International Association of Independent Tanker Owners BIMCO/INTERTANKO Seminar Tokyo, Oct 2013 Sustainability of the Shipping Industry - How are we meeting current challenges ? Katharina Stanzel Managing Director INTERTANKO International Association of Independent Tanker Owners

INTERTANKO International Association of Independent Tanker Owners Non-governmental organization est. 1970 in Oslo representing interests of independent tanker operators Strict membership criteria 250 Members in 45 countries > 3,300 tankers, 285 million dwt & 320 Associate Members Spokesman - Information Service - Meeting Place 15 Technical Committees & 5 Regional Panels Observer Status at IMO, IOPC, UNFCCC, OECD, UNCTAD Oslo - London - Washington - Singapore - Brussels

How are we meeting current challenges ? Sustainability How are we meeting current challenges ?

Moore Stevens (Sept.13): “Shipping is going through one of the severest and most prolonged downturns in recent history”

Shipping Markets Freight Newbuilding Sale & Purchase Scrapping

Market 4: Scrapping Design life 25 yrs.. really ?

Average Age Membership Fleet 2013 global tanker fleet: 1/3 < 5yrs 2/3 <10yrs 13% >15yrs Average Vessel Age (yrs)

Iron Ore prices US$130/tonne VLCC ideas: Suggestion by a fellow owner: scrap anything >15 yrs = 10% of trading fleet or 59 vessels This year so far 6 have been scrapped 60 are still on order

Market 3: Sale & Purchase Prices still way down Greece 2nd hand tankers Jan-Aug: 51 tankers, 5.5 mio dwt

Source: BRS

Market 2: Newbuilding Prices still down but order books filling up

Tanker Supply fleet development Tanker fleet 2003-2013 increased some 72% m dwt number Assumed orderbook August 2011, include chemical tankers Clarksons 30. Sept.: “Oil tanker newbuilding activity up 40%” 128 new contracts in 9 months (122 in all of 2012)

When is Eco really Eco & who benefits? Efficiency Improvements Source: TK

Banks, Basel III and the rise of Private equity Finance Banks, Basel III and the rise of Private equity

Market 1: Freight

Now ? Changing Supply & Demand both for Crude and Products Demand Growth driven mostly by Asia Refinery Capacity growth in China & India as well as Saudi and US Gulf Source: BP

Sustainability – how are we meeting current challenges ? charter/freight rates not covering basic vessel operating costs earnings not supporting forward investment charterparty terms which are not balanced and at times ignored

5 Year Plan – Key Focus Areas Sustainability of the tanker industry Human element Tanker safety and performance Global maritime security threats Greenhouse gas emission reductions Air emission reductions Ballast water management Chemical Tanker Operations

Sustainability Project Aim Realign tanker industry’s key stakeholders for the re-creation of balanced tanker trading conditions and fair risk sharing that will allow quality shipping regardless of market cycles.

Pilot study results - Demurrage

Comments so far: BP Exxon Mobil Koch Repsol Shell Sitgo Statoil Total Trafigura

Thank You www.INTERTANKO.com Katharina.Stanzel@intertanko.com