---

A fuel oil tanker operated by FAL Oil has been seized by Singapore authorities following the company's failure to pay an outstanding debt.

The 105,000-deadeight tonne vessel Khorfakkan [pictured] was seized by Singapore's Supreme Court Sheriff's Office on July 18, but was reportedly allowed to discharge its cargo to its owner ChinaOil, a subsidiary of PetroChina Company Limited (PetroChina).

The tanker is understood to have been seized because of an outstanding debt of US$2.84 million that was due to be paid to Germany's DVB Bank

FAL Oil has eight days to decide whether to contest the claim or allow the bank to foreclose on the property.

Established in 1969, Sharjah-based FAL Oil has, up until recently, been a leading player in the fuel oil trading industry and was considered to be one of the largest privately run trading firms in the Middle East. The company has been primarily involved in the sale of bulk cargoes of primary fuel oils, marine diesel oil (MDO), gasoil, naptha and jet kerosene.

FAL Energy Co. Ltd., a company within the FAL group, has been supplying marine fuels and lubricants to customers in the Arabian Gulf since 1991 and the group's shipping division, FAL Shipping, operates a fleet of 21 tanker vessels ranging from 1,000dwt up to 125,000dwt.

Last year, however, FAL Oil was blacklisted by the Pakistan State Oil Company (PSO) after failing to meet its contractual agreements. Prior to this, PSO had been a regular purchaser of fuel oil from FAL Oil.

In January, FAL Oil was one of three companies blacklisted by the United States due to its alleged links with Iran. The other two firms were China's state-run Zhuhai Zhenrong Corp, which the US said was Iran's largest supplier of refined petroleum products, and Singapore's Kuo Oil.

The sanctions meant that FAL oil was prevented from receiving US export licences, US Export Import Bank financing or any loans over US$10m from US financial institutions.

FAL Oil has also recently closed its trading operations in London and Singapore. A lack of funds has forced the company to cut its fuel oil and bunkering business by as much as 60 percent.