HONG KONG (Bloomberg) — Helmut Sohmen, whose Bermuda-based BW Group owns the largest privately held fleet of oil supertankers, says hiring rates will decline next year as deliveries from shipbuilders cause a glut of new vessels."The difficulties will only start in 2008 to 2009, when the majority of new tankers will be delivered," BW Group chairman Sohmen said in an interview in Hong Kong. "After 2007, we will have to face a very large order book in all sectors."

The global order book for new very large crude carriers, or VLCCs, able to carry 2 million barrels of oil, will expand the existing fleet by 36 percent, according to London-based shipbroker Clarkson Plc. More than 80 percent of those ships will be delivered from 2008 onwards. Orders were spurred by above-average tanker rates over the last three years.

New ships mean that global tanker supply is likely to grow faster than demand, reducing profit for Sohmen and other tanker operators such as John Fredriksen's Bermuda-based Frontline Ltd. Hire rates for tankers plying the route from the Persian Gulf to Japan and China averaged 9.2 percent less in 2006 than the previous year, as measured by the industry's Worldscale standard, as the fleet expanded more than oil shipments from Middle East producers.

Rates "have come down somewhat from the very high rates of the last two years, but they still produce a good profit," said Sohmen, 67, speaking in German. "It's true that 2007 might be less bullish than 2006, but it will still be a good year."

Among its shipping assets, the Sohmen Family Foundation owns nearly 12 percent of General Maritime Corp., the third-biggest US oil-tanker operator. The family said in a regulatory filing this week that it may alter the size of the stake, which the Sohmens bought for $154 million from Frontline last year.

In an interview last week, Andreas Sohmen-Pao, managing director of the family's Singapore-based ship management unit, said it was "very unlikely that we would be making an offer at this stage but it's impossible to say in the future."

BW Group, based on the Island, but run from offices in Hong Kong, Singapore and Oslo, owns a fleet of 21 VLCCs, with four more ships under construction at shipyards in South Korea and China, according to its web site.

The group was formed in 2003 when World-Wide Shipping, started in Hong Kong by Sohmen's father-in-law 1955, acquired Oslo-based Bergesen d.y. ASA. BW has listed units that focus on gas shipping and offshore oil platforms and owns dry-bulk carriers and oil-product tankers.

Frontline, the world's largest publicly traded tanker owner, said on November 28 that third-quarter profit rose 34 percent to $98.8 million, missing analyst estimates of $118.3 million. Each of its VLCCs made $59,800 a day in the quarter, almost double the $29,966 a day it needs to break even. The company forecast weaker earnings in the fourth quarter.

The cost of building ships hasn't followed the decline in earnings, making investment in new vessels unattractive, Sohmen said. The cost of building a VLCC is $130 million, 18 percent more than two years ago, according to shipbroker Clarkson.

"Even though charter rates have been falling, tanker prices are still very high, almost too high for us," Austrian-born Sohmen said. "We will hold back for the time being and see where prices are going."