Posts Tagged private navy

Maritime Security: Typhon–Yet Another Bid At A Private Navy

What better way to start the new year off than with a post about another private navy? lol The last couple of years, I have been posting about the Jardine Lloyd Thompson CEP ‘private navy’. With that venture, they made a lot of promotional announcements, but never got it off the ground.  Funding of such a thing is the problem, and we will see how this new private navy venture by Typhon does in their drive to get set up.

So lets look at the business model, as was stated by Typhon in January of last year.

“A huge difference between our model and others is that we will negotiate reduced insurance rates. Rates have skyrocketed because it’s costing the industry $10bn-$12bn a year when you add everything up. Ransoms alone are $800m-$1.2bn.”
South Korea reportedly paid $25m to reclaim a ship last year. “And then that’s the new bar. It throws out Lloyds’ actuarial valuations,” says Sharp. “You have no idea what to charge as a premium. For my clients, we can take out some of the risk. I’ve got a letter from a Lloyds broker saying we can offer a 50pc discount on rates. That more than caters for our services.”

You know, in fairness to potential clients, the company should post that letter from Lloyds on their website. Matter of fact, they should do a lot of things with their website in order to spell out exactly what they are all about because it is ‘vacant’.

Furthermore, when a company puts it out there that it is recruiting 240 former Royal Marines, you kind of think there would be some talk of that within the industry? I haven’t heard anything about it, nor is there any lively talk about it over at Close Protection World. I would also like to see this recruitment advertisement or maybe even a recruitment career page on their website, but there is nothing.

I do know that their website is registered in the UAE and supposedly they are based in Abu Dhabi. I do know that they made a promotional video for the company and concept, and you can watch that over at the gCaptain’s website here.

According to the article last year, they have brought on some interesting folks to run this navy. Here is the list.

The ribs will be manned by ex-Royal Marines, as will the group’s base in Abu Dhabi. Murray, a former French Foreign Legionnaire, will be Typhon’s chairman, with Lord Dannatt a non-executive. They will be joined by non-executives including General Sir Jack Deverell, former commander of Allied Forces Northern Europe; Admiral Harry Ulrich, ex-head of US naval forces in Europe; and Peter Ahlas, former chief of HSBC’s marine and insurance business. It’s quite a roll-call for a company that’s just completing its first fund-raising, of just $15m, and has yet to put to sea.

On a side note, Simon Murray has an interesting background. He did a stint in the French Foreign Legion. He is also a power broker and wealthy enough to make a project like this work. He is also partnered up with a non-military guy who I guess was the one that came up with the idea of Typhon. Here is the quote.

But Sharp himself is new to the all-action side of things. His career has seen him invest in start-up travel ventures from lastminute.com to GoAmerica, take AIM minnow Cashbox public, and launch Earthshine, a commodities distributor.
“I had the idea for Typhon playing polo one afternoon, thinking about what my next business might be,” says Sharp. “I picked on maritime security. Two years later we’re completing our funding round, acquiring our first vessel in weeks, and hope to be in theatre shortly after.”

It is always funny to me when you hear about the inception of an idea, like with Sharp’s statement of ‘while playing polo one afternoon, thinking about what my next business might be…’ lol  Polo or golf, it seems like a lot of ideas for businesses get their start during play.

No mention of a Letter of Marque being issued either. Here is what was mentioned, and it would be cool to hear more about the legal side of this private navy.

The Britons intend to sail under a sovereign flag which will give them the legal right to carry their weaponry into harbour, rather than cache them on platforms in international waters.

Interesting stuff and I wish the company luck in their goal of firing up a private navy. -Matt

Company website here.

 

Glencore chief Simon Murray launches private navy to combat Somali pirate threat
By NICHOLAS HELLEN
January 06, 2013

BRITAIN’S first private navy in almost two centuries is being created by a group of businessmen to take on the Somali pirates who are terrorising an expanse of the Indian Ocean.
Its armed vessels – including a 10,000-ton mother ship and high-speed armoured patrol boats – will be led by a former Royal Navy commodore. He is recruiting 240 former marines and other sailors for the force.
It will escort its first convoy of oil tankers, bulk carriers – and possibly an occasional yacht – along the east coast of Africa in late March or April.
Typhon, the company behind the venture, is chaired by Simon Murray, a millionaire businessman who joined the French Foreign Legion as a teenager and walked unsupported to the South Pole aged 63.
Typhon has been set up because the Royal Navy, NATO and the European Union Naval Force lack the vessels to patrol an area of ocean that is as large as North America, said Anthony Sharp, chief executive. “They can’t do the job because they haven’t got the budget and deploying a billion-pound warship against six guys [pirates] with $500 of kit is not a very good use of the asset,” he said.

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Maritime Security: JLT News–CEP Private Navy Will Have Full Funding By End Of Month

This is interesting news and JLT has been fighting to get this funded and operational for awhile now. So it will be great to see this in action. Although a couple of ‘what ifs’ have popped up as I read through the plans.

The CEP is planning to buy seven 150-foot fast patrol boats, understood to be ex-Swedish Navy, and has already earmarked 11 former offshore supply vessels for purchase and conversion.
The ships will be equipped with fast semi-inflatables, called ribs, an array of non-lethal counter-measures, and 0.50 calibre heavy machine guns. They will be operated by a crew of five and carry eight armed security personnel each.
The programme will result in convoys of up to four merchant ships closely escorted by one CEP craft along the IRTC, with additional CEP ships in support, covering east and west-bound traffic.

So this will be 8 armed security personnel covering down on convoys of up up to four merchant ships?  These armed guards will be in small boats to deploy and intercept pirate attack groups?  Ok, so I imagine 1 guard and the commander of the guards will have to remain on the patrol craft in order to guard that and do command and control, and that would leave 6 guys in probably two inflatables (with 3 per craft). So that is two inflatables and one patrol craft to cover down on four merchant ships? Or 2 guys for each inflatable, for 3 craft?

With that kind of force structure, pirates would have quite the juicy target (four merchant ships) with bare minimum force protection (8 guys?). And what is interesting is that pirates usually attack in groups of two skiffs. But there is also precedent for pirates attacking in packs of up to 10 skiffs. (a recent attack with 6 skiffs and 40 pirates was stopped by the Iranians)

So I have to say that this CEP sounds nice, but I question the manpower levels, and especially given the possibility of an attacking force using a swarm.

It might even be worth the investment for a pirate action group to figure out a way to sink the CEP vessel, like using guided missiles purchased on the black market. (thanks to conflicts like Libya)  The reasoning here is that an investment in a couple of missiles, might result in the sinking of a CEP vessel and the capture of four merchant ships that could all bring in about 4 to 5 million dollars a piece. Maybe more if those vessels are highly valuable. So the folks at JLT should know, that a determined pirate force might attempt such an attack because of the potential for profit. Is it wise to just use one CEP patrol vessel per convoy, and especially if it takes awhile for air assets or reserve CEP vessels to show up and help?

The other thing is that JLT is trying to sell this as a cheaper option than guards on boats.  Which is fine, but only assigning one CEP patrol vessel to a convoy of four merchant ships is one of the reasons why they are able to go cheap. I mean ideally you would want enough vessels to cover down on both sides of the convoy. Either CEP vessels that cover port and starboard sides, or aft and  fore of the convoy. That way you don’t have vessels running from one side to the other to repel an assault.

Another point is that what if the one CEP vessel covering down on the convoy, breaks down?  Do all of the merchant ships stop while the CEP vessel waits for repairs? That is another advantage of keeping armed guards on the boats. Perhaps JLT should write into the contracts that in those cases of CEP vessels breaking down, that the armed detail could board the vessels and cover that way so they can continue on with the trip? Who knows and I imagine this stuff has been worked out.

Finally, the other reason why they are pushing for this convoy concept is because it get’s the firefight off of the merchant vessels and out in the open between the CEP and the pirates. That’s so companies can distance themselves from the liability of these types of engagements. It also keeps the firefight away from merchant vessels that have explosive or flammable materials on them. Although with a swarm attack, if a CEP vessel is occupied, then how do they expect to stop other pirate vessels from attacking while they are busy? So pirates will shoot at these vessels anyways, just to signal them to slow down or draw the attention of the CEP boats.

Now one option, that might be more expensive but would definitely cover down on 4 vessels properly, is a patrol craft with helicopter launching capability. Much like the Bob Barker vessel in the Sea Shepard fleet, or the MacArther vessel. Having an eye in the sky to watch over the convoy, as well as engage multiple targets from that helicopter would be an excellent capability. That is owning the high ground!

It’s a numbers game guys, and pirates will take advantage of that. At least with guards on the boat, the advantage is with them because they have the high ground and own a pretty stable platform to fight from. That, and the enemy has to deal with that guard force if it wants to take the ship. With no guards on the boat, pirates could distract and overwhelm the CEP in order to get folks on that boat. The probability of this happening is pretty low, but it is possible.

I am also wondering what is cheaper? Slower vessels with armed guards, consuming less fuel because of a reduced speed, or this convoy model? We will see, and the market of these protection types and the pirates will dictate how this goes.

Also, nice try JLT for trying to dispel this idea that the CEP is not a private navy. lol It certainly is a private navy, that’s unless a government now owns and runs the CEP and will be collecting all of the profit from this venture? -Matt

 

Private navy planned to counter pirate raids
David Black
May 13, 2012
A private navy costing US$70 million (Dh257m) is being set up to escort merchant ships through the pirate-infested Gulf of Aden.
It will comprise a fleet of 18 ships, based in Djibouti, and will offer to convoy merchant vessels along the Internationally Recognised Transit Corridor (IRTC).
This is the world’s most dangerous shipping lane, between the Red Sea and the Arabian Sea. The fleet will be operated by the Convoy Escort Programme (CEP), a British company launched by the international shipping insurers Jardine Lloyd Thompson (JLT) and the Lloyds of London underwriters Ascot.
Full funding will be in place by the end of next month, and the CEP hopes the fleet will be operational by December.
“The shipping industry needs to stand up and be counted,” said Angus Campbell, the CEP’s chief executive and a former director of Overseas Shipholding Group, the world’s second-biggest listed oil tanker company. “The time is now, not in four or five years’ time.”
Piracy in the region is costing the global economy an estimated US$7 billion a year. For the ship owners alone, every vessel sailing through the waters off Somalia is charged additional insurance premiums of between $50,000 and $80,000.

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Maritime Security: Jardine Lloyd Thompson Private Navy News…Still Raising Cash

The original intention was to get government or European Union funding for the programme, but when this did not materialise organisers decided to raise the money privately with the aim of forming a profit-making business.
Angus Campbell, chief executive of the CEP, said: ‘It is at a very active stage. We’ve done a lot of groundwork so we are ready when we raise the funds.’ He added: We hope to begin operations in the second half of this year.’
The CEP will buy insurance and use the cover to provide a guarantee to ship owners wishing to travel in convoys under its protection.

And the saga continues….. lol JLT has been doing everything they can to get this private navy concept going. So far, their hopes in getting government funding has been crushed. Which figures, seeing how austerity measures are forcing governments to be more selective with their cash. So now they are going after private investors.

Now what is interesting with their latest selling point is cost.  Check this quote out.

At present, every vessel that sails through the waters in the region of Somalia must pay a massive additional premium on its marine insurance. The extra premium usually amounts to between $50,000 and $80,000, but the CEP intends to charge ship owners from $30,000 to $40,000 for its services.

That is quite the savings, but we will see how it really works once they are funded and underway.  Hopefully they are able to raise the $70 million in their latest scheme, and get this private navy operational. -Matt

 

Insurers in bold plan to raise money to outgun Somalian pirates
By Jon Rees
10 March 2012    ?Convoys of ships with armed escorts could soon be operating in waters infested by Somalian pirates if a planned $70million (£45million) fundraising scheme succeeds.
The Convoy Escort Programme – a proposal from insurance broking group Jardine Lloyd Thompson – aims to raise the sum over the next month in order to equip a fleet of up to 18 vessels to escort convoys of about four ships at a time through the highly dangerous Gulf of Aden and across the Indian Ocean.
The original intention was to get government or European Union funding for the programme, but when this did not materialise organisers decided to raise the money privately with the aim of forming a profit-making business.
Angus Campbell, chief executive of the CEP, said: ‘It is at a very active stage. We’ve done a lot of groundwork so we are ready when we raise the funds.’ He added: We hope to begin operations in the second half of this year.’

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Maritime Security: JLT In The News–Private Navy To Start Within Five Months

The project, first discussed more than a year ago, experienced some delays in getting a state jurisdiction to register its vessels. Cyprus agreed to add the ships last month, following a U.S. State Department veto for registration in the Marshall Islands, Campbell said.

This is really the only quote I was interested in with this article. Of course JLT and these security contractors have been promising this private navy concept for awhile now, and it all revolves around getting backing from a country and from investors.

What I am interested in though, is Cyprus allowing these vessels to be state registered? That seems pretty close to issuing a Letter of Marque if you ask me? Especially if Cyprus registers these vessels, knowing full well that they will be purposely used for anti-piracy operations and escort duty. That they are endorsing a ‘private navy’.  Even if they have not issued a LoM, they might as well do so anyways, because in effect, Cyprus is blessing a privateer force. (mind you, historically speaking, LoM’s have been issued to early privateers to do exactly what these guys will be doing–escorting commerce through pirate infested waters)

The other thing to bring up here is that there just isn’t enough naval assets out there to cover all of the transits.  The reason for this is the poor economy and a reduction in naval forces and their missions. Especially missions protecting commerce in such a vast operational area. So enter private industry to fill in the void…..  But it is all still all talk, and when this private navy actually gets some investors, and we see video of them doing their thing, then I will truly be impressed. -Matt

 

Somalia Piracy Spurs Private Navy to Start Within Five Months
November 07, 2011
By Michelle Wiese Bockmann
The company behind the world’s first private navy to protect merchant ships against Somali pirates plans to start armed escorts through the Gulf of Aden within five months after attacks rose to a record this year.
Convoy Escort Programme Ltd., backed by the marine insurance industry, will initially deploy seven former naval patrol boats, each with armed security teams of eight people on board, Angus Campbell, chief executive officer, said by phone from Swarland, England today. The bullet-proofed boats will charge about $30,000 per ship traveling in a convoy of around four vessels over three to four days, he said.
“We are going to be a deterrent,” Campbell said. “We are not in the business of looking for trouble but if anybody tries to attack a vessel we are escorting, our security teams will deploy force if they have to act in self defence.”
Attacks reached a record this year and cost the global economy an estimated $7 billion to $12 billion annually, according to the United Nations’ International Maritime Organization. About 23,000 vessels carrying $1 trillion of trade pass through the Gulf of Aden every year, the U.K. government estimates.

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Maritime Security: Naval Guard’s Escort Forces Save The Day, Repel Pirate Attack Off Coast Of Yemen

     Naval Guards’ Operations Chief, Thomas Jakobssen, explained to gCaptain that the 42-meter escort vessel Marshal-5 had been shadowing the Capricorn at a distance of approximately 100m when both vessels were attacked simultaneously by the Somali pirates.  Reacting quickly, Capricorn’s crew fled to previously rehearsed hiding spots on the yacht, buying them valuable time as their rescuer’s fought off the pirates.

     After a fierce exchange of gunfire between the pirates and the escort vessel, there were no injuries reported on either side, and only minor damage to the vessels themselves.  With a clear firepower advantage however, the Naval Guards quickly gained control of the situation and the pirates gave up.

 

     This story has not received much attention because of all the other news going on out there.  But because this blog tracks the security contracting industry, to include maritime security contracting, this stuff is relevant and deserves some attention.

     If you go to Naval Guard’s website and check out their Alerts section, you will see all of the attacks they have had to deal with the last couple of months.  I am not sure if this incident below is the only one in which they had an exchange of gun fire with pirates, but it does highlight the danger these companies face out there.

     Also, a hat tip to gCaptain for getting some clarification on the story. Take note of the effective use of safe rooms and armed security.  Safe rooms alone will not save the day. That safe room will buy you time and safety until an armed guard force from a nearby escort ship can clear the vessel of these heathens. Or if you actually had the armed guards on the boat, they would be even quicker to respond to attacks and even prevent some because of how close they are to the action. (these escorts were 100m away, and this attack still happened, and pirates still boarded!)

     The other thing to mention here is the type of attack that happened. The pirates attacked the escort ship and the target vessel at the same time (a swarm attack, a distraction move, desperation, ignorance, who knows why?).  I am thinking that the pirates were either desperate, or they felt if they could board the target vessel, that a private guard force would not take the risk and further endanger the lives of the crew with a rescue assault. They thought wrong, and Naval Guards and their client had a plan and they were prepared for such an assault. But I don’t know everything about this, and it would be cool to read a full blown AAR on this incident.

    I am also going to guess that they probably did not know the intent of this attacking pirate force until it was too late.  The rules of engagement-the shoot no shoot scenario-the policy written up between client and escort are all at play here.  It would be interesting to hear how these pirates were able to get so close and act so quickly–did the escort vessel not see it, or were they restricted by the ROE?  Mind you, companies cannot go on the offensive, and can only be used defensively.  So this might have been a factor in why the pirates were able to attack and board so quickly. Thanks to George for sending me this. -Matt

Armed guards open fire as ship attacked off Yemen

March 03, 2011

A maritime news portal says armed guards stopped an attack on a Danish-owned vessel when they exchanged fire with suspected pirates.

Maritimedanmark.dk says no one was injured on the Singapore-registered Brattingborg that has a Thai crew in Thursday’s attack.

Shipowner Lars Steen Rasmussen was quoted as saying it was the first time the company had armed guards on one of its ships. He could not be reached for comments.

The attack comes days after suspected Somali pirates captured a Danish yacht in the Indian Ocean.

Earlier Thursday, the head of a private security company said his guards retook a yacht from Somali pirates after the Dutch couple on board locked themselves in a safe room.

Thomas Jakobsson of Naval Guards said Thursday that six of his guards were accompanying the Capricorn yacht on a separate motorboat. Six armed pirates were able to get aboard the Capricorn but the Dutch couple barricaded themselves in the boat.

Jakobsson says his men had a brief exchange of fire with the pirates before retaking the Capricorn with no casualties on either side.

Story here.

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Yacht crew rescued from pirate attack by private security firm

From the gCaptain

March 3rd 2011

Private security firm Naval Guards Ltd successfully rescued their Dutch clients on board M/Y Capricorn after it had been overrun by pirates in the central Arabian Sea yesterday.  The crew of the 21-meter M/Y Capricorn had contracted Naval Guards Ltd to provide armed escort for their eastbound trip from Djibouti in the western Gulf of Aden, through the Arabian Sea.

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Maritime Security: The JLT ‘Private Navy’ Is Close To Kick-Off

      Woollerson would also like to see it involved in trying to remove the causes of Somali piracy through land-based initiatives.

     “I see the CEP as a self-destructing company. Maybe in many years’ time we will no longer be needed and could donate the tonnage to a Somali coastguard,” he said.

     This is a very interesting quote, and actually the entire article below is filled with some great stuff. Bravo to the author for getting the scoop and putting it out there for all to read. Here are my older posts with comments that first talked about this venture.

     Now for my take on the whole thing.  In order for this Convoy Escort Programme (CEP) to be a ‘self-destructing company’, it must take part in destroying their ‘Raison d’être’ –the pirates.  Escorting ships does not alone create this kind of market mechanism. Especially if they only plan on capturing 27% of the merchant traffic going through the GoA, and allowing the pirates to feast on the other 73% of the merchant traffic. If anything the consequence, intended or unintended, will be a higher concentration of armed pirates attacking undefended vessels.

    The other angle on this is that merchants and insurance companies will see how this works, and they too will fire up a similar business model.  That other 73% of the merchant market might shrink pretty fast with a higher concentration of pirates coming down on them, and an increase of insurance backed protective services available to them at a decent price.

    But this is where the quote up top really grabs me, and that is the land based initiatives of this CEP team.  Could there be something going on here, like JLT taking a hint from what is going on with Saracen International and their proposed private militia? I bet JLT wouldn’t mind attracting some of that funding coming from this middle eastern mystery donor either.

    Finally, there is the quote about a reputable flag state sponsoring these CEP vessels, and the concept of a government and military granting them ‘legitimacy’. That sounds like all the makings for a Letter of Marque or some kind of similar license to do what they are going to do. We will soon find out in the coming months exactly what kind of arrangement we have here. -Matt

‘Private Navy’ Is Close To Kick-Off

December 10, 2010

An insurance broker’s plan to create a “private navy” to combat Somali piracy is close to being launched.

Shipowners could be asked to back the project as early as late January or February with private military-escort vessels sailing alongside merchant ships by mid-2011.

A reputable flag state prepared to register the 18 patrol boats has been lined up, shipowner support is being canvassed and preparations made to secure funding for the vessels and crew.

Sean Woollerson of the Jardine Lloyd Thompson (JLT) insurance-broking group says there are still issues to overcome but the key task of securing government and military support to give the project “legitimacy” is almost there.

The venture, now branded as the Convoy Escort Programme (CEP), estimates it needs only £15m ($23.5m) to buy secondhand vessels suitable for use as patrol boats and the rest of the infrastructure.

Greek salvage entrepreneur George Tsavliris is already seeking support from fellow shipowners and Bimco has indicated a willingness to help facilitate the project.

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