Singapore (Platts)--18Feb2011/518 am EST/1018 GMT

Middle Eastern trader Fal Oil has clarified Thursday that it has not resumed offering bunker fuel on a spot basis at the United Arab Emirate ports of Khor Fakkan and Fujairah, a company official told Platts.

"We are not doing spot in February. We are only doing term [bunker fuel] in Khor Fakkan and Fujairah in February," Fal Oil general manager Mohammed Osman said.

Another source at Fal Oil told Platts late Wednesday that the company had resumed offering bunker fuel on a spot basis at the ports of Khor Fakkan and Fujairah but was unable to make prompt deliveries. The source said the company would only be able to make deliveries from February 25.

But Osman said Thursday that the company expects to be able to offer bunker fuel on a spot basis only in March as the Sharjah government has released a 275,000 mt VLCC which the company uses as a floating storage for its finished bunker grade fuel oil.

Osman declined to provide details of the reason for the release of the VLCC except to say that the Sharjah government had held the VLCC in connection with Fal's ongoing negotiations with the government over unspecified payment issues.

Platts was unable to get a confirmation from the Sharjah government on the matter as government offices in the UAE were closed for a public holiday Thursday.

When asked about the progress of the negotiations with the Sharjah government, Osman said: "It is not settled but it has improved."

Last week, Platts reported that Fal Oil had stopped offering spot bunker fuel from UAE's Fujairah, the bunkering hub in the Middle East.

This came after it had withdrawn supplies of bunker fuel at neighboring Khor Fakkan in early December while continuing its negotiations with the government of Sharjah over the payment issues.

--Norazlina Juma'at, nora_jumaat@platts.com

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