Betelgeuse Incident - Background

Background

During the 1960s, developments in the pattern of oil transportation indicated that it would soon become most economic to move oil between the Middle East and Europe using Ultra Large Crude Carrier (ULCC) vessels. These vessels were so large that they would not be able to enter most of the older ports on the Atlantic Ocean, North Sea and English Channel coasts.

Accordingly, it was judged appropriate to build a new oil terminal in Europe capable of handling the largest vessels that were planned. The intention was that oil coming from the Middle East would be off-loaded at this terminal and then stored for transshipment to European refineries using smaller vessels. The closure of the Suez Canal in 1967 as a result of the Six-Day War reinforced the economic viability of this scheme. Oil shipments had to come round the Cape of Good Hope, thus avoiding the vessel size constraints previously imposed by the canal.

In 1966, the Gulf Oil Corporation identified Whiddy Island in Bantry Bay, Ireland, as being the most suitable site for the new terminal. Whiddy Island offered a long, sheltered deep-water anchorage. Furthermore, it was well away from any major population centres and shipping lanes. Construction started in 1967 and the terminal was completed in 1969.

The onshore facility included a "tank farm", consisting of two tanks for ballast, two for bunker fuel oil, one for diesel oil and twelve crude oil storage tanks, each capable of holding 81,280 tonnes, bringing the total capacity to approximately 1.3 million tonnes of oil. The offshore facility comprised an island type berth (known colloquially as the "jetty") 488 metres (1,601 ft) in length, approximately 396 metres (1,299 ft) from the shore. The jetty was commonly described as "a massive concrete structure" and access to it was only possible by boat. It was claimed that the jetty was capable of accommodating vessels of up to 500,000 metric tons deadweight (DWT), although no such vessels existed at that time.

The construction and operation of the terminal transformed the economy of the Bantry area. In 1968, the tanker Universe Ireland went into service for Gulf. At 312,000 DWT this was the largest ship in the world. It was intended to use this vessel mainly to move oil between Kuwait and Whiddy Island. It was the first of six such tankers planned for use by the company. The opening of the terminal was celebrated in the Clancy Brothers song Bringin' Home the Oil which was used as the theme for a 2 minute Gulf Oil TV commercial.

The terminal was very successful for the first five years of operation, but then events began to move against it. The Suez Canal reopened and the economics of ULCCs began to appear less satisfactory than had originally been anticipated. Shipping goods in the form of infrequent but very large loads involves engaging more idle capital in the form of stock than the alternatives. Also, the process of transshipment is costly. The whole economic basis of the Whiddy terminal was incompatible with the "just-in-time" approach to industrial management which was being widely adopted at the time. That apart, the late 1970s saw a levelling-off in demand for oil as the result of both economic recession and a rise in the price of oil. All these circumstances caused a fall in the utilisation of the terminal to a level below that which had been planned for. Thus, by the late 1970s, the local Gulf operating company (Gulf Oil Terminals (Ireland) Ltd) was struggling to maintain the viability of the terminal. The company was forced to undertake a number of cost-saving measures.