or “Onassis.” And it is generally accepted that the head man is entitled to play his hunches.
Fortune Magazine, 1974
“Ladies and gentlemen,” the impeccably dressed real estate agent said with flourish as she floated up the first few steps of the wide central staircase. “Prepare yourselves to hear some-thing absolutely wonderful about the special home you have just entered.”
After stopping halfway up the wide and gracious stairs, the petite woman turned around and lifted her palms into the air like a preacher preparing to deliver a sermon to the parish of twenty potential purchasers. “There is magic in this home,” she said dramatically.
“This place had better not be haunted,” Grace whispered into Robert’s ear, “because I will not share a bathroom with a ghost. Two boys are quite enough.”
“According to the local historian here in Edgartown,” the agent continued with a dramatic whisper, “the Daniel Fisher House was built by a prominent shipowner and ship captain in 1840. Some people even believe it was the inspiration for the Admiral Benbow Inn featured in the novel Treasure Island.”
Robert’s eyes bulged and his body tingled with excitement as he absorbed the words. “Did you just hear that, Grace?” he whispered to his wife after jabbing her with his elbow.
“What? Did you hear something?” she replied and looked around nervously. “Was it the ghost?”
“No, first our dream house comes on the market the day before we were planning to come out here for our anniversary and now we learn it was built by a shipowner and might have even been the inspiration for Oliver’s favorite book! Oh, Grace, it’s a sign.”
“It’s a sign alright,” she said. “It’s a sign that you are crazy.”
The agent continued. “Fearing he might not return from one of his long voyages at sea, Captain Fisher built this house for his only child…a boy named Oliver. Only later was it turned into an inn for sailors and then restored by members of the Fisher family.”
Robert emitted a gasp so loud that his wife slapped her open hand over his mouth. They had walked past the stately white house a hundred times since they started visiting the island, but not in their wildest dreams did they imagine living there – never mind having such a close connection with the place. Robert suddenly felt possessed with the same kind of self-determination that had been getting him into trouble for as long as he could remember; he had to have it.
“It’s more than a sign,” he said. “It’s two signs and do you know what that means?”
“What?”
“It means there’s another sign coming,” Robert said. “These things always happen in threes.”
“We don’t have the $3 million required to buy the house,” Grace reminded him. “Maybe that’s the last sign. You lost your hedge fund and now you work for a sweet but financially unstable Norwegian playboy who lives on a yacht and needs a haircut.”
“We’ll find a way,” Robert said, just as the telephone in his pocket rang. “We always find a way.”
Needless to say, Robert Fairchild was in a receptive frame of mind when he answered the incoming call from Houston, Texas. “Hello,” Robert whispered with his hand cupped over the telephone.
“Good afternoon,” the gentleman caller said with a gracious southern drawl. “May I have the pleasure of speaking with Mr. Robert Fairchild?”
“This is Robert Fairchild,” Robert said as he slowly drifted away from the herd of house hunters. “May I help you?”
“I hope so,” the voice said. “My name is Thompson DuBois and I am with a little company here in Texas called…”
“American Refining Corporation,” Robert finished the man’s sentence. Robert was stunned. He knew exactly who Mr. DuBois was. The man’s story was legendary; he was a geologist turned wildcatter who never gave up on fracking even after the big oil companies had. Heck, Robert had seen him on CNBC that very morning when he and Grace were waiting in the JetBlue lounge at LaGuardia. “I know it well.”
“I’m honored to hear that,” he said modestly. “May I have a few moments of your time, Mr. Fairchild?”
“Absolutely, Mr. DuBois,” Robert said.
“Please call me Rocky,” he laughed slowly.
“Rocky?” Robert asked.
“That’s the name my daddy gave me when he noticed I couldn’t stop cracking open rocks in the backyard of our house in West Texas to see what was inside of them,” he chuckled.
“That’s a great story,” Robert said.
“It’s been a long, strange trip,” Rocky said. “Mr. Fairchild, I’m calling you today because I’d like to take some of your boats on long-term time charter to move some my Middle Eastern oil to America.”
“Excuse me?” Robert said.
“You are the CEO of Viking Tankers, are you not?” Rocky asked.
“Yes,” Robert said slowly.
“And as CEO you do have authority to enter into charters on behalf of your company, do you not?” the Texan asked.
“Of course I do,” Robert bluffed.
The truth was that he had never been approached to charter a ship. In fact, Coco and Oddleif had never even included him in a conversation about chartering a ship. The only thing the swashbuckl
ing Norwegians did was perpetually pester him to find “the free money” on Wall Street – as if he was searching for loose change under the seat of a car.
“Then I’ll be straight with you, son,” he said. “I need some boats to move my crude oil and I would prefer to work with someone in my own time zone,” Rocky said. “I need someone who speaks my language, if you know what I mean.”
“I understand,” Robert said as he slipped out the front door of the house and stood on the colonial cobblestone sidewalk.
“Mr. Fairchild, I’d like to start by having my ocean transportation subsidiary charter-in ten of your VLCCs for five years,” Rocky said. “How does that sound?”
Robert swallowed hard and said, “Come again.”
“And I believe this is could be just the beginning of the kind of mutually beneficial business that our organizations can do together, Mr. Fairchild. You see, what I am looking for here is a long-term relationship,” Rocky said. “I want maritime monogamy.”
“Maritime monogamy?” Robert repeated the words slowly, wondering whether they had ever resided next to each other in a sentence before.
As if hypnotized by the pair of tiny barge ferries shuttling back and forth between Martha’s Vineyard and the neighboring island of Chappaquiddick, Robert listened with fascination as an elder statesman of the U.S. fracking community eloquently espoused the importance of cooperation between shipowners and oil companies.
“Well, how much are you comfortable paying for the ships,” Robert finally asked. He didn’t particularly want to leave the fantasy world he was enjoying, but he knew that shipping deals always started with talk…but ended with dollars.
“How about $50,000 a day,” he proposed. “Each.”
“I believe the spot market is quite a bit stronger than that,” Robert said.
“It won’t be this strong for five years, which is exactly how long my subsidiary is willing to commit to your boats,” Rocky said.
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